House Energy and Commerce Committee Chairman Fred Upton has a vision for the electric grid in which innovative technologies spur billions of dollars in investment without the need for Washington handouts.
The Michigan Republican said the “potential is exciting” at a House subcommittee hearing on the “21st Century Electricity Challenge.”
“Utilities are spending billions of dollars each year modernizing the grid and making it smarter” through new digital devices and infrastructure projects that are creating jobs and revitalizing the economy.
“Of course, Congress must decide the proper role of government in these changes to the electricity system. [But] new mandates and subsidies are not the answer,” Upton said.
He called the modernization of the power sector an “integral part” of an “architecture of abundance.”
That “architecture” is at the core of the energy committee’s legislative agenda in the new Congress, seeking to develop the nation’s energy infrastructure to support the boom in shale oil and gas production by building out everything from pipelines to new transmission lines.
But Upton wants those investments done by removing market barriers and not with the assistance of subsidies, tax credits or mandates from Washington.
Instead of new government subsidies, which the GOP has been seeking to cut or curb, Upton said the investments would be better served by identifying “regulatory barriers to entry” where Washington may have gotten in the way. Those barriers include “market-distorting incentives and artificial constraints on competition that will be critical to further innovation.”
Upton was partly alluding to tax credits for wind and solar energy that have been a sticking point between Republicans and Democrats. The GOP has sought to repeal them while Democrats want to extend them.
Many in the nuclear industry have said the wind credit has distorted the market, making nuclear power plants less economically viable, leading to premature shutdowns that pose risks for the nation.
Ed Whitfield, R-Ky., the Energy subcommittee’s chairman on energy and power, underscored the “challenges” that stem from “much of our grid [being] outdated” where older “coal-fired generation facilities are shutting down at an alarming rate.”
The challenges are compounded by more renewables coming online that produce “intermittent” electricity and may not be able to respond as well as coal plants to the daily ups and downs of electricity demand, Whitfield said.
But at the same time, he sees the enormous potential for investment, echoing Upton’s comments on the billions that utilities plan to spend.
“Utilities plan to invest more than $60 billion … in transmission infrastructure through 2024 to modernize the nation’s electric grid, while abundant fuel resources and advanced generation, storage, and distribution management technologies can help modernize and diversify the nation’s power portfolio,” he said.
