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[Laughter]

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Madam secretary, you have

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covered a lot of ground today.

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I want to refer to the final

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question by senator

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hickenlooper.

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One of the problems with these

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technologies is high capital

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cost but they have extremely low

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or no operating cost.

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That is why we have to develop

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incentives to get these in place

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because then with hydro, it is

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very close to zero.

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In the long run, if we can get

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over the capital hump, we can

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really make a difference in

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people's bills at home.

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Let me turn -- I take it you

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agree.

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Sec. Granholm: I agree.

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Sen. King: Thank you.

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Nods don't show on the record.

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Let me turn to another issue

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which is transmission.

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Transmission in many states now

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is more expensive than

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generation.

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It's going to get more so

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because of the enormous buildout

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of the grid that is necessary

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for the electrification of the

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country.

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You have mentioned grid

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enhancement technologies, which

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I am in favor of very much so,

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but the problem is the

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incentives in the industry or

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towards building, and the cost,

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it is rate based.

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You understand how that works.

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So, we need to have incentives

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for doing the cheaper things

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first or perhaps even mandates

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that say you have a demonstrate

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you have done the grid enhancing

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technologies before you build

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the big new transmission line,

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which may be obviated by the

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technologies.

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Your thoughts.

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Sec. Granholm: It requires a

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different mindset.

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Perhaps a slightly different

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business model on the part of

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the utilities who are

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understandably conservative.

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You are seeing a lot of

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utilities --

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sen. King: Their financial

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incentive is to build.

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Sec. Granholm: Because they get

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a return on investment that

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corresponds.

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What a fantastic thing and I

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encourage you to look at the

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liftoff report that we issued

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one hour ago on innovative

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grid technologies because if you

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just look at what estimates are

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of necessary expansion of the

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grid between now and 2033, which

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is according to -- it's about 91

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gigawatts.

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The grid enhancing technologies

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can achieve between 20 and 100

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gigawatts, and they are at 5% of

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what the cost is of buildout.

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Sen. King: I hope you will

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communicate with your friends at

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ferc because they issued an

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order that did not require the

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utilities to even study these

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grid enhancing technologies

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before embarking on a

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transmission project.

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I don't understand that decision

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but I think that is something

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they need to continue to press

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on because it will not happen by

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us talking about it.

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There have to be incentives.

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It may be shared to savings to

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the utilities.

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Let me change the subject for a

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minute just to clarify.

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The pause and the approval of

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lmg terminals is indeed a pause,

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right?

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It is not a ban or stop.

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Sec. Granholm: Correct.

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Sen. King: All you are doing is

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using that time to update the

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data on impacts on domestic

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prices and environmental

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impacts.

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Sec. Granholm: Correct.

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Sen. King: The problem is I sat

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in this seat seven years ago

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when a representative of the gas

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industry said exports of lng

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will never exceed 9% of

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production.

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Right now, they are at 14% of

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production and they are going up

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to 40%.

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It seems to be prudent to

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understand the implications of

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that before we approve massive

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new projects that may end up

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significantly increase domestic

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prices or environmental impacts.

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Is that the case for the study?

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Sec. Granholm: Yes.

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Prices at home are usually

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important.

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Also, what are the impacts on

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our allies overseas?

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Sen. King: Our low domestic gas

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prices are huge asymmetric

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advantage around the world and I

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am concerned we will export that

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advantage by not understanding

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the implications of going from

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48% of production to something

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approaching 60% or 70%.

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We have to understand that as

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what the cost is all about, is

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it not?

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Sec. Granholm: Yes.

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Sen. King: Finally on methane,

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fossil fuels are going to be

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part of the transition.

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Methane is the low hanging fruit

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of climate change.

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I hope you will be working -- we

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now have space-based affect --

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assets that can detect leaks,

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how to remedy them, how to bring

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them to the attention of the

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manufacturer because this is one

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of the places we can really make

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a significant difference at a

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relatively low cost.

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Sec. Granholm: Yes.

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If you talk to the oil and gas

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industry, they say we can do

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this.

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It is the detection that has

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been slow, but now we do have,

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as you noted, satellite assets,

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as well as on the ground assets

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to be able to regionally detect

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where these leaks are happening.

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It makes sense from a financial

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point of view and a climate

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point of view.

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Sen. King: Thank you very much.

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Thank you for your testimony and