1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:32,160 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. We're 7 00:00:32,200 --> 00:00:35,720 Speaker 1: broadcasting from the Sea the Future of Energy Summit. It 8 00:00:35,840 --> 00:00:39,440 Speaker 1: is powered by Bloomberg New Energy Finance. I'm Pim Fox 9 00:00:39,560 --> 00:00:42,640 Speaker 1: here with Lisa Abramwitz and you know, Lisa, our next guest. 10 00:00:42,680 --> 00:00:45,199 Speaker 1: I would have not expected to see this gentleman here 11 00:00:45,200 --> 00:00:48,000 Speaker 1: at a conference on energy. He bikes all the way 12 00:00:48,000 --> 00:00:50,320 Speaker 1: here from California, that's right. And and you know what 13 00:00:50,400 --> 00:00:53,240 Speaker 1: he doesn't he's on the bicycle most of the time. 14 00:00:53,760 --> 00:00:56,000 Speaker 1: Uh and um, well, he does happen to manage over 15 00:00:56,000 --> 00:00:58,840 Speaker 1: two hundred billion dollars and he's right, and he is 16 00:00:58,880 --> 00:01:03,840 Speaker 1: responsible to the retirees of the California State Teachers Retirement System. 17 00:01:03,920 --> 00:01:07,080 Speaker 1: Chris Silman is the chief investment Officer and he joints us. Now, Chris, 18 00:01:07,080 --> 00:01:09,360 Speaker 1: thanks for being with this, Thanks for stopping by. What 19 00:01:09,440 --> 00:01:11,720 Speaker 1: are you I mean not that we don't love seeing 20 00:01:11,760 --> 00:01:15,280 Speaker 1: you and having you around, but what are you doing here? Yeah? No, 21 00:01:15,360 --> 00:01:17,840 Speaker 1: it's very unusual. I think I'm the only chief investment 22 00:01:17,880 --> 00:01:21,760 Speaker 1: officer that's actually here. I'm only the second number two 23 00:01:21,840 --> 00:01:24,520 Speaker 1: pension plan and the whole world that's actually here. Has 24 00:01:24,560 --> 00:01:26,360 Speaker 1: anyone talked to you? I mean, or you get to 25 00:01:26,360 --> 00:01:30,880 Speaker 1: be up, you get to be anonymous? Now you guys? 26 00:01:30,880 --> 00:01:33,200 Speaker 1: All right, Well, I actually came to I saw the 27 00:01:33,480 --> 00:01:37,399 Speaker 1: radio station here's like, came here to say hi to you. Um. No, 28 00:01:37,600 --> 00:01:40,119 Speaker 1: people don't know us very well here. We're actually kind 29 00:01:40,120 --> 00:01:42,759 Speaker 1: of incognito, which is kind of nice. It's a great 30 00:01:42,800 --> 00:01:45,840 Speaker 1: learning experience the second time I've been here. Um, the 31 00:01:45,880 --> 00:01:49,120 Speaker 1: future of energy is huge. The demand will continue to 32 00:01:49,240 --> 00:01:52,760 Speaker 1: rise globally, and the sources of energy are going to 33 00:01:52,840 --> 00:01:55,800 Speaker 1: really diversify. And so that's an investment opportunity. It's a 34 00:01:55,880 --> 00:01:58,680 Speaker 1: risk and an opportunity to us. Although Chris, you were 35 00:01:58,720 --> 00:02:01,560 Speaker 1: saying that we do not see other chief investment officers here, 36 00:02:01,600 --> 00:02:05,000 Speaker 1: certainly not of retirement systems. You have to wonder, you know, 37 00:02:05,360 --> 00:02:09,000 Speaker 1: will there be a growing amount of demand from public 38 00:02:09,040 --> 00:02:12,400 Speaker 1: pension managers such as yourself, and how big do you 39 00:02:12,440 --> 00:02:15,280 Speaker 1: think that demand could be Oh, I think it's gonna 40 00:02:15,280 --> 00:02:18,359 Speaker 1: be huge. Energy is already a giant part of everybody's portfolio. 41 00:02:18,800 --> 00:02:23,440 Speaker 1: But if you think about power generation, it's very long term. 42 00:02:23,480 --> 00:02:26,120 Speaker 1: It's going to show up on our infrastructure portfolios. It's 43 00:02:26,160 --> 00:02:29,320 Speaker 1: already impacting our real estate portfolios. It's going to show 44 00:02:29,400 --> 00:02:32,160 Speaker 1: up in private equity in terms of new opportunities and 45 00:02:32,240 --> 00:02:36,200 Speaker 1: new investment, and in the general equity portfolio. Energy power 46 00:02:36,240 --> 00:02:38,880 Speaker 1: generations a big part of the US equity market. Well, 47 00:02:38,880 --> 00:02:42,280 Speaker 1: but how much do renewable sources of energy already factor 48 00:02:42,360 --> 00:02:44,760 Speaker 1: into your portfolio at all, or how much do you 49 00:02:44,800 --> 00:02:47,720 Speaker 1: see the potential for that going forward. I've always been 50 00:02:47,720 --> 00:02:50,440 Speaker 1: really clear with people. We were an early mover into 51 00:02:50,560 --> 00:02:53,880 Speaker 1: solar and in wind back in two thousand three, and 52 00:02:53,919 --> 00:02:57,000 Speaker 1: an early being an early mover is not necessarily an advantage. 53 00:02:57,440 --> 00:03:00,320 Speaker 1: I quote the late Joe Deer who said, you know, 54 00:03:00,400 --> 00:03:02,920 Speaker 1: clean energy was a noble way to lose money, but 55 00:03:03,040 --> 00:03:05,280 Speaker 1: it lost us money there. You know, it's like there's 56 00:03:05,280 --> 00:03:10,360 Speaker 1: a really good noble but you know it definitely is 57 00:03:10,400 --> 00:03:12,360 Speaker 1: going to be part of the future. You're seeing clean 58 00:03:12,480 --> 00:03:14,600 Speaker 1: energy show up as much as ten percent of the 59 00:03:14,600 --> 00:03:18,040 Speaker 1: power generation Michael Leeverrick just showed a slide that said 60 00:03:18,080 --> 00:03:21,440 Speaker 1: that in some countries it's of the power generation, so 61 00:03:21,800 --> 00:03:25,480 Speaker 1: it's becoming price competitive. It's still subsidized in many parts 62 00:03:25,520 --> 00:03:28,320 Speaker 1: of the country, but it's showing up in our infrastructure 63 00:03:28,360 --> 00:03:32,000 Speaker 1: portfolio a little bit in our venture capital portfolio. And 64 00:03:32,040 --> 00:03:35,680 Speaker 1: what's interesting I'm learning here is that companies people like Alphabet, 65 00:03:35,840 --> 00:03:40,480 Speaker 1: Amazon Um buy so much power more than some countries. 66 00:03:40,960 --> 00:03:43,960 Speaker 1: They're actually going out and developing their own power generation 67 00:03:44,040 --> 00:03:46,960 Speaker 1: because it's a critical need to them. When you think 68 00:03:47,000 --> 00:03:51,720 Speaker 1: about clean energy, you have this whole supply chain that 69 00:03:51,880 --> 00:03:55,240 Speaker 1: is different than burning fossil fuel of any kind. Having 70 00:03:55,320 --> 00:03:57,560 Speaker 1: said that, when do we get to the point where 71 00:03:57,560 --> 00:04:02,640 Speaker 1: it's just energy? The cause the decision making process changes. 72 00:04:02,760 --> 00:04:06,880 Speaker 1: As the head of a public pension retirement program, does 73 00:04:06,920 --> 00:04:11,200 Speaker 1: it matter to your beneficiaries how you make the money 74 00:04:11,240 --> 00:04:14,560 Speaker 1: for that? It does? You know? I think I represent 75 00:04:14,640 --> 00:04:18,000 Speaker 1: California teachers and extent. If you lose a ton of money, 76 00:04:18,000 --> 00:04:20,280 Speaker 1: nobody cares whether it was like nobly or not right 77 00:04:20,480 --> 00:04:24,520 Speaker 1: exactly well, And our mandate first and foremost just is 78 00:04:24,600 --> 00:04:28,160 Speaker 1: to fully fund that retirement system over thirty years. So 79 00:04:28,320 --> 00:04:31,320 Speaker 1: we have to be focused and on return, but representing 80 00:04:31,360 --> 00:04:33,720 Speaker 1: California teachers. We hear from a lot of them. They 81 00:04:33,720 --> 00:04:36,359 Speaker 1: are very concerned about how we make our money. But 82 00:04:36,560 --> 00:04:38,200 Speaker 1: you know, I think him when you look at the 83 00:04:38,240 --> 00:04:41,040 Speaker 1: future of energy, it's you know, it's going to be 84 00:04:41,080 --> 00:04:43,440 Speaker 1: a long term trend. I need a big wave. So 85 00:04:43,480 --> 00:04:45,960 Speaker 1: I'm a bike ridor, but we like to serve in California, 86 00:04:46,000 --> 00:04:47,880 Speaker 1: so I need a big wave of an investment wave. 87 00:04:47,960 --> 00:04:49,960 Speaker 1: It's going to stick around for a long time that 88 00:04:50,080 --> 00:04:51,840 Speaker 1: we can catch up with. And that's why we're here 89 00:04:51,920 --> 00:04:53,720 Speaker 1: is to see it early so that we can ride 90 00:04:53,720 --> 00:04:56,760 Speaker 1: this for a long time. And I think that we'll 91 00:04:56,800 --> 00:05:00,360 Speaker 1: start talking about energy when there's actually a price on carbon. 92 00:05:00,680 --> 00:05:04,040 Speaker 1: Right now, coal plants and natural gas plants can burn, 93 00:05:04,880 --> 00:05:08,320 Speaker 1: and they've got a subsidized nuclear and wind and solar 94 00:05:08,400 --> 00:05:13,160 Speaker 1: to be price competitive because the carbon plants don't pay 95 00:05:13,240 --> 00:05:16,600 Speaker 1: for their waste. Al right. So Chris, you're biking, you're surfing. 96 00:05:16,880 --> 00:05:19,039 Speaker 1: I love it. I love the California vibe coming to 97 00:05:19,160 --> 00:05:21,440 Speaker 1: us right now from Chris Amon. Uh. You know you 98 00:05:21,480 --> 00:05:23,080 Speaker 1: said that it was a noble way to lose money 99 00:05:23,120 --> 00:05:25,800 Speaker 1: to get in early with renewables. But now as you 100 00:05:25,839 --> 00:05:28,599 Speaker 1: listen to the presentations, is there anything that's caught your 101 00:05:28,720 --> 00:05:32,760 Speaker 1: ear as far as a promising potential investment that you're 102 00:05:32,760 --> 00:05:35,719 Speaker 1: gonna look more at. Let me get back to California. UM, 103 00:05:35,760 --> 00:05:39,520 Speaker 1: the whole world distributed energy, the fact that with solar 104 00:05:39,560 --> 00:05:43,120 Speaker 1: on rooftops you've got people generating electricity all over the place, 105 00:05:43,560 --> 00:05:45,680 Speaker 1: and the big difference, and they talk about here kind 106 00:05:45,680 --> 00:05:49,120 Speaker 1: of the holy grail is battery technology. UM is the 107 00:05:49,120 --> 00:05:52,880 Speaker 1: ability to store all of that renewable because it comes 108 00:05:52,920 --> 00:05:55,240 Speaker 1: during the day or only when it's windy, and you've 109 00:05:55,240 --> 00:05:57,440 Speaker 1: got to hit it for peak time. So for us, 110 00:05:57,960 --> 00:06:01,560 Speaker 1: I see this. You know, energy trans mission distribution is 111 00:06:01,600 --> 00:06:05,359 Speaker 1: an infrastructure play. Storage will probably become very much a 112 00:06:05,440 --> 00:06:08,960 Speaker 1: strong infrastructure opportunity. Which companies are at the forefront of 113 00:06:09,000 --> 00:06:13,120 Speaker 1: the battery technology well, obviously Tesla gets all the headlines 114 00:06:13,160 --> 00:06:16,120 Speaker 1: to the giant right, but you know it's we don't 115 00:06:16,360 --> 00:06:18,240 Speaker 1: spend a lot of time talking about what you gotta 116 00:06:18,440 --> 00:06:20,840 Speaker 1: when you're gonna dispose of those lithium batteries. You know, 117 00:06:20,880 --> 00:06:22,560 Speaker 1: I think we have to look long term. It's not 118 00:06:22,640 --> 00:06:26,160 Speaker 1: always all all great, glorious, But we just saw a 119 00:06:26,160 --> 00:06:29,520 Speaker 1: couple of slides. The automakers are very interesting and if 120 00:06:29,600 --> 00:06:32,440 Speaker 1: GM and four don't get their act together. People like 121 00:06:32,560 --> 00:06:35,440 Speaker 1: Toyota and what in Voteswagon are actually gonna eat their 122 00:06:35,520 --> 00:06:40,000 Speaker 1: lunch Internationally when it comes to UH electronic vehicles. Uh. 123 00:06:40,600 --> 00:06:42,960 Speaker 1: You see a lot of electric cars in California, not 124 00:06:43,040 --> 00:06:45,240 Speaker 1: so much obviously here in New Yorker in the Midwest, 125 00:06:45,320 --> 00:06:48,560 Speaker 1: but you're going to see US companies, even the odds 126 00:06:48,600 --> 00:06:52,120 Speaker 1: of Lockheed Martin. Right, Chris Alemen, thank you so much 127 00:06:52,160 --> 00:06:54,840 Speaker 1: for stopping by. Always wonderful to speak with you and 128 00:06:55,120 --> 00:06:57,880 Speaker 1: hear about your fifteen mile bike right to work every morning. 129 00:06:57,960 --> 00:07:01,120 Speaker 1: Chris Alman is Chief Investment Officer for California State Teachers 130 00:07:01,120 --> 00:07:04,320 Speaker 1: Retirement System in Sacramento, California, with more than two billion 131 00:07:04,360 --> 00:07:07,359 Speaker 1: dollars of assets under management. And he's not lonely anymore, 132 00:07:07,800 --> 00:07:10,680 Speaker 1: even though he is probably the only uh C I 133 00:07:10,800 --> 00:07:15,200 Speaker 1: O certainly of a retirement plan. Here at the Future 134 00:07:15,240 --> 00:07:30,200 Speaker 1: of Energy Summit. We are here at the Future of 135 00:07:30,360 --> 00:07:33,480 Speaker 1: Energy Summit, which was powered by Bloomberg New Energy Finance, 136 00:07:33,520 --> 00:07:35,680 Speaker 1: and we're lucky to be speaking with Ralph is O, Chairman, 137 00:07:35,720 --> 00:07:39,559 Speaker 1: President and chief executive officer of Public Service Enterprise Group 138 00:07:39,600 --> 00:07:43,160 Speaker 1: Incorporated that's otherwise known as p S E and G 139 00:07:43,520 --> 00:07:48,160 Speaker 1: and Ralph I wanted to start with your capital investment program, 140 00:07:48,200 --> 00:07:50,920 Speaker 1: which you have just recently laid out, and it includes 141 00:07:51,160 --> 00:07:54,640 Speaker 1: a four point seven billion dollars of plan investments this 142 00:07:54,760 --> 00:07:58,680 Speaker 1: year that is the most ever in your history. What 143 00:07:58,760 --> 00:08:01,120 Speaker 1: are you spending that money on? That's right, So it's 144 00:08:01,360 --> 00:08:05,800 Speaker 1: primarily an electric transmission. We have an aging infrastructure that 145 00:08:06,120 --> 00:08:09,600 Speaker 1: is in desperate need of replacement, both from a reliability 146 00:08:09,960 --> 00:08:14,120 Speaker 1: and a storm resiliency point of view. A close second 147 00:08:14,400 --> 00:08:18,440 Speaker 1: is in gas pipe replacement. We have the largest cast 148 00:08:18,480 --> 00:08:21,000 Speaker 1: iron main system, you know, it's many of our pipes 149 00:08:21,000 --> 00:08:24,560 Speaker 1: approaching a hundred years old. And then probably in third 150 00:08:24,560 --> 00:08:27,280 Speaker 1: place would be the fact that we're building three natural 151 00:08:27,280 --> 00:08:31,760 Speaker 1: gas combined cycle power plants. So it's electric transmission, gas 152 00:08:31,760 --> 00:08:35,040 Speaker 1: pipe replacement, and power plants um in addition to the portfolio. 153 00:08:35,080 --> 00:08:36,640 Speaker 1: I wonder if you could speak a little bit about 154 00:08:36,720 --> 00:08:40,840 Speaker 1: nuclear power generation. Yeah, so we've we've actively engaged in 155 00:08:40,880 --> 00:08:45,839 Speaker 1: a policy discussion around nuclear power. We're concerned that short 156 00:08:45,920 --> 00:08:49,000 Speaker 1: term market forces will push the system to a one 157 00:08:49,080 --> 00:08:53,720 Speaker 1: fuel only electric supply option, that being natural gas. We 158 00:08:53,800 --> 00:08:56,920 Speaker 1: believe natural gas is abundant, we do believe it's low cost, 159 00:08:56,960 --> 00:08:59,040 Speaker 1: and we do believe it's a comic fuel. But we 160 00:08:59,120 --> 00:09:01,480 Speaker 1: just think that like tricity is so core to the 161 00:09:01,520 --> 00:09:05,080 Speaker 1: economy and all quality of life that a lack of 162 00:09:05,080 --> 00:09:08,520 Speaker 1: fuel diversity could be a serious problem from a system 163 00:09:08,520 --> 00:09:11,319 Speaker 1: interruption or resiliency point of view. And then, of course 164 00:09:11,559 --> 00:09:14,440 Speaker 1: that doesn't speak at all to the environmental benefits from 165 00:09:14,480 --> 00:09:17,280 Speaker 1: an air emissions point of view of nuclear, and nor 166 00:09:17,360 --> 00:09:20,600 Speaker 1: does it speak to the fact that many nuclear plants 167 00:09:20,600 --> 00:09:24,240 Speaker 1: are major employers and in different states. So what proportion 168 00:09:24,320 --> 00:09:28,199 Speaker 1: of P S E n g's UH energy comes from 169 00:09:28,240 --> 00:09:30,680 Speaker 1: renewable sources right now? And where do you see that 170 00:09:30,720 --> 00:09:33,120 Speaker 1: going in the next decade? YEA, So, so right now 171 00:09:33,160 --> 00:09:36,280 Speaker 1: we are fifty seven percent of our output comes from nuclear, 172 00:09:37,240 --> 00:09:40,480 Speaker 1: thirty five percent of our output comes from natural gas, 173 00:09:41,040 --> 00:09:43,559 Speaker 1: about five percent from coal, and the remaining three or 174 00:09:43,600 --> 00:09:47,679 Speaker 1: four percent comes from renewables. More important from a policy 175 00:09:47,679 --> 00:09:50,760 Speaker 1: point of view is what percent of New Jersey's output 176 00:09:50,880 --> 00:09:53,920 Speaker 1: comes from those various fuel sources. And New Jersey gets 177 00:09:53,920 --> 00:09:58,880 Speaker 1: about forty four percent from nuclear, about one percent from renewables, 178 00:09:58,880 --> 00:10:01,280 Speaker 1: and fifty five percent from actual guest of the absence 179 00:10:01,280 --> 00:10:04,880 Speaker 1: of nuclear would make New Jersey a single fuel jurisdiction, 180 00:10:04,920 --> 00:10:07,080 Speaker 1: which is just not a good idea. So what are 181 00:10:07,120 --> 00:10:08,960 Speaker 1: some of the steps or what are some of the 182 00:10:09,000 --> 00:10:12,400 Speaker 1: programs that you're involved with in order to make sure that, 183 00:10:12,520 --> 00:10:16,160 Speaker 1: for example, plants stay open because I understand that you 184 00:10:16,160 --> 00:10:19,000 Speaker 1: know some of them they're not making any money, and 185 00:10:19,280 --> 00:10:22,520 Speaker 1: you've already said that unless there's some way to figure 186 00:10:22,559 --> 00:10:25,440 Speaker 1: out how to make these cost effective, they could be 187 00:10:25,440 --> 00:10:28,280 Speaker 1: shut down. So we're taking two approaches. PIM One is 188 00:10:28,320 --> 00:10:32,000 Speaker 1: to say, if you look at organizing markets, there's a 189 00:10:32,040 --> 00:10:35,720 Speaker 1: missing money problem. Uh, it's it models the mind to 190 00:10:35,840 --> 00:10:38,440 Speaker 1: think that a nuclear plant that takes in that courts 191 00:10:38,440 --> 00:10:41,160 Speaker 1: anywhere from thirty to thirty five dollars a megawatt hour 192 00:10:41,800 --> 00:10:46,240 Speaker 1: would retire and be replaced by a new combined psycho 193 00:10:46,320 --> 00:10:50,320 Speaker 1: plant that estimates range would require fifty to sixty dollars 194 00:10:50,320 --> 00:10:53,480 Speaker 1: a megawatt hour from a proven investment point of view, 195 00:10:53,720 --> 00:10:57,240 Speaker 1: How can the market create that reality that a low 196 00:10:57,280 --> 00:11:00,200 Speaker 1: cost plant would retire and be replaced by something that, 197 00:11:00,240 --> 00:11:03,040 Speaker 1: over the long term, should be more expensive. So that's 198 00:11:03,080 --> 00:11:06,800 Speaker 1: getting FIRK to recognize that there's a price formation issue 199 00:11:07,200 --> 00:11:09,560 Speaker 1: at the state level. What we're saying is, if we 200 00:11:09,640 --> 00:11:13,800 Speaker 1: look at how you're subsidizing renewables, arguably you're paying anywhere 201 00:11:13,800 --> 00:11:16,720 Speaker 1: from two to four hundred dollars a ton of carbon 202 00:11:17,640 --> 00:11:20,040 Speaker 1: to get less than two percent of your electricity from 203 00:11:20,080 --> 00:11:24,240 Speaker 1: rooftop solar grid connected solar. No one has ever estimated 204 00:11:24,240 --> 00:11:26,920 Speaker 1: to be carbon worth that much. Why would you want 205 00:11:26,920 --> 00:11:29,840 Speaker 1: to let your nuclear power plants retire what you're getting 206 00:11:29,920 --> 00:11:33,200 Speaker 1: paid zero for carbon today? So we're really approaching us 207 00:11:33,520 --> 00:11:35,960 Speaker 1: at the policy level in two different ways. We're saying 208 00:11:36,000 --> 00:11:39,320 Speaker 1: markets are not pricing the attributes of nuclear that are important, 209 00:11:39,840 --> 00:11:42,920 Speaker 1: nor are states fairly pricing the attributes of carbon that 210 00:11:43,000 --> 00:11:45,240 Speaker 1: they seem to be saying are reporting. I like that 211 00:11:45,280 --> 00:11:47,160 Speaker 1: the missing money problem. I can say that I can 212 00:11:47,200 --> 00:11:48,840 Speaker 1: come home and say to my husband, we have a 213 00:11:48,840 --> 00:11:51,640 Speaker 1: missing money problem after I went shopping today. You know, 214 00:11:51,679 --> 00:11:53,600 Speaker 1: I do want to just go back to this fifteen 215 00:11:53,640 --> 00:11:57,040 Speaker 1: billion dollar spending plan, capital spending program over the next 216 00:11:57,120 --> 00:12:00,680 Speaker 1: five years. You know, we talk a lot about jobs, 217 00:12:00,760 --> 00:12:03,319 Speaker 1: and you know President Trump has emphasized jobs with the 218 00:12:03,320 --> 00:12:07,160 Speaker 1: fossil fuel industry. Will you be hiring more people in 219 00:12:07,280 --> 00:12:10,000 Speaker 1: order to complete some of these projects? Yes, we we 220 00:12:10,000 --> 00:12:13,839 Speaker 1: we are actively hiring people to complete these projects. We 221 00:12:13,920 --> 00:12:16,080 Speaker 1: think that there are some improvements that could be made 222 00:12:16,120 --> 00:12:19,160 Speaker 1: in state regulation to make the hiring of these people 223 00:12:19,720 --> 00:12:24,440 Speaker 1: are less lumpy, for lack of a better word. Right now, 224 00:12:24,880 --> 00:12:27,679 Speaker 1: utilities are compensated by state regulators in a way that's 225 00:12:27,679 --> 00:12:30,280 Speaker 1: a that's been going on for a hundred years, and 226 00:12:30,360 --> 00:12:31,760 Speaker 1: we just think that it needs to be a more 227 00:12:31,760 --> 00:12:36,200 Speaker 1: predictable system of state regulation that allows us to hire people, 228 00:12:36,640 --> 00:12:39,320 Speaker 1: train them, and keep them in the pipeline. Because an 229 00:12:39,360 --> 00:12:42,439 Speaker 1: aging infrastructure isn't getting younger, right we so we will 230 00:12:42,480 --> 00:12:45,959 Speaker 1: need to continue this investment profile out and for the 231 00:12:46,000 --> 00:12:48,839 Speaker 1: foreseeable future. And right now, the way which we've we 232 00:12:48,960 --> 00:12:53,120 Speaker 1: fund these programs is going back for incremental additions. So 233 00:12:53,200 --> 00:12:55,600 Speaker 1: we hire a lot of contractors, and we hire people 234 00:12:55,640 --> 00:12:59,120 Speaker 1: for short duration and what we'd rather do is hire 235 00:12:59,160 --> 00:13:01,959 Speaker 1: them for a long career. But that requires a more 236 00:13:02,000 --> 00:13:04,520 Speaker 1: predictable regulatory system than the one that's in place now. 237 00:13:05,000 --> 00:13:07,760 Speaker 1: Thank you very much for joining us, pretty much appreciate it. 238 00:13:08,559 --> 00:13:11,559 Speaker 1: Propito is the chairman, the president, and the chief executive 239 00:13:11,559 --> 00:13:16,440 Speaker 1: of Public Service Enterprise Group that are known as PEG. 240 00:13:16,679 --> 00:13:21,600 Speaker 1: At least that's symbol well PG PG PEG where thank you? Yeah? 241 00:13:21,640 --> 00:13:25,360 Speaker 1: Where that it's PEG and you're Lisa, okay, and yeah, 242 00:13:25,360 --> 00:13:28,679 Speaker 1: well so far and we're broadcasting of course from the 243 00:13:29,360 --> 00:13:31,880 Speaker 1: seen The Future of Energy Summit. It's all powered by 244 00:13:32,280 --> 00:13:41,560 Speaker 1: Bloomberg New Energy Finance. We want to take a moment 245 00:13:41,600 --> 00:13:44,640 Speaker 1: to let you know about something new from Bloomberg. Starting 246 00:13:44,720 --> 00:13:47,560 Speaker 1: right now, you can use our io s app or 247 00:13:47,679 --> 00:13:51,320 Speaker 1: our new Google Chrome extension to scan any news story 248 00:13:51,400 --> 00:13:55,400 Speaker 1: on any website, instantly revealing relevant news and market data 249 00:13:55,440 --> 00:13:59,160 Speaker 1: from Bloomberg and other sources related to companies and people 250 00:13:59,240 --> 00:14:02,439 Speaker 1: you're reading about. So no matter where you're reading the news, 251 00:14:02,480 --> 00:14:04,760 Speaker 1: you can bring the power of Bloomberg's news and data 252 00:14:04,840 --> 00:14:08,240 Speaker 1: with you. It's pretty amazing. Download our Io s app 253 00:14:08,360 --> 00:14:10,800 Speaker 1: or search for the Bloomberg Extension on the Chrome Store 254 00:14:10,800 --> 00:14:13,680 Speaker 1: to try it out. Learn more at Bloomberg dot com 255 00:14:13,960 --> 00:14:24,720 Speaker 1: slash lens. We are broadcasting from the the Future of 256 00:14:24,880 --> 00:14:28,280 Speaker 1: Energy Summit. It's all powered by Bloomberg and New Energy Finance. 257 00:14:28,640 --> 00:14:31,680 Speaker 1: And here to tell us about energy policy and the 258 00:14:31,720 --> 00:14:35,760 Speaker 1: world's climate situation is Barbara Buchner, the executive director of 259 00:14:35,800 --> 00:14:40,640 Speaker 1: Climate Finance of Climate Policy Initiative. They're based in San 260 00:14:40,680 --> 00:14:43,680 Speaker 1: Francisco and Barbara Buchner can be followed on Twitter at 261 00:14:43,800 --> 00:14:48,080 Speaker 1: b Buchner thirteen. Barbara, thanks very much for being with us. 262 00:14:48,240 --> 00:14:50,160 Speaker 1: Maybe just give people a little bit of an idea 263 00:14:50,160 --> 00:14:54,120 Speaker 1: of what the Climate Policy Initiative is. Sure, and thanks 264 00:14:54,160 --> 00:14:56,880 Speaker 1: so much for having me here. So Chemic Policy Initiative. 265 00:14:56,880 --> 00:14:59,800 Speaker 1: It's a non for profit organization be really focused on 266 00:15:00,360 --> 00:15:04,280 Speaker 1: helping policy makers and decision makers how they can improve 267 00:15:04,320 --> 00:15:08,600 Speaker 1: basically their policies around land use climate energy, but doing 268 00:15:08,640 --> 00:15:11,160 Speaker 1: that with a specific focus on finance. So what dcs, 269 00:15:11,200 --> 00:15:13,280 Speaker 1: We really want to advise them on how to use 270 00:15:13,320 --> 00:15:17,600 Speaker 1: public policies and public resources most effectively in order to 271 00:15:17,680 --> 00:15:21,280 Speaker 1: unlock more investment and really get us on the local 272 00:15:21,480 --> 00:15:23,960 Speaker 1: climate recident passway. So you spend a lot of time 273 00:15:23,960 --> 00:15:27,200 Speaker 1: in Washington now with guests amongst other countries. We are 274 00:15:27,200 --> 00:15:31,400 Speaker 1: a global organization. So do you find that, given the 275 00:15:31,560 --> 00:15:34,440 Speaker 1: new presidential administration in the U S that you've gotten 276 00:15:34,440 --> 00:15:37,400 Speaker 1: more pushback in Washington when you go and you talk 277 00:15:37,480 --> 00:15:41,000 Speaker 1: with different policy makers. Well, I do think you know that, 278 00:15:41,080 --> 00:15:43,200 Speaker 1: and we've heard it also today at the summit here 279 00:15:43,560 --> 00:15:47,120 Speaker 1: that there is a generally positive sentiment that is caused 280 00:15:47,120 --> 00:15:50,280 Speaker 1: by the folly technology costs of renewable energies and so 281 00:15:50,400 --> 00:15:54,200 Speaker 1: notwithstanding you know, obviously some delays or like some slow 282 00:15:54,240 --> 00:15:57,239 Speaker 1: down in some of due to some two political developments. 283 00:15:57,440 --> 00:16:00,800 Speaker 1: But BC is a very good, you know, general trend 284 00:16:01,240 --> 00:16:04,880 Speaker 1: saying that the energy transition is irreversible. And I think 285 00:16:04,880 --> 00:16:08,000 Speaker 1: this is something that we hear also from policymakers. But 286 00:16:08,040 --> 00:16:10,800 Speaker 1: obviously it is something where you know, we work a 287 00:16:10,840 --> 00:16:13,400 Speaker 1: lot is the private sect in order to understand how 288 00:16:13,480 --> 00:16:16,640 Speaker 1: we can make the case with policymakers on what the 289 00:16:16,800 --> 00:16:19,040 Speaker 1: instrument should be in order to get the climate sector 290 00:16:19,080 --> 00:16:21,800 Speaker 1: in So have you found that you've had to make 291 00:16:22,160 --> 00:16:25,280 Speaker 1: more of an argument on a financial level, much more 292 00:16:25,360 --> 00:16:27,560 Speaker 1: so than in the past, where you could talk about 293 00:16:27,600 --> 00:16:32,400 Speaker 1: the actual science behind UH global warming, etcetera. I mean, 294 00:16:32,400 --> 00:16:34,640 Speaker 1: now it is it's sort of a finance focus. It's like, look, guys, 295 00:16:34,640 --> 00:16:36,960 Speaker 1: you can save money, so do it well. To be 296 00:16:37,080 --> 00:16:38,880 Speaker 1: very you know, this is something which you've done over 297 00:16:38,960 --> 00:16:41,400 Speaker 1: the last year's already. As exactly, we work not only 298 00:16:41,400 --> 00:16:43,840 Speaker 1: in the US, we have offices in Brazil, in India, 299 00:16:43,960 --> 00:16:46,960 Speaker 1: in Indonesia, and you know wherever we go. What we 300 00:16:47,040 --> 00:16:50,560 Speaker 1: want to do is really enable economic growth while reducing 301 00:16:50,640 --> 00:16:53,480 Speaker 1: climate risk. And so that the narrative that we have is, 302 00:16:53,560 --> 00:16:55,840 Speaker 1: you know, try to understand what's the incentives for the 303 00:16:55,880 --> 00:16:58,440 Speaker 1: private sector will come in. You know, given that the 304 00:16:58,560 --> 00:17:02,120 Speaker 1: economics of renewable we see actually very positive trend there. 305 00:17:02,680 --> 00:17:04,520 Speaker 1: At the same time as insaide like we've had not 306 00:17:04,640 --> 00:17:07,320 Speaker 1: been We've had not that many discussions now here in 307 00:17:07,359 --> 00:17:10,639 Speaker 1: Washington in order to see what's the changes. We have 308 00:17:10,760 --> 00:17:13,959 Speaker 1: not really seen any changes yet. Maybe just give an 309 00:17:14,040 --> 00:17:17,359 Speaker 1: example of the kind of work and the kind of 310 00:17:17,400 --> 00:17:20,480 Speaker 1: partnership that you have with states, because I know that 311 00:17:20,520 --> 00:17:23,080 Speaker 1: you work with New York State on a renewable energy 312 00:17:23,080 --> 00:17:25,919 Speaker 1: plan and also you put together what's called a carbon 313 00:17:26,200 --> 00:17:29,879 Speaker 1: dashboard for California. What are those things? Yes, So the 314 00:17:29,920 --> 00:17:32,199 Speaker 1: carbon dashboard, for example, this is really kind of to 315 00:17:32,240 --> 00:17:35,480 Speaker 1: provide the information to all market players. We are tracking 316 00:17:35,840 --> 00:17:38,639 Speaker 1: the prices of the carbon market in in California and 317 00:17:38,680 --> 00:17:42,200 Speaker 1: really try to kind of inform decision making by different 318 00:17:42,200 --> 00:17:45,760 Speaker 1: stakeholders public sector, private sector. It's a statement, but you 319 00:17:45,800 --> 00:17:47,760 Speaker 1: know what I would love to talk about a little 320 00:17:47,760 --> 00:17:50,000 Speaker 1: bit more is our interactions not only with states, but 321 00:17:50,119 --> 00:17:54,280 Speaker 1: with different types of stakeholders from like governments, from private sector, 322 00:17:54,320 --> 00:17:58,600 Speaker 1: from commercial banks, um, institutional investors, and different types of 323 00:17:58,680 --> 00:18:01,719 Speaker 1: really investors, both for the public and private side. And 324 00:18:01,800 --> 00:18:04,400 Speaker 1: we do that in the context of the Global Innovation 325 00:18:04,480 --> 00:18:07,560 Speaker 1: lab for Climate finance that we manages the secretariat. The 326 00:18:07,560 --> 00:18:10,919 Speaker 1: idea there is really to work with different constituencies and 327 00:18:10,960 --> 00:18:14,840 Speaker 1: different stakeholders to come up with innovate definancial solutions that 328 00:18:14,920 --> 00:18:19,440 Speaker 1: really can help use public money most effectively drive private investment. 329 00:18:19,720 --> 00:18:22,879 Speaker 1: So as you talk with people in these finance arms, 330 00:18:23,560 --> 00:18:30,680 Speaker 1: do you encounter many climate change deniers? Um? Pause? Actually 331 00:18:31,119 --> 00:18:33,879 Speaker 1: not really, I do see, you know, but that again, 332 00:18:34,000 --> 00:18:36,320 Speaker 1: I think the narrative you're using is not only focused 333 00:18:36,320 --> 00:18:39,159 Speaker 1: on climate change. We really try to show that, you know, 334 00:18:39,400 --> 00:18:41,720 Speaker 1: I understand that, but I think that there is sort 335 00:18:41,760 --> 00:18:44,719 Speaker 1: of this understanding that you know, the clock is ticking 336 00:18:44,760 --> 00:18:47,680 Speaker 1: amongst sort of certain scientifics circles. So there's a certain 337 00:18:47,800 --> 00:18:51,120 Speaker 1: urgency to making changes. Whereas you know, if somebody doesn't 338 00:18:51,160 --> 00:18:54,160 Speaker 1: necessarily buy into the argument that you know, human man 339 00:18:54,160 --> 00:18:59,120 Speaker 1: made influences are causing global climate to uh change substantially, 340 00:18:59,160 --> 00:19:01,600 Speaker 1: then you know, okay, maybe it saves me a few bucks. 341 00:19:01,600 --> 00:19:03,919 Speaker 1: For what's the incentive to really make a make a 342 00:19:03,920 --> 00:19:05,960 Speaker 1: big change right now? Well, I think the incentive is 343 00:19:06,000 --> 00:19:07,960 Speaker 1: that you can make money. There is a business case 344 00:19:08,000 --> 00:19:10,719 Speaker 1: to invest in renewable energy, and I see you now 345 00:19:10,760 --> 00:19:13,800 Speaker 1: we're seeing renewable energy costs go down and their competitive. 346 00:19:13,840 --> 00:19:17,600 Speaker 1: It's almost all regions for almost all renewable. So I 347 00:19:17,640 --> 00:19:20,960 Speaker 1: do think, you know, there is a shift in awareness 348 00:19:21,040 --> 00:19:22,960 Speaker 1: that there is not only risks and you know it's 349 00:19:22,960 --> 00:19:25,560 Speaker 1: like the unknown fountain, we have to stick to business 350 00:19:25,600 --> 00:19:28,080 Speaker 1: as usual, but that there is a real opportunity to 351 00:19:28,240 --> 00:19:30,240 Speaker 1: go into new grounds. And you know, I think what 352 00:19:30,359 --> 00:19:32,200 Speaker 1: we need to do is just to help scale that 353 00:19:32,600 --> 00:19:34,800 Speaker 1: movement and make sure that we really feel you know, 354 00:19:34,840 --> 00:19:37,119 Speaker 1: the gaping investment that we see at the moment. You 355 00:19:37,200 --> 00:19:39,719 Speaker 1: get us on a on a two degrees buthway. Now 356 00:19:39,800 --> 00:19:42,880 Speaker 1: you have some your financial support from the German Ministry 357 00:19:42,880 --> 00:19:47,320 Speaker 1: of the Environment, also Open Society right to George Soros, 358 00:19:47,359 --> 00:19:51,399 Speaker 1: plus from the Norwegian Does having that government and that 359 00:19:52,160 --> 00:19:54,879 Speaker 1: foundation level support, does that make a big difference in 360 00:19:55,680 --> 00:19:58,000 Speaker 1: getting a project succeed, you know, to succeed give you 361 00:19:58,040 --> 00:20:02,320 Speaker 1: that twenty seconds. Well, the support we received this from 362 00:20:02,400 --> 00:20:04,639 Speaker 1: multiple sources, not only the ones that you've seen. I 363 00:20:04,640 --> 00:20:06,960 Speaker 1: think in the context of specific projects that we try 364 00:20:07,080 --> 00:20:10,119 Speaker 1: try to you know, pilot there, we really need the 365 00:20:10,200 --> 00:20:13,119 Speaker 1: initial seat funding from public sources. So yes, they're you know, 366 00:20:13,280 --> 00:20:17,240 Speaker 1: funding from governments, from a foundations is really helpful to 367 00:20:17,320 --> 00:20:19,200 Speaker 1: take off some of the races at the private sector, 368 00:20:19,240 --> 00:20:22,960 Speaker 1: otherwise wouldn't be able to take Yeah, thanks very much. Um. 369 00:20:22,960 --> 00:20:26,040 Speaker 1: Barbara Buchner is the executive director Climate Finance and Climate 370 00:20:26,119 --> 00:20:28,560 Speaker 1: Policy Initiative. Thank you very much for being with Thank 371 00:20:28,600 --> 00:20:34,480 Speaker 1: you so much for having me. Thanks for listening to 372 00:20:34,480 --> 00:20:37,359 Speaker 1: the Bloomberg P and L podcast. You can subscribe and 373 00:20:37,440 --> 00:20:41,440 Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast 374 00:20:41,440 --> 00:20:44,920 Speaker 1: platform you prefer. I'm pim Fox. I'm on Twitter at 375 00:20:45,080 --> 00:20:48,480 Speaker 1: pim Fox. I'm on Twitter at Lisa Abramo. It's one 376 00:20:48,680 --> 00:20:51,399 Speaker 1: before the podcast. You can always catch us worldwide on 377 00:20:51,440 --> 00:20:52,280 Speaker 1: Bloomberg Radio.