Democrats, GOP spar over Chu plan to upgrade power lines

Source: Hannah Northey, E&E reporter • Posted: Wednesday, September 12, 2012

A heated dispute over an Obama administration initiative to modernize the country’s sprawling electric grid triggered a partisan brawl in the House Natural Resources Committee yesterday, with a top Democrat accusing his GOP colleagues of trying to implement a “socialist electricity system.”

Committee ranking member Ed Markey (D-Mass.) accused Republicans of prematurely attacking and mischaracterizing Energy Secretary Steven Chu’s plan to upgrade power lines and bolster renewables and cybersecurity through the country’s power marketing administrations (PMAs). Republicans are pouncing on the memo as part of their “anti-clean energy” campaign that will culminate with this week’s vote on the “No More Solyndras” legislation, Markey said (E&E Daily, Sept. 10).

Republicans “want the federal government to continue owning huge pieces of the transmission system, and they oppose operating it in the most … efficient manner possible,” Markey said. “Not only do Republicans support the socialist electricity system, they support the backward and inefficient socialist electricity system, like it was the old Soviet Union or Chinese.”

Republicans, on the other hand, say the plan could trigger price spikes and point out that it has garnered criticism from a host of industry groups and a bipartisan collection of lawmakers.

At issue is a memo that Chu issued in March that outlined tailored goals for each PMA — the Bonneville, Western Area, Southeastern and Southwestern power administrations — for modernizing its system.

The PMAs currently market hydropower from federal hydropower projects, and Chu called on the DOE entities to implement his goals, including the creation of rate structures to support energy efficiency, demand response, renewables and the deployment of electric vehicles.

Chu’s initiative aligns with the Obama administration’s push to green the grid and would reach far, considering the PMAs oversee more than 37,000 miles of transmission in 20 states.

But Rep. Doc Hastings (R-Wash.), the committee chairman, criticized Chu for declining — a second time — to answer questions about the memo in person, noting that the secretary had personally signed the document. Chu should “pull the plug entirely on this misguided effort,” Hastings said.

“The Obama administration and the Energy secretary, in particular, should have heard loud and clear the message that they needed to work with those ratepayers most impacted by the memorandum and that maybe they had gone too far,” but they “failed to get the message,” Hastings said.

Hastings quickly pointed to concerns over the memo on Capitol Hill.

After the administration ignored bipartisan opposition to the plan, the House Appropriations Committee approved language to bar the initiative from moving forward, he said (E&E Daily, May 30). In June, a bipartisan group of 166 lawmakers — including 40 senators and 126 House members — accused Chu of trying to change the role of the nation’s power marketing administrations without congressional approval.

Industry witnesses echoed those sentiments yesterday.

Joel Bladow, senior vice president of transmission for the Tri-State Generation and Transmission Association in Colorado, said DOE bulldozed ahead with the effort without taking comment up front. DOE most recently wrapped up meetings to take comment on how the Western Area Power Administration can upgrade its system, which covers 15 states, and is expected to formulate recommendations by the end of the year.

“DOE defined the road we were on and then asked us for input on that road,” Bladow said. “They may be on the wrong road.”

Mark Crisson, president and CEO of the American Public Power Association, which represents companies that buy power from the PMAs, said DOE has rolled out a “confusing and secretive” initiative that has been poorly organized and misinformed, and that the justification for the memo has shifted. Crisson also expressed concern in his written testimony that DOE’s desire to revamp the western United States’ market structure could tax existing resources and spike power costs.

But Lauren Azar, Chu’s top energy adviser, defended the memo and said much of the criticism being mounted against the secretary’s initiative and subsequent public stakeholder meetings is premature. Azar also said DOE ultimately oversees the PMAs and is responsible if the system fails and that the federal government needs to modernize the system.

WAPA, for example, needs to upgrade aging parts of its electric system — at a cost of $2.3 billion — that could translate into $100 million annually during the next two decades, she said. But WAPA receives $15 million to $20 million annually through appropriations and borrows $50 million each year from its customers, leaving a running shortfall that forces the entity to use money that would have gone toward new projects.

“We think maybe that there’s a better way,” Azar said.