DOE’s Implementation of EPACT’s Electricity Title and Related Provisions

1. APPA Energy Policy Act of 2005 Seminar DOE’s Implementation of EPACT’s Electricity Title and Related Provisions Larry Mansueti Office of Electricity Delivery and Energy Reliability U.S. Department of Energy www.electricity.doe.gov lawrence.mansueti@hq.doe.gov November 10, 2005

2. Mission Office of Electricity Delivery and Energy Reliability (OE) Lead national efforts to modernize the electric grid, enhance security and reliability of the energy infrastructure, and facilitate recovery from disruptions to energy supply

3. Grid Modernization – A Presidential Priority “…We have modern interstate grids for our phone lines and our highways. It's time for America to build a modern electricity grid.” President George W. Bush April 27, 2005

4. Office of Electricity Delivery & Energy Reliability Priorities • Implement assigned parts of Energy Policy Act of 2005 and National Energy Policy • Conduct national study of transmission congestion, and designate National Interest Electric Transmission Corridors • Mobilize efforts to modernize and enhance the transmission grid • Bolster physical and cyber security of critical energy infrastructure • Assist states and industry to recover from disruptive losses of energy supply capacity

5. DOE Office of Electricity Delivery and Energy Reliability Kevin Kolevar, Director Permitting, Siting, & Analysis: D. Meyer Infrastr Security & Energy Restoration: A. deAlvarez Research & Dev’t: Bill Parks • Transmission Reliability • Electric Distribution Transformation • Electricity Storage • Superconductivity • GridWorks • GridWise • Infrastructure Security Technology • Visualization and Decision Analysis Tools • State and Regional Assistance • Policy Analysis • Congestion Analysis • Energy Corridors • Cross-Border Export Authorizations and T- Line Permits • Power Marketing Administration Liaison • Energy Infrastructure Protection • State/Local Gov’t Partnerships • Training and Exercises • Visualization • Critical/Vulnerability Assessment • Emergency Response support

6. OE Planning, Siting, and Analysis: Strategy and Approach Forge concerted efforts at regional level to modernize nation’s electric grid through technical assistance and dialogue with states and regions • Show need for new grid, urgency of using current window of lead time effectively • Build partnerships with national, regional and state organizations with key roles in electricity markets • Utilize experts from national laboratories, universities, and electricity state-based organizations to provide objective technical assistance

7. Energy Policy Act of 2005 and Electricity • Creates Mandatory/Enforceable Reliability Rules • Streamlines Transmission Siting/ Identify National Interest Corridors & Fed. Land Corridors • Transmission, Generation, Efficiency Tax Incentives; Public Power/Coop Clean Energy Bonds • Research & Development Authorization Titles • Repeal Public Holding Company Act of 1935 (PUHCA) coupled with tighter FERC merger review & better access to books & records

8. EPACT Mandatory Tasks Delegated to DOE Office of Electricity • Sec. 1221 Report on study of electric transmission congestion. 1yr and every 3yrs after. • Sec. 1221 Designate national interest electric transmission corridors--coupled with FERC “backstop” siting • Sec. 1221 DOE to coordinate federal permits (EIS’s) for transmission. Create an MOU with federal resource agencies for coordination process. • Sec. 368(a) Designation of corridors for oil, gas, and hydrogen, T&D corridors on Federal land in 11 western states (in two yrs) and other states (east) (in four yrs) • Sec. 1234/1832(c) Report to Congress on economic dispatch- current practice; possible revisions to allow non-utility generation. Recommendations for states. (due 11/8/05) • Sec. 1252 Demand Response Report to Congress/technical assistance to states and regions (Feb 06) • Sec. 1815(b) Report to Congress by Interagency Electric Energy Market Competition Task Force on competition in the wholesale and retail markets (in one yr)

9. EPACT Mandatory Tasks Delegated to DOE Office of Electricity • Sec. 925 T&D R&D five yr plan Report to Congress • Sec. 139(c) Report on increasing energy efficiency use by electric and natural gas utilities study. 1yr • Sec. 1816(b) Report on study of benefits of using mobile transformers & mobile substations for blackout restoration. 1yr • Sec. 1817(b) Report on a study of potential benefits of cogeneration and small power production. 2 yrs • Not mandatory but will help states, utilities as needed with Sec. 1251-1254 PURPA “must consider” provisions

10. Designation of National Interest Electric Transmission Corridors (1) • Energy Policy Act requires DOE to issue national study of transmission congestion for comment by August 2006; every three years thereafter • Based on study and comments, DOE is to designate geographic areas, using criteria, as “National Interest Electric Transmission Corridors” • Projects that would ease congestion or mitigate related concerns may qualify for exercise of federal “backstop” siting authority by FERC

11. Designation of National Interest Electric Transmission Corridors (2) • Team formed: Includes CRA Int’l (Charles River Associates), others. Finalizing process. • Separate Western Interconnection and Eastern Interconnection studies. In West, study by WECC/SSG-WI/CREPC. East: use existing plans & augment by modeling. • Despite deadlines, essential to move with care -- DOE wishes to augment, build upon work done by others, not disrupt or supplant • Open process, with ample opportunity for public input by stakeholders. Public notice & meetings soon (East & West).

12. Economic Dispatch Report to Congress • Of current debate in Congress, due to high natural gas prices • Report to be released any day • Current practices (surveyed) • Recommendations for changes in practices

13. Identification of West-Wide Energy Corridorson Federal Lands Section 368: Secretaries of Energy, Agriculture, Interior, Commerce and Defense to: • Designate corridors for oil, gas and hydrogen pipelines and electricity transmission facilities on Federal land in the eleven contiguous Western states; (Nov 05 public scoping mtgs) • Perform any environmental reviews required to complete the designation of such corridors; and • Incorporate the designated corridors into the relevant agency land use and resource management plans; • Do so within 24 months of enactment….Do same in four years for the East.

14. Coordination of Federal Permits for Transmission on Federal Lands Sec. 1221(h) and 372: • If applicant requests, DOE to coordinate the issuance of all federal permits/authorizations needed for a transmission project • This means environmental impact statements, other federal authorizations • Purpose is to streamline and avoid duplication among resource agencies • DOE needs to do an MOU with resource agencies to define “lead coordination”

15. Save the Date The U.S. Department of Energy Office of Electricity Delivery and Energy Reliability and The National Association of Regulatory Utility Commissioners In Cooperation with The Consumer Energy Council of America Invites you to The First National Electricity Delivery Forum February 15-17, 2006 Hyatt Regency of Capitol Hill Washington, DC Details to Follow Soon