Chu to miss heated GOP hearing over controversial grid upgrades

Source: Hannah Northey, E&E reporter • Posted: Monday, April 23, 2012

House Republicans won’t get the chance they were banking on to grill Energy Secretary Steven Chu about a controversial plan to upgrade transmission in the nation’s power marketing administrations that they suspect will trigger electricity price spikes.

The Energy Department said Chu will be traveling and unable to attend the House Committee on Natural Resources hearing Thursday. Chu will be leading the U.S. delegation to the Clean Energy Ministerial in London, DOE said.

Chairman Doc Hastings (R-Wash.) had called on the secretary to testify before his committee earlier this month to assure Congress that his new directive would not change the core purposes of the power marketing administrations (PMAs) or cause electricity prices to increase.

Hastings also said the plan should be scrapped until Chu made that clear (E&ENews PM, April 5).

Chu’s memo outlined a strategy for how the nation’s four PMAs can leverage partnerships, rate-making power and financing to upgrade transmission and install new technologies to improve the transmission system and make it more accessible for renewable power generators. Such entities, the memo also noted, are uniquely positioned to serve as “test beds for innovative cyber-security technologies.”

The PMAs — the Bonneville, Western Area, Southeastern and Southwestern power administrations — are independent companies within the Energy Department that market wholesale electricity, mainly from federal hydropower projects.

Hastings has argued that the memo would dramatically change the administrations’ core mission of providing low-cost hydropower and instead force the entities to impose “experimental schemes” to pick winners and losers in the energy market.

DOE, in return, has said it is working with the regional PMAs to upgrade the grid to ultimately save consumers money and support growing and changing energy needs in coming decades (E&ENews PM, April 5).

The memo was spearheaded by DOE senior adviser Lauren Azar, who has said the initiative will “capture the economies of scale” in the electric sector and eventually decrease costs for customers through energy efficiency and demand response (E&E Daily, March 21).

Jen Stutsman, a spokeswoman for DOE, said the agency had offered for a “senior” agency official with expertise on the power marketing administrations to testify in Chu’s place, but the committee did not accept the offer.

Jill Strait, a spokeswoman for Hastings, said in an email Friday that Chu declined the invitation to attend the hearing, “so the committee will hear from a panel with representatives of impacted consumers.” Those witnesses include officials from the National Rural Electric Cooperative Association, the American Public Power Association, Tri-State Generation and Transmission, and the Public Power Council.

Chu’s plan has also garnered criticism from South Dakota Republicans Rep. Kristi Noem and Gov. Dennis Daugaard, who told Hastings in an April 20 letter that the DOE directives “are a threat to the reliable and economic electricity that is provided in South Dakota by hydroelectric dams on the Missouri River.”

Noem and Daugaard also said the memo would increase rates and reduce the value of federal power for consumers.

The conservative Heritage Foundation and the American Public Power Association, which will also be represented at the hearing, have raised concerns that the memo could raise costs for consumers.

The hearing is also likely to touch on Republicans’ concerns over cost overruns associated with the Western Area Power Administration’s $3.25 billion in loan authority. Rep. Tom McClintock (R-Calif.), the Water and Power Subcommittee chairman, introduced legislation to repeal WAPA’s authority, which the House Natural Resources Committee passed (E&E Daily, March 21).

DOE’s inspector general released a report last year that found the program lacked internal controls to protect taxpayers and prevent cost overruns. DOE said that criticism was mainly directed at the Montana Alberta Tie Line LLP, a project that was stalled and has since moved forward.

Schedule: The hearing is Thursday, April 26, at 10 a.m. in 1324 Longworth House Office Building.

Witnesses: Glenn English, CEO of the National Rural Electric Cooperative Association; Mark Crisson, CEO of the American Public Power Association; Joel Bladow, senior vice president of transmission at Tri-State Generation and Transmission; and Scott Corwin, executive director of the Public Power Council (all invited).