 We're going to go ahead and get underway And I am very very honored that we have for commissioner federal Energy Regulatory Commission representative here today, and it is a great privilege to have Commissioner John Norris with us I know that he has had an unbelievably busy schedule And so we are very pleased that to know that he came because he also has really been providing a lot of leadership at FERC in terms of looking at a clean energy economy and how we can move to do a better job with regard to renewables here in the U.S. Commissioner Norris Thanks Carol. Great to be here with you all. I uh This is a little, I'm a little, Carol characterised on my schedule is busy and this is what happens today, happens to be crazy As a commissioner it ebbs and flows in terms of busyness, but I'm doing something rare today Usually I like to come to these type of events and be where you're at and listen and learn But today I have just a moment, a few moments to stop by and share some thoughts with you all And hopefully I'll get some thoughts generated for the panel coming up that you can ask them the tough questions and not me But great to be with you to address the topic of energy efficiency and grid technology And let me start, you know, I go to all these different events to talk with folks and them on a panel Often times on the panel as I was yesterday down in Asheville, North Carolina And all the panelists always have a slideshow with their own commercial of what entity they're from And how many employees they have and what's their capital base and all that stuff I'm starting to feel a little inadequate at first so I came up with my own infomercial To start a lot of my presentations these days So here is my infomercial And it's around the 2050 carbon goals We often talk about the need to reduce our carbon emissions I think the administration's goal is by 80% of the 2005 numbers by 2050 In order to avert a damaging level of climate change And that has been kind of the standard lying goal people understand and accept But I've tried to put a little context into 80% reductions of 2005 carbon emissions by 2050 What's that really mean? I'm just going a little bit deeper in my infomercial And that is in 2005 we emitted 2381 million metric tons of carbon emissions Now 2011 figures, what's that mean? So to go from 2005 2381 million metric tons And 80% reduction by 2050 means we can have 405 million metric tons of carbon emissions in our electric generation What's that mean? In 2011 we generated just under 4,000 billion kilowatt-hours electricity And generated 2,166 million metric tons of carbon emissions By 2050 we're expecting just north of 5,000 billion kilowatt-hours for demand for electricity But we can only yield 405 or produce 405 million metric tons of carbon emissions The 2011 figures I gave you of those 2,166 million metric tons of emissions 1,718 of that came from coal 411 of that came from natural gas And just a smidgen from oil and biofuels So we know by 2050 unless there's successful carbon capture and secretration If we're going to meet those goals there's no room for baseload coal generation in 2050 There's no room for natural gas baseload generation in 2050 We'll need those 400 million metric tons just for load following for intermittent resources If we hit our goals of what NREL says as potential of 80% renewables by 2050 Now, here's the point for all that information Sorry if my numbers got a little unjumbled there, I hope you followed them all The point is it's going to be very challenging to go to 405 million metric tons of emissions in 2050 And still meet our electricity demand But one of the best ways we can begin to mitigate the impact of meeting those goals Is through aggressive energy efficiency and deansified management The more we can reduce that projected 5,000 billion kilowatt hours of electricity demand lower It puts less pressure on us in terms of our generation fleet and what the makeup is So that I believe is the goal for energy efficiency and deansified management It's overall reduction of energy consumption It's reducing peak consumption and our need for capacity And it's also a very valuable tool for balancing the grid and providing ancillary services So how do we do that? It's two key things One is by continuing the advancement of technologies that are enabling us to use less energy to do the same thing And also to utilize the shaving of our peak or reducing energy consumption at key times To provide that to the grid for valuable services So we have to maintain the technology advances we've maintained in the last several decades in this country I liken it to this, Jimmy Carter really got us started on this track in my least of my generation His idea of energy efficiency or conservation was, here's an idea Everyone put on a sweater, right? What a novel idea, we could save energy by conserving by putting on a sweater Now, I don't know, a decade or so later we came up with the idea Let's put those sweaters around our water heaters and have greater efficiency in our water heaters And now just recently PJM is able to have interactive water heaters that they can use for the stored energy To help balance the grid or frequency response provision of services that provide real value to that stored energy in water heaters That's a track of the evolution in my mind of what technology, where it's been and what it enables us to do The key though are policies that enable those technologies to capture the full value of that energy efficiency And that demand side management So it's not just the value of reduced energy consumption Which is what Jimmy Carter's sweater would be But to provide the full range of values that those technologies that interface with energy consumption and our energy system And electricity system to capture the values of those So, some examples of that We need to enable consumers to have price responsive demand for electricity So there's price sensitivity We need to enable demand side management and energy efficiency to be able to bid into the capacity markets To capture that value from energy efficiency and demand side management We need demand side management and demand response and energy efficiency to be able to bid into Providing ancillary services like frequency response The more we can attach and recognize and realize the value of energy efficiency measures The more we cost justify the investment energy efficiency The more we cost justify the investment energy efficiency The more investment will take place in the technologies that provide additional means of Achieve energy efficiency and demand side management One example I cited PJM with interactive water heaters is able to bid into the ancillary service market Frequency response they can provide for that energy store in that water heater Another example in PJM are the subway services in southeast Pennsylvania Transportation District Where they are able to capture the energy that's generated by the braking metro system Store that electricity into batteries and then reutilize that electricity for acceleration services And then also the excess electricity from that battery storage From capturing the electricity generated by braking Selling that to the grid to provide ancillary services when the grid needs energy fast And on that grid to balance our electricity It's a way to add value to energy efficiency and demand response that triggers more investment in technology And the provision of energy efficiency services and demand side management Capturing that value I think is really critical in the capacity market options So how do we structure our markets or what policies do we put in place for our capacity options That value energy efficiency and demand response We just last year we did a rule making at FERC where we added value to storage capability By compensating it for the value it provides in terms of accuracy and speed of response For providing frequency regulation that gives an added value to storage of energy Which can capture energy at unneeded times produced by intermittent generation sources And increase the value of that energy Even through our recent order at 1000 we provide in the planning process for the transmission services For the planning regions an avenue for consideration of non-transmission alternatives In planning our needs for the build of our electricity system going forward That adds value to things like demand response and energy efficiency When you put it in the equation of the computation for what's the most efficient way to meet our energy needs It may not be transmission if we can provide it through other alternatives like energy efficiency and demand response So it's critical that we create a fair and equal market opportunities For demand side management tools such as energy efficiency So that they get the value of not just reduced energy use Which you as a consumer save if you lose less energy But if you could also sell the value of those balancing services and those ancillary services Those capacity reduction needs into the marketplace To capture the value for those technologies that enable us to do that We'll continue this down this path of increasing energy efficiency And reducing our need for generation and the resulting carbon emissions And finally we are in a I think a moment in time is very critical Because a lot of our infrastructure in this country on the electric system is fairly aged We are in a transition of building the system now When you make investments in this sector You intend those investments to have a payoff of beyond 30 years We're still living off generation facilities, transmission facilities, distribution facilities That were built way beyond 30 years ago What we're investing in now will be here in 2050 And a lot of the conversation right now are how many gas plants do we build And how many pipelines we need to provide the gas service to keep those generation facilities going In the decades beyond Concerns me because the price of gas has changed in a lot of the economics of these investment decisions Take lead in energy efficiency and demand sign management That it's critical now that we find the value in those And we find those values through energy savings, capacity markets, ancillary services Non-transmission alternatives, the one key missing value point Is still the issue that perplexes me and causes me concern about our future And that is we have not valued carbon And so as we rush to deploy new pipelines and new gas fire generation That we know we can't use as base load in 2050 if we want to meet those carbon reduction goals We will have assets in the ground In pipeline and generation facilities that those people who've made those investments in those facilities Expect return on those investments into that time period of which it becomes questionable whether we can use them or not Hence the importance for fully developing and realizing energy efficiency And demand sign management now in this environment is critical Because it means we will make less of those long-term investment decisions and capital expenditures that will be stuck with By preventing the need for them So you're on the right track here, I know you're on this room because you have concerns about this You're on the right track here with recognizing the importance of energy efficiency And managing our demand side resources And just encourage you to keep pressing Congress and the other policy makers To continue to enact policies that will enable us to capture the value But also enact policies that value carbon so that we can recognize the value of energy efficiency more appropriately in our energy system So thanks for being here, thanks for your interest in this issue Carol, turn it back to you Thank you very much Commissioner Norris And I think this was such a terribly important message that we really all do need to take to heart Because the decisions that are made today will have a profound impact upon our future And it becomes ever more difficult to deal with the changes that really need to be made if we are not making sound investments today So I hope that everyone thinks about what Commissioner Norris said very carefully And that indeed it's a message that I think that more and more policy makers need to hear So that we try to make as good a decision as possible as we think about energy policy going forward