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Energy Secretary Chu Says Transformation Under Way

February 23, 2009
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U.S. Secretary of Energy Steven Chu said last Wednesday that while the country faces a number of challenges with electricity infrastructure in an ever-changing environment, the new administration is ready to promote a new, more intelligent system through green-lighting loan guarantees for new projects and investing in the nation's smart grid and in new sources of renewable energy.

Speaking at the National Association of Regulatory Utility Commissioners' Winter Meetings, Chu said the American Recovery and Investment Act can help restart the American economy.

"We face incredible challenges," Chu said, noting that energy demand worldwide will continue to grow and unless the United States "acts boldly, we'll be more dependent on foreign sources of oil." He noted that the climate change problem is also real and the transition to renewable energy will require a lot of work especially in the transmission and distribution system. He said "incredible investments are being made in renewable energy that will put America back to work."

Chu said revamping the country's aging electricity infrastructure is no small task. "Right now, it is supplying 4 million GWh/year from over 3,000 power plants to over 100 million customers. [We are relying on] that transmission and distribution system...for reliable, secure, safe and economic electricity for our economic growth."

Going forward, Chu said the country will be relying more on renewable energy. He noted that the United States has a lot of wind in places like Texas, South Dakota and Wyoming and sun in the southwestern areas. "The good news is the renewable energy sources -- which require a lot of area -- are in places where there are not many people," he said. "The bad news is those renewable energy sources are in places where there aren't any people." As a result, he said power is going to have to be shipped "over distances rarely considered before." This puts a larger burden on the transmission and distribution system.

Under the American Recovery and Investment Act, Chu said $4.5 billion has been allotted to implementing smart grid technology, $3.25 billion apiece to systems of the Western Area Power Administration and Bonneville Power Administration, $6 billion to renewables and transmission and $2 billion to science.

Chu said energy loan guarantee applications for new energy projects that have been stuck within the Department of Energy will be processed more quickly under the new administration and that red tape will be cut. "The loan applications before were averaging approximately 1,000 pages. We are trying to reduce that to about 50 pages. You don't need 1,000 pages," he said. "Our target now is to start writing checks in the new loan guarantee program by the end of April [or] beginning of May. That's three to four months as opposed to three to four years."

The secretary said a smart grid -- which allows consumers to monitor their own usage and gives utilities more flexibility -- has to be a secure grid. "The good news is much of the technology is there...not implemented, but we have that technology. It is really a matter of building a reliable system," Chu said.

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