LOCKE:

Good afternoon -- or good morning. I'm Gary Locke, secretary of commerce, and with me is Secretary Chu of the Department of Energy and George Arnold, who's with the National Institute of Standards and Technology, which is a division of the Department of Commerce.

Today, we just had an open, honest discussion with more than (ph) executives, 70 executives from around the nation, dealing with the smart grid. We made great progress toward achieving the commitment and cooperation of many important players that are necessary to realize the president's vision of a smart electricity grid.

Secretary Chu and I delivered the message that companies whose business model depends on customized proprietary interfaces to lock in customers will now have find a new business model based on open standards.

We made very clear that accelerating the standards development is an urgent national priority if we are to realize what everyone calls a smart grid.

A smart grid is where your appliances can interface with your home computer and end up talking with your utility, where people will be able to sell electricity back into the power grid either from solar power or from their plug-in electric vehicles.

It also means greater efficiency with respect to the distribution center, our -- our grid system.

We're pleased to announce today the first 16 standards that will be included in a Release 1.0 of the Smart Grid Interoperabilty Standards Framework, spawning (ph) areas ranging from smart electricity meters that you might have on the side of your house or on the side of a business to distributed power-generation components to cyber-security. The list of standards will help ensure that software and hardware components from different vendors will work together seamlessly, while securing the grid against disruption.

Release 1.0 is a work in progress. It is not complete, but these 16 standards are a significant first step. The standards reflect the consensus expressed by participants at the first public standards workshop, that took place in April. The second public workshop starts tomorrow and goes for two days here in Washington, D.C.

President Obama is absolutely committed to moving quickly to develop the smart grid, and this work is critical to achieving energy independence, energy efficiency, as well as creating jobs and cutting -- and cutting the energy cost for consumers.

Today represents a significant step down the road toward realizing the Smart Grid vision, and Secretary Chu and I indicated that, while we would like consensus, and as much as we would love unanimity, this is a very urgent matter, and we want all the players to be involved in the table -- at the table -- to help set the standards.

LOCKE:

But, in the end, if there is not unanimity, if there is not even strong consensus, we in the Department of Energy and the Department of Commerce, through the National Institute of Standards and Technology will make the decisions to get us moving forward as quickly as possible.

Now, I'd like to turn it over to Secretary Chu.

CHU:

Thank you, Gary.

So, just to add to what Secretary Locke has said, I want to remind you all why we want the smart grid. As we go to renewable energy, renewable energy like wind and solar power are intermittent -- they're variable. And as -- if the wind stops blowing momentarily, if clouds roll by, we have to be able to shift loads and shift generation and distribution very rapidly, on a time scale of really thousandths of a second, so that we prevent brownouts and blackouts.

This is something where we're at renewable energy, wind and solar, of 2.8 percent today. This is nothing compared to where we want to get -- 10 times more than that, let's say 20 percent, 25 percent, 30 percent. So we need a smart grid for that.

We anticipate that plug-in (ph) hybrids and, finally, electric vehicles will become a reality, a significant market penetration. I'm hoping and expecting that the batteries we need for those technologies will be developed in the next five years. But you can't have significant market penetration unless we have the grid that can -- that can allow those things to happen.

Finally, as solar portable kegs (ph), become more a reality, we have to begin to manage two-way flows, so that the consumers are also some of the suppliers. Again, we need a smart grid.

So for all those reasons, we have to get moving. There are -- in the past, there's an energy act of, I believe of 2007, that authorized the Department of Energy in collaboration with NIST to begin to set these standards.

CHU:

We have gone not very far since that authorization in 2007. And so Secretary Locke and I were there to show our enthusiasm, our commitment and offer any help we can.

I also should say that, in terms of the Department of Energy budget, in order to start pilot plans of a meaningful scale, we've gotten a lot of good comments from the industry. And so the cap of $20 million that was set before, we've raised now to $200 million for piloting some of these projects.

There are a number of other steps we've made. Another one is that I've transferred $10 million of Department of Energy resources to the NIST in order to help facilitate the development of these standards.

And so we are very serious about getting this going as quickly as possible. So, thank you.

George do you want to say something?

ARNOLD:

Well, I would say the...

(UNKNOWN)

Speak up, please?

ARNOLD:

I'm George Arnold. I'm the national coordinator for smart grid interoperablity at the National Institute of Standards and Technology.

And I would have to say that a meeting of the type that we had, with over 70 CEOs and top business leaders from the electric utility industry, the suppliers, the I.T. and telecom industry, state and federal regulators, to discuss standards, is really unprecedented.

But it really is a once-in-a-lifetime opportunity for us to renew and reenergize one of the nation's most important infrastructures.

And for that to happen, we need to have a common foundation of standards.

ARNOLD:

The commitment expressed by the business leaders, along with the sense of urgency communicated by Secretary Locke and Secretary Chu, will really help propel this initiative forward, and I look forward to accelerating our progress.

The 16 standards that we announced today are a first start. The workshop over the next two days will gather together over 500 experts from industry and government to make further progress in identifying the next set of standards and a complete road map that will allow the smart grid to become a reality.

Thank you.

QUESTION:

Mr. Secretary, what kind of reaction did you get -- either Mr. Secretary?

 (LAUGHTER)

What kind of reaction or feedback did you get from the business leaders (inaudible)?

LOCKE:

I think there is a lot of enthusiasm. What was really nice about this meeting is they're saying we want to hurry up, we want to get going. And we're saying we want to hurry and we want to get going. They -- they do appreciate the commitment shown at now the highest levels of government. And so they're very enthusiastic.

You know, my idea is you lock them up in a room for a couple of weeks and figure it out. But I think there was receptivity and enthusiasm.

CHU:

Yes, I think everyone was very, pleased by the sense of urgency that every sector displayed, from the private nonprofit regulatory side of state and local governments, utilities, all the way to the federal government.

LOCKE:

So it was almost "who was trying to outdo the other" in terms of the sense of urgency, and how fast people were willing to work. I'm very, very encouraged. We had people there representing utilities, the regulators at the local level, transmission representatives, utility regulators -- or utility representatives, to people who make the devices and the meters that go on the side of your homes. And this is an enormous opportunity to fundamentally transform how consumers use and monitor their own electricity, and to interact with their utility districts, or their local utilities, on their consumption of electricity. So we're really excited. And we're going to go back to the drawing board, and change our timeframes and make the products come out, and the standards that will emerge, much, much faster.

QUESTION:

When do you think you would have enough tentative (ph) standards in place that enders (ph) (inaudible) would say, "OK, we're ready to invest"? How long before you finish the job?

LOCKE:

Well, industry is already investing. And the 16 standards that we are announcing today already exist, and are in wide use by industry. So I think we're prepared to move ahead. There are certain applications for which standards have yet to be developed. But the process that we've launched today will allow us to accelerate the development of those standards and make the smart grid a reality much more quickly.

QUESTION:

Secretary Chu, how quickly (inaudible)?

CHU:

As quickly as possible.

 (LAUGHTER)

CHU:

Well, what we're trying to do is we're -- we're making announcements. We are planning on having -- I've written a letter -- in these situations, you have to make an announcement of an opportunity for funding. You have to receive proposals. You have to -- you have to evaluate the proposals.

This summer -- I've already sent a letter out to the presidents of major research universities, to deans, to professional societies to say we will be calling on you sometime this summer to assemble in Washington for a week to start reviewing many of the proposals, not only for smart grid technologies, but many of the innovative energy proposals we're asking for.

And so, we hope to be making decisions sometime this summer.

QUESTION:

Secretary Chu, how can you be sure -- how can you be sure that the technologies that are supported through the DOE stimulus grants are harmonized and match together well with pending NIST standards, that might not be developed for a while?

CHU:

Well, because we're working very closely together, number one. We've had a couple of meetings already, a telephone meeting. Secretary Locke and I and George Arnold had another meeting in person for about an hour, an hour and a half.

And so -- and this is at the principals' level, but we are actually going to be meeting and working on a daily basis intimately with the Department of Energy and with NIST.

And so, that's -- that's how we harmonize. We're -- we're doing this together.

QUESTION:

Secretary (inaudible), how would you characterize the weight of the batteries in any of the (inaudible)? How would you characterize your awareness of something called eStore, Incorporated, and their solid state energy storage process?

CHU:

What was the -- I'm not aware of that company.

QUESTION:

The name of the company is E-Store (ph), Incorporated. It's -- it's different from a lithium-ion-based storage system.

CHU:

Well, I can't comment specifically on any specific company.

QUESTION:

(OFF-MIKE) breakthrough battery technologies that you're tracking. I was wondering, could you say a few words about which ones you're personally aware of, and also relative to the smart grid -- that's important to the smart grid?

CHU:

Well, no, I'm not going to -- I'm not going to comment on specific companies, but what I would like to say, that there are a bunch of novel technologies, especially on the cathode side, the electrolyte side.

You -- there are novel nanotechnologies that many people are pursuing that, I think, could lead to real breakthroughs. But I don't want to mention specific companies.

 (UNKNOWN)

Thanks, everyone.

LOCKE:

You know, with respect to these standards, we're going to be rolling them out in a variety of different stages and we're going to be basically working on foundational standards -- and foundational standards and, let's say, smart meters -- foundational standards with respect to the energy grid itself, the transmission lines, foundational standards with respect to appliances, so that we're working concurrently in a whole host of areas, but with a great sense of urgency.

And you're going to see a lost of these standards coming out over the next several months. And that will give the people who make -- design appliances, so that maybe your clothes dryer can be governed by your computer, talking with your local utility.

So we're going to be rolling out all these things, and it gives the industry, both the people who design the software, the people who design the appliances, the people who are working on transmission lines, enough information so they can start working on their end, in coming up with these innovative products and control mechanisms.

And then, as we further refine them, then you're going to see even greater application within the household.

But there is a great sense of urgency, and we're really pleased with the commitment by all the different stakeholders, from the public utilities, the public regulators, the state utility commissions to the people who designed these applications, computerized applications for the Internet, as well as appliances, all there in the room today.

And there will be several hundred more people who will be...

(END COVERAGE)