About a week ago, the temperature hit 90 degrees here for the first time this year. That got people talking about a long, hot summer ahead. Of course, what’s really on their minds is air-conditioning. So what has to be on our minds are peak power loads and efficient power transmission.

This is a propitious moment for us to talk about where we stand in our joint efforts to strengthen the nation’s electric power grid.

In last year’s Energy Policy Act, Congress set out broad goals and specific mandates in nearly every sector of energy generation and delivery. Implementing them all at once is a little like fighting a battle where there’s no front line but the bullets are flying all around.

Some of my colleagues at the Energy Department have let me know they feel they are already operating under peak loads and at risk of blacking out as they push to complete a series of reports on electricity by the August 8^th deadline Congress has given us.

The report that I think will be of most interest to all of you is the one we are doing on congestion problems in the national power grid. We plan to highlight major trouble spots in our power grid so bottlenecks can be removed and the entire transmission system can be strengthened.

Our goal is to make certain that our electrical infrastructure is strong enough to reliably and efficiently accommodate the nation’s growing demand for power. While the immediate cause of the blackout that hit the Northeast, the Midwest and Canada so hard three years ago was an operator error, we also know that our transmission and distribution system hasn’t kept pace with the two other aspects of the system it must navigate—producers’ ability to generate power and customers willingness to consume it.

To reduce the risk of future disruptions, the entire system must be upgraded and woven together.

We have been receiving good input from state regulators, regional transmission entities and power producers, and we expect to produce a report that will help us ease the flow of power throughout the country.

Probably the single most important change brought about by the Energy Policy Act was the authority it granted the Federal Energy Regulatory Commission to approve mandatory reliability standards for the nation’s power grid.

I was pleased to see that the North American Electric Reliability Council applied for designation as the nation’s Electric Reliability Organization and kicked off the debate on what standards should apply with a set of 100 specific proposals. I know that Joe Kelliher is working hard to come to a decision on NERC’s application and I am optimistic that we will have new mandatory reliability standards in place early next year.

What we are doing on the regulatory front is important to strengthening the nation’s power grid. But I have been even more encouraged by what we have seen happen in the private sector since the Energy Policy Act became law last August and the repeal of the Public Utility Holding Company Act took effect in February.

We have seen a flurry of proposals from Pepco Holdings, AEP and Allegheny to build new inter-regional transmission lines in the East. These represent commitments of billions of dollars of private capital to improve the efficiency of the power grid and to capture cheaper power for customers.

The commitment last year by the governors of California, Wyoming, Utah and Nevada to support the Frontier line, a high-capacity regional tie-line that would run through their states, was a major move forward.  And the proposal by TransCanada for the NorthernLights transmission line to connect consumers in the Pacific Northwest and Southwestern states with power sources in Alberta, Montana and Wyoming, are also represent major steps forward for both nations’ ability to move electricity throughout both countries efficiently and reliably.

To meet the power needs of a growing economy and to maintain its global economic leadership, the United States must have an electrical infrastructure that is world-class…not second-class.

I believe we will see more bold proposals like these as your industry responds to the changing regulatory environment. I also expect to see more mergers and partnerships among power providers that are driven by strong business rationales and that do not depend on geographic proximity.

As I have said before, the task we face reminds me of the one President Eisenhower persuaded the nation to take on in the 1950s when he prodded Congress to invest in the interstate highway system—then the largest public works project the nation had ever attempted.

Today, our regional electrical transmission and distribution system must be upgraded and woven together into a robust national network just as our networks of state and local roads needed to be upgraded fifty years ago.

Transmission, of course, is only one part of our power system. I’d like to bring you up to date on what is happening with the President’s policies in the areas of generation and energy efficiency as well.

The President’s Advanced Energy Initiative calls for increased spending next year to speed the development of alternative and renewable energy sources. We are focusing on wind and solar power, hydrogen fuel cells, cellulosic ethanol and lithium ion batteries for use in hybrid-powered vehicles.

We also plan to spend $54 million next year on the FutureGen initiative to build a demonstration plant incorporating the most advanced clean coal burning and carbon sequestration technologies. Last month, seven states expressed interest in being chosen as the locale for this showcase plant—and suggested twelve possible sites. It is very encouraging to see this kind of public enthusiasm for a power project. And I am pleased that Congress has agreed to fully fund all of these initiatives.

Along with alternative and renewable fuels, we believe emissions-free nuclear power must be part of the solution to this nation’s energy challenges. We are making our case to Congress for an initial $250 million in funding for the Global Nuclear Energy Partnership to develop new recycling technologies for spent nuclear fuel that will cut down on proliferation risks and future permanent disposal needs.

We are also moving ahead with our Standby Support program of federal risk insurance for the first companies that commit to ending our 30-year hiatus in building new nuclear power plants in the U.S.

The program, which was authorized by the Energy Policy Act, will provide up to $2 billion in insurance against the costs of delays for the builders of the first six new plants that are added to our power grid. We issued an interim rule for this program last month and will follow that with a final rule in August.

At the same time, we are also moving ahead with another requirement of the Energy Policy Act—the loan guarantee program for new clean energy projects including new clean coal and nuclear power plants. Last month, we created a Loan Guaranty Office within the Department with an initial funding of $2.7 million. We have placed it under the supervision of our Chief Financial Officer so that the proper financial discipline will be brought to bear on our project evaluations.

We are also continuing to encourage the development of more efficient technologies for delivering lighting to homes and businesses. For example, today I am pleased to announce that the Department is making $7 million in cost-sharing grants to five companies that are working on promising new technologies for solid-state lighting systems. These systems offer not only the prospect of energy savings but a chance to position U.S. companies as global leaders in this emerging market.

We are taking other steps to advance energy efficiency as well. We have already made significant progress by working with power producers such as yourselves on reducing greenhouse gas emissions through public-private partnerships under the Climate VISION program.

Now we look forward to working with Jim Rogers of Duke Energy, Dianne Munns of NARUC and the Environmental Protection Agency to develop a public-private partnership approach that will encourage electric and gas utilities to operate more efficiently.

I believe this group is taking precisely the right approach by tackling both the economic and regulatory barriers that now stand in the way of unleashing the private sector’s ingenuity in this cause. By devising incentives that will reward more efficient energy use instead of a greater volume of power production and sale, I believe we will make great strides. With the leadership we have assembled for this group, I know we can do it in short order.

This President and this Administration have been committed from the beginning to using market-based solutions and public-private partnerships to meet our nation’s energy challenges. I think we are seeing the positive results from that approach today and they will become even more dramatic in the future.

Your industry has responded time and again to our calls to join us in working together to do what is best for the nation’s energy portfolio and the environment. Thanks for all you have done already and I know we can count on you to act even more vigorously in the future.

Thank you for having me.