[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
SAVING ENERGY: LEGISLATION TO IMPROVE ENERGY EFFICIENCY AND STORAGE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 12, 2020
__________
Serial No. 116-101
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
_______
U.S. GOVERNMENT PUBLISHING OFFICE
51-562 PDF WASHINGTON : 2024
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Energy
BOBBY L. RUSH, Illinois
Chairman
SCOTT H. PETERS, California FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania Ranking Member
JOHN P. SARBANES, Maryland ROBERT E. LATTA, Ohio
JERRY McNERNEY, California, Vice CATHY McMORRIS RODGERS, Washington
Chair PETE OLSON, Texas
PAUL TONKO, New York DAVID B. McKINLEY, West Virginia
DAVID LOEBSACK, Iowa ADAM KINZINGER, Illinois
G. K. BUTTERFIELD, North Carolina H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont BILL JOHNSON, Ohio
KURT SCHRADER, Oregon LARRY BUCSHON, Indiana
JOSEPH P. KENNEDY III, BILL FLORES, Texas
Massachusetts RICHARD HUDSON, North Carolina
MARC A. VEASEY, Texas TIM WALBERG, Michigan
ANN M. KUSTER, New Hampshire GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
TOM O'HALLERAN, Arizona
LISA BLUNT ROCHESTER, Delaware
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 1
Prepared statement........................................... 2
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 3
Prepared statement........................................... 4
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 5
Prepared statement........................................... 7
Hon. Robert E. Latta, a Representative in Congress from the State
of Ohio, opening statement..................................... 8
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, prepared statement..................................... 117
Witnesses
Mark W. Menezes, Under Secretary of Energy....................... 9
Prepared statement........................................... 12
Answers to submitted questions............................... 180
Kelly Speakes-Backman, Chief Executive Officer, Energy Storage
Association.................................................... 44
Prepared statement........................................... 47
Julie Hiromoto, LEED AP, American Institute Of Architects........ 52
Prepared statement........................................... 54
Arn McIntyre, President, McIntyre Builders, National Association
of Home Builders............................................... 61
Prepared statement........................................... 63
Lowell W. Ungar, Ph.D., Senior Policy Advisor, American Council
for an Energy-Efficient Economy................................ 73
Prepared statement........................................... 75
Jennifer Schafer-Soderman, Executive Director, Federal
Performance Contracting Coalition.............................. 85
Prepared statement........................................... 87
Bryan Howard, Legislative Director, U.S. Green Building Council.. 93
Prepared statement........................................... 95
Submitted Material
H.R. 1744 Storage Technology for Operational Readiness and
Generating Energy Act.......................................... 119
H.R. 2909 Promoting Grid Storage Act of 2019..................... 123
H.R. 3962 Energy Savings and Industrial Competitiveness Act of
2019\1\
H.R. 4447 Expanding Access to Sustainable Energy Act of 2019..... 138
H.R. 5650 Federal Energy and Water Management Performance Act of
2020........................................................... 146
H.R. 5758 Ceiling Fan Improvement Act of 2020.................... 162
----------
\1\ The information has been retained in committee files and also
is available at https://docs.house.gov/meetings/IF/IF03/
20200212/110516/BILLS-1163962ih.pdf.
Letter of February 12, 2020, to Mr Rush and Mr. Upton, from
American Public Gas Association, submitted by Mr. Rush 16
Letter of February 10, 2020, to Mr. Pallone and Mr. Walden, from
Coalition of Advocates, submitted by Mr. Rush.................. 168
Letter of February 10, 2020, to Mr. McConnell, et al., from
Coalition of ESIC , submitted by Mr. Rush...................... 169
Letter of February 10, 2020, to Mr. Rush and Mr. Upton, by Mr.
Gary Shapiro, President and CEO, Consumer Technology
Association, submitted by Mr. Rush\2\
Chart DOE R&D Investments FY 2017-2019, submitted by Mr. Rush.... 172
Letter of February 10, 2020, to Mr. Rush and Mr. Upton, by Dave
Lock, CEO, Grand Canyon State Electric, Cooperative
Association, Inc., submitted by Mr. Rush....................... 174
Letter of February 12, 2020, to Mr. Rush and Mr. Upton, by Louis
Finkel, Senior Vice President, Government Relations, National
Rural Electric Cooperative Association, NRECA, submitted by Mr.
Rush........................................................... 175
Letter of February 11, 2020, to Mr. Pallone at al., by Jeffrey D
DeBoer, President and CEO, Real Estate Roundtable, submitted by
Mr. Rush....................................................... 177
Letter of February 12, 2020, to Mr. Rush and Mr. Upton, by John
Coequyt, Director, Federal and International Climate Campaign,
Sierra Club, submitted by Mr. Rush............................. 179
----------
\2\ The information has been retained in committee files and also
is available at https://docs.house.gov/meetings/IF/IF03/
20200212/110516/HHRG-116-IF03-20200212-SD8147.pdf.
SAVING ENERGY: LEGISLATION TO IMPROVE ENERGY EFFICIENCY AND STORAGE
----------
WEDNESDAY, FEBRUARY 12, 2020
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:30 a.m., in
room 2322, Rayburn House Office Building, Hon. Bobby L. Rush
(chairman of the subcommittee) presiding.
Members present: Representatives Rush, Peters, Doyle,
McNerney, Tonko, Loebsack, Butterfield, Schrader, Kennedy,
Kuster, Kelly, Barragan, O'Halleran, Blunt Rochester, Pallone
(ex officio), Upton (subcommittee ranking member), Rodgers,
McKinley, Griffith, Flores, Hudson, Walberg, and Duncan.
Staff present: Jeffrey C. Carroll, Staff Director; Jean
Fruci, Energy and Environment Policy Advisor; Tiffany
Guarascio, Deputy Staff Director; Omar Guzman-Toro, Policy
Analyst; Rick Kessler, Senior Advisor and Staff Directory,
Energy and Environment; Brendan Larkin, Policy Coordinator;
Jourdan Lewis, Policy Coordinator; Elysa Montfort, Press
Secretary; Tim Robinson, Chief Counsel; Medha Surampudy,
Professional Staff Member; Rebecca Tomilchik, Staff Assistant;
Tuley Wright, Energy and Environment Policy Advisor; Jordan
Davis, Minority Senior Advisor; Peter Kielty, Minority General
Counsel; Ryan Long, Minority Deputy Staff Director; Mary
Martin, Minority Chief Counsel, Energy and Environment and
Climate Change; Brandon Mooney, Minority Deputy Chief Counsel,
Energy; Brannon Rains, Minority Policy Analyst; and Peter
Spencer, Minority Senior Professional Staff Member, Environment
and Climate Change.
Mr. Rush. [presiding]. Good morning.
The Subcommittee on Energy will now come to order.
Today, we will hear from a number of witnesses on the
saving energy legislation to improve energy efficiency and
storage.
The Chair recognizes himself for 5 minutes.
OPENING STATEMENT OF HON. BOBBY RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Today, the subcommittee convenes for a hearing focused on
legislative proposals to bolster energy efficiency and energy
storage. Through the implementation of these policies, the
committee will boost consumer cost savings, offset energy
supply-demand, reduce air pollution, and advance job creation.
The flexibility and reliability of our nation's grid is
enhanced by any new storage capability. Energy producers use a
variety of these economically-and environmentally-beneficial
technologies to store excess energy from power sources. Energy
producers later release this stored energy in response to
energy generation demand, service disruption, or non-dispatched
energy generation. Bills up for discussion today, which
includes H.R. 1714, H.R. 2909, and H.R. 4447, will amplify the
deployment of this strategy.
Energy efficiency is an equally important tool that
harnesses technology to meet our energy needs through smart
energy use. According to a recent American Council for an
Energy-Efficient Economy report, enhancing economywide
efficiency standards could cut both energy use and greenhouse
gas emissions in half by the year 2050. This is why I am
pleased to discuss H.R. 3962, H.R. 5650, and H.R. 5758 at
today's hearing.
The extensive efficiency of residential appliances,
lighting systems, and buildings alone will curtail 550 million
metric tons of carbon dioxide per year. This amounts to the
emissions from burning 606 million tons of coal.
The intensity of energy use is contingent upon geographic
location. Case in point, Chicago heat waves and winters.
However, a typical household may save up to 25 percent on their
utility expenses through energy efficiency measures.
In light of this, I remain deeply disturbed by the
Department's failure to meet legal obligations for a new
efficiency standard, and I am puzzled by this administration's
continuing requests to slash funding for related programs.
Therefore, I look forward to today's discussion on these
policies that require active participation from the Department
of Energy, from states, and from industry to implement these
mechanisms to the benefit of ratepayers and consumers.
I want to thank my colleagues, both on the committee and
off the committee, for their contributions to today's
legislative hearing.
[The prepared statement of Mr. Rush follows:]
Prepared Statement of Hon. Bobby Rush
Today the Subcommittee convenes for a hearing focused on
legislative proposals to bolster energy efficiency and energy
storage. Through the implementation of these policies, the
Committee will boost consumer cost savings, offset energy
supply demand, reduce air pollution, and advance job creation.
The flexibility and reliability of our nation's grid is
enhanced by energy storage capabilities. Energy producers use a
variety of these economically and environmentally beneficial
technologies to store excess energy from power sources. Energy
producers later release this stored energy in response to
energy generation demand, service disruptions, or non-
dispatchable energy generation. Bills up for discussion today,
for example H.R. 1744, H.R. 2909, and H.R. 4447, will amplify
the deployment of this strategy.
Energy efficiency is an equally important tool that
harnesses technology to meet our energy needs through smarter
energy use. According to a recent American Council for an
Energy-Efficient Economy report, enhancing economy-wide
efficiency standards could cut both energy use and greenhouse
gas emissions in half by 2050. This is why I'm pleased to
discuss H.R. 3962, H.R. 5650, and H.R. 5758 at today's hearing.
Extensive efficiency of residential appliances, lighting
systems, and buildings alone would curtail 550 million metric
tons of carbon dioxide per year. This amounts to the emissions
from burning 606 billion pounds of coal. The intensity of
energy use is contingent upon geographic location--case in
point: Chicago heat waves and winters. However, a typical
household may save up to 25 percent on their utility expenses
through energy efficiency measures.
In light of this, I remain deeply disturbed by the
Department's failure to meet legal obligations for new
efficiency standards and puzzled by this Administration's
continued requests to slash funding for related programs.
Therefore, I look forward to today's discussion on these
policies that require active participation from the Department
of Energy, states, and industry to implement these mechanisms
to the benefit of ratepayers and consumers.
I thank my colleagues, both on and off the Committee for
their contributions to today's legislative hearing. With that,
I recognize my friend and colleague, the gentleman from
Michigan, Ranking Member Upton, for 5 minutes.
The Chair am now honored to recognize my friend my
colleague, the great gentleman from the great State of
Michigan, the great ranking member, Fred ``Great'' Upton, for 5
minutes.
[Laughter.]
Mr. Upton. We are going to have to get you a MAGA hat with
``Fred'' on it.
[Laughter.]
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Thank you, my friend, indeed, my friend, and chairman of
this great subcommittee for sure.
This is going to be a good hearing. And today's legislative
hearing is going to focus on six energy bills focused on energy
efficiency and grid storage. I am pleased that most of these
bills are, indeed, bipartisan and reflect close cooperation and
compromise among our many members.
I also want to welcome back Under Secretary Menezes, Mark,
back to the committee to provide testimony on this first panel.
Under his leadership, he served as chief counsel to the
committee and helped us enact the Energy Policy Act of '05.
And on the second panel, we have a range of witnesses
representing and energy efficiency--advocates, architects, home
builders, energy service companies that retrofit federal
buildings. I look forward to gathering their views and
suggestions to perform these bills.
And as we lay the framework for a modern electricity
system, we know that advances in energy storage and energy
efficiency, indeed, will be critical. Not only will they have
the potential to provide substantial benefits to consumers in
the form of lower electricity bills, which we all want, but
they are also going to help us balance the power grid and use
less energy, which will, obviously, reduce emissions.
DOE is dedicating substantial resources, cutting across
multiple program offices and the National Labs, to accelerate
the development, commercialization, and utilization of next-
generation energy storage and energy efficiency technologies. I
look forward to receiving an update from DOE on the programs
already in place and the Department's plan for the future.
And as we work to modernize the electric grid, one of our
top priorities is certainly going to be to make sure that new
technologies being developed and commercialized are resilient
to cyber threats. While it doesn't appear that these bills
address cyber, today I would like to explore opportunities to
address this critical need as well.
With that, I want to turn to the bills to make a few
remarks.
I am pleased to support H.R. 4447, the Expanding Access to
Sustainable Energy Act, introduced by Mr. O'Halleran and Mr.
Mullin, a targeted bill to provide energy storage and microgrid
assistance in rural areas.
I also certainly support H.R. 5650, the Federal Energy and
Water Management Performance Act, introduced by Mr. Welch and
Mr. Kinzinger to codify DOE's existing Federal Emergency
Management Program, which helps federal agencies meet energy-
related goals and facilitates public-private partnerships. It
is a good program. It has been in existence for a good number
of years, and it should be authorized.
We also have H.R. 5758, the Ceiling Fan Improvement Act of
2020, introduced by Mr. Guthrie and Ms. Schakowsky, to make
technical corrections to the energy conservation standards for
ceiling fans, a narrow fix for a specific type of ceiling fan.
And it should be a no-brainer for us to support this bill as
well.
The other three bills before us may require additional work
before moving through the full committee.
H.R. 2909, the Promoting Grid Storage Act of 2019,
implements a new government spending program that could be
duplicative of existing programs and may not serve the
interests of taxpayers or consumers.
H.R. 1744, the S.T.O.R.A.G.E. Act, which does impose a new
regulatory mandate on states to consider technologies that may
be infeasible or too costly, and H.R. 3962, the Energy Savings
and Industrial Competitiveness Act, which is the ``kitchen
sink'' of energy efficiency provisions, this bill has been
around for a number of Congresses and some of the provisions,
especially the Energy Codes, have been the subject of
disagreement among stakeholders.
With that, I look forward to our witnesses today, and I
yield back the balance of my time.
[The prepared statement of Mr. Upton follows:]
Prepared Statement of Hon. Fred Upton
Thank you, Mr. Chairman, for holding today's legislative
hearing to examine six energy bills focused on energy
efficiency and grid storage. I am pleased that some of these
bills are indeed bi-partisan and reflect close cooperation and
compromise among our members.
I would also like to welcome Under Secretary Mark Menezes
back to the Committee to provide testimony on the first panel.
Under Secretary Menezes served as a chief counsel to the
Committee and helped us enact the Energy Policy Act of 2005. On
the second panel, we have a range of witnesses representing
energy efficiency advocates, architects, home builders, and
energy service companies that retrofit federal buildings. I
look forward to gathering their views and suggestions to
perfect these bills.
As we lay the framework for a modern electricity system, we
know that advances in energy storage and energy efficiency will
be critical. Not only will they have the potential to provide
substantial benefits to consumers in the form of lower
electricity bills, they will help us balance the power grid,
and use less energy--which will reduce emissions.
The Department of Energy is dedicating substantial
resources, cutting across multiple program offices and the
National Laboratories, to accelerate the development,
commercialization, and utilization of next-generation energy
storage and energy efficiency technologies. I look forward to
receiving an update from DOE on the programs already in place
today, and the Department's plans for the future.
As we work to modernize the electric grid, one of my top
priorities will be to make sure the new technologies being
developed and commercialized are resilient to cyber-threats.
While it doesn't appear that these bills address cyber, I would
like to explore opportunities to address this critical need as
well.
With that, I would like to turn to the bills to make a few
remarks. I am pleased to support H.R. 4447, the ``Expanding
Access to Sustainable Energy Act,'' introduced by Mr.
O'Halleran and Mr. Mullin. This is a targeted bill to provide
energy storage and microgrid assistance in rural areas.
I am also supporting H.R. 5650, the ``Federal Energy and
Water Management Performance Act,'' introduced by Mr. Welch and
Mr. Kinzinger to codify DOE's existing Federal Energy
Management Program, which helps Federal agencies to meet
energy-related goals and facilitate public-private
partnerships. This is a good program--it's been in existence
for many years already--and it should be authorized.
We also have H.R. 5758, the ``Ceiling Fan Improvement Act
of 2020,'' introduced by Mr. Guthrie and Ms. Schakowsky to make
technical corrections to the energy conservation standards for
ceiling fans. This is a very narrow fix for a specific type of
ceiling fan, and I support this bill.
The other three bills before us today may require
additional work before moving through Committee. H.R. 2909,
``Promoting Grid Storage Act of 2019,'' implements a new
government spending program that could be duplicative of
existing programs and may not serve the interest of taxpayers
or consumers. H.R. 1744, the ``STORAGE Act,'' imposes a new
regulatory mandate on States to consider technologies that may
infeasible and too costly. H.R. 3962, the ``Energy Savings and
Industrial Competitiveness Act,'' is the ``kitchen sink'' of
energy efficiency provisions. This bill has been around for
multiple congresses and some of the provisions--especially the
energy codes--have been the subject of disagreement among
stakeholders.
With that, I look forward to hearing from the witnesses and
gathering their suggestions. I plan to keep an open mind and
encourage my colleagues to do the same. Let's reach across the
aisle and get to work.
Thank you, I yield back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Pallone, the chairman of the full committee, for
5 minutes for his opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman.
I wanted to begin by welcoming back to the committee the
Under Secretary, who served as a key staffer on the committee
on energy matters for many years.
Today, this subcommittee will review six bipartisan bills
that continue our work to combat the climate crisis by
improving energy efficiency and investing in battery storage
infrastructure.
Energy efficiency is a critical tool in our efforts to
address climate change while also saving consumers money on
their electric bills. Residential and commercial buildings
contribute nearly 40 percent to our nation's carbon pollution,
and today we are considering several bills that support the use
of energy efficiency technologies in residential, commercial,
and industrial sectors.
Representatives Welch and McKinley have introduced H.R.
3962, the Energy Savings and Industrial Competitiveness Act,
which includes a suite of measures to make buildings,
manufacturers, and the federal government more energy
efficient. The bill strengthens national building codes to
ensure new homes and buildings are more energy efficient, and
it helps manufacturers and the Federal Government transition to
technologies that will reduce energy consumption.
While there are many important provisions in this bill,
there are a few provisions that concern me. The bill repeals
Section 433 of the Energy Independence and Security Act of
2007, which phases out the use of fossil fuel energy in federal
buildings by 2030. To achieve a 100 percent clean economy, the
Federal Government must lead by reducing its energy consumption
and carbon pollution, and I can't support walking away from
this strong standard.
I am also uncomfortable allowing companies to self-certify
that their products meet Energy Star standards. Consumers must
have certainty that an Energy Star product they buy will
actually save the amount of energy accompanying claims that it
will.
The subcommittee will also review H.R. 5650, the Federal
Energy and Water Management Performance Act, introduced by
Representatives Welch and Kinzinger. The Federal Government is
the nation's largest energy buyer and consumer. The bill will
drive major energy and water use reductions in federal
buildings over the next decade.
We are also considering H.R. 5758, the Ceiling Fan
Improvement Act of 2020, which was introduced by
Representatives Guthrie and Schakowsky. And this bill provides
a technical fix for large-diameter ceiling fan efficiency
standards.
The subcommittee also has three energy storage bills to
consider. They speed up adoption of this important technology.
Building new energy storage infrastructure is critical to
expanding renewable energy technology use. As the U.S. brings
online more wind, solar, and other renewable energy, storage is
key to providing reliable electric service.
And today, we will be reviewing Representative Casten's
H.R. 2909, the Promoting Grid Storage Act. This bill
establishes programs and grants for energy storage research,
technical assistance, and storage system pilot projects.
H.R. 1744, the S.T.O.R.A.G.E. Act, introduced by
Representative Takano, amends the Public Utility Regulatory
Policies Act of 1978, or PURPA, to require states to consider
energy storage when developing energy plans.
And H.R. 4447, the EASE Act, introduced by Representatives
O'Halleran and Mullin sets up a grant program to assist Rural
Electric Cooperatives with energy storage and microgrid
projects.
So, this committee will continue to work in a bipartisan
fashion to boost energy efficiency, cut carbon pollution, and
reduce consumers' bill. But, unfortunately, the Trump
administration is moving in the opposite direction with the
budget it released this week. The Trump budget cuts clean
energy research, guts funding for the Office of Energy
Efficiency and Renewable Energy by an appalling 75 percent, and
zeroes out weatherization assistance for low-income homeowners.
These are all devastating cuts that would seriously undermine
our ability to combat the climate crisis. Despite this
administration's ongoing denial of the climate crisis, this
committee will continue its work to modernize energy
infrastructure, reduce carbon pollution, and make homes,
businesses, and federal buildings more energy efficient.
And we have six bipartisan bills before us that accomplish
all these goals, and I commend the sponsors for their hard
work, and yield back to you, Mr. Chairman.
Prepared Statement of Hon. Frank Pallone, Jr.
I would like to begin by welcoming back to the Committee
Undersecretary Menezes who served as a key staffer on the
Committee on energy matters for many years.
Today the Subcommittee will review six bipartisan bills
that continue our work to combat the climate crisis by
improving energy efficiency and investing in battery storage
infrastructure.
Energy efficiency is a critical tool in our effort to
address climate change, while also saving consumers money on
their electric bills. Residential and commercial buildings
contribute nearly 40 percent to our nation's carbon pollution.
Today we are considering several bills that support the use of
energy efficiency technologies in residential, commercial and
industrial sectors.
Representatives Welch and McKinley have introduced H.R.
3962, the Energy Savings and Industrial Competitiveness Act,
which includes a suite of measures to make buildings,
manufacturers and the federal government more energy efficient.
The bill strengthens national building codes to ensure new
homes and buildings are more energy efficient, and it helps
manufacturers and the federal government transition to
technologies that will reduce energy consumption.
While there are many important provisions in this bill,
there are a few provisions that concern me. The bill repeals
section 433 of the Energy Independence and Security Act of
2007, which phases out the use of fossil fuel energy in federal
buildings by 2030. To achieve a 100 percent clean economy, the
Federal Government must lead by reducing its energy consumption
and carbon pollution, and I cannot support walking away from
this strong standard. I am also uncomfortable allowing
companies to self-certify that their products meet ENERGY STAR
standards. Consumers must have certainty that an ENERGY STAR
product they buy will actually save the amount of energy a
company claims it will.
The Subcommittee will also review H.R. 5650, the Federal
Energy and Water Management Performance Act, introduced by
Representatives Welch and Kinzinger. The Federal Government is
the nation's largest energy buyer and consumer. This bill will
drive major energy and water use reductions in federal
buildings over the next decade.
We are also considering H.R. 5758, the Ceiling Fan
Improvement Act of 2020, which was introduced by
Representatives Guthrie and Schakowsky. This legislation
provides a technical fix for large-diameter ceiling fan
efficiency standards.
The Subcommittee will also review three energy storage
bills to speed up adoption of this important technology.
Building new energy storage infrastructure is critical to
expanding renewable energy technology use. As the United States
brings online more wind, solar and other renewables, energy
storage is key to providing reliable electric service.
Today we will be reviewing Representative Casten's H.R.
2909, the Promoting Grid Storage Act. This bill establishes
programs and grants for energy storage research, technical
assistance, and storage system pilot projects. H.R. 1744, the
STORAGE Act, introduced by Representative Takano, amends the
Public Utility Regulatory Policies Act of 1978 (PURPA) to
require states to consider energy storage when developing
energy plans. And H.R. 4447, the EASE Act, introduced by
Representatives O'Halleran and Mullin which sets up a grant
program to assist rural electric cooperatives with energy
storage and microgrid projects.
This Committee will continue to work in a bipartisan
fashion to boost energy efficiency, cut carbon pollution and
reduce consumer's bills, but unfortunately the Trump
Administration is moving in the opposite direction with the
budget it released this week. The Trump budget cuts clean
energy research, guts funding for the Office of Energy
Efficiency and Renewable Energy by an appalling 75 percent, and
zeroes out weatherization assistance for low-income homeowners.
These are all devastating cuts that would seriously undermine
our ability to combat the climate crisis.
Despite this Administration's ongoing denial of the climate
crisis, this Committee will continue its work to modernize
energy infrastructure, reduce carbon pollution and make homes,
businesses and federal buildings more energy efficient. We have
six bipartisan bills before us that accomplish all these goals,
and I commend the bill sponsors for their hard work.
Oh, I can yield to--where is the gentleman from California,
Mr. McNerney?
Mr. McNerney. I thank the chairman for yielding.
I want to speak up briefly in favor of the Welch-McKinley
H.R. 3962. Welch-McKinley strengthens national building codes
to make new homes and commercial buildings more energy
efficient and the code-writing process more transparent. It
will deliver significant cost and energy savings for families
without imposing any new mandates or increasing the deficit.
And I yield back.
Mr. Rush. The gentleman yields back. It is my understanding
that the ranking member of the full committee, Mr. Walden,
yields his allotted time, 5 minutes, to the gentleman, Mr.
Latta. Mr. Latta is recognized for 5 minutes.
OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Latta. Well, thank you very much, Mr. Chairman, and
thank you very much for holding this legislative hearing today.
And I thank all of our witnesses for agreeing to testify
today.
Before we discuss the bills that are before us, I want to
express my disappointment that we are not also discussing
legislation I introduced, H.R. 2101, the Energy Star Program
Integrity Act. No energy efficiency program has been as popular
or effective as the Energy Star Program. This voluntary program
allows manufacturers to obtain Energy Star labeling for
products if specific energy-savings guidelines are met,
benefitting consumers that are looking to purchase energy-
efficient products. Technologies that have complied with these
guidelines have resulted in tens of billions of dollars in
energy savings for families and businesses and a dramatic
reduction in emissions.
It is my hope that the majority will work with us to move
H.R. 2101, which will improve and strengthen this great
program.
And before yielding back, I will ask if any other members
on our side would like the balance of my time. And seeing none,
Mr. Chairman, I thank you again for holding today's hearing,
and I yield back the balance of my time.
Mr. Rush. The gentleman yields back. It is my understanding
that in the President's budget he cut the Energy Star Program
out of the budget.
Mr. Latta. Well, Mr. Chairman, again, if we could move
forward with the bill, I would really appreciate working with
the majority. Thank you.
Mr. Rush. All right.
The Chair would like to remind Members that, pursuant to
committee rules, all the members' written opening statements
shall be made part of the record.
Now I would like to welcome our first witness for today's
hearing, the honorable Mark Menezes, the Under Secretary of
Energy. And I certainly want to welcome you here, Mr.
Secretary, and I want to thank you for joining us today. And we
all are sitting on the edge of our seats awaiting your
testimony.
Before we begin, though, I would like to explain--and you
are fully aware of it, but it is on the script here that I have
to read, so bear with me--I would like to explain the lighting
system. In front of you is a series of lights, as if you hadn't
noticed. The light will initially be green at the start of your
opening statement. The light will turn yellow when you have 1
minute remaining. Please begin to wrap up your testimony at
that point. The light will turn red when your time has expired.
Mr. Under Secretary, you are recognized for 5 minutes.
STATEMENT OF MARK W. MENEZES, UNDER SECRETARY OF ENERGY, U.S.
DEPARTMENT OF ENERGY
Mr. Menezes. Thank you, Mr. Chairman. Chairman Pallone,
Chairman Rush, Ranking Member Upton, indeed, it is an honor and
a privilege to be back before this committee. I look forward to
this hearing.
Indeed, on the way over here, I was excited to hear that
over in the other body Chairman Murkowski and Ranking Member
Manchin have announced that they are going to introduce a
comprehensive energy bill later this month. And so, the work
that we are doing here today is going to be very meaningful,
and it is hoped that your committee can get together with the
full committee and put some bills together. And perhaps we can
help get bills considered in conference, much like we did back
some many years ago now; sadly, when we last did a
comprehensive energy bill, which was bipartisan and had full
support, and embraced a lot of the policies.
Today, I am privileged enough to be Under Secretary of
Energy over at the Department of Energy, and I am actually
implementing some of those very same provisions. Typically, on
any day, walking down the hall, I am either praised for some of
the foresight that Congress had seen in giving the Department
of Energy authorities to do things, but on other days I am also
blamed for some of the things that we put in that bill that
perhaps can be improved upon. So, really, it is an honor to be
here, and I look forward to our discussion today.
I am going to touch on the six bills that we have. And I
just want to remind everybody that the administration has not
taken a formal position yet on these bills. We have provided
some technical assistance in the drafting of these bills,
particularly the Ceiling Fan Act, which I think has been
touched on by members. And so, I won't go into that. But we did
provide the technical assistance, and we believe that the bill
is now technically drafted in a way that it can go forward.
Regarding the Promoting Grid Storage Act, H.R. 2909, this
requires the Secretary to establish a cross-cutting national
program for research in the energy storage systems, components,
and materials. It will require DOE to provide technical
assistance and grant programs. Of course, the Department
recognizes the critical importance for providing the technical
assistance to state, local, and relevant stakeholders, but,
indeed, we recognize the importance of storage generally. This
is the true breakthrough technology that we have to achieve;
that as we make our grid more flexible and we are bringing more
renewables on, we need to be able to develop storage
technologies of all types to be able to address the demands and
the needs of the future on a more flexible grid.
Indeed, the Department has recently announced the Energy
Storage Grand Challenge. This builds on the President's fiscal
year 2020 budget for promoting the Advanced Storage Initiative,
which began at about $158 million, and we are now building on
that to expand it to over $282 million. This is going to be an
integrated Department R&D strategy to focus across the
Department and drive American leadership in energy storage.
Our Department's Grand Challenge takes a comprehensive
approach to energy storage, recognizing the value of different
technology pathways in providing the full range of services, as
I mentioned, required by the grid and transportation
infrastructure, to ensure that our system is reliable,
resilient, and safe. Our Challenge includes traditional
bidirectional electricity storage. That would be batteries,
flywheels, pumped-storage, hydropower, and compressed air
energy storage, thermal and chemical storage, and technologies
that increase the flexibility of electricity generation and
demand.
Now this is a cross-cutting challenge. So, we draw on many
offices and agencies within our Department. It is a
collaborative effort leveraging our efforts by the Office of
Energy Efficiency and Renewable Energy, our Office of
Electricity, our Offices of Science, Fossil Energy, and
Nuclear, as well as our Loan Programs Office, and ARPA-E.
Existing technologies include the batteries, the pumped-
storage, controllable loads, distributed energy, resource
management, microgrids, power system planning and operations,
hybrid systems, power plant dispatchability, and, more
importantly, cybersecurity. And it is on this foundation that
the Energy Storage Grand Challenge will develop an R&D roadmap
over the course of fiscal year 2020 to guide future Department
efforts.
I will say that, when you look at the legislation, to the
extent, Mr. Chairman, Ranking Member Upton had said, if we can
look at considering adding the cybersecurity component of this,
because, again, we make things more flexible. We do not want to
make them more vulnerable.
H.R. 4447 that members have mentioned, this appears to be
expanding a lot of what is in H.R. 2909 to the co-ops, and that
it is also modeled after the SUNDA Project. This was a project
that led to co-ops' solar capacity increasing tenfold in five
years, and it has been a tremendous market success for solar
technologies really without any federal mandates. So, that bill
is for your consideration.
H.R. 1744, this would add the energy storage systems to the
list of strategies that states should consider. This is your
classic 111(d). So, this is the national standards that would
require the states to look at this.
A couple of things on PURPA 111(d) for your consideration.
One, consider that the world has changed. Back in the day when
PURPA was passed, where you may have had only one or two
companies within a state, remember today, because of now our
integrated electricity markets, you may have multiple
stakeholders in different states. And so, when you put this on
the states, there may be companies that have to deal with 11 or
20 or more states. So, each state will have to do it. So, just
keep that in mind when you put this in PURPA 111(d).
It is a good thing, also, to consider to give credit to
states that might have already considered this, so you wouldn't
have to have them redo it again. And we found that it was
important to consider not only prior actions but a timetable.
So, you want to incent them to take timely action, but you may
consider sunsetting it just to make sure that you send the
right message to the states.
On H.R. 3962, this is a very comprehensive bill and quite
creative in many respects. You all have heard what the bill
does. Because I know I am already short on time, I just want to
comment on a couple of things.
One, the bill----
Mr. Rush. Well, continue.
Mr. Menezes. Do you mind if I just roll this quickly up?
Mr. Rush. Yes, please. Please continue.
Mr. Menezes. I know you all are tight on time as well.
Mr. Rush. Yes. Please continue.
Mr. Menezes. Congressman McNerney made the point about
being voluntary. And indeed, certainly, it appears that way.
There are some provisions in there that talk about how DOE
shall update the milestones and shall provide technical
assistance. So, the art will be in the draft, and we want to
make sure that the Department can work in a way to make sure
that the goals of the bill are accomplished, should it become
law.
We don't do everything that is in the bill there. We are
not necessarily codifying things there. But, on some of the
creative things, for example, on the rebate programs, there is
a rebate program for motors; there is a rebate program for
transformers. We don't do that now. So, there are some new
things in that comprehensive bill.
It is significantly broad that we are continuing to look at
that bill. But I will say, from personal experience, that is
the kind of bill that would fit in well with a comprehensive
view as you are looking at these issues and if you begin to
work with the other body toward a comprehensive solution to
some of these problems.
Finally, H.R. 5650, the Federal Energy and Water Management
Performance Act, I will just say our comment here is that it
does codify the FEMP program. It does create a FEMP Director
that would make it a career SES. That is a little bit
different. Right now, the Secretary has that authority. It is
delegated to the FEMP Director.
In addition to the current law that it codifies, it does
add water performance requirements for the federal agencies. It
creates a new metric and a new baseline, and it changes the
baseline from an earlier date to 2018. It also provides
different metrics to the current baseline. So, there will have
to be a transition if you want to see a comparison of what we
have been doing since 2003.
With that, I think I have hit on all of my points. I know I
have exceeded my time. Thank you for the opportunity to be here
today, and I am ready to answer any questions that you might
have for me.
[The prepared statement of Mr. Menezes follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. The gentleman yields back the balance of his
time. We will conclude the opening statement, and we will move
now to member questions. Each member will have 5 minutes to ask
questions of our witnesses, and I will begin by recognizing
myself for 5 minutes.
Before, I start my questioning, in my opening statement I
mentioned H.R. 1714, but I want to correct that. It is H.R.
1744, Mr. Takano's bill, the S.T.O.R.A.G.E. Act. So, I want to
clarify the record.
Under Secretary Menezes, I want to again thank you for
appearing before the subcommittee today, and though I
appreciate your attendance, I remain dissatisfied with DOE's
inaction on efficiency standards under the Trump
administration. It is my intent to use the balance of my time
to address these longstanding concerns.
The President's most recent budget address has this quote,
and I quote, ``Burdensome energy efficiency regulations,'' end
of quote, to create, a new quote, ``a more effective
implementation of the energy efficiency standards program.''
Secretary Menezes, how are delaying efficiency standards and
proposed funding cuts to the energy efficiency program
contributing to, again, ``a more effective implementation of
the energy standards program?''
Mr. Menezes. Thank you for the question, Chairman Rush.
As all of you have heard me testify before, we have a full
endorsement of catching up getting out these appliance
standards. From administration to administration, it has always
been a category of failure to meet the statutory deadlines
category on appliance standards. We inherited it, and we are
trying to reduce it. I pledge that we will strive in every way
to meet the statutory deadlines. So, we are committed to
meeting our legal obligations, including all the deadlines.
I am happy to report that, just since last year, we have
issued 26 notices relating to energy conservation standards and
14 notices relating to test procedures, including seven final
rules. I will say that, under our leadership, we have heard
from you, and we have been doing our best to get these
appliance standards out. It is a complicated process. It is not
a simple thing. But we are doing our best, and we are proud as
to what we have accomplished certainly since I have been over
there.
Mr. Rush. I am really concerned because we need, and the
Department does not have the discretion to choose when or if it
must follow congressionally-mandated laws or obligations. Do
you agree with that?
Mr. Menezes. No, sir, I mean, we have full intention of
following all of our legal obligations. In fact, as I just
mentioned, it is a high priority of ours, and we work with the
office regularly to try to meet these demands. It is not a
simple thing to simply go there. There is testing, and there is
evaluation, and there is quite a stakeholder process involved.
But you can compare our record against any prior administration
on following the law and trying to get these appliance
standards out.
We have also taken the initiative to issue some new
categories for appliance standards. Because one thing, as you
know, it is important to meet consumer satisfaction and
performance. We buy appliances so that they perform the job
that we expect them to do. Energy efficiency for the sake of
energy efficiency sometimes erodes performance standards. So,
it is important that, as we get these appliance standards out,
that it actually does the job that the customers buy the
appliance for. So, for us, it is important to make sure that we
get customer choice, consumer satisfaction, and performance
standards while reducing energy efficiency--I mean increasing
energy efficiency.
Mr. Rush. The Chair yields back. Now I recognize the
ranking member, Mr. Upton, for 5 minutes.
Mr. Upton. Well, thank you, Mr. Chairman.
And I just want to say we appreciate the work that you have
done on the new standards because it ought to be a focus of the
Department. And we have had hearings in past years, and I think
all of us on both sides of aisle have been somewhat frustrated,
and appreciate the work in that regard.
I would like to focus my attention really this morning on
H.R. 3962, the Energy Savings and Industrial Competitiveness
Act. It is supported by a number of businesses and product
manufacturers, but there are provisions--there is controversy;
I guess you would say--as it relates to the building codes that
are opposed by some groups, such as the home builders, who are
going to be on the next panel after you depart.
So, two things. What is DOE doing in the building code
space today? And how would this bill, legislation, change that
status quo?
And Second, as it relates to this, there always seems to be
a concern as relates to the payback period for the new code
requirements and the increased costs that consumers are going
to be forced to pay. Of course, from the home builders'
perspective, it is always the homebuyer is going to spend--they
know what their ``X'' amount is that they are going to spend on
the house. And so, the home builder is trying to get as many
things as they can within that ``X'' amount. But what is DOE
doing to ensure that the model building codes are both energy-
efficient as well as cost-effective as it relates to these
provisions? It is something that continues to haunt us as we
try to get a bill through the committee and through the
legislative process.
Mr. Menezes. Right. Well, thank you, Ranking Member Upton,
for the question. As I had mentioned, this is quite a
comprehensive bill in many areas.
Regarding the manufacturing, we support research
technologies on federal buildings. We set the standards for
green building certification, system requirements for new
federal buildings, the major renovations, and revising
performance standards for construction of new federal buildings
and major renovations. We had mentioned our FEMP office.
We establish standards for the federal green buildings, the
third-party certification that we have going on now. We strive
right now to set and certify the energy and water performance
requirements for federal buildings. This is also with GSA that
we work with. And we maintain a catalog of the products that
have been designed, and we work with GSA to make sure that
these standards are met and that federal buildings are
contained in that.
So, we have a fairly comprehensive approach today on this.
Indeed, it is important because a significant amount of our
energy that is being used today is in buildings. So, it is
important that we get goals out there that industry can hit and
meet.
There are some technical probably details in that bill that
I would probably need to get with staff as we review how the
language is written regarding our role in setting these
standards and increasing the standards, and getting them out.
So, I am happy to work with your staff in looking at----
Mr. Upton. If you can do that, I mean, I am not quite sure
what the timeframe will be. This is a legislative hearing, and
I presume that at some point in the near future, we will have a
markup in the subcommittee and move forward. But if you can
help us as we try to reach a consensus, the goal being that
most of us here will be in support of the bill--it is sort of
hard to be opposed to energy efficiencies in general
buildings--so, if you can help us to really make sure that the
bill is the best that it can be, and to bring us together, that
would be useful. And I would encourage the Department to do
that.
With that, Mr. Chairman, I yield back. Thank you.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Peters for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman.
Thank you for being here.
In your testimony, you mentioned using ARPA-E as a tool for
developing new technologies of storage. I am sure you are aware
that the administration budget proposal zeroes that out. Do you
have a comment on that? I assume you think that is a bad idea.
Mr. Menezes. Well, we are committed to following
congressional appropriations and direction. Our proposal
focuses on ways that we think we can really target basic R&D.
That is an important distinction to keep in mind. ARPA-E tends
to focus on more of the applied, so our applications of
technologies that have been developed.
We look at focusing primarily on breakthrough technologies.
We talked about storage.
Mr. Peters. What would be the vehicle for that outside of
ARPA-E?
Mr. Menezes. Well, the way the Department currently is
working. So, we issue funding opportunity announcements now.
Much like the bill that we talked about on storage, it would be
that Congress would appropriate monies. It might have some
directive language in it. But we would put together a cross-
cutting plan to issue a funding opportunity where applicants
can come in--industry, universities, not-for-profits--they come
in; there is a cost-share requirement. But we push this out.
And we have, under this administration at the Department,
we have actually established an Office of Technology Transfer
for the first time. So, it is important to try to kind of cross
that valley of death, so to speak, so that when you come up
with a good idea, and it works, maybe in the laboratory or
maybe a pilot project, then you can push it out into the
commercial area.
So, ARPA-E has a separate budget from the Department
generally, is an interesting creation of it. So, it has its
separate budget. So, just keep that in mind when you look at
the budget proposal.
Mr. Peters. And the vehicle for what you just talked about
was? Was it Office of Technology Transfer?
Mr. Menezes. That is one of the offices there, but it
would----
Mr. Peters. How much funding does that get currently?
Mr. Menezes. I am not sure of the funding. But it serves
more of a function. It is a function to work with our program
offices that issue the funding opportunities. So that when
there are technologies that are pushed out----
Mr. Peters. Right.
Mr. Menezes [continue]. At the Department, it goes
through--what that office does is it pushes it out into the
commercial sector.
Mr. Peters. So, there is a cost associated with that, too?
There is an appropriation associated with that, is there not?
Mr. Menezes. I honestly would have to check. I am not sure
if it is in the administration budget of the Department or if
it is a special line item. I just don't know the answer to it.
Mr. Peters. We would be interested in knowing--and maybe
you could answer this for the record--what the funding
requirements for that would be to achieve the goals you talked
about. Because you referenced ARPA-E in your initial statement.
So, that is why I asked about it.
Mr. Menezes. I did.
Mr. Peters. OK.
You expressed some interest in amending or a different
approach to H.R. 1744, the S.T.O.R.A.G.E. Act, with respect to
PURPA. Does the administration have a view on what we should do
with PURPA? I will sort of give you the open-ended opportunity
to address it without referencing----
Mr. Menezes. The administration?
Mr. Peters. Yes.
Mr. Menezes. I am not aware of a formal policy on PURPA of
the administration, but I can check. I will say that FERC,
which is an agency within DOE, has issued some modernization
proposals on PURPA, on issues within its jurisdiction.
Mr. Peters. Do you have an opinion on those, whether those
are good improvements?
Mr. Menezes. Well I believe, I think like most Members in
the congressional branch, that it is always a good idea to
modernize acts that might have been passed at a time----
Mr. Peters. Sure.
Mr. Menezes. I mean, PURPA was passed in 1978. I think it
would be reasonable, whether you are an agency or whether you
are a Member of Congress, to consider updating PURPA.
Today's PURPA provision, though, it is 111(d). It is
separate from the mandatory purchase obligations----
Mr. Peters. Right.
Mr. Menezes [continue]. That FERC is looking at.
Mr. Peters. Just while we have you, do you have any
independent thoughts, while you are here, about what we should
do with PURPA in general?
Mr. Menezes. I think it is important to modernize it. I
think you can look at it.
Mr. Peters. Sure. Of course, we would all agree on
modernizing it.
Mr. Menezes. Yes.
Mr. Peters. But do you have specific steps you would like
to see within this term of ``modernization''?
Mr. Menezes. Well, and these are my opinions only, based on
probably my prior role----
Mr. Peters. That's good.
Mr. Menezes [continue]. Which I was actually looking in the
opposite direction at the witness.
And that would be, I think that it is fair that you look at
avoided costs definition on states, because today our
electricity markets have changed considerably. Back in 1978, we
had vertically-integrated utilities. We had vertical markets.
We had essentially natural monopolies in place. And all of that
has changed.
We also have quite a few other incentives for the building
of renewables. I do think you ought to look at definitions--and
we did this in 2005; we tried to modernize it as well. Back
then, we looked at the cogen units, and I think it is fair to
look at the small power production facilities as well.
Mr. Peters. Thanks. My time has expired.
Mr. Menezes. OK.
Mr. Peters. I appreciate it. Thank you.
Mr. Menezes. And maybe you might want to look at 111(d) as
well.
Mr. Rush. The gentleman's time has expired. The Chair now
recognizes Mr. Latta for 5 minutes.
Mr. Latta. Well, thank you again, Mr. Chairman.
And, Mr. Under Secretary, thanks very much for being with
us today. I really appreciate your testimony.
Given your position and experience, I know that you have
worked with the private sector to advance new technologies and
solutions that would improve energy efficiency. Would you offer
your perspective on the Energy Star Program and how important
it has been to driving innovation in energy efficiency?
Mr. Menezes. Well, thank you for that question.
You can go back to the early days of the efficiency program
and other efforts through 2005 on the Energy Star Program. This
was a voluntary program where the Department would establish
standards and, together with EPA, would essentially market
appliances that would meet certain energy-efficient standards.
I think that, generally, it has worked well with respect to the
marketing of it.
Regarding expertise within each Department, I think we
might want to look at that and see if, in fact, we can make any
improvements there.
But, by all measures, the Energy Star Program is a good
indication to consumers right away that it meets certain
standards and that they can rest assured, knowing that the
appliance that they purchase will have gone through a fairly
rigorous process.
Mr. Latta. Since there have been efforts to establish
building codes to reduce emissions, could you talk about the
instances of buildings utilizing Energy-Star-certified
technologies for emissions reduction?
Mr. Menezes. Well, I think what you see is, on Energy Star
on buildings, it is typically buildings and the builders of
buildings like to include these Energy Star appliances in all
buildings. I know I just recently had a chance to move closer
to the Department, and it was a brand-new building. And
throughout the entire building was all Energy Star products. In
fact, it was a selling point.
Together with the building codes that they meet today--it
was not a LEED Building. You know, there are times when we do
put the leading environmental and engineering design on there.
That is another way that buildings can inform the public that
they have made investments to meet performance standards and
energy efficiency standards in the building. And the Department
supports all these things.
But I think it is working well. I think it is good to
inform the consumers and anything that I think we can do to
build on it would be positive. Again, I will say that I think
it is fair to look at the relationship between DOE and EPA as
we go forward.
Mr. Latta. All right. Thank you.
On the subject of storage, I have heard from electric
utilities and rural co-ops--and just by coincidence, I have the
largest number of rural co-ops in the State of Ohio in my
district about the need for additional research and development
into storage technologies. At the same time, since my district
is home to 60,000 manufacturing jobs, I understand the need for
reliable baseload capacity to meet these industrial needs.
Would you discuss what DOE is doing to foster storage
technologies while also keeping in mind the great demand for
baseload capacity?
Mr. Menezes. No, I appreciate the question. And in my
opening remarks, I did go into great detail about what we are
doing in the energy storage. It is important that it is a
comprehensive approach, and we need to keep in mind that it
includes just more than batteries. And we need to keep in mind
that a stationary storage battery would be different from
transportation batteries. So now, while we have made great
advances in transportation batteries, when we look at grid-
scale storage, it might be different technologies.
We also need to look at the critical minerals and materials
that go into these batteries today. Today, we are overly
dependent on China and other countries for some of the critical
minerals and materials that go into these batteries. So, our
effort is to try to look at new materials that can go into
these batteries.
Storage, as I had mentioned, is, indeed, truly, quote,
``the holy grail,'' if you will, of really improving and
integrating our grid of tomorrow. And that is going to be very
flexible. It is going to include a lot of renewables. We are
going to be driving down emissions. Indeed, EIA released its
outlook the other day. For 2020, all new electricity
generation, with the exception of the Vogtle Plant in Georgia,
which is a nuclear facility using the AP1000, all new
generation in the United States will be renewables and natural
gas, both for 2020 and 2021. In 2020, 75 percent of the new
generation will be renewables; 25 will be natural gas. And in
2021, it is expected to be about 50/50. So, to accommodate
that, battery storage will be important because it helps to be
able to bring in these new sources of energy.
Mr. Latta. Well, thank you very much, Mr. Chairman. My time
has expired, and I yield back.
Mr. Rush. The gentleman yields back. Mr. Doyle is
recognized for 5 minutes.
Mr. Doyle. Thank you, Chairman Rush and Ranking Member
Upton, for holding this hearing. The bills we are discussing
today are important because reducing our energy consumption and
building out new energy systems will be critical to reaching
our goal of becoming a net-zero carbon emitter.
Energy efficiency is a really effective tool because it not
only reduces the need for energy infrastructure, reduces
emissions, and provides thousands of jobs, but it lowers energy
bills, leaving consumers with more money in their pockets. In
fact, according to the American Council for an Energy-Efficient
Economy, by expanding energy efficiency programs through
efforts such as improving industrial efficiency, retrofitting
buildings, and improving appliance standards, energy efficiency
has the potential to cut U.S. energy use and greenhouse gas
emissions by 50 percent while delivering energy savings worth
more than $700 billion by 2050.
Energy storage is also a key component to a cleaner energy
future because it is a multidimensional resource, that its
applications are almost limitless. Importantly, it has the
ability to truly unlock the full potential of renewables by
smoothing out the intermittency of the energy they produce. We
have already seen that by making renewables function more like
baseload power, renewables plus storage are already able to
replace some fossil fuel power plants.
But storage is not just limited to helping renewables. It
is also a key component of making the grid more resilient. It
can be used in a microgrid to ensure that vital services have
power during a disaster, and it can help delay or negate costly
upgrades of transmission infrastructure by storing locally-
produced energy near customers.
It is clear to me that we must expand the use of energy
storage and energy efficiency to reach our climate goals and to
continue reducing consumer bills while growing a clean energy
workforce.
Mr. Secretary, in your written testimony, you said that the
Department is committed to creating and sustaining American
global leadership in energy storage through the Energy Storage
Grand Challenge. What is the Grand Challenge currently doing to
advance energy storage research and development?
Mr. Menezes. Well, thank you, Congressman Doyle, for the
question.
And as I had outlined in my opening remarks, it includes
many of the things that you mentioned in your statement. It is
a comprehensive approach that will look at all types of
different storage. It is not limited to one type or the other.
It is hybrid system. It is to make sure that the systems can
discharge electricity on demand over time--over time. It is
just not simply a battery.
Mr. Doyle. I understand what the goals of the program are,
but what are you currently doing in this program, this Grand
Challenge? What is currently going on that is advancing
research and development?
Mr. Menezes. Right. So, it is cross-cutting. We use a lot
of different offices within the Department. We include EERE, as
you had mentioned, Office of Electricity. That covers the grid.
It includes the Offices of Science, batteries, pumped-storage,
controllable loads, Distributed Energy Resource Management, and
microgrids.
Mr. Doyle. But are there any projects or programs? I mean,
it is a Grand Challenge to advance the R&D. Is there anything
going on right now?
Mr. Menezes. Right. Yes. So, we have the Advanced Storage
Initiative. We have a program that is in Colorado right now
that has an integrated grid. It is over at NREL, which is our
National Renewable Energy Laboratory. This is an integrated
grid in real time. So, it has the wires; it has component parts
in real operation.
We also have announced at PNNL--now this is in Washington
at our lab. We have the grid storage launchpad. This, too, will
involve setting up the technologies that will serve as storage
in real time.
Mr. Doyle. OK.
Mr. Menezes. We are building a facility out there.
Mr. Doyle. I want to ask you a couple more questions, and I
see my time is going down.
One of the challenges we have with energy storage is that
most of the commercial batteries can't provide energy for more
than four hours. I am curious, what is the Department doing to
advance research on longer-term storage solutions?
Mr. Menezes. Yes, that is a key factor. Our Program Office
of Fossil Energy, in particular, and elsewhere, we are driving
to expand the time that it takes to store, fast-charge, the
length of time that you can keep a charge, the dispatchability
over time, the number of times that you can call on it to
discharge. It has to act like a baseload.
Mr. Doyle. Yes.
Mr. Menezes. All right? So, you have to have it when you
need it, but it has to be able to discharge it. And it has to
do it repetitively on demand. These are enormous challenges.
Mr. Doyle. I see my time has expired. Thank you.
Mr. Menezes. Yes. But the key is that there is a difference
between these stationary storage technologies and the
transportation storage technologies. So, if you have a battery
in a car, it doesn't necessarily mean that you can have a
battery that can withstand those rigors that we need to
address.
Mr. Doyle. Yes. Thank you.
Mr. Rush. Thank you. The Chair now recognizes Mrs. McMorris
Rodgers for 5 minutes.
Mrs. Rodgers. Thank you, Mr. Chairman.
Storage and efficiency are two crucial components to any
sustainable energy strategy. Eastern Washington is on the
cutting edge in innovating to help America lead on both fronts.
For instance, hydropower, pumped-storage, is a great solution
for increasing grid flexibility with the ability to store and
produce electricity when demand is high.
On energy efficiency, Avista in Spokane, Washington, is
currently working with a group of companies on a first-of-its-
kind energy-sharing ecodistrict. It is about five blocks in
Spokane and creating one of the most sustainable building
complexes in the world. This ecodistrict will be centered on
zero emission, zero carbon, catalyst building, and a central
clean energy plant that will enable the district to operate in
its own self-contained green grid using thousands of state-of-
the-art IOT sensor devices, solar panels, thermal and battery
storage, and sustainable building materials like cross-
laminated timber.
These types of innovative projects are going to help
America lead the world in a clean energy future. And I am proud
that much of this innovation is happening in eastern
Washington.
I am interested in learning today how the federal
government can complement what the private sector is already
doing. So, the question is, the Pacific Northwest National Lab,
PNNL, just mentioned, coordinates much of the energy storage
work that DOE performs on batteries, specifically large-scale
batteries for the grid and relatively small batteries for
electric vehicles. As they say, better batteries drive better
technology. Can you talk about the work being done at PNNL on
materials, manufacturing, and the design of batteries?
Mr. Menezes. Well, thank you for the question.
And indeed, after much deliberation, we chose to site the
grid storage launchpad at PNNL, in part because of many of its
expertises. Our job is to help educate folks as to what goes on
at these labs because a lot of our labs were created for
reasons that we couldn't go into initially, but now it is time
to educate the population.
PNNL is a great example. It is a chemistry lab and it is a
cybersecurity lab, among other of its many things, its
expertise. And the importance of chemistry in these batteries
is very important, grid-scale. So, we chose PNNL. We are making
investments there.
What we hope to do is not only to find new chemistries and
new materials necessary to be the world leader on this, but we
also want to make sure that the complexities in integrating
into the grid are also met. And so, that is what we hope to do
there.
We have to factor in cybersecurity. It was another great
location there because, as you know, PNNL has been a leader in
developing some of the diagnostics that, frankly, our
intelligence communities are using to help make sure that our
energy systems are secure and safe.
Combined with the research that we are doing there, we
will, then, develop the public-private partnerships because we
do think that that is the best way to be able to drive these
technologies out, so that utilities, companies, and communities
can take what we are developing there and help develop these
kinds of microgrids, the integrated microgrids, et cetera, that
you describe.
We also have several of those around the country where DOE
has helped support, and tried to bring communities together and
all the stakeholders together to describe what you just
described, the many different ways to go about it to be able to
get an integrated, modern grid using right now the best
technologies that we have.
But we need to do better, and that is what the Department--
and the Department should be doing that, right? I mean, private
industry is going to be doing a lot. You can see announcements
every day that customers want, many of them want 100 percent
renewable. Many utilities are looking at ways to bring in
battery storage and storage on their systems.
In the Pacific Northwest, we have had energy storage for
years; we still do.
Mrs. Rodgers. Yes.
Mr. Menezes. It is great. It is storage, right?
Mrs. Rodgers. Natural, yes.
Mr. Menezes. It works well, and complements renewables. It
is great. Not all places in America have that.
Mrs. Rodgers. There is lots of potentials, though.
Mr. Menezes. There is plenty of potentials.
Mrs. Rodgers. The largest natural battery is behind a lot
of dams across the country.
I will have one last question. PNNL estimates the energy
storage market could be more than 3 billion by 2022. What is
DOE doing to help America stay on the forefront and customers
reap the benefits?
Mr. Menezes. Right. So, the thing here, when you look at
what the Department can do with our labs, breakthrough
technologies really do not occur in the labs, as you would have
expected in the old days where it is experiment after
experiment after experiment, and you learn through the
scientific method then. Today, it is modeling. It is modeling
and remodeling, and it is a development of new materials.
I mean, just think about that for a minute. These are
materials that do not exist, that through the modeling, you are
going to create. And when you layer over the artificial
intelligence, so that we can look at all the data that we are
getting, we are going to be able to drive to get to those new
materials that are going to be necessary. So that they can
withstand the demands that we are going to put on them to have
the modern grid of the future.
Mrs. Rodgers. Thank you. I yield back.
Mr. Rush. The gentle lady yields back. The Chair now
recognizes the chairman of the full committee, Mr. Pallone, for
5 minutes.
Mr. Pallone. Thank you. Thank you, Chairman Rush.
Mr. Secretary, as far as I can see, DOE hasn't completed a
single new or revised appliance standard developed during the
Trump administration. Rather, it has missed one legal deadline
after another for updating standards. Chairman Rush touched on
this issue, but I wanted to get into a bit more detail.
And it is not the first time I have asked you about these
missed statutory deadlines. In January 2018, you testified
before this committee and gave, I quote, ``full-throated
support to meeting statutory deadlines''. You said, and I
quote, ``The Department is committed to following the law, to
having these changes in place according to the deadlines that
are set in statute.'' You specifically gave the committee
assurances that DOE wouldn't slow-walk or stall efficiency
rules.
Now, from your time on this committee, I think you are a
person who doesn't give his word lightly, and I think you meant
what you said. But two years have passed since those statements
and the Department has only fallen further behind and the
number of missed deadlines has only increased. In January 2018,
DOE had missed eight statutory deadlines for new standards. The
total missed deadline count now stands at 21. And the
Department has yet to complete a single updated standard.
So, let me ask you, Mr. Secretary, you just told Chairman
Rush that DOE has published seven final rules in the last year.
How many of these seven final rules were published as a result
of a court order only after DOE held the rules for three years
of the seven?
Mr. Menezes. Well, thank you for the question.
I am not sure I can answer that question precisely. So,
allow me to get with my Department and find out.
Mr. Pallone. All right. I mean, please get back to us. My
understanding is it is about four.
Mr. Menezes. Well, that is over half.
Mr. Pallone. Well, four that were only by court order, is
what I am pointing out. But, again, you have to get back to me.
I don't want to answer the question. I want you to answer it.
How many of these seven final rules are related to light
bulbs? Can you answer that?
Mr. Menezes. Again, I will have to get back.
Mr. Pallone. All right.
Mr. Menezes. You are talking about a final rule. I will
have to get back to you.
Mr. Pallone. OK.
Has the DOE issued any final rules fully developed under
this administration that advance efficiency? In other words,
that were actually developed by the Trump administration, have
there been any that were fully developed under the Trump
administration that advanced efficiency, yes or no?
Mr. Menezes. Well, again, these are rules--you know, you
inherit a process. Each administration doesn't come in and
start from scratch.
Mr. Pallone. Well, I understand, but I think the answer you
don't want to give me, but I think it is no because----
Mr. Menezes. No, but the answer I want to give you is that
in the last year--you are quoting 2018 numbers. I respect
that,but----
Mr. Pallone. But, Mr. Secretary, look----
Mr. Menezes. But my point is that over the last year, we
have been making tremendous progress.
Mr. Pallone. Well, I don't agree with that because you
can't answer--you say seven final rules, but it seems like----
Mr. Menezes. Well, you are asking me very specific
questions, and I am happy to----
Mr. Pallone. I mean, you can't tell me whether or not you
developed--look; my point is, it is very nice to say you have
seven final rules. But if you were forced into them by court
order, OK, or if they were actually done to try to make things
less efficient, that doesn't count, in my opinion. They have to
be final rules that were done by this administration because
they were actually trying to advance efficiency, and it seems
to me there aren't any in that category----
Mr. Menezes. Let me respond.
Mr. Pallone [continue]. Unless you can give me one.
Mr. Menezes. Let me respond to that. One thing that we have
proposed is the Process Rule, because when you look at the
efficiency standards----
Mr. Pallone. I understand. Look, it is three years. I only
have a minute----
Mr. Menezes. But just allow me to answer it. Just allow
me----
Mr. Pallone. I just wanted to know if there was anything
that you developed that actually advanced efficiency that you
did on your own without the court telling you that you had to
do it. And you can't answer it. So, I think the answer is no,
or you certainly are hinting that there is nothing like that. I
just want to see action from the Department to update and
finalize efficiency standards that will actually save consumers
money and that you are actually doing as opposed to just, you
know, responding to some court order. That is all I am asking
for, and not things that are making things worse and not
advancing efficiency, but are making things less efficient.
That is where it seems to be going.
In fact, many times the Department or the President almost
imply that they don't want to do things that advance
efficiency; they want to make things less efficient. And to be
perfectly honest, whether it is Democrats or Republicans, we
are all in favor of energy efficiency. This isn't a partisan
issue. But unless you can point out some case where you are
actually doing this because you want to, I have doubts about
it. Go ahead.
Mr. Menezes. Well, just give me a couple of seconds to
respond.
Mr. Pallone. You have got, sure, 20 seconds. Sure.
Mr. Menezes. Because I stand by the fact that we are
absolutely committed to try to meet these statutory deadlines.
Now, interestingly, when you get there, the first report you
get is a category of status on appliance standards, and there
is a category that says, ``Failure to meet statutory
deadlines.'' We inherited that category. That is a category. In
fact, I asked my general counsel, ``Is this a new category?''
He says, ``No, no, no, this has been in existence for some
time.''
Mr. Pallone. OK. Mr. Chairman----
Mr. Menezes. Just please allow me to finish. One thing that
we did is the Process Rule. So, we have all these appliance
standards and they are all statutory. You know, they are not
prioritized by statute, right? They are all treated equally.
The Chairman. Yes.
Mr. Menezes. But when you look at how much time the
Department has to implement all these appliance standards, what
you find----
The Chairman. But these are just excuses, Mr. Chairman.
Mr. Menezes. Just allow me to finish, please.
TheChairman. But you are not answering the question.
Mr. Menezes. But just let me tell you what we are doing.
TheChairman. The question is, are you actually doing
anything to promote efficiency? And you are giving me all
bureaucratic answers about the process. But whatever, it is
hopeless, Mr. Chairman.
Mr. Menezes. So, what we have discovered is that we are
spending 40 percent of our time on efficiency standards that
will essentially save only four percent energy off of a
baseline. Forty percent of our time is chasing four percent on
energy savings. OK? Sixty percent of our time is on energy
efficiency standards that result in 96 percent efficiency
gains. So, all we are saying is let us prioritize those and let
us go forward on that.
Mr. Rush. The gentleman yields back. The Chair recognizes
Mr. Flores for 5 minutes.
Mr. Flores. Thank you, Mr. Chairman.
And Under Secretary Menezes, thank you for being here
today.
You were talking in the last set of questions/responses
about new materials and new technologies for grid-scale
storage. One of the things I am very concerned about is the
environmental impact and the impact of certain societies on
lithium-ion batteries. Why don't you talk a little bit about
the greatest challenges to advancing grid-scale storage that is
both environmentally-friendly and doesn't cause slave labor or
human trafficking issues in other countries?
Mr. Menezes. Thank you for the question.
Two important points on that. One, on the recycling of
lithium, for example, lithium batteries. So, today, we
recycle--many of you remember the lead-acid batteries. I grew
up with lead-acid batteries. Recycling was an issue. Today, we
recycle almost 99, almost 100 percent of lead-acid batteries.
We recycle much, much less, maybe five to ten percent of
lithium batteries today.
So, we put in place a battery recycling beyond lithium. We
want to recycle that. We want to reuse the lithium. We want to
reclaim the lithium. And so, that is just good housekeeping.
Mr. Flores. But beyond lithium--I mean lithium still has
environmental challenges that are huge so, where do we go
beyond lithium?
Mr. Menezes. Right.
Mr. Flores. What is it that is used to get to the next
battery storage solution?
Mr. Menezes. Well, that is our breakthrough technology
efforts. So, we have the Beyond Lithium Program, and that is
the research and development that I have been talking about
before. That looks at new chemicals, new technologies, solid
state, any number of different ways. And many of our labs are
investigating these new materials.
I want to say that, with respect to lithium, this goes to
the earlier point, right? While we have lithium available, we
have to find ways that we can process it here in the United
States so that we can lessen our reliance on other countries
that provide us the critical mineral.
Mr. Flores. Yes.
Mr. Menezes. So, that is a hallmark of what we do. In fact,
we have an initiative at the Department on critical minerals.
Mr. Flores. OK. Let's move to a different subject. As we
know, our electricity grid has been probed by bad actors
overseas and maybe a few domestically as well. And that is our
current legacy system, transmission, generation, distribution,
and so forth. If we incorporate a new technology, and that is
grid-scale storage, it seems to me like we ought to be building
cybersecurity mitigation and defense into that from the outset.
How is the DOE proposing to do that?
Mr. Menezes. Well, what we did when we got over there,
Secretary Perry and Under Secretary Brouillette, or Deputy
Secretary Brouillette, we set up an Office of Cybersecurity,
Energy Security, and Emergency Response. It goes by CESER. We
have put the resources in to address the threats that you
mentioned.
Mr. Flores. OK. Moving to the next step, one of the bills
we are looking at is the S.T.O.R.A.G.E. Act. Is there any
additional language that ought to be included to address
cybersecurity?
Mr. Menezes. Right. We talked about that earlier. Indeed, I
think that it would be very helpful if we could put some
provisions in there on cybersecurity for several reasons. One,
it shows the congressional intent to make sure that we put
resources there. It sends the message to our appropriators. And
so, it certainly helps, because we have limited resources
there.
Mr. Flores. In that regard, one of the things we have
noticed over in the telecommunications space is that we have
bad actors like Huawei that have known security vulnerabilities
for anybody that uses Huawei equipment. There may be challenges
from Chinese supply chains or the impact of Chinese supply
chains on components for our electrical grid, including
storage. What should we be doing about that?
Mr. Menezes. Excellent question. And we are doing what we
can. In addition to creating the CESER office, what we are
working on is, certainly, working with our intel communities--
and I can't get into it in a public setting--but we are
identifying these actors. We are identifying the potential
threats.
We are also working with the supply chain providers to make
sure that those that make the new devices that we are putting
on our grid to make them more flexible, and more modern--you
know, the sensors, the phasers, the industrial operating
systems that we need to make it more flexible and to modernize
it--we need to make sure that they are protected as well.
Mr. Flores. OK.
Mr. Menezes. So, we are working with our labs. We are
working with industry. We are working with the intel
communities to ensure that we can identify the makers of these
systems that we use, and we are making sure that they are as
secure as they can be in the new cyber world.
Mr. Flores. OK. Thank you. I yield back the balance of my
time.
Mr. Rush. The gentleman yields back. Mr. McNerney is
recognized for 5 minutes.
Mr. McNerney. I want to thank the chairman.
And I thank you, Mr. Under Secretary, for your service and
for your testimony this morning.
I am going to stray a little bit from the topic of energy
storage to the topic of storage of nuclear waste, if you don't
mind too much. I am the lead sponsor of H.R. 2699, the Nuclear
Waste Policy Amendment Act of 2019, along with my good friend
and colleague, Mr. Shimkus. This bipartisan bill came out of
committee on a voice vote highlighting the desire of our
members to break the logjam and address the pressing issue of
nuclear waste storage.
In a reversal from previous budgets proposed by the Trump
administration, the recently-released fiscal year 2021 request
omits any money for the licensing of the stalled Yucca Mountain
Nuclear Waste Repository. Instead, the President has been
quoted as saying that his administration will be, quote,
``exploring innovative approaches for long-term storage of
nuclear waste''. Can you, Mr. Under Secretary, elaborate on
what types of innovative approaches are under consideration?
Mr. Menezes. Thank you for the question.
Indeed, the President recognized the importance of us doing
something with the nuclear waste that we have stored across our
country at the nuclear facilities. He also recognizes that the
law of the land is, indeed, permanent repository at Yucca
Mountain. He is, as everybody that cares about this issue,
frustrated in the fact that, still, we have not been able to
get the resources or the authorization that we need to be able
to license Yucca.
So, what he has called on is going to be an interagency
process with states, with the stakeholders, so that we can get
together and we can try to figure out a way forward on this. It
has been, as you expressed, the urgency to address this, it is
costing us $2 million a day as we continue to delay the
permanent storage, and we are trying to find a path forward to
build on some of the ideas. But that is the goal here.
Mr. McNerney. Well, how does the administration envision
getting the approval of the states that would be involved in
the storage?
Mr. Menezes. It will be a process and that is important.
What we are trying to do is to put together a process that will
give us a path to permanent storage at Yucca. So, it will be a
difficult way to go. But, rather than just simply pointing a
finger at one another or at Congress or at other agencies of
not going, we are going to get everybody together----
Mr. McNerney. I see your frustration, but I did ask what
innovative approaches are being considered, and I haven't heard
anything about that yet.
Mr. Menezes. Well, it is going to be some of the things
that you have in your bill. For example, I mean, it is interim,
potentially the interim storage, whether it is private, whether
it is public, the location, who might help pay for some of the
cost. It is going to be a comprehensive view of that, so that,
ultimately, we can find the ways to a permanent repository.
Unless Congress decides to change the law and name another
place for a permanent repository than Yucca--and Congress can
do that; that is the law--we have got to figure out how to get
there.
Mr. McNerney. Well, we are going to have to cooperate to
get something done; that is for sure. The current law only
allows you to do one thing with regard to addressing the issue
of nuclear waste, as you just mentioned. What do you think
legislation would be necessary to change that?
Mr. Menezes. Right. Well, again, the administration hasn't
taken a position, please. But the Shimkus bill, your bill on
interim storage, Congress needs to direct us to focus on
interim storage. Otherwise, right now, the permanent storage is
the repository at Yucca Mountain. So, Congress can actually
help.
Mr. McNerney. Thank you for giving us that power.
Mr. Menezes. You have the power. We hope that you use it to
help us.
Mr. McNerney. The Interim Storage Program would be subject
to the approval of the states under consideration or Indian
tribal land----
Mr. Menezes. In your----
Mr. McNerney [continue]. In our bill.
Mr. Menezes. Yes, right.
Mr. McNerney. So, considering the President stated that his
fiscal year 2021 budget requests support for, quote, ``the
implementation of a robust interim storage plan,'' do you
envision the DOE increasing research into storage programs, in
the different innovative programs?
Mr. Menezes. Well, I hope it complements the process that
we have established to go through. So, I would like to work
with you and your staff to make sure that our process
complements perhaps the goals in your bill. I think that is----
Mr. McNerney. I mean, there are different approaches that
are being recommended. So, we need research into deciding if
those are viable or not.
Mr. Menezes. We have definitely learned that lesson with
Yucca. You are going to need the science. You are going to need
the research. You are going to need everything it takes to
address this very difficult issue.
Mr. McNerney. All right. Thank you. Mr. Chairman, I yield
back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes the gentleman from Michigan, Mr. Walberg, for 5
minutes.
Mr. Walberg. Thank you, Mr. Chairman.
And thanks to the Under Secretary for being here.
H.R. 1744 calls for making changes to PURPA, requiring that
state electricity regulators must consider investments in
energy storage when doing resource planning. I have been a
leading advocate on this committee and in Congress for
modernizing PURPA. As you may know I am sure, late last year,
FERC announced plans to update regulations related to PURPA.
Many of those changes in their regulatory reform mirror changes
in PURPA that I have called for in my bill, H.R. 1502, the
PURPA Modernization Act. Things like stopping the gaming,
implementing innovation, and the like, those things are
important.
The changes, and these regulatory revisions are long
overdue--I think you identified that already--significantly
long overdue. PURPA worked. It moved us forward in looking at
the means by which we could have renewables and other energy
issues dealt with. These changes should provide state
regulatory authorities much-needed flexibility to ensure that
consumers continue to benefit from lower energy prices, and
specifically, results from shale innovation and the revolution
there.
Let me ask you, Mr. Secretary, does H.R. 1744, the
S.T.O.R.A.G.E. Act--and we have been talking about storage
here--but does it address any of the real reforms necessary to
reflect today's new technologies, abundance of competitively-
priced energy supplies, or last but not least, the needs of
consumers?
Mr. Menezes. Well, thank you very much for the question and
thank you very much for your leadership on the PURPA issues.
You know, it is sort of an arcane law in many respects. But
your leadership on this, and your willingness to get down and
look at some of the----
Mr. Walberg. Arcane is an understatement at this point.
[Laughter.]
Mr. Menezes. Yes. Regarding the bill before us, it clearly
amends 111(d). And so, in the PURPA world, we know that is
separate from a lot of what FERC is working on. FERC is sort of
working on the mandatory purchase obligations; 210(m) I think
it is. And you know, we tried to address to a lot of that in
2005 on the cogen units. Today's small power production
facilities may be a problem, but FERC is looking at that.
Today's bill is 111(d), and 111(d) really doesn't go to any
of the things that you had mentioned with respect to needing to
reform PURPA. This bill adds to--I think we are up to over 20
of the national standards where it looks at storage. And it
puts the burden on states to open up a docketed proceeding,
have stakeholders come in, get comments, and within each
state--and each state is different, right? Some states are in
PJM. Some states are in regulated markets. Some are in bid-
based markets. Each state is potentially unique in coming into
compliance on this 111(d).
As I had mentioned, this is not a small undertaking. States
do take the 111(d) seriously because it is a federal mandate to
do it. And if you have them do it within a certain time period,
this is going to take quite a bit of resource.
And as I had mentioned earlier, today, our energy has
gotten, our energy system has gotten to be that many
stakeholders operate in multiple states. And so, today's bill--
and again, the administration has not taken a position pro or
against, but just in my own personal experience, you have to
cover a lot of states, all dealing with this. And just keep in
mind that it just takes resources from the states as well as
the individuals.
However, it does set forth a national standard. And in the
absence of a mandate, a 111(d) PURPA, you know, does serve a
purpose. So, after the time period, we can get all the data
together and we can see. Some states will choose to go forward;
some states will not.
Mr. Walberg. Well, I think the benefit of today, though,
here in Congress, is that this has support from Members of both
sides of the aisle----
Mr. Menezes. Yes.
Mr. Walberg. [continue]. In doing something, in
modernizing, in dealing with storage, et cetera. Can a case be
made that it might be harder to fully measure the benefits of
storage technology if PURPA is not modernized from its current
outdated regulations?
Mr. Menezes. Well, I know PURPA needs to be updated. That
is an interesting question. Really, I guess I----
Mr. Walberg. I guess what I am getting at is, with the
benefit of having support from both sides of the aisle, in
dealing with PURPA, we would love to have the administration
jump in with us and push as hard as possible to move to the
modernization, to deal with the storage issues as well.
I see my time is over, but I did want to get that point in,
Mr. Chairman. I yield back.
Mr. Menezes. We look forward to working with the committee.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Kennedy for 5 minutes.
Mr. Kennedy. Sir, thanks for being here. Thanks for your
testimony.
And, Chair, thank you for having this important hearing.
Mr. Secretary, as a part of the 2021 budget request
released by the Trump administration on Monday, DOE would set
aside $97 million for the Energy Storage Grant Challenge
Program and $40 million for the grid storage launchpad. Can you
discuss in a little bit of detail the specific goals that DOE
would like to achieve with the Grand Challenge?
Mr. Menezes. Right, and thank you for the question.
And I have articulated this. This is going to be a
comprehensive approach using many of the offices within the
Department. So, it is both comprehensive in technology and in
use. It is also comprehensive in us drawing in all the
expertise within the Department. So, we will include the
applied offices, but we will also go to the Office of Science,
where we get their best work there. We had mentioned ARPA-E
before. We have ARPA-E and some of their projects. And so, we
are pulling together all of the efforts across the Department
and its labs to be able to focus on pulling together all the
expertise, so that we can help design not only the products,
but the way that they would be applied.
And then, we also have set up the Office of Artificial
Intelligence and Technology office. And so, to the extent that
we create data as a result of this, we will be able to use that
to further make advancements on materials and applications.
Mr. Kennedy. Thank you.
And can you explain if the goals of the grid storage
launchpad have changed at all since it was first proposed in
2020?
Mr. Menezes. Our goals?
Mr. Kennedy. Yes, have the goals changed since 2020 to
today?
Mr. Menezes. We have added on the initial goals. So,
initially, it was sort of a physical location to where we were
actually going to build things and put in place, which is a key
part. But we have now expanded it. It is important to know that
we have expanded it to bring in basic R&D to help develop new
products, materials, et cetera, that can be used in it to help
further the expansion of the actual grid storage. So, together
with modeling and new materials, we will be able to add to what
we are doing.
Mr. Kennedy. And you mentioned ARPA-E. Do you think they
would have something to add in the development of those two
programs as well?
Mr. Menezes. Sure. So, it is cross-cutting. We draw on all
of the offices that are involved in storage in any way. So,
ARPA-E tends to be the applied side, but its tremendous results
there could be used in further development of basic R&D.
Mr. Kennedy. So, thank you.
Both the programs, as I understand it, Mr. Secretary, seek
to entice innovation in storage technologies, which is great.
You can probably see where this is going. Once again, DOE is
proposing to eliminate the Office of ARPA-E, which is,
arguably, the office most poised to make significant advances
on breakthrough energy technologies, especially on the storage
front. And you just described some of the results there as
``tremendous''. So, if ARPA-E has been important on such
research and development innovation, why does DOE continue to
call for its elimination?
Mr. Menezes. Well, thanks for the question.
ARPA-E focuses more on applied science, and applied
technologies. That is, it is no longer basic R&D, right? You
can force it out to commercialize it. OK, and we think that
public-private partnerships can do that.
For the role of the government, it is important that the
government spend its limited resources--we only have so much
resources--on basic R&D, because this is what the private
sector is not doing. The energy sector is so competitive today,
that gone are the days when companies can have the luxury of
having like Bell Labs, right, and have their own huge R&D. I
mean, some companies do, but, generally, the times have
changed.
The government plays the role in looking at the
technologies that don't exist, the new materials that don't
exist. And you can use the taxpayer resources to really drive
that. ARPA-E is set up to take what has been developed and to
push it out commercially. Okay? And to complement ARPA-E on
that, we have established the Office of Technology Transfer.
Okay, and that is where we are setting up these public-private
partnerships.
Mr. Kennedy. Understood, and I guess the only thing I would
highlight, and we can move on, but given that you have
described the success as ``tremendous,'' given the fact that
you have said that there is an important for it to play, I do
think it is interesting that the administration continues to
call for the elimination of the office. That is it.
Mr. Menezes. Right, but we do have the obligation to make
sure that appropriated monies are spent. And so, we have that
commitment. So, we do follow the law over there. This is the
President's proposal. And like I said, the reason why the
President's proposal makes sense, this is to distinguish the
important role of the government to really focus on basic R&D.
That is where taxpayer dollars, in our view, should really be
spent.
Mr. Kennedy. Fair enough, sir.
Thank you.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Duncan for 5 minutes.
Mr. Duncan. Thank you, Mr. Chairman.
Mr. Secretary, I want to align myself with Mr. McNerney's
comments about Yucca Mountain. I think he is spot-on. But, as a
fiscal conservative, I don't see the nation spending more money
for an interim storage site when we have already spent so much
ratepayer money and tax dollars on Yucca Mountain to get it to
the point that it was. That is throwing good money after bad.
And we have interim storage right now, and that is
currently where the nuclear waste is sitting. That's onsite at
the commercial reactors around the country, 38 states and 122
sites. The permanent solution, the national solution, the
national problem is Yucca Mountain. We need to get behind the
Nuclear Waste Policy Amendments Act. We need to get Yucca
Mountain back on track. And I appreciated your comments there.
Shifting gears to the topic of the hearing today, there are
direct costs to the consumer for more stringent building codes.
And Mr. McIntyre, the president of the National Association of
Home Builders, who is going to testify, I think, in a little
while, but he testified in front of this subcommittee last
September that each $1,000 of regulatory cost displaces about
127,000 households from the market. We all support saving
energy and there is a natural incentive to do so because it
saves money, but in your opinion, what role should the federal
government play in energy-efficient efforts?
Mr. Menezes. Well, we have a role to play, as you just
heard me talk about, in doing basic R&D to make sure that we
can make new materials and that the public-private partnerships
can take it out and implement it. One thing that this
administration stands for--and I think that it is evident in
the results of the economy today--is we have stood for
deregulation. OK. We have found that, if you lessen the
regulations on people, they will be creative and innovative,
and they will be able to do the things that their consumers
need, and they will be able to do it in a most efficient
manner. We reformed the tax code, and you can see the evidence,
again, in the economy today.
So, we believe that, without the mandates, and you provide
incentives for people, that that is the way to encourage
behavior. And it is the same thing, whether it is building
codes or anything else, that usually gets the best results, and
we see that.
We are leading the world in energy, in greenhouse gas
emissions, not because it has been mandated on us. It is
because we are making choices that result in that.
Mr. McNerney. I think, given a choice, a consumer is going
to pick the most energy-efficient appliances readily available,
as long as there is not a huge price-point difference. But when
we see policies like what Berkeley County, California, has done
with banning natural gas, so the consumer doesn't have a choice
in choosing a very efficient natural gas appliance. Now they
are forced into an electrical appliance that may not be as
efficient, but it is based on the desire to end the fossil fuel
usage. So, shouldn't builders and consumers be able to choose
if natural gas appliances make more economic sense, depending
on where they live, instead of a one-size-fits-all approach of
stretch codes in H.R. 3962? Wouldn't you agree with that?
Mr. Menezes. I would.
Mr. Duncan. You have answered a lot of questions. I am
toward the end here. Let me just finish with this. I want to
revert back to the Yucca Mountain for just a second, and remind
members of this committee, and remind people watching this
hearing, that the Nuclear Waste Policy Act that set up Yucca
Mountain imposed a fee on ratepayers in this country for the
construction and operation of Yucca Mountain, ratepayers as a
portion of the utility bill, pennies at a time, but the
consumer didn't have any choice of whether they wanted to pay
that or not.
As small as South Carolina is, South Carolina ratepayers
have paid upwards of $3 billion for Yucca Mountain. That is
just in South Carolina. In thirty-eight other states,
ratepayers paid that as well. That is on top of the tax dollars
that we are paying now every year. So, South Carolina has
gotten nothing for that $3 billion investment, money that was
confiscated in every utility bill that South Carolinian
ratepayers paid for a long period of time. It is time to get
the Yucca Mountain back on track.
And with that, I yield back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes thegentle lady from California, Ms. Barragan, for 5
minutes.
Ms. Barragan. Thank you, Mr. Chair.
Mr. Under Secretary, the Office of Energy Efficiency and
Renewable Energy, did it spend all of the money that Congress
allocated last year?
Mr. Menezes. Oh, thank you for asking me that question. I
have some good news.
Ms. Barragan. It is a yes or no. Did they or not? Did they
spend all the money that Congress allocated?
Mr. Menezes. For fiscal year?
Ms. Barragan. For last year.
Mr. Menezes. For fiscal year 2019?
Ms. Barragan. Correct.
Mr. Menezes. Right? So, for fiscal year 2019, we have
completed selections on all but one of the FOAs, and we have
been consistent or ahead of schedule when compared to the past
five years.
Ms. Barragan. So, have you guys spent all of the money, yes
or no, other than this one little program you are telling me
about?
Mr. Menezes. Yes, we have a good record on that. I can get
you the specific numbers, but----
Ms. Barragan. So, there is an article that says a third of
the budget was unspent. Is that not accurate?
Mr. Menezes. So, this is going to get into a little
arcaneness here. So, monies, we issue FOAs. All right. And
then, we----
Ms. Barragan. OK. So, let me ask you a simple question.
Mr. Menezes. Yes.
Ms. Barragan. Are you spending 100 percent of the money
that Congress is allocating on the programs for energy
efficiency?
Mr. Menezes. Yes, so we are complying with the law.
Ms. Barragan. Yes?
Mr. Menezes. And we are spending it as rapidly as we can.
Ms. Barragan. OK.
Mr. Menezes. There are some of these----
Ms. Barragan. But you haven't yet----
Mr. Menezes. There are some of these obligated, but unspent
monies that will be spent. But when you just do the
bookkeeping, you will see that there is a carryover amount, but
they are obligated and they will be spent over the life of the
project.
Ms. Barragan. OK.
Mr. Menezes. So, it is not like you spend all your money in
one year. It is physically impossible because these are very
technical challenges and they are negotiated.
Ms. Barragan. OK.
Mr. Menezes. And we expect to pay over the years.
Ms. Barragan. Mr. Under Secretary, I reclaim my time. I
have another question I want to get to.
Mr. Menezes. OK.
Ms. Barragan. I am asking you because I read an article
that indicated that the Office of Energy Efficiency cancelled
$46 million in grants for solar research and development before
they could be awarded. Is that true or not true?
Mr. Menezes. No, that is a false statement.
Ms. Barragan. It is a false statement?
Mr. Menezes. It is a false statement.
Ms. Barragan. You guys haven't cancelled any dollars for
solar research and development before they could be awarded?
Mr. Menezes. No. If we reissued a FOA, that is something
completely different. The process was not finished. And we
reissued the FOA and the monies went out. So, it is a false
statement. I am not sure who read that. I don't know why you
would believe everything you----
Ms. Barragan. OK. Well, that is why I am asking you, Mr.
Under Secretary, because I want to make sure to get the
answers.
Mr. Menezes. Yes, that is a false statement.
Ms. Barragan. And we will follow up with you with that
article.
Mr. Menezes. Yes.
Ms. Barragan. So that we can make sure to expect
disparity----
Mr. Menezes. Yes, if that is what they said, and, you know,
the context may make it different, but that is false.
Ms. Barragan. OK. Are you aware that on the website for the
Energy Department, it says, ``On the Energy Star''--rather, on
the Energy Star Program's website, it says, ``Energy Star
products saved American families and businesses $30 billion in
2017.'' Do you agree with that? Do you agree that the Energy
Star Program saved American families some $30 billion in 2017?
Mr. Menezes. I don't dispute that figure, although I don't
know what the exact figure is.
Ms. Barragan. OK. And according to your Department, nearly
600,000 Americans are employed in manufacturing or installing
Energy-Star-certified appliances. Do you believe that is
accurate?
Mr. Menezes. Again, I don't know the specific numbers. I am
not disputing it. I just don't know if the numbers----
Ms. Barragan. Well, it is by your own Department. So, we
will just say yes.
Mr. Menezes. Well, I--OK.
Ms. Barragan. So, does the Trump administration's proposed
budget--have you seen the proposed budget? Let's start there.
Mr. Menezes. I have.
Ms. Barragan. OK. Do you stand by the Trump budget?
Mr. Menezes. Of course.
Ms. Barragan. OK. I am just checking.
Mr. Menezes. I am a Trump official.
Ms. Barragan. Well, you know, we have had people come in
here that don't exactly, you know, aren't on point and they may
vary a little bit different. So, I just wanted to make sure.
When you looked at the budget, does the Trump budget
eliminate money for the Energy Star Program?
Mr. Menezes. It might. I am not sure I know all the
specifics.
Ms. Barragan. OK. Well, let me tell you that it does.
Mr. Menezes. Why don't you tell me what you have read?
Ms. Barragan. It does cut money for the Energy Star
Program. And I just don't understand why. Because if the Energy
Star Program is saving Americans billions of dollars, if it is
creating and employing hundreds of thousands of people, it
doesn't make sense to me why we would be cutting opportunities
to save American dollars when it comes to energy efficiency and
jobs and energy efficiency.
And so, maybe what I will do----
Mr. Menezes. Well, I will tell you why. I will tell you
why.
Ms. Barragan. Maybe what I will do is I will just follow up
with you----
Mr. Menezes. Yes, please do.
Ms. Barragan [continue]. About that.
I want to----
Mr. Menezes. Can I just say something positive about this,
right? So, you hit the nail on the head. In EERE, in
particular, they have been very good about establishing
milestones. When you see the congressional justification for
it, across all the offices, whether it is levelized cost of
energy, whether it is performance, cost per kilowatt hour, they
have been measuring their success going back years. And we have
continued that today.
And what you see is we have driven down these prices. We
have driven down these efficiencies such that it is fair to ask
the question, do we need to continue to spend money to drive it
down even more? We have historic low natural gas prices. Our
prices for renewables are really driven down. I mean, it is
hard to complain about it. With limited resources, were you to
spend additional monies for breakthrough technologies, to maybe
get off of photovoltaics, for example--photovoltaics in a lot
of ways is horse and buggy. OK. We have liquid crystalline
perovskite that is the solar device of the future. And yet, we
still seem to be overly focused on driving down the cost of
photovoltaics, which really is not the way of the future. The
government should be doing that, not so much the private
sector, but it is fair to say that the government should be
spending money to look at that.
Mr. Rush. The gentle lady yields. The Chair now recognizes
Mr. McKinley for 5 minutes.
Mr. McKinley. Thank you, Mr. Chairman, and thank you for
having this important meeting.
Mr. Secretary, I want to focus back on the issue of the
Energy Savings and Industrial Competitiveness Act, the
sensitive building code sections. Now I spent most of my
career, probably I hate admitting it, but like 55 years in the
construction business dealing with building codes. But one
thing we have learned in our practice with the firm I used to
have was how to work with the code and how to work in energy
efficiency. My former firm was probably, well, it was the first
firm in West Virginia to get LEED certification for a school
building, and we are very proud of the fact that we understand
energy efficiency. We understand how we can make those changes
with it.
So, when I came to Washington, one of the first things we
did was to try to be an extension of what we have already
learned, put in practice the things we learned in the private
sector to help out other people with that. So, we have worked
with numbers of Democrats in a bipartisan way and more recently
with Peter Welch. Peter is, unfortunately, not able to be here
today, but we are talking about the McKinley-Welch and the
Shaheen-Portman legislation that has passed the Senate now
twice. So, we want to deal with this. We want to get this. But
I am sorry that Peter can't be here on this.
But the concern I am hearing is involving DOE. I want some
assurance from you, if you could, on that, knowing how the
codes work and how the modifications would be; we don't have
that DOE steps in here and doesn't use a heavy hand. I
understand in our legislation it is not mandatory for states
and municipalities to adopt the new code or the changes that
are made, but I want to make sure--I want them to adopt it. So,
the concern is, how heavy? I think you answered part of it a
little bit with the gentleman from Michigan, something about
being cooperative with it, how things have worked out. So, tell
me a little bit about how you are not going to use a heavy hand
when it comes to recommending or implementing changes to the
National Building Code or the International Building Code. Can
you share some of that with me?
Mr. Menezes. Well, thank you for the question.
And I don't want to give the impression of using a heavy
hand. I do look forward to working with experts like you to
fully understand the provisions of the Act. And just really, my
only observations were, in reading the Act, the part with the
building codes, my understanding--that is Chapter 1, right?
So, it is similar to the Portman bill in that it comes out
and it says that it is voluntary.
Mr. McKinley. It is voluntary.
Mr. Menezes. And then, when you go through it, then you see
a series of ``shalls,'' which we know are mandatory. And I am
not arguing or complaining one way or the other. I am just
saying that the voluntary program, it may be a voluntary
program overall, but DOE will have obligations in a voluntary
program that seem to say that we will need to develop new
standards--again, I am just making observations, making sure
that is the intent--and that we will have to grade how these
states, tribes, and others are either implementing or not. And
we kind of have to do a grading of them. We also have to make
sure that we provide technical assistance. And as long as
monies are appropriated for that, that is fine, but----
Mr. McKinley. But the premise of it, Mr. Secretary, is----
Mr. Menezes. I want to make sure we are not talking past
one another.
Mr. McKinley. Yes, Mr. Secretary, I want to make sure that
the standards that are set, I want municipalities to accept the
code. I just want to hear some assurance that DOE will not be
using a heavy hand on this; that they are going to be
cooperative; they are going to work together. Because what we
don't want to have in our housing stock is causing standards to
be so that it raises the cost of housing. Therefore, when we
have an issue of affordability, we are not exacerbating that
problem. So, as long as I can get some comfort from the DOE
that they are going to be more cooperative----
Mr. Menezes. Well, let me give you that assurance. And
please do not misinterpret my comments on a legal reading of it
in any way----
Mr. McKinley. OK.
Mr. Menezes [continue]. To speak for the experts in our
Department that have been working with industry to try to make
standards that are affordable to everyone. We do not accomplish
anything if, as you say, we are too heavy-handed and we set
standards either no one can meet and they are never implemented
or they are too costly, and they never are used. So, you have
my complete assurance.
Mr. McKinley. Thank you.
Mr. Menezes. And please do not misinterpret my remarks.
Mr. McKinley. Thank you, Mr. Secretary.
I yield back my time.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Tonko for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair.
Secretary, welcome.
The Department of Energy deserves a lot of credit for the
past decade in supporting the technological developments and
cost reductions we have witnessed in energy storage, but there
are still big challenges. And I know that Mr. Doyle covered
this area a bit when he talked about long-term seasonal
storage. But can you give us a sense of what the Department is
doing in terms of long-duration and seasonal storage, and how
those technologies will likely be needed to realize very high
levels of renewable resources on the grid?
Mr. Menezes. Right. And, you know, we talked, we have
touched on that, right? To start, for example, you can make a
distinction between efficient batteries used in transportation.
We think it is ubiquitous now in electrical vehicles and
lithium-ion, for example. But when you go to grid scale, you
have to look not only at size, but, as we talked about, it is
seasonal. It may make a difference in technologies on location,
right?
So, not every battery grid storage that you might make can
withstand the harsh environments of New England, the Pacific
Northwest, or the arid Southwest. So, these are technical basic
research and development you need in chemistry and materials
and in modeling that is going to help us do that. And that is
what we are bringing all together.
So, when we talk about storage, it is just not one-size-
fits-all and it is not that you can just go take a bunch of
lithium-ion batteries and throw them up and expect to have a
resilient and a safe storage system that can make our grid
modern in an economy----
Mr. Tonko. Or storing energy in soil or what----
Mr. Menezes. Well, we are looking at all aspects. We are
not limited to batteries. We are having a conversation about
batteries, but, as we talked about earlier--and you might have
come in a little bit after that--but, I mean, it is pump hydro
where we can do it, right? It may be compressed air. It can be
all media, is what we look at.
Mr. Tonko. OK. Turning to lithium-ion batteries, we know we
are going to see a lot more deployed in EVs and on the grid.
Mr. Menezes. Right.
Mr. Tonko. DOE launched the Lithium-Ion Battery Recycling
Prize to identify innovative solutions for collecting, sorting,
storing, and transporting spent and discarded lithium-ion
batteries for eventual recycling and materials recovery. These
batteries rely upon critical minerals like lithium, cobalt, and
nickel. Can developing a domestic industry for recycling and
reuse of these materials help reduce our reliance on foreign
sources?
Mr. Menezes. Yes, sir. And, indeed, that is one of the aims
that we had of announcing that challenge. As I had mentioned
before, we might recycle maybe five to ten lithium-ion
batteries now and we are overly dependent on other countries to
provide us with these necessary elements. So, we are looking
for material changes. So, if you go to our labs today, and if
you go through our offices today, you will see us really trying
to develop new materials to take the place of the lithium and
the cobalt.
Mr. Tonko. Well, it is my understanding that Europe is
currently recovering about 60 percent of its lithium in the
economy. So, it can be done.
Mr. Menezes. Yes.
Mr. Tonko. And the U.S. is dreadfully behind that at around
5 percent.
Mr. Menezes. Yes.
Mr. Tonko. Do you believe additional DOE support can help
bolster domestic recycling and recovery of critical minerals?
Mr. Menezes. I do. I mean, it is part of the educational
process, right? And just look at the educational process on
lead-acid batteries, right? We are almost 100 percent right now
today on the acid batteries. It can be the same thing with
lithium. We just need to make the public aware. They will start
treating all the devices that they have probably more as a
recyclable item. And it is important that those that, frankly,
make the product and sell these products have the obligation.
One thing at the Department that you should be aware of, we
are now calling on all the developers of new materials, whether
they are in our labs or in the private sector, that if you make
a new material, you should not leave any environmental legacy
to our children or grandchildren. Those days should be over.
So, when we make new materials, it has to be a complete
circular economy, if you will. If you make a product, it needs
to be recycled and reused.
Mr. Tonko. OK. And some of these batteries could have a
second life.
Mr. Menezes. Correct.
Mr. Tonko. Has DOE looked at how to help encourage reuse of
EV batteries for grid applications?
Mr. Menezes. Yes. I mean, that is part of the grid storage
challenge that we have. So, we take existing materials, and if
we can make improvements on them, we can find out we can make
greater use; we can recycle them and upcycle them, if you will,
to increase their efficacy.
Mr. Tonko. And it is also a priority to ensure that we are
avoiding environmental and safety risks----
Mr. Menezes. Yes, sir.
Mr. Tonko [continue]. From disposal. Can the recycling of
used batteries also help facilitate safer disposal?
Mr. Menezes. Yes, sir. Yes, sir. That is part of our
recycling Grand Challenge.
Mr. Tonko. Well, I appreciate your responses.
And with that, Mr. Chair, I yield back.
Mr. Menezes. Thank you, sir.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Griffith for 5 minutes.
Mr. Griffith. Thank you very much, Mr. Chairman. I
appreciate it.
It is nice to see you, Mr. Secretary.
Mr. Menezes. It is nice to see you.
Mr. Griffith. It is my understanding that the Office of
Energy Efficiency and Renewable Energy's Water Power
Technologies Office is investing in closed-loop pumped hydro
storage technologies and designs. Last Congress, my legislation
that streamlined the FERC process for these projects with a
two-year permitting goal was enacted into law. What role do you
see for pump storage in meeting our grid-scale energy storage
needs?
Mr. Menezes. As we mentioned today, it plays a significant
role. Right now, it is playing a key role in the Pacific
Northwest and in your district as well, Smith Mountain Lake, I
believe, and it has been a great asset to have. Indeed,
others----
Mr. Griffith. Just so my constituents don't think I am
lost, Smith Mountain is just outside of my district.
Mr. Menezes. Oh, just outside?
Mr. Griffith. Yes.
Mr. Menezes. OK. All right.
Mr. Griffith. But that is OK. A lot of my constituents go
there and we get power from there.
Mr. Menezes. Well, I think it is on my way to your
district.
Mr. Griffith. It is, absolutely.
Mr. Menezes. Smith Mountain Lake. Sorry about that.
Mr. Griffith. That is all right.
Mr. Menezes. But, again, it is an example----
Mr. Griffith. Yes, sir.
Mr. Menezes [continue]. Of what you are talking about. And
I think that we have other opportunities across America. We
have a lot of hydro out there. To the extent that we can begin
to integrate some of the hydropower, that is a clean,
renewable, available resource. The technology is tried and
true.
Mr. Griffith. Now in the closed-loop pump storage that, we
got some language changed on, because the water comes--it is
not native water; it comes from outside. What we were hoping to
do is stimulate some use in the mines of central Appalachia. We
have got the permitting process under control. Are there other
challenges that you know of to advancing this pump storage
closed-loop technology?
Mr. Menezes. Right. I mean, permitting is always going to
be a challenge. It is a hallmark of this administration that we
try to streamline, not eliminate----
Mr. Griffith. Right.
Mr. Menezes [continue]. But we streamline the process. And
so, to the extent that we can help with other agencies, we are
happy to do so. We provide technical assistance to help in the
permitting process and to try to get it done timely.
Mr. Griffith. Now I am going to switch gears just a little
bit, and I know I am a little off-topic from the discussion
that is on the marquee today.
Mr. Menezes. It won't be the first question that has been
raised today.
Mr. Griffith. That has been done? Yes. But you and I and a
number of other Members in a bipartisan group went to Puerto
Rico a couple of years ago. One of the things I was struck by,
we were in a town up in the mountains, and there was an
abandoned hydro project, a smaller project. It struck me that,
even if we had that operational, even if it was just going to
supply the local hospital or the high school as a shelter with
electricity, it was worth having those types of facilities out
there. I think we should use Puerto Rico as a testing ground
for some microgrids because I think it could be helpful in
other areas like my district in central Appalachia in times of
disaster. But you can't just suddenly say we are going to do it
overnight. So, what is the Department of Energy doing on
microgrids that might be helpful in times of disaster to have
something already there and small hydro?
Mr. Menezes. You might be aware that the Department has
been working with groups in Puerto Rico to help identify areas
where you can establish the microgrids, right? And so, it is a
combination of locations. I am not sure if one of them actually
involves that, but it could very well be. But the concept is a
good one, right? It is you have got available natural
resources. You have infrastructure in place. It might need to
be modernized. But, at the end of the day, you can have an
integrated microgrid that can go both ways. So, it can help the
provide necessary power in Puerto Rico to help stabilize the
grid or, if the system shuts down, it can continue to provide
its electricity to those that are connected to the microgrid.
Mr. Griffith. Right. And certainly, with the various
disasters we have seen in Puerto Rico, they could use something
like that.
Now I don't know if I am the last questioner or not, but we
are getting near the end of your questions. Is there anything
that you wanted to talk about today that you have not had an
opportunity to address?
Mr. Menezes. Well, thank you very much.
No, I do think that there is an opportunity here to have
the committee work with your full committee and pass some
bills, right? Again, the administration doesn't take a
position, but the Department stands by, ready to work with the
House and your colleagues in the other body, that if they see
fit to begin to pass energy legislation, it will be an
opportunity for us to bring our technical expertise, and we
look forward to working with you throughout the process.
Some of us in this room have been through this before. We
know it can be done. It is timely. Things need to be
modernized. We would look forward to doing that.
Mr. Griffith. Well, you are always good to work with, and
even when we might disagree occasionally, you are always glad
to get us the facts. And we appreciate that.
And I yield back, Mr. Chairman.
Mr. Menezes. Well, thank you.
Mr. Rush. The gentleman yields back. And I am not going to
make a commentary.
That concludes our first panel. I want to thank you, Mr.
Under Secretary, for joining us today to testify on these
hearings.
And The Chair now asks the staff to prepare the witness
table, so we can begin our second panel.
Again, thank you, Mr. Under Secretary, for your testimony.
Mr. Menezes. Thank you very much.
And I will say that your members continue to ask as hard of
questions as they asked when I was Chief Counsel. So, thank you
very much----
Mr. Rush. Thank you.
Mr. Menezes [continue]. For the opportunity to be here.
Mr. Rush. All right.
Will the second panel please join us at the witness table?
We will now hear from our second panel of witnesses. And I
want to welcome this panel of witnesses and I want to thank you
for your patience as we concluded the first panel.
Our second panel of witnesses includes:
Ms. Kelly Speakes-Backman who is on my right. She is the
chief executive officer of the Energy Storage Association.
Ms. Julie Hiromoto, the principal of HKS, Incorporated, on
behalf of the American Institute of Architects.
Mr. Arn McIntyre, the president of McIntyre Builders, on
behalf of the National Association of Home Builders.
Mr. Lowell Ungar, the senior policy advisor for the
American Council for an Energy-Efficient Economy.
Ms. Jennifer Schafer, who is the executive director of the
Federal Performance Contracting Coalition.
And Mr. Bryan Howard, who is the legislative director of
the U.S. Green Building Council.
Again, I want to thank each and every one of you for
joining us today, and we look forward to your testimony.
At this time, The Chair will recognize Ms. Speakes-Backman
for 5 minutes to provide your opening statement.
STATEMENTS OF KELLY SPEAKES-BACKMAN, CHIEF EXECUTIVE OFFICER,
ENERGY STORAGE ASSOCIATION; JULIE HIROMOTO, PRINCIPAL, HKS,
INCORPORATED, ON BEHALF OF THE AMERICAN INSTITUTE OF
ARCHITECTS; ARN MCINTYRE, PRESIDENT, MCINTYRE BUILDERS, ON
BEHALF OF THE NATIONAL ASSOCIATION OF HOME BUILDERS; LOWELL W.
UNGAR, Ph.D., SENIOR POLICY ADVISOR, AMERICAN COUNCIL FOR AN
ENERGY-EFFICIENT ECONOMY; JENNIFER SCHAFER-SODERMAN, EXECUTIVE
DIRECTOR, FEDERAL PERFORMANCE CONTRACTING COALITION, AND BRYAN
HOWARD, LEGISLATIVE DIRECTOR, U.S. GREEN BUILDING COUNCIL
STATEMENT OF KELLY SPEAKES-BACKMAN
Ms. Speakes-Backman. Chairman Rush, Ranking Member Upton,
and members of the subcommittee, thank you for the invitation
to speak today on the legislation proposed to promote
innovation and modernization of the grid with energy storage.
ESA is the national trade association working toward a more
resilient, efficient, sustainable, and affordable electricity
grid enabled by energy storage technologies. With 190 member
companies, ESA represents a diverse group of stakeholders,
including manufacturers; implementers; system operators,
including municipal and cooperating utilities, and other
services, all involved in deploying energy storage. We
represent a broad technology base that includes
electrochemical, thermal, mechanical, process, chemical, and
pumped hydro storage.
Energy storage enables electricity to be supplied from any
source to be saved for use later, exactly when, where, and in
whatever form it is needed. Essentially, it decouples the
elements of time from when it is generated and used, enabling
vast amounts of capabilities, be it backup power, peak demand
reduction, alleviating stress to grid infrastructure, firming
variable generation sources like solar and wind, or maintaining
optimal function of inflexible generation sources like nuclear.
I provided testimony speaking to the nature of energy storage,
the many applications it can provide, some data on the prolific
market growth and cost declines, and a few examples of the
types of end-users.
Today, approximately 2500 megawatts of battery storage are
installed or under development in the U.S., with megawatt-scale
installations planned or operating in 29 states. Battery
storage specifically, their deployments are forecast to triple
this year, representing over $3 billion of investment by 2021.
These statistics are staggering.
For the purpose of today's hearing, though, the remainder
of my remarks will focus on the three pieces of legislation
under consideration by this committee.
First of all, we applaud the subcommittee for considering
the Promoting Grid Storage Act, H.R. 2909, which we have
endorsed, as have the American Public Power Association and the
National Rural Electric Cooperative Association. This bill
would create a competitive grant program at DOE for state and
local governments, utilities, public power authorities, and
rural co-ops, to incorporate storage into long-term planning
and grid operations. We particularly appreciate that in this
bill the local entities would be empowered to identify the
modeling support and the locations that will best serve their
systems and share the investment responsibility and construct a
competitive proposal for cost-share.
We are pleased to see H.R. 2909 has bipartisan, bicameral
support. The Senate Energy and Natural Resources Committee has
incorporated the major provisions of this bill into an amended
version of the BEST Act, Senate bill 1602, which it reported
favorably last fall. The House Science, Space, and Technology
Committee is also advancing components of the BEST Act falling
under its jurisdiction in H.R. 2986. We encourage this
subcommittee to advance the Promoting Grid Storage Act in
parallel with these efforts.
We believe that, by creating public-private partnerships,
the widest range of private partners can also be eligible to
advance those demonstrations. Therefore, ESA asks the
subcommittee to ensure that program eligibility, as specified
in Section 6(a)(2)(F) is available to private sector entities
as well, similar to the Senate Energy and the House Science
bills. ESA also recommends that the subcommittee harmonize the
technology definitions in Section 1, the listed priorities in
Section 4, and the listed objectives in Section 6 with those
from the BEST Act bills in those committees.
The EASE Act, H.R. 4447, would create a new program of
technical assistance to Rural Electric Cooperatives to
undertake planning for energy storage and microgrid projects.
ESA believes the Promoting Grids Storage Act actually may
already accomplish the aims of the EASE Act, but we commend the
focused assistance to cooperatives that the EASE Act provides.
The S.T.O.R.A.G.E. Act, or H.R. 1744, would amend Section
111(d), as you heard in the panel before, of PURPA to direct
states to consider energy storage in utility resources planning
for supply purposes. There has been remarkable progress in
utility planning for storage over the past several years. In
just the past four years, utilities in more than 20 states have
selected energy storage for their long-term resource plans.
We emphasize, though, that energy storage can perform the
services of transmission and distribution assets as well as
generation assets. It is critical that storage be considered in
infrastructure planning, not just supply planning. We welcome
the opportunity to discuss how regulations as proposed in the
S.T.O.R.A.G.E. Act can complement these programs.
In conclusion, I just want to thank you for the opportunity
to be here today. It is a privilege and an honor to sit on the
panel with such esteemed colleagues.
Thank you.
[The prepared statement of Ms. Speakes-Backman follows:]
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Mr. Doyle. [Presiding] Thank you.
We will ask the witnesses, when it is your turn, make sure
your microphone is on and pull it close to you, so that we can
hear you.
Ms. Hiromoto, you are now recognized for 5 minutes.
STATEMENT OF JULIE HIROMOTO
Ms. Hiromoto. Thank you.
Good afternoon, Chairman Rush, Ranking Member Upton, and
members of the committee.
Thank you for the opportunity to testify about the
legislation before you today. Building sector energy use is a
deeply important issue to me and my profession.
I am a licensed architect with the firm HKS, based in our
Dallas headquarters office. I am also a member of the American
Institute of Architects, a professional association of 95,000
architects and allied professionals who work to advance our
nation's quality of life through design. Since 1857, the AIA
has fought to protect the public's health, safety, and welfare.
I am also The Chair of the AIA's Committee on Environment,
COTE.
I applaud the House Energy and Commerce Committee for their
serious work to consider how the built environment is
contributing to our nation's climate crisis and how it may
become part of the solution. The building sector alone accounts
for almost 40 percent of greenhouse gas emissions, GHG. Roughly
11 percent come from embodied carbon, meaning the greenhouse
gas emissions produced by the creation of building materials
and construction. Building operations contribute roughly 28
percent. To get that down to zero, we must end building's
dependence on fossil fuels.
To that end, in 2009, the AIA established the 2030
Commitment to help architectural firms reduce energy
consumption in all new buildings and retrofits to 70 percent
below the regional average for that building type and to reduce
fossil fuel use to zero by 2030. These goals align with the
policy put forth in the Energy Independence and Security Act,
EISA, of 2007, which sets targets for federal buildings to
decrease overall energy use and to phase out the use of fossil
fuels. The AIA was a firm supporter of that bipartisan policy,
signed into law by President George W. Bush.
I want to thank the lead cosponsors of H.R. 3962, the
Energy Savings and Industrial Competitiveness Act, Congressman
Welch and Congressman McKinley, for their work to promote
building energy efficiency. By establishing Building Training
and Assessment Centers, the bill provides beneficial support to
architects and other professions in the building industry to
learn new energy-efficient design and best practices. It
requires the Secretary of Energy to encourage and support the
adoption of building codes by states and municipalities. Most
importantly, the bill reestablishes the energy efficiency
targets of ECPA with an updated baseline year.
Despite the positive provisions, the AIA is deeply
concerned that the bill also includes the repeal of Section
433, the current policy that requires the phaseout of fossil
fuel use in federal buildings. As we have in the past, the AIA
strongly opposes this repeal and cannot support the bill with
the inclusion of that provision. We urge the committee to
strike that provision and move forward with the other important
updates in this bill.
Energy efficiency and energy sourcing are not a replacement
for one another. We must urgently address both. This is a
mathematical necessity if this committee is going to achieve
its announced goal of a zero carbon economy by 2050.
In our profession, the reduction of energy use and the
decision of where energy should come from are two parts of the
same conversation. We start with reducing energy demand, then,
absorption and conservation strategies. And finally, the
generation of renewable energy is the last piece to offset the
nominal remaining energy demand. Please see my written
testimony for more specific examples.
Some have argued that the move to entirely renewable energy
sources is not yet possible in all places, and therefore, the
government should back away from this policy. But this
misunderstands the way industry responds to market challenges.
Large-volume and iconic projects must lead the way, as they
have the unique ability to capture the public's imagination.
The federal government building portfolio, under the GSA, is
both large and iconic. And as the client, the U.S. Federal
Government should demand that it meets its own goal. The GSA
has done impressive work in achieving the targets set out in
energy use reduction and energy sourcing. Their hardest work
should be supported by this Congress and not undermined by
repealing Section 433.
Finally, I urge the committee to consider America's role as
a leader in reducing global reliance on fossil fuels. This is
what the climate crisis demands.
Thank you, and I look forward to your questions.
[The prepared statement of Ms. Hiromoto follows:]
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Mr. Doyle. Thank you very much.
Mr. McIntyre, you are recognized for 5 minutes.
STATEMENT OF ARN MCINTYRE
Mr. McIntyre. I am not sure who to address. The face has
changed up there.
But, Chairman Rush, Ranking Member Upton, and members of
the committee, I am pleased to appear before you today on
behalf of the more than 140,000 members of the National
Association of Home Builders and to testify in opposition of
Subtitle A of H.R. 3962, the Energy Savings and Industrial
Competitiveness Act of 2019.
My name is Arn McIntyre. I am a home builder from Grand
Rapids, Michigan. As a home builder, I deal with energy codes
every day and I understand how different energy-efficient
features impact the performance of homes and the experience of
their residents.
As long-time leaders in the drive to make new and existing
homes more efficient, while ensuring housing remains
affordable, my fellow builders and I are uniquely positioned to
evaluate the impact this legislation will have in the
homebuilding, remodeling, and rental housing industry.
Earlier versions of energy codes have focused on consumers,
helping them reduce their utility bills with affordable
improvements to their homes. Subtitle A, however, will
dramatically change this focus by giving the Department of
Energy a heavy-handed role in the code development process, in
allowing it to pay little attention to costs associated with
efficiency improvements, all at the expense of the would-be
homeowners. Although DOE currently plays a key role in research
and validating energy efficiency technology, the bill will
direct it to advocate for/against certain proposals,
technologies, classes of products, and essentially pick winners
and losers and impose unreasonable and costly requirements.
Subtitle A also undermines the ICC code-setting process by
requiring DOE to set aggressive energy-savings targets and
allowing it to submit code change proposals without being
required to obtain stakeholder input. It will also
significantly limit the ability of states and local governments
to adopt cost-effective and local appropriate building codes.
The code development process has proven effective at
maintaining the balance between advancing energy efficiency and
maintaining the safety, durability, and disaster resistance of
buildings. The current consensus process has increased the
efficiency of new residential buildings by 40 percent over the
last 12 years, and new homes now far outperform existing homes.
Instead of focusing on new construction, Congress should target
initiatives and programs that foster solutions and offer
incentives for upgrading the existing older buildings, which
constitute more than 80 percent of the U.S. housing stock or
building stock.
Equally problematic, Subtitle A fails to ensure that the
full array of costs and their economic implications are
considered when making further energy use reductions. We know
how valuable energy savings can be to consumers, but, even with
these savings, significant upfront investments must be made for
these savings to occur. The 2012 edition of the Residential
Energy Code has such significant increases over the 2009 code
that it would take the average American family 13.3 years to
recoup the cost through utility savings. In some part of the
country, including areas in Kentucky and Illinois, payback
periods were in excess of 17 years.
If the efforts to rachet up the Energy Code continue, more
consumers will end up paying more for the new requirements than
they recoup from energy savings. As a result, the overall cost
of homeownership will continue to rise and housing
affordability will suffer. For every $1,000 increase in the
price of a new home, over 158,000 U.S. households will be
priced out of qualifying for a mortgage.
To partially address this, NAHB believes that the SAVE Act,
which is encompassed in H.R. 3962, is an essential component.
The SAVE Act provides guidance to the Department of Housing and
Urban Development to ensure that underwriting and appraisal
guidelines more accurately reflect economic benefits of high-
performance features. NAHB supports this voluntary program
because it will not only ensure more accurate valuations, but
it will have a transformative effect in encouraging energy
efficiency across the residential sector.
In summary, I urge the subcommittee, when considering
options to improve energy efficiency, to:
One, ensure upgrades are cost-effective, defined as simple
payback of ten years or less, and their value is accurately
reflected in mortgage instruments, appraisals, and other
related documents.
Two, maintain the Department of Energy's primary role as a
technical advisor, as we heard this morning.
Three, focus on highest-impact, lowest-cost reduction
strategies, strategies that deliver true value to the consumer,
including retrofitting the existing housing stock.
And, No. 4, provide consistent incentives and market
support to continue the development of a high-performance
building industry.
I thank you for this opportunity and welcome any questions
when we get to that.
[The prepared statement of Mr. McIntyre follows:]
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Mr. Rush. [presiding] I want to thank you.
Mr. Ungar, you are recognized for 5 minutes.
STATEMENT OF LOWELL UNGAR
Mr. Ungar. Thank you, Mr. Chairman.
Having spent many hours in the chairs against the back wall
behind this subcommittee, it is my pleasure today to speak
before you.
Today, I want to encourage you to send a Valentine to
consumers and workers, to businesses, and to the environment in
the form of energy efficiency, and specifically, the three
efficiency bills that are before you. We love energy efficiency
policies because they help us all. They save consumers money,
make businesses more competitive, create jobs, cut air
pollution and global warming, improve our health and comfort,
and strengthen resilience.
I don't have time to talk about each of those, but the
benefits are surprisingly large. We estimate that efficiency
improvements since 1980 save almost $800 billion worth of
energy each year. And as the chairman and Mr. Doyle have
already said, the biggest energy savings are still ahead. We
can cut our total energy use and greenhouse gas emissions in
half.
The bills before us today are not just sending flowers. The
biggest gift is the Energy Savings and Industrial
Competitiveness Act. Congressmen Welch and McKinley, along with
their Senate colleagues, have worked hard over several years to
bring dozens of stakeholders together and refine the bill to
achieve its broad support.
Yesterday, ACEEE released an updated analysis of key
provisions in the bill. We project it would over a few decades
save over $50 billion--that is net savings after investments--
cut energy waste by as much energy as all U.S. industry uses in
a year, and reduce carbon dioxide emissions by the amount
released from all U.S. cars and light trucks in a year. That is
sweet.
Most of those savings would come from building energy
codes. While codes may not set the heart aflutter, they are one
of the most important energy efficiency policies. They limit
energy waste in new homes and commercial buildings when it is
cheapest to do so and they make homes more affordable. And they
are flexible and based on performance.
Codes are mostly developed in stakeholder processes adopted
into law or regulation by states and enforced by local code
officials. The Department of Energy helps where it can, but too
many new homes and buildings still leak air, have poor quality
windows, and not enough insulation.
The codes provisions in this bill, the first version of
which was actually introduced by the late chairman of this
committee, John Dingell, would keep the current codes process,
but direct DOE to provide more guidance and assistance to
increase savings. DOE would set energy-savings targets and,
then, would work with code developers, states, and local
governments to achieve the targets through better codes, faster
adoption, and more effective compliance. But the bill would not
force states or local governments to do anything. They would
still decide what codes to adopt. The codes provision will be
easier to implement with its partner, the SAVE Act, which is
also in the Welch-McKinley bill.
Homeowners with lower energy bills can afford a higher
mortgage payment, and homebuyers are willing to pay for an
efficient home, but they generally can't get a larger mortgage.
This provision would direct federal agencies and enterprises to
require their lenders to consider these important factors in
underwriting mortgages if the borrower asks for it. SAVE will,
thus, make it easier to finance energy efficiency improvements.
One more important provision in the bill would expand
Industrial Assessment Centers. This program is a perfect
marriage between workforce development and aid to small
manufacturers. It trains students to help small and medium-
sized plants reduce energy waste.
With my little time remaining, I would like to recommend
the other two efficiency bills as well. The Federal Energy and
Water Management Performance Act would reinstate energy and
water savings targets for federal buildings, and it would
authorize DOE's important Federal Energy Management Program.
The Ceiling Fan Improvement Act would use a new metric to
improve the recent efficiency standard for large commercial
ceiling fans.
These three bills unite businesses, consumers, states, and
environmentalists, and Democrats and Republicans. They are an
important down payment on the tremendous potential of
efficiency. We urge you to swipe right for them all.
Thank you for the opportunity to testify, and I welcome any
questions.
[The prepared statement of Mr. Ungar follows:]
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Mr. Rush. The Chair thanks the gentleman.
The Chair recognizes Ms. Schafer for 5 minutes.
STATEMENT OF JENNIFER SCHAFER
Ms. Schafer. Thank you, Mr. Chairman, and members of the
subcommittee.
I am Jennifer Schafer with the Federal Performance
Contracting Coalition. I am pleased to testify today on behalf
of the federal energy provisions in the suite of bills that you
are discussing today.
Our coalition is a national coalition of energy service
companies that use private sector funding and expertise to
improve our federal buildings. Our members, which are listed in
our written testimony, are responsible for approximately 95
percent of all federal energy savings performance contracts, or
ESPCs.
That is significant. The ESPCs right now are responsible
for more than half of the government's intentional expenditures
on energy efficiency upgrades. In fact, between 2016 and 2019,
almost $7 billion of private sector investment through
performance contracting was invested in the federal government
to make them more efficient and pay back all over time with
energy savings.
In the ESPC, as many of you are well familiar, an energy
service company finances the energy efficiency upgrades,
installs them at no upfront cost to the federal government, and
then, they also measure and verify, and guarantee that the
savings accrue. If the savings do not accrue, the energy
service company pays the difference. For that reason, ESPCs
mostly also include operations and maintenance. We can make
sure that the savings accrue to the Federal Government.
ESPCs with the federal government are trending larger and
more comprehensive. In large measure, that is because we are
also doing a number of underfunded or unfunded priorities of
the Federal Government, including cybersecurity and resiliency
measures.
We have a history of bipartisan support. We have a fabulous
caucus, chaired by Representatives Kinzinger, Welch, Moulton,
and Hudson. This committee passed a bipartisan bill last year,
H.R. 3079, a barrier reduction bill for performance
contracting. We hope that that and the bills today can become
law fairly quickly.
Our coalition strongly supports H.R. 5650. That is the
Federal Energy and Water Management Performance Act. It
authorizes the Federal Energy Management Program, FEMP. FEMP is
the go-to resource to assist agencies to become more resilient,
efficient, and secure. The bill also directs new energy
intensity reduction targets by the Federal Government. Our
members are clear, goals move performance. Without goals, we
don't get performance. We haven't had goals since those
developed under the Bush administration and authorized in EPAct
2005 expired about five years ago. We would certainly like to
see those goals.
We also support the water goals within that bill. Water is
a bill-payer of sorts for performance contracting. It is still
very achievable, very inexpensive, and very necessary in our
federal buildings.
The FPCC also supports H.R. 3962, the Energy Savings and
Industrial Competitiveness Act. And we are going to talk today
about mostly the provisions in Title 4, which are the federal
energy provisions. The goals for water and energy efficiency
are in that bill as well, as in the bill I just discussed.
But, importantly, Title 4 also includes the requirement
that agency audits, already mandated under EISA 432, lead to
actual energy projects if they are cost-effective. For 13
years, the government has been required to audit their federal
buildings for energy savings, but doesn't have to act and
actually save energy and money for the Federal Government.
According to performance.gov, 65,000 unimplemented, yet
cost-effective, energy conservation measures, worth at least $9
billion, are sort of sitting on the shelf in these audits. That
is with only half of the buildings audited. So, we encourage
that anything cost-effective should have to be implemented. It
is a huge upside for my members, of course. It is a business
proposition for us, but there is a huge upside for the federal
government and the American taxpayer reducing energy use with
no upfront cost.
The FPCC also supports the rest of Title 4, including the
retro-commissioning provision. This entire section aims to
strengthen federal energy efficiency and to replace the fossil
fuel reduction mandate in EISA 433, which has been
unimplementable as drafted.
We additionally support Sections 301 and 302 of the Energy
Savings and Industrial Competitiveness Act. Those are the
Energy Efficient Government Technology Act and the Federal Data
Center bill.
In conclusion, we strongly encourage the committee to move
these bills quickly as a way to address energy resilience and
climate in a cost-effective and bipartisan manner. And I would
be happy to answer questions. Thank you.
[The prepared statement of Ms. Schafer follows:]
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Mr. Rush. Thank you.
The Chair now recognizes Mr. Howard for 5 minutes.
STATEMENT OF BRYAN HOWARD
Mr. Howard. Thank you, Mr. Chairman. Chairman Rush, Ranking
Member Upton, and subcommittee members, I am greatly honored to
project the microphone better into my mouth, and then, also
continue speaking.
I am greatly honored to join you and thank you on behalf of
the U.S. Green Building Council. We commend the subcommittee
for holding this hearing and calling attention to ways Congress
can help accelerate progress on efficiency, clean energy, and
building performance. With the available time, I wanted to
summarize our perspective on the legislation before the
subcommittee today.
USGBC supports H.R. 5650, the Federal Energy and Water
Management Performance Act of 2020. We commend Congressman
Welch, Congressman Kinzinger, and their staffs for crafting a
bipartisan approach to advance the performance of the federal
footprint and providing formal authorization for the Federal
Energy Management Program, or FEMP.
The Federal Government has generally been a leader in
reducing energy and water consumption of its own buildings with
high-performance new construction as well as energy performance
contracts in existing buildings. In fact, in 2015, the U.S.
Energy Information Administration attributed the reduction in
building energy use as a contributing factor for energy
consumption in the Federal Government Being At Its Lowest
Levels Since 1975. Efforts To Reduce Potable Water And Outdoor
Water Use Have Also Been Impressive.
Up until last year, the federal government had forward-
looking targets for energy and water performance.
Unfortunately, there is a gap in federal leadership, which is
why this legislation is so critical. To that end, we support
the provisions of the bill that would reinstate the building
energy intensity reduction targets for federal buildings and
would set reduction targets for potable water and outdoor water
use. These provisions should be included in any comprehensive
energy legislation being advanced by the committee.
Provisions of the bill to assist the federal government
with better infrastructure and storm water management would
bolster the storm water runoff requirements in the Energy
Independence and Security Act of 2007. These approaches can
increase the resilience of the federal property while reducing
the strain on local waterways, storm drains, and wastewater
systems.
We also want to appreciate the bill's explicit
authorization for FEMP. This small, but impact program at DOE
is critical in helping all agencies of the federal government
use energy-related resources more wisely. While USGBC supports
the bill, I would note that the authorization is shorter than
the bipartisan-centered counterpart. Given the variance of
reauthorizations for DOE, we would recommend the authorization
be extended to ten years.
Turning our attention to H.R. 3962, the Energy Savings and
Industrial Competitiveness Act, I wanted to highlight important
provisions of the bill and one that could benefit from changes.
The USGBC supports the code provisions in the Energy Savings
and Industrial Competitiveness Act. This section of the
legislation is supported by real estate interests,
manufacturers, consumers, and environmental groups. The role of
DOE in the code activity is limited, but it is critical in
providing technical assistance and accurate information to
states and localities as they consider adoption.
And I would note that efficient housing is important and
critical to all segments of our communities. A study of
efficient green-certified apartments in Virginia found that
residents saved an average of $54 a month, or almost $650
annually, on their electricity bills. This represents 3 percent
of their household income. Energy efficiency helps those people
save that money and, typically, that goes right back into the
local economies. So, to put a real-life example on it, I think
that is important to note.
We also believe that the training and implementation
provisions of the bill to assist in education and enforcement
of codes is a critical piece of the equation.
I also wanted to highlight our support for a provision of
the bill related to appraisal and underwriting, which has
already been spoken of. We support the voluntary approach to
improving the accuracy of mortgage underwriting with regards to
energy efficiency. The cost and value of efficiency must be
better captured in the process if we want to see broader
deployment of efficiency in existing homes and new
construction.
Finally, I did want to suggest a change to the bill. The
provisions related to fossil-fuel-neutral buildings should not
be eliminated, but updated. We would recommend modifying the
goals to zero-energy buildings or a net-zero energy portfolio.
This would allow a greater flexibility for agencies in
accomplishing their mission while being consistent with the
committee's goals of emissions reductions in the building
sector. Since the law has never been regulated, we also support
changing the compliance dates.
Thank you for the opportunity to be here today. It is truly
an honor. I look forward to answering questions that you may
have.
[The prepared statement of Mr. Howard follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. I want to thank you.
We now conclude the opening testimony from the witnesses.
And now, we will move to member questions. And I will begin by
recognizing myself for 5 minutes.
Mr. Ungar, in your testimony you highlight the Energy
Savings and Industrial Competitiveness Act. Specifically, you
detail its manifest, which includes energy savings for
consumers, customer energy waste, and improvement to air
quality. In your view, what is the likely impact of this bill
on job creation?
Mr. Ungar. Thank you, Mr. Chairman.
We do not analyze jobs impacts in this time. However, in
the past we have analyzed jobs impacts for previous versions of
the bill. We believe that this bill would create net tens of
thousands of jobs, likely over 100,000 jobs, over a period of
time.
This comes both from the actual jobs implementing the
efficiency measures, and it also comes from the energy savings.
That money goes back into consumers' pockets. They can, then,
spend that money, and that creates more jobs throughout the
economy. In our analyses, we also include the fact that there
is less money going into the energy sector, but, on net, we
find that it creates quite a large number of jobs.
I will also note that others have found that there is
currently 2.3 million jobs working on energy efficiency. The
number that was stated for Energy Star is actually low if you
consider the whole range of jobs that are working on Energy
Star products.
Mr. Rush. Each of you has mentioned in a positive sense the
FEMP program. Mr. Ungar, and any others who want to join in,
what is your assessment of the FEMP program? What are its
strengths and what are its weaknesses?
Mr. Ungar. I will just briefly say, and then defer to
others, that we think the program is a very good one. The
Federal Government should be a leader and FEMP provides
important assistance throughout the government, both on energy
savings performance contracts and, also, in other ways of
saving energy, both for new buildings and for existing
buildings. I believe they have at times gotten behind a little
bit on the federal standards for new buildings. So, there
certainly could be improvement, but it is a very important
program and we certainly support authorizing it.
Mr. Rush. Anybody else?
Mr. Howard. Yes. I would just echo some of the comments.
For us, FEMP bats above their weight in terms of their
performance versus their budget. I mean, they have an enormous
role in terms of providing efficiency across the federal
sphere.
One of the areas that is not subject to this, but it is
certainly something that they are precluded from doing because
of current law, is the longer-term execution of power purchase
agreements. Those are things that I know Congress has looked at
in the past that certainly would merit review.
In terms of some of the advice and some of the additional
activities, I think where we would sit is, if they had
additional authorities, some of the work or the discussion that
Ms. Schafer had discussed around some of the clarity around
ESPCs could be helpful. The other elements that could also be
helpful which they are precluded from doing in certain ways is
how to bake in broader resiliency or other cyber activities in
relation to performance contracting. There are some things
that, just because of the nature of what they might be looking
at, wouldn't be allowed to be baked into some of those
opportunities, but have enormous potential.
Mr. Rush. Ms. Schafer, do you have any additional comments?
Ms. Schafer. Not much more than what these two gentlemen
have talked about. I will say that they provide help to
agencies in every way, whether they are federal, whether they
are military. They do interpretations. They hold the hands of
individual managers at facilities to make sure they know what
they are doing and how to do it, make sure they are getting a
good deal from the private sector contractors, if that is what
they are doing. So, they have just been incredible.
They are moving towards doing more resiliency because that
is a high priority, as is cybersecurity. Almost everything we
do now includes cyber-secure provisions. They don't pay for
themselves. Those are the kind of things FEMP is working on
guidance on how one would incorporate that in a cost-effective
manner. So, there is just a ton that they do.
Mr. Rush. So, would anybody oppose the thought that FEMP's
budget should be increased?
Ms. Schafer. I think what FEMP would tell you is that--and
I may be speaking for them; I don't know--I guess what I would
say is they are doing very well with the budget they have. They
are short-staffed at the moment. So, just more money probably
isn't going to be hugely impactful right now, but, yes, there
are a lot more things they could be doing. Right now, their
core budget is about $28 million.
Mr. Rush. All right. That will conclude my time. I now
recognize the gentleman from Michigan, Mr. Upton, for 5
minutes.
Mr. Upton. Well, thank you, Mr. Chairman. I was sorry that
I had to be absent and missed some of the testimony, but I
appreciated getting copies of it for sure.
I have a couple of questions. Thanks for bearing with us as
we have a number of different subcommittees that are meeting
today. I know they are still meeting downstairs.
Mr. McIntyre, you are a little bit in the hot seat today,
in that one of the things that this committee prides itself on
over the last number of years, both under Chairmen Pallone and
Walden and when I was chairman, was really trying to build a
bipartisan consensus on a number of things. I can remember when
I first took over as chair, I urged my colleagues--I was, then,
sitting where this guy was--my colleagues to the right to work
with the colleagues on the left to get things done.
And that is really what they did on H.R. 3962. Mr.
McKinley, who is here, a Republican, and Mr. Welch, a good
Democrat, really worked together on building codes and worked
very closely with our colleagues in the Senate, Mr. Portman and
Ms. Shaheen, to do a bill. And the home builders I guess, to
put it nicely, have not been terribly excited about it, to say
the least. But do you think that there is a fair compromise
that many sides would support as it relates to the building
sector for energy efficiencies in different products that they
might have?
Mr. McIntyre. Thanks for the question, Mr. Upton.
Mr. Upton. Again, I am sorry I wasn't here for your
testimony. I raced.
Mr. McIntyre. No, no, that is fine. That is fine.
First of all, I want to make kind of a quick statement
because I didn't cover it in my beginning of my perspective
sitting here at the table. I am a builder. I am also a high-
performance builder. I am a RESNET rater. I am a code
inspector, a building inspector. I am a Michigan real estate
broker. So, I have a lot of different perspectives. Most of
them involve the consumer, the person that is paying for all
this and getting the value out of it. So, a lot of my answers
are going to come from that direction.
When you ask about the compromise, one of the key issues I
think right now is the cost-effectiveness and how we measure
that, how we value that, how we equate that to the consumer.
So, getting over that hurdle is going to be a key piece of it.
I have heard different interpretations, different revisions, of
what that cost-effectiveness is, how many years, from DOE's
current method to what this bill is proposing, how the DOE acts
to what the consumer wants.
And I know what the consumer wants. That is what I deal
with every day. And so, the cost-effectiveness of it and the
programs that promote cost-effectiveness of this bill are a key
hurdle. If we can get over that, we can come to some consensus
there----
Mr. Upton. What do you think the sweet spot would be in
terms of the time length for a payback period? Five years, ten
years?
Mr. McIntyre. Well, I will tell you how it goes when I sit
down----
Mr. Upton. Where do you think most of these folks are?
Mr. McIntyre [continue]. And I do this all the time with
consumers. I got one Friday. I got a new homeowner coming in,
their second meeting. That is going to be part of their
questions.
The general consumer is going to be looking for a three-to-
five-year payback. It doesn't come up in the initial meetings,
but, as we are trying to sell this--and, believe me, we build
these, folks. We build it. We are an Energy Star builder. We
are a HERS builder. So, we are promoting this.
And as that comes up in conversation, they are looking for
that three-to-five-year payback. I can usually get them to the
seven-year point. With everything we are talking about here,
the utilities and all those types of things, we can get them to
that point. Once you get past that, you pretty much have lost
them. They are generally not interested in costs that are going
to be incurred beyond that for a number of reasons.
Mr. Upton. Ms. Speakes-Backman, again, my apologies that I
wasn't here for your oral testimony.
One of the issues with the new technologies and systems for
energy storage, of course, is the concern about cyber attacks.
Can you expound a little bit more beyond what you might have
said before?
Ms. Speakes-Backman. The controls of energy storage devices
are really the brains behind how this is operated and how makes
the grid itself more resilient, more efficient, more
sustainable, and affordable. Cybersecurity is central to that
interest and that concern that our members have as the
industry. And so, we have been very supportive of the work that
DOE has done, especially in opening their new office. And we
stand ready to be helpful in any way that we can.
Mr. Upton. OK. Thank you. I yield back, Mr. Chairman.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. McNerney--Mr. Doyle. Sorry, Mr. McNerney. Mr.
Doyle, for 5 minutes.
Mr. Doyle. Thank you, Mr. Chairman.
As I said during the first panel, I think expanding our use
of energy efficiency and energy storage is going to be critical
if we are going to reach our climate goals.
Ms. Speakes-Backman, since energy storage systems of all
sizes and duration can play an important role in our energy
systems, do you believe that the technical assistance and grant
created by the Promoting Grid Storage Act will help expand the
deployment of innovative storage technologies?
Ms. Speakes-Backman. Absolutely.
Mr. Doyle. And how about if we paired that program, as well
as more research and development at DOE, with an investment tax
credit for storage, like my Energy Storage Tax Incentive and
Deployment Act provides? Would that be helpful to deploying
more energy storage?
Ms. Speakes-Backman. To be frank, there is no policy that
is more impactful than the storage ITC for standalone storage
resources. And I appreciate your leadership in that manner.
Mr. Doyle. So, you see that this incentive is really
critical to spur the development of solutions to the challenge
of developing long-duration storage?
Ms. Speakes-Backman. Absolutely. Studies have shown 16
percent increase in deployment in each and every year because
of the storage ITC.
Mr. Doyle. Thank you.
Dr. Ungar, I understand there is concern that having too
many requirements may discourage people from buying homes or
making them less affordable, but I believe that H.R. 3962 tries
to address this by incorporating economic and cost
considerations from the perspective of the building owners and
tenants as model energy codes are being developed, including
return on investment analysis. Can you explain why looking at
the life-cycle cost-effectiveness of energy efficiency
improvements it the best way to protect and ensure savings for
homeowners?
Mr. Ungar. Thank you. Thank you, Mr. Doyle.
Homes don't just last for ten years. They last for decades.
And it is not just the first homeowner, but the one after that
and the one after that who are going to be affected by the
energy-efficiency features of the home. We need to take all of
that into consideration.
I would also note that the financial considerations are
more complicated than just a simple payback. There are some
provisions and codes for which you can't quantify the payback.
There may be information or other provisions which are part of
a larger package that save energy or that make the home safer
and have better air quality that you couldn't calculate simple
payback, but which are important to the overall picture.
And so, we think it is important to look at the broader
economic considerations. In general, that means the life-cycle
cost-effectiveness. But we wouldn't say just to use that
metric. There are multiple metrics you can look at, but it is
important to take the whole picture into account.
Mr. Doyle. Yes, and just to clarify, the Department of
Energy can already set energy targets for residential model
building codes today, right?
Mr. Ungar. The Department of Energy did, actually. Back in
the George W. Bush administration, the administration announced
in codes hearings a goal of achieving 30 percent savings for
codes. They did that, actually, without a public process and
careful kind of deliberation that this bill would require. The
model codes did not achieve it in the next cycle, but,
ultimately, they did achieve that 30 percent savings.
Mr. Doyle. Yes, I mean, the target--these were non-binding,
right?
Mr. Ungar. Right.
Mr. Doyle. Yes.
Mr. Ungar. The federal government cannot force the
independent code organizations or the states to do things. In
this case, they said, this is what we think is needed in order
to achieve our energy goals, and the processes took that into
account.
Mr. Doyle. Right.
Mr. Ungar. As I said, they did not respond immediately, but
ultimately. And because there were many others who were also
looking for those savings, they ultimately responded and the
codes did improve.
Mr. Doyle. Thank you.
Mr. Howard, while ensuring that new buildings are as
energy-efficient as possible is important, we already have
millions of existing buildings in the United States that are
not going to be torn down anytime soon. So, what policy
recommendations do you have for how to improve the efficiency
of existing buildings?
Mr. Howard. Well, thank you for the question. And again, I
appreciate all the work that the committee has been doing on
these subjects.
Certainly, one of the areas that I would flag that the
committee has been considering is Congressman Tonko's
legislation on updating and enhancing the existing
weatherization program. The capacity for that program is well
beyond its means in terms of what it can handle in that process
now. Those are things that are immediately impactful for
communities all across the country, and especially communities
who have or people who have significant means in terms of not
being able to pay for a utility bill. So, that is one obvious
easy one. There are others that I can follow up with your staff
about.
Mr. Doyle. Thank you very much.
Mr. Chairman, I yield back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. Flores.
Mr. Flores. Thank you, Mr. Chairman.
And I thank the panel for joining us today. I just want to
let you know I am on the same page that many of you are. I was
just checking my home energy measurement system, and since
2013, my net energy usage is down 36 percent and my solar
panels have moved up from 31 percent, my annual usage, to 44.6
percent. So, I am on the same page. I have a difference opinion
maybe on how we get there from time to time.
So, Mr. McIntyre, let's start with you. What is the one
thing that the federal government could do from a regulatory
standpoint, perspective, whatever, that would help--what is one
technology or measure that would make implementing energy
efficiency more attractive to your home builders and, also, to
homeowners?
Mr. McIntyre. Well, the one thing is going to translate
into two or three, and that one thing is delivering value to
the consumer, putting it in a package that the consumer
realizes and receives value from it. And that is done a number
of ways or with a number of components.
No. 1 is cost. First, cost is important. We can all sit
here and talk about all the payback and everything, and I don't
disagree with that and we don't disagree against energy
efficiency. The consumer sees that first, and then, you have
got to get over that hurdle. So, keeping the cost in check,
having incentive programs in place, tax incentives, or what
have you, that are in place that help address that.
And address it consistently, not here today, gone tomorrow,
back again the next day, and then, gone the next day and back
again the next day, like they have been for the last several
years. Consistent, ongoing, repetitive. So, that is an
important one.
Secondly is going to be, as part of that equation, the
life-cycle cost or the life-cycle payback. The Appraisal
Institute and appraisals, right now, we do not effectively
recognize the value of energy features. I am going to call them
``energy features'' because there are all kinds of them, just
like a granite countertop or tile floors. It doesn't
effectively recognize that.
So now, if we don't have that two-, three-, five-, seven-
year payback--and the average homeowner used to live in their
home seven years; now it is up to near 13--if they don't
receive that payback in that first period of time before they
sell that home and they move, they have lost that and it is
never regained.
So, they need to receive it when they sell the home. If
they get a part of it in utility payback, they get the rest
when they sell the home, that comes with the appraisals.
Addressed in the appraisals, getting it recognized, so the
appraisers have a tool to go to and treat it just like a
granite countertop or a tile floor. Those are two areas that
would be key.
Mr. Flores. OK. Thank you.
I have another question for you, Mr. McIntyre. And Ms.
Hiromoto, I would like to ask you to answer this one as well.
Some jurisdictions are starting to try to ban the delivery of
natural gas to commercial buildings and also to homes. And some
folks are concerned that the building code language in H.R.
3962 would worsen those attempts to reduce consumers' choice of
energy. So, my question is this: will consumers still be able
to have natural gas delivered to their homes and businesses,
should they codes be enacted? Let's start with you, Mr.
McIntyre.
Mr. McIntyre. Well, the first thing I would say is
consumers should have a choice to have natural gas or
electricity, their choice, first and foremost.
Mr. Flores. OK.
Mr. McIntyre. But, secondly, with the stretch codes that
are in this legislation, that is going to drive more to site-
source-generated utilities, which is going to lead you to
electric. When you get to electric--and I understand you have
got panels; I have them also--our utility company doesn't allow
you to generate more than what you use on average. So, you
can't make up, if you have natural gas in the home, you can't
make up for that to get to net zero by generating excess
electricity. So, in essence, it drives you away from natural
gas and more toward electricity just out of default in the code
language.
Mr. Flores. Ms. Hiromoto, what are your thoughts on that?
Ms. Hiromoto. I think the variability of energy sources is
important, but so is the clear goal of a net-zero carbon
future. And if we are able to define ways where we can get to
zero, which is a very clear and distinguishable and simple
goal, then it will require us to move away from fossil fuels
and to more renewable sources of energy.
Mr. Flores. Mr. McIntyre, we have got a few seconds left.
So, I would like to ask you a question. Who is the hardest
impacted by tight energy standards for new construction?
Mr. McIntyre. Was that for me?
Mr. Flores. Yes.
Mr. McIntyre. Oh, I am sorry.
Mr. Flores. What income group is most----
Mr. McIntyre. I am sorry. I didn't----
Mr. Flores. OK. What income group is most heavily impacted
by tight energy efficiency standards on new construction?
Mr. McIntyre. Low-cost.
Mr. Flores. Yes.
Mr. McIntyre. Low-income. Or low-income.
Mr. Flores. And so, it could have a perverse standard of it
increases the home price so much that a low-income buyer can't
get into it. And then, they are stuck where they are in a high-
energy-use situation.
Mr. McIntyre. Correct.
Mr. Flores. So, I guess the key point is we need balance,
is that correct?
Mr. McIntyre. Correct. Correct.
Mr. Flores. OK. Thank you.
I yield back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. McNerney for 5 minutes.
Mr. McNerney. I want to thank the chairman for recognizing
me.
I thank the witnesses, too. I appreciate your testimony.
The varying inputs are important to us in developing good
legislation.
Ms. Speakes-Backman, thanks for your testimony.
You highlighted storage's unique flexibility among all the
grids' resources with good reason. Can you speak more about how
this beacon on the electric grid can efficiently ensure that
supply and demand reliably match?
Ms. Speakes-Backman. Thank you for the question. And
especially thank you for the question now that my microphone
works. I was feeling a little incompetent there. So, thanks so
much.
Yes, so the very exciting thing about energy storage is
never in the history of the electricity industry have we had a
time when we can decouple the element, have the element of time
decoupled from when you are generating it and when you are
delivering it. And so, because of that, you can make the
generation sources more efficient. Their capacity factor moves
up quite a bit because you can store that energy when it is
generating and you don't need it and bring it out to the grid
during times of higher demand. Actually, when it comes to the
carbon impact, during times when often the carbon impact of
generation is higher with the peaking plants. And so, it helps
to even out the assets that are already on the grid, but it
also helps on the transmission and the distribution side in
terms of making the grid itself more efficient in increasing
the capacity factor there.
Mr. McNerney. I think the challenge is the massive amount
of energy that needs to be stored, depending on when there is
solar over a period of a couple of days or even week. What is
the biggest challenge, in your mind, in terms of getting to
that place where we can rely on storage to fill in that gap for
a long period of time.
Ms. Speakes-Backman. Right now, with the penetration of
variable resources like wind and solar, we are not really at a
current crisis period where we need to have these long-duration
seasonal storage and daily storage, but we will get there, if
the projections are correct, in more solar and wind on the
grid. And so, this is why I think bills such as the Promoting
Grid Storage Act are so important, in that it is going to help
with the research and development of cost-effective long-term
storage. And we are very excited about that prospect.
Mr. McNerney. It sounds good. I hope we get there.
Ms. Speakes-Backman. Me, too.
Mr. McNerney. What about the resilience and reliability
aspects of storage
Ms. Speakes-Backman. Right. So, at least for the battery
storage that is on the grid, the micro-interruptions, the
ability to manage regulation on the grid, the frequency
regulation, is insurmountable. This is sort of how storage as a
modern deployment trend became so in PJM territory. So, on
reliability and resilience for short term, those batteries are
right there. And for pumped-hydro and for some of the
mechanical storage technologies that are there for a little bit
longer term, reliability and resilience for batteries and for
other technologies to be there on the grid when generation goes
down is really important, especially in wintertime and up in
the Northeast.
Mr. McNerney. I feel guilty, I am not going to be able to
ask every one of you a question, but I will move forward.
Dr. Ungar, Mr. McIntyre cites that H.R. 3962 will allow the
Department of Energy to hijack the building code development
process. But the legislation is intended to ensure that DOE
conducts open, public process for setting energy savings
targets, including publishing its analysis, evaluating a wide
range of economic impacts such as the return on investment.
Additionally, the targets themselves are ultimately non-
binding. There is nothing in the legislation that requires the
code developers to meet those targets. Do you agree with that?
Mr. Ungar. Absolutely.
Mr. McNerney. Can the Department of Energy right now today
set targets for residential model building codes?
Mr. Ungar. As I said, they can do it right now and they
have.
Mr. McNerney. So, this legislation doesn't impose anything
additional?
Mr. Ungar. It would encourage DOE to set targets and would
also encourage them to provide more assistance to the code-
setting bodies as well as others. That is not hijacking the
process. DOE participates in the process already. Their
technical assistance has been invaluable in that process. And
so, it is not creating something new. It is encouraging DOE to
do more effectively what they are already doing.
Mr. McNerney. OK. All right, Mr. Chairman, I am out of
time.
Mr. Rush. The gentleman yields back. The Chair now
recognizes Mr. McKinley for 5 minutes.
Mr. McKinley. Thank you again, Mr. Chairman.
And, Mr. McIntyre, let me just pass on one comment to the
West Virginia Home Builders Association. Kent Pauley does a
fabulous job in West Virginia representing the homebuilders. He
and I have had conversation after conversation about this
because we want to make sure we are reaching some form of
compromise on this legislation.
Mr. McIntyre. Right. We do, too.
Mr. McKinley. Because we well know--and Kent understands
it--if it is not bipartisan, it ain't going to happen. And so,
we have been trying to work in a bipartisan fashion. Otherwise,
we are going to have the status quo. The status quo has been a
little bit of a problem in energy consumption and energy
policy. So, we are trying to work something out.
So, I appreciate some of the comments that you have raised.
I have heard a little conditioned love on this H.R. 3962. I
didn't see anyone really embracing it, as I hoped for, but I am
a realist on what this is.
But I would like to go back to Ms. Hiromoto. My firm was an
engineering firm. We were an EA. Now, for the people here who
don't know what that means as an EA firm rather than an AE
firm, it wouldn't be the first time that I would disagree with
architects. I made a point of disagreeing with architects in
our firm.
So, in this case, I want people to understand the Section
433 that you said, but only if that is out, will you support
it. That is what I heard. Am I correct? Only if it is out will
you support this bill? Well, to make sure that people
understand Section 433, if I can just read this one, it
established a requirement, 433. We are repealing that, so that
fossil fuel energy consumption of buildings is reduced to zero
by the year 2030. That is pretty Draconian. And for people that
espouse to say, ``I want an all-of-the-energy approach,'' that
doesn't do that. That says we don't want gas, coal, oil used to
create energy. So, I am going to fight you on this, okay? And I
think a lot of folks will on it.
So, when it is amended, we will find a compromise. Whether
or not, as Mr. Howard said, we change the date, but look at
ways, because that is what we want to do, is innovation to be
able to do that.
But let's switch back over. So, Mr. Ungar, I think I heard
Mr. Doyle say it and I just heard Mr. McNerney say the same
thing. It is, currently, that DOE can set targets for the
residential building, the model building code. I want to make
sure this is clear on that. Would this legislation be a
departure on how codes have been traditionally developed?
Mr. Ungar. This legislation keeps in place the process by
which codes are developed and adopted. What it would do is
encourage DOE to extend what it already does in helping all the
way through the process.
Mr. McKinley. The conversation with West Virginia Home
Builders Association and the National Home Builders has been,
are we going to do away with--or is it going to go one-size-
fits all? Because what would be appropriate in Washington or
Texas is different than it would be in West Virginia. So, can
you give us some assurance, your impression from the IECC
building code, would it be broken down by code, sections of the
country as well?
Mr. Ungar. Oh, absolutely. The codes already are divided
into eight different climate regions. Those regions, by the
way, were developed by the Pacific Northwest National Lab on
behalf of DOE. It is the kind of technical assistance that DOE
provides. The requirements for a building envelope and for many
different things vary by region. And then, of course, each
state can look at those and make sure that it makes sense for
that state. But, yes, they already are set by climate and----
Mr. McKinley. And Mr. Pauley also brought the point--and I
think many people here in this panel have talked about it--the
additional costs that could be incurred. And that was why I was
raising that question back--I don't know if you were there when
I was challenging the Secretary about that, about could it
exacerbate the problem of affordable housing by that? And you
heard his testimony that it would not, and they are going to do
everything they can to make sure that doesn't happen. But would
this legislation help homebuyers afford the upfront capital
cost of energy efficiency?
Mr. Ungar. So, the legislation would both help afford the
upfront costs, particularly through the SAVE Act provision that
would account for the energy efficiency in mortgage
underwriting, so that homebuyers could get a larger mortgage if
they are buying a home in which they can afford to pay a larger
mortgage and which the home is more valuable.
In addition, affordability is not just the upfront cost. It
is those homebuyers have to be able to afford to pay the
monthly costs of a home, and that includes a mortgage and it
includes energy costs. And it would help lower those costs and
make homes more affordable.
Mr. McKinley. OK. And, Mr. Chairman, I yield back.
My point here is I just want to make sure that DOE does not
use a heavy hand as they set this assistance with it. And I got
the impression from the Secretary they are not going to do
that, but I just want to make sure that the panel understands
we are trying to make sure it is no heavy hand.
Mr. Rush. The gentleman yields back. The Chair now
recognizes the gentleman from New York for 5 minutes.
Mr. Tonko. Thank you, Chairman Rush.
And thank you to our panel.
We know 40 percent of domestic energy use is associated
with residential and commercial buildings. These are long-lived
assets with slow stock turnover. So, it is critical that new
buildings are energy-efficient, and I believe building codes
play an important role.
I certainly appreciate the bipartisan, consensus-based
approach in Mr. Welch and Mr. McKinley's bill. And I think we
can even go further, but I do commend them on the efforts they
have made.
Dr. Ungar, can you explain DOE's role in developing model
codes?
Mr. Ungar. Certainly. Model codes are set through
stakeholder process. The federal government recognizes the
International Energy Conservation Code set by the International
Code Council for residential and the ASHRAE Standard 90.1 for
commercial. Their processes are actually quite different, but
they both involve stakeholders and they both refer to them as
consensus processes.
DOE's role in that is primarily to provide technical
assistance. I mentioned one case where there were more climate
regions. There was a desire to simplify the codes. And so, DOE
helped to determine which county should go in which climate
region, to make the codes as effective as possible.
DOE also can propose amendments in-house. Those amendments,
then, are considered in the same process as amendments that
anyone else, including us, may propose. But DOE will do that,
and because they have their resources, they can do that
particularly with very strong technical backing and show why
they think these amendments are important. They also provide
technical assistance to states and sometimes financial
assistance to both the code-setting bodies and the states.
Mr. Tonko. Yes. The sponsor, Representative Welch, couldn't
be with us today, but he and I share some concerns, and he
wanted some questions on the record.
So, would this legislation mandate that any state, local
government, or tribe adapt those codes?
Mr. Ungar. No.
Mr. Tonko. OK. Can you give us a sense of how strengthened
codes would make new homes more valuable and save homeowners
energy and money?
Mr. Ungar. As you have heard already today, homeowners
recognize that there is value in energy-efficient homes. And
there is significant evidence that they are willing to pay more
for homes. Unfortunately, the current appraisal process doesn't
usually recognize that. I have seen that in my own home with
the ground-source heat pump where generally that is ascribed no
value, even though it is keeping my energy bills low. And we
know from the condos that I live in that people will pay more
them. They help keep homes affordable by allowing people to pay
the costs of owning home. That includes the energy costs. And
when you add in the small added extra cost of the mortgage and
the much larger energy savings that people get, that makes it
more affordable, so that they can stay in their homes, which is
very important.
Mr. Tonko. So, any upfront cost increases would be made up
in savings fairly quickly?
Mr. Ungar. So, PNNL, again, has analyzed codes. If you look
about the most recent code, we should almost know savings. But,
previous codes, one of the ways you can look at it that I think
is effective is to say, how long does it take for a homebuyer
to come out ahead? There is a little bit more in the down
payment they have to pay and a little bit in the mortgage, and
then, they are receiving energy savings. PNNL has analyzed that
for most states, and usually that time to come out ahead on a
cash-flow basis is in months, not years, months.
Mr. Tonko. And how would the bill ensure DOE's process is
more open and more transparent?
Mr. Ungar. The bill has multiple provisions to require DOE
to go through a rulemaking process to receive comments, to
publish the methodology by which they do the analyses. It is a
major concern of the bill, both on transparency and for public
input.
Mr. Tonko. Thank you.
And, Ms. Speakes-Backman, in New York City storage has been
deployed as a non-wire solution to avoid new T&D
infrastructure. How can we best ensure storage is given proper
consideration in planning processes for all of its grid
benefits?
Ms. Speakes-Backman. Thank you very much for the question.
We have seen a lot of activity from the utilities, the
investor-owned utilities, as well as municipals and co-ops, but
not enough yet. What we are suggesting to them is that you
cross the silos; you take the generation long-term planning;
you take the transmission or the distribution long-term
planning, and you look at a single asset across all three of
those planning processes and coordinate it.
We heard an example yesterday of Duke Energy actually doing
exactly that. And because of it, they have saved millions of
dollars in transmission and distribution upgrades by installing
energy storage instead.
Mr. Tonko. Thank you very much.
Mr. Chair, I believe I am out of time. I yield back.
Mr. Rush. The gentleman yields. The Chair now recognizes
Ms. Barragan for 5 minutes.
Ms. Barragan. Thank you, Mr. Chair, for holding this
hearing, and for our panelists for being here today.
Give me just a moment here. I wanted to take an opportunity
to mention a bill by my colleague who couldn't be here today,
Congress Member Peter Welch, who has building codes provisions.
It is the Welch-McKinley bill. It is H.R. 3962. It is a bill
that will strengthen national model building codes to make new
homes and commercial buildings more energy-efficient and code-
writing processes more transparent.
It is important, I think, that we, as we have a
conversation about energy efficiency and we have a conversation
about how do we get to 100 percent clean by 2050, that we take
into consideration efficiency and we take into consideration
what we can be doing as a Congress.
I want to, first, apologize. There is a competing hearing
downstairs on women's reproductive issues. And so, I have been
running back and forth, and I have missed a bit of the
conversation that has been happening here today. So, I
apologize if some of this is a little redundant.
Mr. Howard, I am going to go to you, as somebody who is
with the U.S. Green Building Council. If you could just
elaborate a little bit if you have any thoughts on any of the
pending bills, or certainly Mr. Welch's bill, on making sure
that Congress is considering what we need to for----
Mr. Howard. Yes, I appreciate that. And certainly, I would
reiterate from some of my written testimony that the work that
has been done around comprehensive energy management for
federal facilities is really important; having strong energy
and water goals for an extended period of time is really
important, and that we lack the critical needs of federal
leadership in those areas.
In addition, I would say that we have spoken in great
lengths about codes and the code process within DOE and the
proposed legislation. I would reiterate that the process of
advising and providing technical assistance to states and
localities as they look at this is a voluntary option, and it
is certainly something that is supported by a broad group of
stakeholders, whether it is real estate interests, the U.S.
Chamber of Commerce, the National Association of Manufacturers,
others, who look at the code development processes that are in
the comprehensive energy bill as a win-win for consumers as
well as efficiency.
Ms. Barragan. Great. Thank you.
Dr. Ungar, I understand that your organization has done an
analysis of the bill H.R. 3962. Is that correct?
Mr. Ungar. That is correct.
Ms. Barragan. And that it shows cumulative carbon emissions
reductions through 2050 of 1.3 billion tons. Where do the vast
majority of those reductions come from in this bill?
Mr. Ungar. By far, the largest portion of those reductions
come from the building energy codes provisions. It can be
challenging to analyze, but those codes affect homes and
commercial buildings throughout the country. And when you make
improvements, those improvements last for decades. And so, we
find that those are really significant energy savings.
Ms. Barragan. Great.
Dr. Ungar, I am also interested in developing programs and
opportunities where people in marginalized communities facing
energy insecurity and energy-related pollution can gain access
to energy efficiency careers. How can these energy efficiency
and building codes bills help to accomplish this?
Mr. Ungar. So, training and assistance really for the
workforce as a whole, but, in particular, for underserved
communities is very important. The bill you mentioned, the
Welch-McKinley bill, actually has two provisions on training
that are important. One I mentioned in my testimony is on
Industrial Assessment Centers. These centers are located in
communities throughout the country, and they help people train
students to manage industrial energy use and do energy audits,
and then, to use those to help small and medium-sized
manufacturing plants become more efficient. The bill proposes
to extend those to community colleges and to labor training
programs and other places, particularly where they may be even
more effective in reaching underserved communities.
In addition, I will mention there is a similar program for
buildings--it does not exist yet, but it would be authorized in
this bill--called Building Training and Assessment Centers. And
those would apply the same thing on the building side, which is
even more widespread, to help energy management in buildings.
Ms. Barragan. Well, great. Thank you to our panelists.
And I yield back.
Mr. Rush. The gentle lady yields back.
This concludes the witness questioning. And I certainly
want to once again thank all of our witnesses for your
participation.
And I just want to add a note to Dr. Ungar. Thank you so
much again for being here. And you were an aide for former
Member Markey who was on this committee. And so, we recall your
participation very fondly. So, thank you again and welcome
back.
Mr. Ungar. Thank you, Mr. Chairman.
Mr. Rush. Yes.
I remind embers that, pursuant to committee rules, they
have ten business days to submit additional questions for the
record to be answered by the witnesses who have appeared before
this subcommittee. And I ask each witness to respond promptly
to any such questions that you may receive.
And I would also ask for unanimous consent that the
following documents be entered into the record:
A letter from the National Rural Electric Cooperative
Association in support of H.R. 4447;
A coalition letter in support of legislation to address the
energy conservation standards for ceiling fans;
A coalition letter in support of H.R. 3962;
A letter from the Real Estate Roundtable in support of H.R.
3962;
A letter from the Grand Canyon State Electric Cooperative
Association in support of H.R. 4447;
A letter from the Consumer Technology Association in
support of H.R. 3962;
A letter from the American Public Gas Association in
support of H.R. 3962;
A PowerPoint presentation for the Department of Energy's
investment in research and development from fiscal years 2017
through 2019 for energy storage;
A letter from the Sierra Club in support of H.R. 3962;
A letter from a Kentucky fan company in support of H.R.
5847.
And seeing no objection, these documents are entered into
the record without objection.
[The information appears at the conclusion of the hearing.]
Mr. Rush. And this concludes the subcommittee hearing, and
I want to thank you once again. At this time, the subcommittee
stands adjourned.
[Whereupon, at 1:51 p.m., the subcommittee was adjourned.]
[The prepared statement of Mr. Walden follows:]
Prepared Statement of Hon. Greg Walden
Today's hearing will allow us to examine policies that seek
to save energy, reduce emissions, and ensure electricity
reliability while protecting the interests of taxpayers and
consumers. We will consider six bills that address two
important energy policy areas for the committee--energy
efficiency programs and energy storage technologies.
As we know from our experience moving legislation on this
panel, the most effective measures build on past bipartisan
approaches and take reasonable steps to advance innovation and
energy savings. Our responsibility today is to review the
measures carefully to identify the policies that will ensure
meaningful, effective reforms.
For this reason, I am pleased that Undersecretary for
Energy Mark Menezes, is here to provide the Department of
Energy's perspective and suggestions. Most of the bills under
consideration today involve DOE directly or will be reliant
upon DOE resources and information. And it is DOE's resources
and information, its technical capabilities, that help support
the acceleration of innovation across the energy landscape. So,
undersecretary Menezes, welcome back to the Committee.
One of today's bills amends the Public Utility Regulatory
Policies Act of 1978, known as PURPA, to require state
electricity regulators to consider investments in energy
storage systems as part of the resource planning process. While
these ``states-must-consider'' provisions are voluntary, we
must be careful not to add to the regulatory burden without
adequate justification.
As we review these bills, I will be interested to hear from
DOE to understand what they are currently doing in this space,
and what additional authorities, if any, would help further
their mission and priorities.
Take energy storage for example. These technologies promise
to enable more reliable and flexible electricity systems.
Improvements in these technologies may increase the viability
of alternate energy sources, such as wind and solar. They also
promise to provide the tools for utilities to respond to the
growth of intermittent renewable generation, to protect the
grid from power disruptions, and to lower congestion on the
transmission system, which can in return lower electricity
rates for consumers.
My home state of Oregon has been ahead of the curve when it
comes to recognizing the benefits of energy storage as many of
our electric utilities are integrating energy storage projects.
In Richland, Washington, across the river from my district, the
Pacific Northwest National Laboratory, is among the DOE
facilities that are working to advance and develop energy
storage technologies and analytical tools for grid-scale
deployment.
As DOE develops new tools and assists development of new
power electronics, polices that pave the way for deployment
should be examined. Fortunately, the electric industry,
particularly investor owned utilities, have been increasing
capital expenditures by tens of billions of dollars to upgrade
grid and transmission infrastructure, which will help harness
the benefits of DOE's work.
Yet, some portions of the electric sector do not have the
resources to invest in innovative new technologies. The
bipartisan bill by Mr. O'Halloran and Mr. Mullin aims to
provide targeted DOE technical assistance and grants to rural
electric cooperatives and non-profits to help share DOE know
how. This is the kind of legislation that deserves our
attention.
On the energy efficiency front, several measures today
would help to reduce emissions and save taxpayer expenditures
over the long term. For example, authorizing in statute DOE's
Federal Energy Management Program, as proposed in a measure by
Mr. Welch and Mr. Kinzinger, would build upon reforms
considered in previous Committee work to expand public private
partnerships in federal facilities.
This is the kind of policy, grounded in innovation, not
regulation, that offers the surest path to more efficient use
of energy. Provisions in the bill by Mr. Welch and Mr. McKinley
would also improve federal and industrial energy efficiency and
seek to accelerate innovations in buildings.
When it comes to ways to save energy and improve the
performance of the homes where we live and the buildings where
we work, we should aim for solutions that are affordable, cost-
effective, and appealing to consumers. With a careful balance
of incentives and market-driven policies, consumers will choose
the products and services that work best for them.
We should support the development and deployment of new
technologies that use less energy, but we need free markets and
consumer choice to drive that innovation. We should avoid
mandates that stifle growth and make homes and buildings more
expensive. I firmly believe we can find common ground with
solutions that are focused on affordability, cost-
effectiveness, and as always, consumers.
I look forward to hearing from DOE and the witnesses on the
second panel to explore these issues to ensure our legislative
efforts will work for energy security, energy savings, and for
the American consumer.
Thank you, and I yield back.
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