Basically, what I want to talk about is the foundation of a rational energy policy for this country in which has a part of which electric energy is going to play and must play a major role. Now there are those who suggest the United States of America doesn't have an energy policy. They're wrong. We do have an energy policy and like any good policy. It's made up of a goal strategies and programs the goal of American Energy policy has been for a long time. If we have would have chosen to articulated in these terms that we want as a nation to have an adequate supply of energy at a reasonable price pretty simplistic goal. The strategies by which we achieve that goal. However, very from Administration to Administration and from secretary to secretary this administration's fundamental strategy is that we do not enhance our ability to achieve and adequate energy Supply by governmental interference and activities in the marketplace that the Innovation and Imagination of American industry energy Industries and other Industries is a far greater means of ensuring an adequate Supply at a reasonable price for an extended. Of time than any combination of governmental intervention strategy, which we favor and that is that we'd need to have a balanced mixed Energy System in this country. No other approach could truly be considered rational any more than an Investment Portfolio consisting only of one stock or one Bond or a diet consisting of only one food category would be considered a balanced or rational energy food. The program so 2 in energy strategies a balanced mixed Energy System is the only rational approach. Growing from these strategies. We have a number of programs some of which we inherited some of which were trying to carry on some of which we have tried to alter as you know, I'm engaged substantially since I came in the department in an effort to decontrol the price of natural gas at the Wellhead. I like them that by the way, when people challenge the concept as somehow unworkable to the fact that electric utilities are regulated and that's generally well understood that electric utilities are regulated, but the government does not regulate the price of most of your fuels And if we can get natural gas decontrolled I'm convinced that we will see an increase in Supply and a reduced price and if in conjunction with it, we can get rid of the fuel use act an incremental pricing. We will have made a major contribution to the benefit of the energy programs in this country. Nuclear licensing reform is on her agenda. Mother programs. We are carrying on now and active effort to implement. The nuclear waste disposal act which was passed in the lame duck session of Congress a very difficult thing to do because that bill as it was past contain the number of competing provision which have to require substantial interpretation, but I believe we are going to make the grade with that bill. It represents the solution to the problem of nuclear waste and that argument in opposition to nuclear power plants. I think is no longer a valid argument. We have a large role in research and development Science and Technology at the department of energy and that role will continue the National Labs in this country represent a 25 billion dollar investment over a 40 year. By the American people in the desire to place this nation in the Forefront of Technology. Certainly those National Labs have permitted us to do that and this administration at the time of a deficit which is of great concern to us has proposed increases in the commitment to Science and Technology to research and of the National Labs in the area of energy conservation We Carry On programs, which we believe will contribute to the furtherance of the ability of the private sector the commercial sector to bring these activities into the marketplace. We're working on more efficient engines. We're doing research on batteries. We are working on a plant standards. Any Renewables on solar we participated in Central Station solar collectors were working on portable takes research but one of the things that they overlooked in this country when we talked about solar photovoltaics, is it today between between 50% and two-thirds of the money spent on research on solar photovoltaics is now being carried on in the non-federal sector and I think that's a great achievement and it's beneficial and some of the most current and exciting developments have been occurring in that non-federal sector. We pursue wind ocean thermal energy concert conversion geothermal in the fossil area. We're carrying on Research with regard to magneto-hydrodynamics. But we do not believe it is a role of the Federal Government to move further into the demonstration stage and let me explain why. Our preference would be to deal with research to deal with proof of principle that when it comes to the building of a project. To prove in a pilot weigh the feasibility we find out when the federal government builds the project we put so many bells and whistles on it to buy the timer ready to turn it over to you for General application. You can't afford to build it and make it operable. It seems to us that our role should be at research and proof of principle and that when the commercial sector sees the opportunity to invest in a resource and make it generally available that is when it should be done. We're investing in Clean Coal Technologies removing sulfur removing Ash in a more efficient less costly way as a means of helping support those Technologies in nuclear recurring on health and safety research were participating from a research standpoint. In the cleanup of Three Mile Island, and we are attempting to find ways to continue the Clinch River breeder reactor, which is in fact a demonstration project and counters precisely what I was just saying about mhd and let me point out to you that one of the problems we're having with the Congress of the United States today is that very fact that they are concerned that the federal cost are going up too high and if we're to continue that project is going to be necessary that we find additional funding from outside the federal sector in order to be able to keep it alive. From the standpoint of programs which support this National policy an important element is Communications in the area of Technology transfer. I do not believe we are doing a good job. I don't think my predecessors have done a good job. I don't fault them for that anymore than I've currently fault myself finding a way to move research even with promising research to the area where it becomes commercially available is extremely difficult and has been slow slower than perhaps is desirable and we are going to continue to work on that. It's my desire it when I have an under Secretary of the department. He will be largely responsible for working on that subject. We also have public information responsibilities beyond that the Energy Information Administration produces all kinds of data regarding information about energy in this country. I need to emphasize the Energy Information Administration though technically administratively apart of the Department of energy. In fact is not policy responses to the secretary not to some of you that won't mean anything but to me it means when they come out with statements which are critical of our natural gas proposal. He ain't speaking for me. We will release the electric utility study which has long been discussed. It has been completed for some time. and for some time I received some at least joking and I think perhaps not so joking criticism for our failure to produce that report because I transported it back and forth from my office to my home off an unread sometimes read with distaste, but often unread and I was not prepared to issue a report which contained Federal recommendations which when you scrape away all of the Surplus age, basically, we're recommending additional layers of Regulation. I do not believe that that is the solution to the problems of the electric utility industry and I couldn't in good conscience support that so what we will issue will be a report which does not contain recommendations talking about what's in that report would be a speech in itself for an audience like this except that Many of the things that are in there are already known to you, you know them very very well. You've studied in them yourselves basically the report hinges on a review of the industry's problems it affirms things. Would you already know but I believe in doing so the reports on which it is based as well as the analysis which has been done may be useful to you and communicating further with the public with legislators with public utility commissions and so on a couple of highlights with regard to demand the analysis is made between 1960 and 1973. The girls in electric demand increased at a rate 1.8 x the growth in the gross national product. Between 1973 and 1980 that reduced to 1.2 times but still in excess of the rate of growth of gross national product other energy sources other electric energy sources grew at a lesser rate in both cases. In fact since 73 the growth and non electric energy sources has actually been negative as compared to the growth in gross national product that partly this is not a function of price electric prices. It is reported are up but they are up on average less than other energy sources the report reaches a general conclusion, which is that even assuming continued mu sufficiency. Let me repeat that assuming continued end-use efficiency improvements demand for electricity will grow at least equal to and perhaps in excess of the growth in the economy through the year 2000 by happen to believe that is true at the moment when I say it I must admit people look at me as if they think I'm a little bit off Target, but I believe it is true. Our economy has turned it is turning we are going to see economic upturn and when that happens, I think we're going to begin to get the message. The report also looks at the low demand studies which have been circulating and finds that there are at least two common attributes of the low demand studies that have been published in this country. First of all, there's an assumption that electric prices will remain high for become High relative to other Energy prices. This is not been through the monster bully in the last two decades, but they turn that has something and say henceforward they will be high. Secondly. They assume that there will not continue to be a shift. Turn electric economy such as we have seen. The report does not pretend to say who is absolutely right. Thank goodness. But it takes a look at what happens if various assumptions are made and comes forth with a range projection of the electric requirements in this country and it comes out with numbers like these at the present time there 572 gigawatts of electric generating capacity in this country 100. + gigawatts will be retired between now and the year 2000 if we have a 2% electric energy growth rate. We're going to need 305 gigawatts additional construction. That's 305 nuclear power plant 610 500 megawatt coal plants or what-have-you between here and the year 2000 with a 2% growth rate, which would mean electric growth would be below the rate of growth for gross national product and every forecast I've seen of gross national product growth between now and the end of the century is 4 greater than 2% If you have a 3% growth rate using the same thing as you're looking at 438 gigawatts, or if you have a 4% growth rate in electric demand, you're looking at 600 additional gigawatts. Dairy in order to meet the requirements of this country by the year 2000. That raises some questions about financing which I'm sure came to mind. As soon as we started talking about those kinds of numbers. First of all study points out Capital has diminished as a fraction of the percentage of the cost of electric operations further and concludes that over building is a far less dangerous problem for the utility and for the consumers and for the nation and far less costly than under building. Small rate increases it concludes would be tremendously beneficial to Consumers if it would enhance the Financial Security of electric utilities and have it has a great cost benefit ratio return for the consumers the report indicates the even with all of the generation capacity to be added that I've talked about it would take approximately the same share of the national capital markets for electric utilities to meet those requirements as it has taken in the past, which doesn't sound overwhelming it does happen to be about a trillion dollars. There's been a dramatic shift which is reported in charts and graphs in this report, which I think will be useful to you and to those who have who have talked about the plight of the industry a dramatic shift. In the ratio between allowed earnings and actual earnings. There's been a decrease in the amount of cash generated by Electric utilities as earnings. These are these factors have all had significant impact on the final question that has to be raised and that is will there be investment by Electric utilities in generation sufficient to meet those levels at that have been talked about in the demand portion of the sperm of this discussion. One of the issues you will confront was touched on by my predecessor it I think is a question of public credibility. Inability to unify the voice of this industry on key issues tend to be destructive of your Unity tends to be destructive of your public credibility. There are other things that you are doing many of you are doing which help your activities in the conservation Arena your activities with regard to alternative energy sources, I believe contribute significantly to the public acceptance of what you're doing your credibility. I think that as you invest in solar and wind and geothermal and as long as you do not downgrade the importance of these things and of conservation and there are imaginative programs, as you know a foot in the country today where utilities are contributing to and supporting on a proper basis pencil installation of insulation that you contribute to your credibility with the public and increase your ability to have good influence on the society's thinking with regard to energy. I would urge that you seek and continue to seek ways in which you can be comprehensive energy suppliers to household. I especially think in terms of conservation and solar type units when I say that but what I was struck by when I was at the Bonneville power Administration, was it our approach tended to be we would leave to the residential consumer the decision as to whether or not to install certain kinds of alternative energy devices and while that was one or 2% of the system. It makes no difference. You can't find it for all practical purposes in your load, but consider the impact on your system if with no participation on your part. A significant share 10 15 20 25% of your load becomes residentially owned and controlled solar systems. For instance. You increasingly become a peeking resource and I submit to you the financial implications of that are such that it will drive you into a very difficult situation and I would seem to me you need to be finding ways to be that comprehensive supplier for years. The phone company rented Us in affect the phones that were in our house. They provided a Communications service that has been changed is being changed but it seems to me that there are opportunities here for investment which are proper Investments and our society beneficial and contribute to the overall balanced mixed Energy System, which this country needs in order to have a rational energy program. One of the problems of Prior speaker Touch. Of course was a problem with consumers. I think that anytime you're increasing prices to people they're going to be suspicious of you. They will welcome hearing from a Critic who give simple straightforward solutions to the problem regardless of their Merit and I've often thought you can spend six months researching an issue carefully and go out to a carefully-planned presentation and layout factually all of the issues and what you believe to be the solutions and I've kiddingly said that a freshman college student at the local Community College can take an envelope and scribble a few notes and make a calculation about The Nearness of the Sun to the Moon in a few other things and get equal coverage in the local papers. That makes it difficult for your credibility. But it's one of the kinds of issues we've got to deal with and you must continue to deal with it. I think there are many options and many opportunities for this industry for the energy industry in this country. This nation is depended upon energy. It has been built by energy. Clearly. We need the kind of leadership which you can provide in the area of electric energy. What are the arguments I make about the importance of the Diversified system we have is it because it is Diversified because there are so many different capable people making different decisions sometimes on the same issues. We get the benefits of flexibility in this system unlike anything that can be imagined in a system where some energy Czar or Secretary of Energy or whatever is making broad National commitment and binding decisions with regard to the supply of energy. I think as you react to the facts as you see them and as you see them change, you will help this nation move toward a rational energy policy. This is the greatest industrial nation in the world. It is the Cornerstone of the military security of the Free World and United States of America is what it is today partly because it has had the best and the most reliable and the least cost Electric System anywhere in the whole world and you've made it that way. I believe you can keep it that way and I would sure like to help. Thank you.