 We have, you've already heard from Barbara Tyron. Barbara is the Executive Director of Government and External Relations for EPRI, the Electric Power Research Institute, which I guess is headquartered in California. Three different locations, okay. She serves as the principal liaison between EPRI and Congress and the administration. They, EPRI is a great organization in terms of its R&D and a lot of the studies that they do and I think Barbara is going to talk about that. She is, she's been with EPRI for almost 20 years and has a prior life at Detroit Edison, at the KCPNL, Great Plains. She worked for Empire for a while and started out as a management consultant at Booz Allen and Hamilton and so Barbara has a wealth of experience. She is a, she has an MBA from from Yale and a bachelor's from Stanford. I, I always enjoy listening to Barbara and it's, I think she will add immeasurably. She's going to talk about one of, I think in part anyway about one of EPRI's recent, recent studies and I look forward to that and I'm sure she'll tell you where you can get copies of it. Kristen Lyons is a partner at Scott Madden. Scott Madden is, I'm proud to say, a Wires member but Kristen is a person I encounter quite a bit on the, on the speaking circuit. She is a frequent speaker at things called transmission summits. I don't know how you can have so many transmission summits but but it you know and maybe it's like the Himalayas I have no idea but it but there one is better than the other. I think this is a summit. I mean it doesn't get any better than this. So anyway Kristen's been with Scott Madden since 1999. She's does expert witnessing work. She's a great analyst in, in providing client services. I've run into Kristen on several occasions and she is a graduate of Gettysburg College and has an MBA from Southern Methodist. I'm, I'm always, always look forward to, to what Kristen asked to say. The, the, the last panelist is Judy Chang. If you look at the Wires reports, you will find her name on, on several of them because we have asked her on a couple, several previous occasions to do a study of some aspect of transmission, transmission planning. She is a, an energy economist and a policy expert and has a background in electrical engineering. Judy has, has been a really quite, I guess one of the big brains in the business I would, I would say. She's led transmission systems, system planners, market design experts, associated state stakeholders in improving market design and that work as you know is never done. I think, I think we have a long way to go and I think one of the things we're going to talk about on this panel is looking forward to the need for transmission, the need for a more flexible grid, the need to integrate new technologies and so forth. How do we, how do we, how do we plan, you know, other than simply using some crystal ball? There are ways we can actually ascertain what the future looks like and what the transmission grid needs to be. Judy is a, a, a, holds a master's in public policy from the Harvard Kennedy School and, and, and an electrical engineering computer science degree from UC Davis and she is now director of the, the Brattle Group. I'm, I think this is a great, as a great panel and I'm not going to talk anymore. I'm going to leave it to them. Do you want to use the podium? Yeah. Okay. Great. Good morning everyone. I'm Barbara Tyron with the Electric Power Research Institute and it's a real pleasure to be here with all of you talking about EPRES Integrated Energy Network. This is a new analysis, as Jim indicated, that we're just coming out with. I see that the subtopic for today's panel is what the electrified economy will look like in 2037, which sounds like a long way out, but I'm going to talk a little bit about this analysis and what our projections are around that energy future. So let's begin with a statistic or a projection I should call it. This was in the EPRI journal, which is published regularly and I hope you all will avail yourselves of it. It is free and publicly available, as I mentioned, but in the January issue EPRES president and CEO projected that we will have more technology transformation in the next eight years in the energy sector than we have in the last 25. I'll repeat that. More technology transformation in the next eight years than in the past 25. So you can see that we are really on our way here into a very exciting future leading to 2037. Now EPRES Integrated Energy Network that we're working on right now is not in isolation from some of our past work. For those who may recall in 2007, we came forward with the prism, which looked at the entire suite of fuels and technologies that generate electricity and that does mean renewable energy, which we've seen, of course, advance tremendously in those 10 years, but also the central base load generation and that was culminated then in 2014 with something called the integrated grid, which I hope some of you may be familiar with, which looked at the value of DER, distributed energy resources, of central base load power plants, but then very importantly, as Jim indicated in his opening remarks today, the transmission and distribution system that connects those and how can we derive the full value from all of those and we know we need that infrastructure investment in order to enable the bi-directional power flow that we enjoy today. So again, that's the legacy on which we're building this integrated energy network. All of the information and the derivative reports that will be coming out around this will be publicly available on the EPRI website. So let's look at where we are today and as we see today, we know that we have advanced meters in about 50% of the homes and businesses today in the United States. That's in 2016, but what we don't have are advanced meters in the water sector, natural gas sector, and so we see huge opportunities to bring that all together in an integrated fashion, hence the name and integrated energy network. And as we're looking at this, we're seeing that with that data being generated, that it's going to start to really transform how that system operates. Think about the United Parcel Service. When they started in the 1990s with what they call Track and Trace Program, so you could actually trace parcel delivery before that, we could not. That revolutionized that entire sector and so they went then into better operations, improved customer experience, huge cost savings. It just completely changed the entire way that packages are delivered in the United States and around the world. So we use that and now use the analogy that essentially what we need is situational awareness, the ability to understand where the electrons are flowing, particularly if they're generated by the customer or stored at the customer site. And what we have today is the equivalent of being able to imagine driving on a freeway and you can have your eyes closed for 14 seconds and open them for one second out of every 15. That's the kind of situational awareness we have going on. You can see you cannot drive very effectively if you only are able to see and sense your surroundings one second out of 15. We need to change that number and we need to change how we operate the system so we can get the best advantages out of that. So what does that mean? It means that in 1950, 3% of energy and use was electricity. Today, it's 19%. But we project that by the middle of the century, it'll be somewhere around 40 to 50%. We see that and it was just mentioned by the congressman with the electrification of transportation, a huge change that's going on. But again, electrification will happen in other sectors of the economy and bring huge, again, operational performance improvements but cost savings across the entire customer scope. So there's great opportunity for this. Again, all of this will be generating data. But data is just data until you can figure out how to evaluate it, use it wisely and then optimize the performance. So that is going to be what links all those different sectors, the telecommunications, the electricity, the natural gas, the water, all of them with smart meters that are generating data so we can try to find some improvements and integrate and enhance that whole system and also be able to bring down some costs in that whole process. So you can see this is a very exciting time upon which we're embarking. And the most interesting part of this is actually the customer, him or herself. Because we anticipate that today's customer is probably engaging about 5% with the electricity sector of what they are capable of and that within the next decade, they will advance that number significantly. So you can imagine if you're only at 5% of your potential right now in terms of your engagement with the system, you have 95% still to go and we're talking 10 years. So Jim mentioned the next couple of decades but we're looking at what's going to be happening here in the very short-term future, a very exciting future and look forward to your thoughts and questions after the panel. Thank you. Well, thank you, Jim. It's a pleasure to be here with you and everyone else. So what I was hoping to do this morning with my remarks is to talk a little bit about the energy future we see today emerging on the distribution side. So talk a little bit about distributed energy resources, how they're showing up, the degree of penetration we see at the moment, and how that's going to impact the transmission system and really everything that we do in the transmission system. And I'll share what my personal hypothesis for where this is going is. Let's see. So I flipped through today's slides in the packets that everyone has and I think we may have like five different versions of this type of schematic. The point that I wanted to make is that for those of you who are fairly new to the industry, I think we have a variety of experiences here. The way we used to plan generation transmission and distribution is you looked at peak, you assumed you had central station generation, long haul transmission and distribution to take it to your ultimate customers. And we plan for peak, we plan for many different contingencies at peak, so many different things can go wrong. We can still keep the lights on. So the typical planning process that we went through for many, many years is starting to shift because the assets on the grid are beginning to change. At the moment, we're, I would describe us in those awkward in between years. So we're no longer strictly central station generation, but we're also not a completely distributed grid and we we lie in the middle and I'll talk about some numbers that suggest that. But what we're seeing is the emergency of all kinds of different resources for which the grid was not built. So we're seeing, first of all, the ability to manage load in ways that are new. And wholesale markets are making the most of this with energy efficiency and demand response as products in the capacity markets. So we're seeing the ability to change what that peak number that we used to plan for looks like. And now we're also seeing distributed generation on customer premises. So yeah, for years, commercial industrial customers have had some flavor of CHP. Well, now that's beginning to look very different with the proliferation of rooftop solar. We're starting to see storage that can serve as a sink or a source. We have electric vehicles, the same thing. And we have micro grids that can island themselves and remain reliable under circumstances where no no part of the grid used to stay up. So I'm sure everyone heard the stories about the resiliency of micro grids during Superstorm Sandy. So the long story short is that the grid for which we built resources for the last 100 years is changing. And it means that everything related to that those planning processes and the way we manage supply and demand has to look different. So what I wanted to do with this slide, so this is decentralized generation, we're talking about this is basically distributed generation and the pieces that you see in orange are what we call net metered. So that's essentially rooftop solar. So as we look at the California numbers look pretty high, right? So they've got roughly 5500 megawatts of rooftop solar and other types of distributed generation on the grid. That's 7% of their name plate capacity in California. As we go through the other states here, those percentages range from 1.3 in North Carolina, which is where I'm from, up to 22% in Hawaii. All in across the US. These resources only make up 1.7% of name plate capacity. So as we talk about the nascent nature of distributed resources on the grid, this is what we're talking about. And importantly, as you look at the percentages for these various states, they're very different. So the impacts on those states are very different. In North Carolina, this question looks completely different than it does in California, because of the way the local policy has evolved. And local policy is key here because it's all state jurisdictional assets. If they're even hitting the state jurisdiction, because often they're behind the meter. So what I wanted to do was was emphasize that this is nascent. And as I talk about those awkward in between years, states are setting policy, they're setting out roadmaps for how to incorporate more and more of these resources. And if the CEO of EPRI is correct, and that we're going to see that level of transformation and technology over the next eight years, then this is going to get very, these numbers are going to get very large very quickly. So having a plan for this is important. A couple of things that this level of resources at the distribution side means. This means more and more intermittency coming from the distribution system. And we're starting to see backfeeds. If you look at California and Hawaii, we're seeing backfeeds of these resources back into the transmission grid. Transmission operators have typically not been able to see this stuff. They haven't planned for it. And we've as an industry over the last 10 or 15 years have worked very hard to create a bright white line between transmission and distribution, everything from the way NERC standards for reliability are set to the separation of T&D control centers to the establishment and proliferation of RTOs and ISOs. We've worked very hard to keep T&D separate. They are coming back together in states and regions where these resources are showing up. So it's important for the transmission system to begin to understand how these resources will impact it. So on the distribution side, there's candidly a lot of predictions about what could happen. Different states are taking very different approaches and the level of intermittency that's being introduced to the transmission grid is unprecedented and will likely continue to be both unprecedented and grow as we go forward. So that's the distribution side. So on the transmission side, and again, I think any consultant that works in energy probably has some flavor of this slide as well. We're seeing coal fall off the stack. As you can see, coal is the gray all the way on the right. We're seeing natural gas come up thanks to fracking and good economics. Nuclear is staying roughly the same, but if you're watching what's happening in the wholesale markets, we're probably going to see nuclear plants continue to retire or they'll find a way to subsidize some of them in certain states. But importantly, the purple and yellow bars are growing. So purple is intermittent resources, i.e. wind and yellow is solar. So in addition to the intermittency that we're seeing coming up from the distribution side, we're seeing increasing intermittency in the bulk power system in the wholesale generation markets. And in places like California, you're looking at levels, again, this is for the U.S. as a whole. In certain states, these numbers are enormous. In California, your renewable resources are actually pushing your baseload generation offline in the middle of the day. So we're starting to see the transmission owners and operators have to manage this balancing act. We heard from the congressmen about having to curtail renewables. That's going to be one of the questions that continues to be asked as these numbers grow. So as we look at the grid going forward, we've got intermittency coming from the distribution side. We've got challenges coming from the transmission side as more and more of these resources become integrated. So what does that mean for us? So one of the things that I've heard posited in the industry is the days of building large-scale transmission are over. Because we can now, through energy efficiency and demand response, manage peaks. We used to build transmission to peak. We don't have the peaks that we used to have, so we can build less transmission as the way the argument goes. I would actually suggest that the level of intermittency and the need to integrate different types of resources creates an even stronger case for a very strong backbone system. And that's been demonstrated, you know, as MISO did studies to figure out how to integrate larger and larger amounts of renewables, particularly wind into their system, larger control areas, and lots of transmission is how you did it. And I don't think that story is going to get different as we see intermitten resources show up on the distribution side of the equation either. Transmission owners and operators are going to have to see into the distribution system. And I think this is where that discussion about the bright white line between T&D is going to get very interesting in the years to come. We're starting to see discussions about the aggregation of distributed energy resources from distribution into wholesale markets. California already has a construct whereby third parties can aggregate these resources and bid them in. New York is headed in that direction with their distributed energy resources roadmap. So again, having to see what's coming from the distribution side and manage it as an integrated set of resources at the transmission level is going to become critical to making all of these pieces work. The last thing, and my colleague, Judy, I'm sure can speak to this much more fully than I, but we're going to have to plan the transmission system differently. We have resources that are showing up in ways that we did not predict when we put the systems we have in place today in place. And we're having different contingencies than we initially had to plan for as well. So it used to be plan for peak and make sure that nothing is going to inhibit your ability to supply power under all those circumstances. Well, now the contingencies may be showing up in non-peak periods in the shoulder months when your renewables are very high. So we're going to have to call on the transmission planners, owners, operators to do all these things differently. So net, net, it's my view, my hypothesis that rather than reducing the need for robust infrastructure at the high voltage level, the situation we're in today requires more. Thank you. Good morning, everyone. My name is Judy Chime with the Browder Group. Thank you, Jim, for inviting me to speak and happy that you're here to listen to a very important aspect of the electricity industry and its future. We could have given the exact same presentation. I think our messages, our messages here, and it wasn't, well, it wasn't like we coordinated the story or anything like that. But as you can see, we have different aspects that we're doing work and addressing different aspects of the industry story. But we actually come to very similar conclusions and observations. So I'll share with you my perspective and of course some of the work that we have been doing in this area. Industry trends, I think you already heard them through Barbara and Kristen, but I think I want to highlight a few things. And in some ways, if you are not from this industry or are just thinking about these issues, these are some of the key trends that you can take to any cocktail parties and start talking about this because this is what's happening, right? So we have, since the economic crisis, the traditional use of electricity has diminished, has really slowed down, not only because of the economic activities had decreased back then, but also customers all of a sudden became very aware of what energy conservation and energy efficiency can do. And people were really focusing on how to spend their dollars. So in that trend has continued, regardless of the economic activities that had grown since then. And I think customers who are now more aware of how to spend their dollars are are going to continue to do so, and we have the technologies to help them to do so. Even in the world of Internet of Things, so we are now, I observed this very carefully in my own life, you know, we are now plugging in everything. In fact, there's barely enough plugs in the house to plug in all the things we need. Even with that growth recently, the growth projection of electricity use and the traditional use has been almost flat. Not flat exactly, I think it's 0.6 percent is what the national average is. There are different pockets of growth, particularly industrial commercial growth, but generally speaking as North America is going, the traditional use, the traditional use has really declined over the last few years, the growth areas. Now, I will talk about electrification as Barbara talked about, which is, I'll just call them sort of new growth. And I took down notes as Barbara talked about what the, you know, 50 percent, I think, in 20 years of our consumption, our energy usage will come from electricity. So that's a huge change going into the future from the way we think about it. And second, increased customer preference for conservation energy efficiency and clean energy. I mean, I talked about this already, but now customers are very aware of what they're using and when they're using it. Not everybody, I mean utilities usually push back when I say that because they say, well, really most of our customers just want to flip on the lights and not worry about it. But think about this, right? Your utility customers maybe in five, ten years, the decision makers about how to use electricity or energy in general are only maybe in high school and college today. And think about the way they think, think about the way they consume in general, but also consume electricity and consume energy. So they're going to want more information. They're going to want to compare what they're getting versus what their neighbors are getting. They're going to want to know more information. Not everybody, but majority of them are going to want more information. And we now have the technologies to manage this big data of the future, right? So, but the industry is just catching up, is trying to figure out how to use this information. I think you said earlier 50 percent has advanced meters in this country. That means we're collecting a boat load of information, but we're not quite using it yet, right? We're not using it. The capabilities are there. We don't even know how to use the information. Technology, okay, so I'm leading to the next one. Technological advances do allow people to monitor and control. And we're seeing, I'm working in New England with a aggregator. In New England, most of the states are deregulated, which means that customers have choice. Customers don't just go to the utility to buy electricity. They can choose who they want to buy it from. So, now, the customers, particularly larger customers, you know, your commercial customers, your universities, your hospitals, are now asking, you know, how do we manage our electricity use better? How, you know, we, in fact, many of them collect this data from the smart meters or at least advanced meters and don't know how to manage it yet. They're now looking for vendors to show them how to use this, make this very user-friendly so that they can shut down certain parts of the buildings if they can. They can turn up the thermostat wherever they cancel. They want to control this so that they can reduce the cost of electricity, their energy consumption. So, customers are now wanting this. They see the potential they're asking for, asking for this. And then significant cost reductions in wind and solar. You probably see this in the trade press almost every day if you watch it. But we had dramatic decrease in the cost in the solar, solar industry. And more than we thought, even five years ago, when we said, oh yeah, the cost will come down, the cost will come down. We have these cost curves that drop, but it's really dramatically decreased in cost. Wind similarly, the technology has improved so that the same type of or the same size of turbines can now produce more wind power than they used to. So when you look across, and I'll show you across the map of the North America, the wind resources in the middle of our country can produce lots and lots of clean energy. Okay, and then the low cost of natural gas, that has also been transformative, right? So we now very much enjoy the low cost of energy from natural gas. And I think other folks' prediction is that the the resources are there. The costs are not going to increase. We're not seeing any significant increase in prices of natural gas in the near, near even far term. So we're enjoying this. I don't know how long it lasts, but so far people are predicting this will last for a while, which means it's placing downward pressure on other resources. And you hear this also in the trade press, coal plants, despite what the policies are, coal plants that have to compete with gas resources are hurting. They're not generating as much. They can't compete on cost. So you know, there's a lot of questions about what to do with them. And as you see, many have been retiring. And same thing for our nuclear plants. Nuclear plants have traditionally been very low cost variable resources, variable cost resources, and they're generating 24 by seven. That's our traditional resource. But now they're also feeling the pressure off from gas plants that are really putting down downward pressure on the prices that they can get from the market. And then increasing stringency environmental regulation, I think, you know, citing new plants, citing or even extending the licenses of existing plants have been more challenging. And then lastly, but really this is the way for the future is electrification. In fact, some of my colleagues just wrote a paper that just got picked up by the press yesterday about the electrification of transportation and heating. And it's interesting to hear that 50 percent number, which is a tremendous increase in electrifying our economy. And what that means is how are we going to power our economy? It's not, you know, looking out in the future, are we really going to power with them with the fuels of the current fuels or are we going to power with them with the, you know, capturing the value of the clean energy resources, plus perhaps storage, right? So that's my introduction. But if you don't learn nothing else, I think that would be a useful sort of cocktail party trend conversation. Just more, more on what we're observing. Here's a very quick glance at the clean energy of our country. But a couple of things to highlight is that in addition to what I already said about wind resources and solar resources, we also have tremendous opportunity to have increased exchanges with Canadian. Canadian resources are, well, the Canadians have been talking to the U.S. for decades now for additional imports, and I think we're going to have a speaker to hear more about the clean energy resources up in Canada and how that can help the U.S. balance its system and bring in more clean energy. Here's a different picture, but basically the same message. You can see if you look at North America or U.S. Canada and look at the resource locations and how we're using, and then, of course, you can put in your head where the biggest consumption areas are. You can see that the wind and the solar are not necessarily in the big consumption area. So what this means is, as Barbara and Kristen have mentioned, this, whether it's distributed generation or centralized generation, this picture does not say that we need less transmission. This says the exact opposite is to capture the value across different regions and bring that clean energy or just diverse resource of the future to our customers that requires infrastructure, backbone infrastructure. So just a brief note about that. So traditionally the utilities, vertically integrated utilities, have built power plants and they built transmission distribution to bring the power from their power plants to their customers. And larger utilities usually have customers in the north and southern part of their system and they had to build a system so that they capture the diversity of usage, because maybe in the north you might have a storm, but then in the southern part of their system they might have simultaneously a heat wave. So the uses of electricity have been diverse and that's how utilities traditionally built their systems. But now when we open up the picture, so now we're in a world where we're not just working with utility by utility, we're really looking at the regions as a whole or the country as a whole. Now we're thinking, how do we do the same thing for the country? How do we capture the diversity of resources but also diversity of uses by creating a backbone system that captures those value? And this is, you know, if we do this well, if we do this cost effectively with our long-term needs in mind, we can do this at a much lower cost for customers. And that's the rub because as you saw the picture that Jim had put up earlier, it seems like we're already building a lot of transmissions, right? There's a huge growth from the 60s and 70s on investments in transmission. But I think our worry is that we're just building incrementally and spending a lot of money. And most of that transmission requires significant uses of rights of ways that are very, very difficult to obtain. And certainly landowners don't want to give those up. So I think we need to plan more smartly with a long-term vision in mind. And I think that's the story or that's the message we want to send to planners and regulators and policymakers to think, look, we're not planning this for next five years or even 10 years. These assets last 40, 50 years. And we're planning and making the investments today for assets that will live for half a century long at least. And our vision is so short-term that we really need to think long-term about, OK, what is the optimal set of investments? That way we can make sure that our customers actually enjoy the lowest cost combination of resources and infrastructure. OK, this is a slide about electrification. I'm not going to cover too much about this, but this is really, there's a lot of debate about how quickly this is going to come. When oil prices were high, we thought this would come much faster. But I think, as you know, as technological breakthroughs come in the transportation sectors too, and as innovation come to for the plug-ins and the ability to plug in your vehicles and use clean energy to supply the resources, I think this will happen. The question is, you know, different regions might have it differently. And one of the messages that my colleagues wrote about is, you know, this gives utility a new role to play, right? So a new role for the electric utility is to say, we can help build this infrastructure, and we can help electrify our transportation system and take out some of the greenhouse gases emissions from the transportation sector. For states that have greenhouse gas reduction goals and targets and laws, this is going to be a big part of that transformation going to the next couple of decades that Barbara talked about. We already have talked about this, about distributed energy resources, but in a nutshell, I think I talked about this already, but basically the traditional drivers, the traditional reasons that we build transmission is to just serve customers. The growth of customers' needs, we build more infrastructure, we want to bring the power generation to the customers, we want to capture diversity of customer needs, what I just talked about, North and South, West and East, within a particular utility sector, utility jurisdiction, and then relieve system congestion, just like the highway. If we have congestion, then the cost increases for customers, so we build enough to relieve enough congestion. The newer drivers are access to renewable clean energy, the picture that you saw earlier where the large and low cost renewables are not located where customers are, so we need a backbone to support that, and then capture the diversity of those resource generation and then regional needs. Just one more point, actually before I get to sort of some of the takeaways in other regions, here's a picture of what we call merchant transmission developers have already proposed. In the ideal world, we want system planners to plan this way, the long term view of the world, where the resources might be needed, where the customers are, and sort of think about how the longer term backbone might look like, but lacking, and unfortunately, we have a big challenge about inter-regional and regional planning on a large scale because we really haven't done this before, so we're just kind of chugging along and trying to do that better. Developers have already had this vision for a long time. They get the locational choices, look at this, I mean just, I guess I wish I had a slide that sort of superimposed the resources against this. People are getting this, developers are getting this, they're saying, okay, we see where the resources are, we see where the customers are, we need to build backbones, this is just a picture to reflect that customers are getting this, I mean developers are getting this, the question is how do we put that into a regional plan, an inter-regional plan so that we have a way to pay for this kind of infrastructure build-up. Two last slides, but essentially all these words are saying that, you know, Europe is going through the same type of transformation in some ways, they, parts of Europe are actually quite advanced in thinking about this, they might face less political diversity in the way we think about the future, but the one take away from many of these words is what actually Kristen has already said that just because we have lost more distributed energy, particularly solar, it does not actually mean we need less backbone, because the backbone transmission system allow us to capture the diversity of customers using them at different times and that's more dramatic in Europe and the diversity of the resources, you know, wind are in different parts, offshore wind is in different parts of the world and storage in the different parts of the world, of different parts of Europe, we see that in Europe and we see that in the US. So with that, I'm happy to open up for discussion or questions. That was absolutely a super panel. I'm an awe of these women. They've got the right idea. I'm going to open this up for questions. Yes, sir. Teri here with the Passive House Institute. In Europe, there's an effort underway to have energy efficiency considered part of infrastructure. There's also an effort underway to dramatically boost the funding for retrofitting existing buildings and reducing the load. But I don't see any discussion of that except in California perhaps here in Washington. So would you please comment on that? I can certainly comment on that from a technical standpoint, not necessarily from a policy standpoint, but as we start to see sensors deployed across the T&D system that can contain the ability to have intelligence and communications, and all three of us have been talking about how important that T&D power delivery infrastructure is. And with the bidirectional power flow where you have distributed energy resources, central baseload generation, they all have an important role to play. But one thing that the more sophisticated sensors can do, as opposed to aggregating demand response, the way we do today is now we can individually tailor it. So that can achieve more energy efficiency, more customer engagement around that process, more tailored offerings around demand response so that it can actually work on an individual basis, not just an aggregated basis. So what I would add to that is, first of all, the energy efficiency discussion is often on a state-by-state or a wholesale market by wholesale market level. So if you think about the wholesale markets, demand response and energy efficiency are appearing as capacity resources in some cases. In addition, on a state-by-state basis, they have different mechanisms for incenting energy efficiency behaviors. In New York, they're looking at earning adjustment mechanisms where utilities can earn additional ROE basis points associated with energy efficiency activities. In Illinois, they're actually looking at treating energy efficiency as a rate-based asset where the utility can earn. So I think part of what you're seeing is a jurisdictional issue where states have individual opportunities that may not be broader as opposed to a nationwide set of structures that you may see in Europe. Yeah, I agree with your assessment that it would be ideal to have some kind of a federal policy about energy efficiency and conservation and perhaps investments. As Kristen said, that investment opportunity and policy are happening at the state level. So you actually have very different investment levels at the state level. And maybe that's part of tradition also. So policymakers are using the utility, whether it's deregulated utility, that no longer own generation or vertically integrated utilities fully, that also own generation. States are using utility as a channel to deploy energy efficiency. I think it would be ideal to have something more at the national level or at least have some challenge and targets or levels or metric to measure that. I think right now it's more done on the nonprofit basis. There's some competition across states. I live in Massachusetts. I know Massachusetts are always competing with California. And it's disparate across the country. Bob? Historically, our federal system has been a blockage to a lot of the kinds of planning that you're talking about. And the problem we've had historically is that we almost choose electric resources based on price. We finally learned about 30 years ago that electricity was price sensitive. But the issue really is, in my mind, why is this decision now to talk about renewables and talk about a disintegrated system, one that five, 10 years from now, a different pricing mechanism will set in and lower the price for some other kind of energy source, make it up from space hypothetically, and that the whole system changes again in response to whatever changes are new. Space energy, anyone? Well, I can certainly speak to that from the standpoint. I mentioned our prism analysis, which came out in 2007. And essentially, what that revealed is that we need all technologies and all fuels because we don't know the future. And we can't bet on some single source to carry us into the long term future, both for technical reasons, technology advances, as you indicated, Bob. Policy could change. And a whole number of factors can go into that. And so actually, the most cost effective strategy is to make sure we have a whole diverse portfolio of clean energy generation resources available. And that's essentially the mission of EPRI. There's another hand up over there. Yeah, actually, I just want to add to that one thing. I totally agree with what Barbara said. I think you're right. We don't know exactly how the future would look. But we know enough that we actually get a sense of the ranges of future. We might not be able to predict energy from space that NASA is able to capture and commercialize and things like that. We can imagine, but we don't know the cost effectiveness of those things. But what I would say is increasingly clear is that the grid needs to be much more flexible. So the flexibility, the value of flexibility is increasing as we speak. Because we are seeing intermittent resources, we're seeing newer technologies that are trying to compete with existing technologies. And therefore, we don't know what the future looks like. But I think flexibility is a value we don't yet know how to place or use the market to price it. But I do think flexibility on all levels, not just resources, but also grid technologies, control and monitor, all of those abilities will have value in the future. Yes. Hi, Mary Ann with Edison Electric Institute. As we talk and we think about the T&D interface in this new bi-directional world in terms of electricity flows, clearly there's going to need to be some changes in operations. I think that's pretty clear. The question that I've been hearing is, what is the rule for policy as we explore the T&D interface and what should that rule be and what should it look like? That's a pretty big question. That's great. That is a really good question. I'm not sure I know that I have the silver bullet, but I think one thing that's clear, I'll speak from the wholesale perspective. I think the wholesale market perspective have traditionally been just wholesale, sort of, you know, at the transformer, high voltage, we care about that. And we haven't had much visibility and neither did we really care too much. I mean, as long as we know, you know, how much customers are needing at any point in time. So I don't know if this is a policy answer, but I think market designers and markets, implementers and operators are now becoming much more aware of the fact that, wait a minute, lots of distributed energy resources on the distribution system can really increase uncertainty on the grid, on the larger, of higher voltage grid, and we need ability to at least see them, if not control them. And then so there will be some jurisdictional question and speaking of a jurisdictional question, I think that is a, I'll just say, not just policy, but legal question that really needs, I would say quick resolution and I don't know how Jim would be the expert on this. I don't know how that touches the Federal Power Act and who has jurisdiction over what, but I think every time we talk to states about what markets should see and should do and should be able to price, the state immediately raises jurisdictional question and there's a huge tension between that. So from a policy angle, I think that's the space that we have to deal with FERC and state jurisdiction. I think a couple of things. I think that this issue is gonna come to a head fairly quickly thanks to the FERC NOPER at the end of 2016 related to storage where they basically said the wholesale markets need to create a role for aggregators of distributed energy resources. So we're gonna see this begin to play out when we have a quorum probably. So that'll be one area that we'll all be watching to see what happens. The other thing that I would suggest is that assuming that we can figure that out and California would suggest that from a policy perspective they have because they have this mechanism in place today. New York is again moving in this direction with their roadmap. To what degree can we actually leverage the wholesale markets for aggregation to make DERs more, give them more access to a true market mechanism? So there are, and this again goes back to state policy, not federal policy. There are moves afoot across the country that say a distribution level market is the right answer. From a policy perspective, an alternative is leverage to the degree you can the wholesale market. Assuming that these issues can get sorted out which I'm actually confident they will be and then look at additional mechanisms that can create liquidity if it's needed at the distribution level. So as Marianne knows, EPRI does not do policy, but we do. But we do, we are an R&D institute that tries to support policy makers. And to that point, the integrated grid analysis that I mentioned was actually conceived by a state public utility commissioner who came to us and said, I am having to make very difficult decisions in my state around how to value the distributed energy resources that are being deployed within my jurisdiction. And I don't know how to do that. I hear very violent arguments on one side and very passionate arguments on the other. And I don't know how to accurately, defensively calculate what that value should be of those assets. And he said, EPRI, this seems like something you could do. And so that's exactly what we did with that integrated grid analysis, which is to set up a benefit cost framework that is transparent and repeatable that anyone can use in whatever state or federal jurisdiction to figure out what is the value of the central base load generation that is pre-existing? What is the value and what is the investment needed in the transmission and distribution system to enhance that resource, as well as what is the value of the retail energy that the customer is potentially generating and would like to potentially sell back into the grid and therefore needs that infrastructure in place? That's great. There are, of course, some complications. If you're talking about integrated energy systems, and EPRI is right on on this, but if you look at, and the natural gas system, natural gas pipeline system, share some of the same problems that the electric transmission system does in terms of its age. And, but it's different. It's not planned regionally. It's certainly only subject, arguably, to FERC jurisdiction, unlike transmission. I think there's a policy question in there somewhere, but how do we address those kinds of barriers to integrating all these energy systems under your thesis? So I would say the best way to address those barriers is to try and get this information disseminated as broadly and widely as possible. As we all know, there's certainly a lack of interest and, which shall I say, engagement right now. I mentioned the customer engagement being 5% right now and with the potential for 95% growth. That's huge, but that is only gonna be well done if they're well informed. And so I think what we need to do is, to your point is, of course, policymaking around this is important, but also consumer education is gonna be critical. Other questions? We'll take another two questions. Yes, sir. Mark Brive-Vogel, I'm with on log of distributed generation. I'm half investor and half garage mechanic, trying to teach Bill Gates how to make money. I make distributed generation equipment. Question I was gonna put to the congressman, but it's equally applicable here. Last Wednesday night, I was at the Atlantic Council. I went to a conference called A New Era for Infrastructure. I had some bankers there and this gentleman, Bob Amadeo was from a company called Western Asset. And he made the statement that we can't build infrastructure because there's too much cheap money out there. My eyebrows rose quite a bit. And he said he didn't want federal involvement and one point he was making was that municipal finance is much less costly than federal finance. So maybe someone would wanna comment on that. After the 2008 banking crisis, again, this is on my investor side, I went to a lot of conferences around here, met a gentleman who said that some congressman called him up, said here's $900 billion, established the TARP office and have it open by Thursday and get that money out. That's for real. But people then were saying there are no good investments. I'm talking about the whole global United States economy. My ass this gentleman said, how can this be? You say there's no good infrastructure investments. It's not what I'm hearing on the front page of the Washington Post. He said there's been nothing but disasters. How can this be? And I don't know what has happened with Harrisburg but they've built a big trash to electric plant. I don't know, four or five years ago they were talking about bankruptcy and maybe they went ahead and filed. I don't know. At one point, the Pennsylvania term pike was up for sale and I think the Italians were looking at buying it. Something people would have a better feel for is the Aureville dam. If this gentleman wanted to lend me $2 billion at zero interest, I think I might go buy that. I think that might be a good investment. But the point there is, what he said later, there's no coupling of risk with reward and that's really the question I want to put to you. Aureville could have spent two million bucks and fixed their spillway and they put it off and they put it off and you can imagine how that happened out of California funds. He who screams the loudest and most effectively gets their dam maintained but they didn't do it. If it's privately owned, they have a big incentive to fix it. Having said that, my father-in-law is in the oil business and there are abandoned oil wells all over and that costs the state a lot of money. You go bankrupt, you just walk away from your well and leave the environmental cost to something else. But you all also mentioned Barbara, the value of a plant and I heard you earlier, you were saying we should all realize the great value to the economy of the backbone power plants but you're also saying what is the value of the price? So I can do a financial projection and that is the big crisis of this business, isn't it? What is anything worth in dollar and cents? So having said that, maybe you can talk about the reward versus risk, is that the problem with investment, is this gentleman wrong that this 300 billion is sitting out there and no one wants it because they don't know how to invest properly. Thank you. Who wants to take that? For the question, since you mentioned Epri's work, I'll start but I bet my fellow panelists will have some comments as well. So when we're looking at this in the framework of the integrated grid, we're talking about existing assets and the reliability, the backup reliability that they provide with intermittent resources and the fact that they already are assets in the ground they therefore do have derivative value that should not be stranded. So that is essentially, but having said that, the idea is not to diminish the value of the DER as well because that also has value and that is also growing and we want to, again, being completely fuel agnostic, we want to encourage all fuels to be able to come forward and fulfill their potential. So essentially that is the risk reward that we're looking at. I would suggest that from an investment perspective, Judy showed a graphic of all of the merchant and other transmission projects that are on the books today, ideally being built in some phase of planning or development. The challenge is not, in my opinion, that there is not money to be spent and people interested in investing is that these assets often have up to 20 years before they're in the ground because the siting and planning is so difficult through multiple jurisdictions. So I don't think it's a lack of interest in the sector. I think one of the challenges of ROE's decreasing is that people may be less willing to take that risk, but as suggested by that graphic, there is plenty of development and interest. Yes, I want to echo that. I think particularly right now there are a lot of uncertainties about large-scale generation. So I do see a slowing down, aside from renewable generation, sort of a nervousness about investments in large-scale, utility-scale generation. On the transmission, though, I can't tell you, I think I would get a call at least once a week with investors looking for investments. I mean, we're not an investment firm and we're not ones to put projects together, per se, but I don't see lack of money globally on transmission infrastructure investment. I think the challenge is not the money, at least my perspective and what I view of the industry for transmission. I don't think it's lack of money. I think where it's challenging is regulatory processes and maybe even planning processes. And we talked a lot about that over the last few wires paper. We don't yet know how to put the right value so that we get the regulatory approval across large infrastructure, particularly if you're crossing jurisdictions. We don't know how to communicate that to state regulators that say, yes, my customer should pay for this because this has insurance value, it has grid value, it protects our customers from future high rises in costs. We don't yet know how to do that and I think planners and regulators have a bit of work to do before we get there. I don't think it's lack of money on transmission side. I think there is great interest from international investors across many continents to invest in the US on transmission. So you're agreeing with that there's certainly enough maybe too much money but there are no quality projects and the quality of the products don't exist because we don't have enough accountants to regulators to be able to price these things accurately to know whether in fact they are good investors. I think investors are looking for projects. More or less, I agree with you. I think investors are looking for projects that will yield a reasonable return and to yield a reasonable return we're talking about putting in some kind of a customer bill. Let's be honest about it. Somebody has to commit to pay for this and we don't yet have certainty about how to get that done on the large cross region infrastructure. I mean, Jim, would you agree to my characterization? Do you have something to? Yeah, I agree that we need to move on but I have to say that the risks and uncertainties that we have to deal with in this area are uncertainties we can deal with. We can deal with them with good policy and deal with them with changes in the law. It's not the mysteries of the economic market. I mean, the money is there at least under current circumstances. And I think when you, Judy and your report talked about anticipatory planning, part of that is let's get moving on transmission development and take advantage of this current monetary situation or financial situation so that we can save consumers money down the road when these assets are producing value in 2030 and 2040 in 2050 and that's an important message. I'm glad you brought it up. I think we're gonna have to move on to the next panel but please join me in thanking this group.