Infrastructure Modernization Options in an Uncertain Economy

February 18-19, 2009   •   Renaissance Hotel   •   Washington, DC

Keynote Speech Talking Points by The Honorable Marsha Smith, Commissioner, Idaho Public Utilities Commission and President of NARUC

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On behalf of NARUC, I would like to welcome everyone to this year's National Electricity Delivery Forum. Thank you to DOE for co-sponsoring this important Forum. In addition, I want to thank Commissioners Jimmy Ervin and Anne George. Commissioner Ervin is chair of the Electricity Delivery Forum, and Commissioner George is the new Electricity Committee Chairman.

For the second time in three years, we are opening this Forum on the heels of passage of significant energy legislation:

  • 2006's Forum followed the Energy Policy Act of 2005
  • This year follows passage of the Energy Independence and Security Act, recently signed by the President
  • We may be on the cusp of another major energy legislation dealing with the climate issue

What this means is that energy is on the forefront of the political spectrum — making the timing of this Forum impeccable: we all must be ready to work on the challenges these new policies will bring.

The 2008 Delivery Forum is focused on ways to modernize the electricity system to deal with three "grand" challenges:

  • Climate change
  • Demand growth
  • Energy security

Meeting these challenges will require continued close cooperation between State and federal officials and, as our past coordination with DOE in putting on this meeting, FERC, EPA, and others demonstrates, NARUC is ready to do its part.

As we have seen in the past, States are truly taking the lead meeting the three grand challenges:

Climate Change

Several regions — the Northeast, Midwest, West — are working on their own greenhouse gas emissions trading programs in an effort to combat climate change.

The National Action Plan for Energy Efficiency (NAPEE) has received commitments from more than 40 States, demonstrating steadfast support to increase the role energy efficiency plays in meeting current and future demand.

In my state, IDAHO is conducting wind integration deliberations.

At NARUC, the Task Force on Climate Policy, led by DC Commissioner Rick Morgan, continues to meet regularly to analyze proposed policies and educate our membership.  In fact, the Task Force recently held a discussion with the National Commission on Energy Policy on ways to harmonize State and federal approaches to reducing carbon emissions.

The NARUC Climate Change Task Force also sponsored two resolutions last year:

  • (Nov 07) Offered NARUC support for federal climate legislation and spelled out a series of principles to ensure that, if Congress implements a cap-and-trade program, State regulators will have a key role in ensuring that any benefits made from selling allowances would serve retail customers.
  • (July 07) Stated that any climate legislation should be economy wide, transparent, flexible, and not preempt existing State/Regional programs.

These resolutions were bolstered by a recent report from the National Regulatory Research Institute that determined that State regulators should be supportive of an economy-wide program with emissions allowances should be given to Local Distribution Companies.  Doing so would let State commissions be the judge and jury for how any costs and benefits are distributed among ratepayers.  However, if emissions are given to generators at no cost, State commissioners will not be able to ensure that consumers receive any benefits at all.  This report, like NARUC's resolutions, underscores the important role State economic regulators play in ensuring that ratepayers are not unduly burdened by new climate policies and, in fact, may benefit.

Demand Growth

In terms of energy demand, as I stated earlier, NARUC continues to be actively involved in the National Action Plan for Energy Efficiency.  I currently serve as Co-Chair of this State-Federal-Industry-Consumer coalition, and last November we released the NAPEE Vision 2025 plan.

NARUC is also working with the National Council on Electricity Policy on energy efficiency frequently asked questions and checklists.

NARUC hosted an Energy Efficiency Program Performance workshop as part of the 2008 Winter Committee Meetings. The Workshop focused on how well energy efficiency can stack up against other traditional resources and how savings from energy efficiency programs can be verified.

Finally, NARUC is continuing our work with FERC in the Demand Response Collaborative, which met again during the 2008 NARUC Winter Committee Meetings.

Energy Security

NARUC generally supported the Energy Independence and Security Act of 2007 signed into law late last year. From first initial glances, the Act appears consistent with NARUC positions, particularly on PURPA-type language on decoupling, combined heat and power, and smart grid issues.

More recently, NARUC announced its newest collaborative with FERC on Smart Grid provisions contained within the Act.  The NARUC lead on the Smart Grid Collaborative is Commissioner Frederick Butler of NJ.