solar, to that extent one is displacing petroleum that becomes available in other areas.

In terms of regional variation, I gather we will be receiving subsequent testimony. Would you like to respond to that kind of concern raised, especially by those of us who live in States where the Sun is not always shining to maximum advantage?

Mr. BENNINGTON. If you look at exhibit 2 in my testimony you will find a breakout by census region which is also split by market sector which provides aggregate information.

The real issue is how much you can believe any projection that far ahead at that level of detail. I can provide you information but it has a very wide error band.

Mr. WOLPE. The last question I would have: Would you care to react to the suggestion of the gentlemen from New York that even with a maximum effort in the area of gasohol, we are talking about no more than 1 percent displacement in the year 2000 in the use of petrol for transportation purposes?

Mr. HAYES. He actually said that a massive 10-year effort would have a 1-percent displacement of imported oil. Obviously it is a technology that we know how to pursue. No major research breakthroughs are needed. It is a question of what kind of resources we are going to put into it. You name your assumption and I will give you a figure for it.

I would guess that, in a 10-year period, we could easily displace one quarter of the gasoline we derive from imported oil, and I would say that with a more aggressive program that goal could go considerably higher.

The 1-percent figure is arbitrary. It could be a 25-percent figure. It is a matter of how many distilleries we build and what percentage of our unused agricultural land we are willing to put into growing feedstocks for those distilleries.

Mr. CRAIG. The domestic policy review talks about a target of 5 percent gasohol by 1985 and 20 percent by the year 2000. They are referencing that against the total use, not just imported use. I won't defend or attack that number. Most of the numbers I have looked at I find reasons to attack.

On the issue of oil displacement in the residential sector, I can observe that in Davis, Calif., the natural gas use has been cut in two as a result of our conservation ordinances and cut substantially below that in the solar homes. That is happening right now. Now, we happen to use gas there. In areas of the country that use oil, that would be direct oil displacement. So there are really very substantial opportunities for rapid displacent if there is a decision made to do it.

Mr. WOLPE. Thank you.

Mr. OTTINGER. The time of the gentleman has expired. Mr. Anthony.

Mr. ANTHONY. No questions.

Mr. OTTINGER. Mr. Fish.

Mr. FISH. Thank you very much, Mr. Chairman. I would like to ask unanimous consent that the remarks I was not here to deliver at the opening of this very important hearing be included in the record at that point.

Mr. OTTINGER. Without objection, they certainly will be.

[Mr. Fish's opening statement follows:]

OPENING STATEMENT OF HON. HAMILTON FISH, JR. (R-N.Y.), RANKING MINORITY MEMBER, SUBCOMMITTEE ON ENERGY DEVELOPMENT AND APPLICATIONS

Thank you, Mr. Chairman. I am particularly pleased that we have scheduled hearings today on the subject of national solar energy policy. The idea of tapping the Sun for clean and almost limitless energy certainly has much appeal. I am firmly convinced that solar energy can and will play an important role in meeting our future energy needs.

These hearings come at a most opportune time. In the months ahead, the subcommittee will be faced with many critical decisions on the course and scope of our Federal solar programs. These hearings give us a good opportunity to consider the administration's position on solar energy, and to see what we in Congress can do to most effectively utilize the potential offered by the Sun.

Our present energy dilemma is both real and complex. Recent events in Iran and elsewhere lead me to conclude that it is in our Nation's best interests to reduce our dependence on foreign supplies of oil. On the domestic front, we have recently heard alarming reports referring to the dangerously low levels of heating oil reserves for the upcoming winter months.

I am particularly optimistic about the role which solar energy can play in reducing on reliance on these uncertain energy supplies and the sooner we start this transition the better. Recent studies have confirmed this view. Solar energy offers us a virtually inexhaustible energy source that can be developed in a manner consistent with our environmental goals. In fact, it might just be the deciding factor in whether we can truly ever become energy independent. In recognition of this potential, I have joined my colleagues on the Committee on Science and Technology in authorizing over $609 million for solar energy research, development and demonstration for fiscal year 1980. This level amounts to an increase of approximately $34 million over the Administration's original budget request, and will allow the Department of Energy to press forward with the solar program that our Nation urgently needs. My goal is for solar, including hydropower and biomass, to contribute twenty to twenty-five percent of our energy needs by the year 2000. It will take a national commitment far beyond today's level to meet this goal, but I believe that is what the American people expect. We still must overcome several barriers facing the use of solar energy, whether they be technical, economic or institutional, but with a vigorous Federal program, I am confident that we can realize the potential offered by the Sun.

In this regard, I hope that our subcommittee will hear testimony today on what we can do to accelerate the development of our solar resources. We need answers to several questions such as what is the best way to overcome the various institutional barriers facing solar energy, at what price can we afford solar energy, and where should we allocate future research and development funds. These questions, and others, deserve much attention, and I hope that we today will be able to give them the consideration they deserve.

Together with my colleagues, I anxiously await the President's statement on solar policy. This statement will set the tone for proceeding with the development of our solar energy resources, and will guide our Federal solar programs for many years ahead. I urge the Administration to show the world that the U.S. really means business when we say that we intend to become energy independent. One way in which we can help do this is by supporting an aggressive and accelerated plan for our solar future. Without such a plan, I am afraid that our Nation will only continue to pay lipservice to the idea of energy independence, a frightening prospect considering the uncertain energy future which we face.

Mr. Chairman, thank you for the opportunity to make these remarks. I welcome the witnesses, and look forward to their testimony.

Mr. FISH. Mr. Chairman, I welcome the panel members and it is good to see Mr. Hayes with us again. He and I have appeared on panels, and I think that shows a high degree of tenacity, and that maybe you see yourself closer to your goal than in past years. I understand that most of the testimony at this point has been about the future. I would like to stop for a minute and talk about the present from a management point of view and see if we can elicit some suggestions. The fiscal 1980 authorization contains over

$600 million in solar energy research and development and close to $1 billion when you consider the solar tax credits.

With the present DOE management and organizational structure, do you believe this money will be wisely spent? What changes in DOE's organizational structure and any additional funding would you recommend? How would you spend any additional funds that may come out of the administration's domestic policy review? Mr. HAYES. There are a number of ways that the Department of Energy could be reorganized. It is rather clear that the current organization is not handling the solar issue with efficiency and it is not handling other issues with great efficiency. I understand that the reason for going to this style of organization is that probably it made sense when the Department was set up. I think it is time now to change.

A way to handle solar that would make more sense would be to put the solar programs under the control of one person in authority rather than carrying on the basic research in one shop, technology development in another shop and commercial applications in still another shop. That leads to consistent turf battles. It leads to one hand not knowing_what_the other hand is doing. It leads to great confusion in the Solar Energy Research Institute. I don't see any particular advantage to it today. That is clearly one organizational possibility.

In a broader sense, solar, I think, needs to be addressed outside the Department of Energy but within the Federal context. That is to say, there are a number of programs administered by Housing and Urban Development, by the Department of Labor, job training in the Peace Corps and in CETA, in the Department of Agriculture, taking that sector of the American economy that can probably most rapidly enter the solar era. I think it would make a great deal of sense.

One of the options within the domestic policy review is for the President to establish a White House coordinator to handle all of these diverse programs that are scattered throughout the administration and establishing a high priority for solar development within the administration and making sure people get together and work cooperatively. That, I think, would be a very substantial improvement over the current organization.

As to how we would spend more money if, in fact, the administration decided to request more money and Congress were to pass it, as I suggested earlier I think the highest priority should be the solar development bank. Once you have that underway and capitalized, then, depending upon the will of the administration and Congress, I think most of the other issues will follow on.

There is a variety of very attractive policy options within the domestic policy review. There are none that I have really objected to. I think all of them should be pursued aggressively, and I will be happy with whatever you are willing to pass.

Mr. FISH. Do you have any recommendations on DOE's approach to program management that you would like to make, or do you think you have responded to that by saying that it should all be pulled together under one head?

Mr. HAYES. That does not necessarily solve the problem unless you have the right head and the right body underneath. I am not

adequately prepared to give you at the moment an evaluation on a program-by-program basis, whether the photovoltaic is operating correctly versus the wind program.

I think you know that the administration has been on hold on solar energy since last year. It is not making bold departures and initiatives, not coming to Congress with new ideas, not saying: "These are the things that do not seem to be working; we will put this money into this set of activities."

Mr. FISH. Despite high visibility by having the Assistant Secretary for Solar Application?

Mr. HAYES. Yes. It has not happened because they need to get their marching orders from the White House. No one right now is going to run the personal risk of coming and saying, "This program is no good" for fear that the President will come out and say that that will be the centerpiece of the solar effort.

Mr. FISH. Are you optimistic that the domestic policy review will change that hold and that we will have some movement in the future?

Mr. HAYES. I was very optimistic last November. My optimism has waned a little bit in the ensuing 6 months. It is at least strong in the rumor mills that the President will announce his decision on the 20th of this month and that he will come up with something better than the middle case of the domestic policy review. I hope at this time the rumor mills are going to be delivering a document at the end of that period.

Mr. FISH. Thank you.

Mr. OTTINGER. I would like to thank the panel for their contribution. I would like to say that we welcome any suggestions that you might want to communicate to the subcommittees with respect to initiatives we ought to take and priorities. I think you have been a real help to us. With that, this panel is dismissed.

I will announce to the subcommittee that our plan is to hear the next panel on utility and users impacts until about 1 o'clock, break for lunch from 1 to 2, and resume with the last panel on solar research, development, and demonstration priorities and strategies at 2. We will then go as long as the subcommittees desire.

Our next panel is on utility and users impacts. They include Mr. Homer J. Vick, vice president, rates consumer services, Wisconsin Power Light. Dr. Kirby Holte, Southern California Edison on behalf of the Edison Electric Institute; Mr. Don Von Raesfeld, city manager, Santa Clara, on behalf of the American Public Power Association; Mrs. Alberta C. Slavin, who is going to be joining us shortly, commissioner, Missouri Public Service Commission; and Mr. David Roe, regional counsel of the Environmental Defense Fund.

From the utility perspective therefore, we will have somebody who is from the power company. We have the Edison Electric Institute and American Public Power Association representing the industry. We will have Mrs. Slavin representing the Public Service Regulatory Commission, and we will have an environmental representative, which I think is a very well balanced panel.

Our particular interest is in the contribution that utilities can make to bringing on renewable resources, the economics and the barriers that presently exist to utilities to make this an attractive

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option. Any recommendations that you have to us to remove those barriers and provide incentives will be welcomed.

I am particularly interested in hearing whatever comments the industry might have concerning the utilities inclusion of their solar and conservation investments in the rate base, pursuant to the Environmental Defense Fund presentations. Unless the panel has any preference why don't we proceed with Mr. Vick.

PANEL II-UTILITY AND USERS IMPACTS-HOMER J. VICK, VICE PRESIDENT, WISCONSIN POWER LIGHT CO.; DR. KIRBY HOLTE, SOUTHERN EDISON INSTITUTE, ON BEHALF OF EDISON ELECTRIC INSTITUTE, ROSEMEAD, CALIF.; DON VON RAESFELD, CITY MANAGER, SANTA CLARA, ON BEHALF OF THE AMERICAN PUBLIC POWER ASSOCIATION, SANTA CLARA, CALIF.; ALBERTA C. SLAVIN, COMMISSIONER, MISSOURI PUBLIC SERVICE COMMISSION, JEFFERSON CITY, MO.; AND DAVID ROE, REGIONAL COUNSEL, ENVIRONMENTAL DEFENSE FUND, BERKELEY, CALIF.

[The biographical sketch and prepared statement of Mr. Vick follow:]