WEBVTT - DOE Loans and How to Get Them, with Jigar Shah 0:00:00.120 --> 0:00:02.360 This is Dana Perkins and you're listening to Switched on 0:00:02.640 --> 0:00:06.120 the BNAF podcast. Today we have an interview recorded at 0:00:06.160 --> 0:00:10.320 the BNAF New York Summit with Jiggershaw. He's an entrepreneur 0:00:10.360 --> 0:00:13.960 that founded sun Edison, a pioneer in building clean energy 0:00:14.000 --> 0:00:17.120 projects for large companies. He later went on to found 0:00:17.239 --> 0:00:20.240 the Carbon war Room with Richard Branson, and most recently 0:00:20.320 --> 0:00:23.599 he was the co founder and former president at Generate Capital, 0:00:23.800 --> 0:00:27.840 involved in financing sustainable infrastructure projects. But away from business, 0:00:27.920 --> 0:00:30.800 he's also an author and a podcaster, and for the 0:00:30.960 --> 0:00:34.120 US government, he worked for the Department of Energy before 0:00:34.159 --> 0:00:37.320 being appointed the Director of the Loan Program's Office in 0:00:37.400 --> 0:00:40.000 twenty twenty one, which is what he's doing now. Senior 0:00:40.120 --> 0:00:42.880 editor at bn EF, Van de Na Goombar sat down 0:00:42.920 --> 0:00:45.680 for a chat with Jigger. Together, they discuss the current 0:00:45.800 --> 0:00:49.360 DOE programs and loans that are available to help companies 0:00:49.400 --> 0:00:52.640 with their clean energy transition. They also discussed the application 0:00:52.800 --> 0:00:56.040 process and what's expected of applicants regardless of the size 0:00:56.080 --> 0:00:58.440 of their company, and they debate whether or not the 0:00:58.560 --> 0:01:02.400 utilities company's rate or customers should front the costs for 0:01:02.440 --> 0:01:06.440 the new transmission capacity that's required. If you like this podcast, 0:01:06.520 --> 0:01:09.640 make sure to subscribe to receive updates for future episodes, 0:01:09.760 --> 0:01:12.600 and if you're listening to us on Apple Podcasts or Spotify, 0:01:12.720 --> 0:01:16.440 consider giving us a review. For more information about BNF's 0:01:16.480 --> 0:01:19.160 summit like the one that this episode was recorded at, 0:01:19.280 --> 0:01:23.039 head to about dot bn ef dot com forward slash Summit. 0:01:23.240 --> 0:01:25.520 There you're going to be able to see the agendas 0:01:25.520 --> 0:01:28.920 and also videos from this event and other previous events. 0:01:29.240 --> 0:01:32.360 Please note, bn EF does not provide investment or strategy advice, 0:01:32.360 --> 0:01:34.360 and we've got a complete disclaimer that can be found 0:01:34.400 --> 0:01:36.479 at the very end of the show. But right now 0:01:36.480 --> 0:01:38.880 we're going to get to vandanas chat with Jiggershaw. 0:01:48.240 --> 0:01:51.200 Okay, so let me just get the headline numbers out 0:01:51.240 --> 0:01:53.920 of the way first before I ask you the other questions. 0:01:54.040 --> 0:01:56.560 How much do you have available to land today? 0:01:56.760 --> 0:01:59.640 It's upwards of four hundred billion dollars that we have 0:01:59.720 --> 0:02:04.320 to learn today across our three original programs. So that's 0:02:04.680 --> 0:02:07.600 the Innovative Clean Energy program that we did, solar and 0:02:07.640 --> 0:02:12.079 wind in geothermalt of the Advanced Technology Vehicle Manufacturing program, 0:02:12.120 --> 0:02:15.560 which is the one they got Tesla for Nissan, and 0:02:15.600 --> 0:02:17.880 then we have the Tribal Energy Loan Program. So across 0:02:17.919 --> 0:02:20.959 those three programs we have about one hundred and sixty 0:02:21.080 --> 0:02:23.880 billion dollars and those are our three oldest programs. Then 0:02:23.919 --> 0:02:28.280 we have a new program called the Energy Infrastructure Reinvestment Program. 0:02:28.320 --> 0:02:31.680 Really helped to design to help like utility companies and 0:02:31.720 --> 0:02:34.919 other owners of existing assets make the transition from coal 0:02:35.000 --> 0:02:37.799 to nuclear, coal to soil plus storage, or we do 0:02:38.000 --> 0:02:40.880 some pipelines that are currently natural gas and converting it 0:02:40.880 --> 0:02:43.680 to CO two or hydrogen. So we're very excited about 0:02:43.720 --> 0:02:46.560 those programs. And then we also have the SOFIA program, 0:02:46.560 --> 0:02:48.120 which is CO two trunk lines. 0:02:48.320 --> 0:02:51.000 So what part of this was the IRA jump? 0:02:51.200 --> 0:02:53.240 Yeah, so we had about forty four billion dollars of 0:02:53.280 --> 0:02:56.519 total loan authority before the IRA, and then we got 0:02:56.720 --> 0:03:00.440 one hundred plus two fifty in the IRA. In the 0:03:00.480 --> 0:03:03.440 omnibus bill for twenty twenty three, we got an additional 0:03:03.480 --> 0:03:06.320 fifteen billion for the Innovative Clean Energy Program. 0:03:06.520 --> 0:03:09.600 Brilliant. So the last time you spoke, the last time 0:03:09.639 --> 0:03:13.160 we spoke, Yeah, you were talking about amplifying the message 0:03:13.200 --> 0:03:16.079 that here is a part of money, come and take it, 0:03:16.240 --> 0:03:18.560 and you were talking to a lot of people who 0:03:18.560 --> 0:03:22.240 would be eligible a lot of prospects who would be eligible, 0:03:22.480 --> 0:03:25.040 and I guess that was phase one of your programmer. 0:03:25.160 --> 0:03:29.880 Are you still doing that amplification process or is that done? 0:03:30.400 --> 0:03:32.960 Everyone knows what the DOELPO does. 0:03:33.720 --> 0:03:34.600 Yeah, you would think so. 0:03:34.840 --> 0:03:38.240 I mean, we've done a lot of interviews and a 0:03:38.240 --> 0:03:40.320 lot of podcasts other things. But I would say that 0:03:40.400 --> 0:03:43.600 we're continuing to meet people every day who don't know 0:03:43.640 --> 0:03:46.680 about the Loan Program's office but are perfect candidates for 0:03:46.880 --> 0:03:49.160 our program. And so I think, you know, we've hired 0:03:49.200 --> 0:03:52.880 an additional forty people or so into our outreaching business 0:03:52.880 --> 0:03:57.080 development group, and now we're covering way more conferences in sectors, 0:03:57.080 --> 0:03:59.520 which is wonderful. And you know, we're talking to probably 0:03:59.520 --> 0:04:02.200 about a how for trillion dollars worth of projects today. 0:04:02.280 --> 0:04:04.680 That number probably needs to get closer to a trillion 0:04:04.680 --> 0:04:07.040 dollars with the projects over the next year or so. 0:04:07.040 --> 0:04:09.120 So we're constantly pounding the pavement. But the other piece 0:04:09.120 --> 0:04:11.400 I would say is that what's happened since we last 0:04:11.400 --> 0:04:13.600 talked was that we've gotten a lot of these conditional 0:04:13.640 --> 0:04:16.200 commitments out the door and then we've closed loans. Right, So, 0:04:16.440 --> 0:04:18.599 there were a lot of people who were just very 0:04:18.720 --> 0:04:22.360 conservative and saying until you've closed more of these loans, 0:04:22.440 --> 0:04:24.560 we're just not going to lean in with your office. 0:04:24.640 --> 0:04:26.920 And now that we've closed loans and we've gotten a 0:04:26.960 --> 0:04:30.159 lot more visibility around the process, I think people are 0:04:30.200 --> 0:04:32.839 feeling far more comfortable expending. 0:04:32.440 --> 0:04:36.280 Resources to go through our office. So that's also very validating. 0:04:36.800 --> 0:04:40.280 Are you happy with the pace of approvals, because that 0:04:40.400 --> 0:04:43.159 was also something that you mentioned that you want the 0:04:43.200 --> 0:04:46.320 office to be like more agile and track the time 0:04:46.360 --> 0:04:49.600 it takes between an application and approval, and that was 0:04:49.640 --> 0:04:51.920 one of the things that you yeh, trying to address. 0:04:52.160 --> 0:04:54.480 I mean, I'm never happy, right, I mean, that's that's 0:04:54.520 --> 0:04:57.200 part of my personality. So I always think we can 0:04:57.240 --> 0:04:59.200 do better, and I think my team thinks it can 0:04:59.200 --> 0:05:01.040 do better, and we can continue to keep trying to 0:05:01.080 --> 0:05:03.400 find ways to improve. But I do think that at 0:05:03.400 --> 0:05:06.320 this point we have hit an absolute standard, which is 0:05:06.440 --> 0:05:10.279 about in line with the commercial sector. So in general, 0:05:10.480 --> 0:05:14.760 these really complicated technology heavy loans take sort of six 0:05:14.800 --> 0:05:16.880 to nine months to get through the private sector, and 0:05:16.920 --> 0:05:19.680 I'd say we do them in like eight to ten months, 0:05:19.760 --> 0:05:21.640 which is right around the same amount of time. So 0:05:21.839 --> 0:05:23.800 I think in general we're quite proud of that I 0:05:23.800 --> 0:05:25.880 think there's lots of ways we can improve and get 0:05:25.920 --> 0:05:28.320 even more efficient. The other challenge I would say is 0:05:28.320 --> 0:05:31.240 that our ecosystem continues to be weak. And so if 0:05:31.240 --> 0:05:34.080 you're an applicant who's just raised four her million dollars 0:05:34.120 --> 0:05:36.000 and you want to pay someone to help you get 0:05:36.000 --> 0:05:38.680 through the office, those teams are not very well set 0:05:38.720 --> 0:05:41.760 up at PwC or Deloitte or you know, KPMG or 0:05:41.760 --> 0:05:44.160 some of the law firms or other places like they 0:05:44.200 --> 0:05:47.840 just they atrophied over ten years of dormancy for our program, 0:05:47.960 --> 0:05:50.960 and they've started the process of ramping back up over 0:05:51.000 --> 0:05:53.120 the last two years, but they're not there yet. And 0:05:53.200 --> 0:05:58.080 so for many of our ecosystem partners, they're overwhelmed with business, 0:05:58.279 --> 0:06:00.839 and so we need ten or twenty more firms to 0:06:00.880 --> 0:06:04.800 set up an LPO division to help applicants get through 0:06:04.800 --> 0:06:07.640 our office. Because for some of these applicants, they're experts 0:06:07.680 --> 0:06:10.280 at raising equity and they have an equity forward CFO, 0:06:10.440 --> 0:06:13.200 but that equity forward CFO has never raised this much 0:06:13.200 --> 0:06:15.880 commercial debt. They've never put together a data room, they've 0:06:15.880 --> 0:06:19.479 never answered questions from a debt perspective, and so for 0:06:19.560 --> 0:06:22.160 some of those applicants, it's taking them a lot longer 0:06:22.200 --> 0:06:24.560 than it should because they're just not used to the process. 0:06:24.960 --> 0:06:29.200 My understanding was the kind of support that you provide 0:06:29.240 --> 0:06:33.080 loans and loan guarantees, it's kind of not available in 0:06:33.120 --> 0:06:36.039 the private sector space. But it's interesting that you're comparing 0:06:36.080 --> 0:06:38.799 your timelines to the private sector players. 0:06:39.240 --> 0:06:41.880 I agree with you that in general they're not comparable 0:06:41.880 --> 0:06:43.640 per se. They're not really competing with us, and we 0:06:43.680 --> 0:06:46.120 would never want to compete with the commercial sector. But 0:06:46.360 --> 0:06:49.279 when you look at like Centender and their leading of 0:06:49.279 --> 0:06:52.440 the Vineyard wind proposal, that deal took over a year 0:06:52.480 --> 0:06:54.920 to close, and so I do think there are some 0:06:55.000 --> 0:06:57.559 of these complicated deals that the bank does when they've 0:06:57.560 --> 0:06:59.960 got very high profile clients that force them to do 0:07:00.240 --> 0:07:03.520 the deal, and those deals are complicated and they take 0:07:03.520 --> 0:07:06.360 a long time to close. I'm comparing us to those deals. 0:07:06.400 --> 0:07:08.640 But for many of the companies that use our office, 0:07:09.000 --> 0:07:11.320 these are growth companies who don't have some sort of 0:07:11.360 --> 0:07:14.080 like inside guy at a bank. We become their inside guy. 0:07:14.160 --> 0:07:15.960 Like we The goal for us is to try to 0:07:16.000 --> 0:07:19.240 make this a more fair process so that everybody can take. 0:07:19.080 --> 0:07:19.680 Advantage of this. 0:07:20.400 --> 0:07:23.200 You've often spoken about I don't know if you've spoken 0:07:23.240 --> 0:07:26.160 about it or write wait about it. Bridge to bankability, 0:07:26.200 --> 0:07:30.320 that's the that's the gap that you fail. I wanted 0:07:30.320 --> 0:07:33.560 to ask you, which are the sectors where you feel 0:07:33.680 --> 0:07:37.640 that the requirement of this bridge to bankability is more sturgent. 0:07:38.120 --> 0:07:40.280 Well, I'd say it's all of them. The goal here 0:07:40.400 --> 0:07:42.840 is for this to be a principle that really applies 0:07:42.880 --> 0:07:46.000 across all of the sectors where the International Energy Agency 0:07:46.040 --> 0:07:49.000 and others have highlighted sectors that are required to meet 0:07:49.000 --> 0:07:51.600 our decarbonization goals by twenty thirty five and twenty fifty. 0:07:51.680 --> 0:07:53.960 So when you think about the four reports that we've 0:07:54.000 --> 0:07:56.560 issued recently, right you have the Carbon Management Report, the 0:07:56.640 --> 0:08:00.480 Hydrogen Liftoff Report, Long grain energy storage, and nuclear those 0:08:00.520 --> 0:08:02.560 four definitely need it. The next set of reports that 0:08:02.640 --> 0:08:05.120 are coming out with or in the industrial decarb space, 0:08:05.320 --> 0:08:08.280 the virtual power plant space, they definitely need it. And 0:08:08.320 --> 0:08:10.480 in general, what you find is that we have a 0:08:10.520 --> 0:08:13.120 slightly different way of doing things than the Europeans do, 0:08:13.200 --> 0:08:16.200 but in general it requires roughly one hundred billion dollars 0:08:16.240 --> 0:08:20.360 of private sector experience to cross the bridge to bankability, 0:08:20.440 --> 0:08:22.320 no matter what the sector is. That's when you go 0:08:22.400 --> 0:08:25.000 through all four pillars, which is first of a kind deployment, 0:08:25.240 --> 0:08:27.760 and then engineering excellence, and then you've got the learning 0:08:27.800 --> 0:08:31.600 curve which we all rediscovered from nineteen thirties. And then 0:08:31.640 --> 0:08:34.319 this Wall Street acceptance and the one hundred billion dollars 0:08:34.320 --> 0:08:36.320 doesn't save you a gig a ton of carbon, but 0:08:36.400 --> 0:08:38.680 it does get you across the bridge to bankability, and 0:08:38.679 --> 0:08:41.000 then now you're available to save a gig a ton 0:08:41.040 --> 0:08:41.440 of carbon. 0:08:42.160 --> 0:08:45.480 I recently had a chat with the Hydrocobec team and 0:08:45.760 --> 0:08:48.839 they planned to start exporting clean power to New York 0:08:49.120 --> 0:08:51.800 by twenty twenty six the reison and they just got 0:08:51.840 --> 0:08:55.040 approval for the second line, which was held up in Cootes. 0:08:55.400 --> 0:08:58.040 So it took them fifteen years to get all the 0:08:58.040 --> 0:09:01.280 approvals for the transmission line which we'll carry that power. 0:09:01.440 --> 0:09:05.000 We heard about permitting issues at the summit at various 0:09:05.080 --> 0:09:08.240 panels this morning. So as you look at the project 0:09:08.320 --> 0:09:12.320 proposals that LPO gets and track their progress, which are 0:09:12.360 --> 0:09:15.840 the systemic weaknesses that stand out for you? 0:09:17.000 --> 0:09:19.920 Well, I mean weaknesses are a strong word in general. 0:09:20.000 --> 0:09:23.680 The federal government wasn't the reason why those projects were slow. 0:09:24.120 --> 0:09:26.680 The reason the projects are slow is because the New 0:09:26.760 --> 0:09:30.360 York ISO and then Nyserta and all these other players 0:09:30.400 --> 0:09:32.560 are like, do we want this line, don't we want 0:09:32.600 --> 0:09:35.960 this line. Here's like sixteen different political factions who have 0:09:36.000 --> 0:09:37.760 a role to play and have a voice they want 0:09:37.800 --> 0:09:40.840 to give, And so like, I'm happy for permitting reform 0:09:40.920 --> 0:09:43.720 to occur, and I think it's clearly needed. And even 0:09:43.720 --> 0:09:46.600 Bill mckibbon like wrote about how we need to build again. 0:09:46.679 --> 0:09:49.520 But I do want people to recognize that for all 0:09:49.559 --> 0:09:52.080 of these long transmission lines, whether it's trans West out 0:09:52.120 --> 0:09:55.640 of Wyoming or whether it's Sunsea New Mexico or Grain 0:09:55.679 --> 0:09:59.439 Belt that Inventergy's building, there's a lot of competing interests 0:09:59.480 --> 0:10:02.840 for these lines, right, And the way that the US 0:10:02.880 --> 0:10:07.319 economy is structured, each state makes the decisions for electric 0:10:07.440 --> 0:10:10.679 utility work. And so I understand that people want the 0:10:10.720 --> 0:10:13.280 federal government to step in and say we will just 0:10:13.440 --> 0:10:15.520 force everyone to do these things, but that is not 0:10:15.679 --> 0:10:17.960 the democracy that we live in. And so I just 0:10:18.000 --> 0:10:20.520 want to make sure that people understand what they're really 0:10:20.559 --> 0:10:22.680 asking us to do and what limits they want to 0:10:22.679 --> 0:10:24.480 put on us. Now, the other way to solve this 0:10:24.559 --> 0:10:27.240 problem is through technology, which is where we come in, 0:10:27.360 --> 0:10:30.160 and we have the technology to reconductor all of the 0:10:30.240 --> 0:10:33.319 existing transmission lines and three x the capacity of them. 0:10:33.360 --> 0:10:36.080 But that requires the electric utilities that own the lines 0:10:36.120 --> 0:10:38.240 to want to do that and so, and it also 0:10:38.320 --> 0:10:41.040 requires the renewable energy companies who currently get all that 0:10:41.080 --> 0:10:44.240 access capacity for free, to pay for it. Right now, 0:10:44.280 --> 0:10:46.680 they're saying, we'd like to build our projects at twenty 0:10:46.800 --> 0:10:49.280 nine dollars a megoat hour, and we'd like to socialize 0:10:49.280 --> 0:10:52.160 the cost of transmission amongst all ratepairs. Well, guess what 0:10:52.640 --> 0:10:55.560 that business model is over And so if you want 0:10:55.600 --> 0:10:58.840 to continue to build eighty gigawatts one hundred gigawatts a 0:10:58.920 --> 0:11:01.640 year of renewable energy, well you have to pay for 0:11:01.679 --> 0:11:04.440 the transmission required to do that. And guess what that 0:11:04.559 --> 0:11:07.199 increases the cost of that power from twenty nine hours 0:11:07.200 --> 0:11:09.720 a MEGO hour to almost sixty nine hours in MEGO 0:11:09.760 --> 0:11:10.040 what hour? 0:11:10.120 --> 0:11:11.760 And they don't want to do that. So then we're 0:11:11.800 --> 0:11:13.880 in an impasse. So I'm happy to. 0:11:13.840 --> 0:11:16.600 Take full blame for all of the things that's wrong 0:11:16.640 --> 0:11:19.640 with the entire innovation economy. My shoulders are broad enough 0:11:19.679 --> 0:11:21.840 to do that. But it doesn't solve the problem for 0:11:21.920 --> 0:11:24.600 me taking the blame. What solves the problem is people 0:11:24.679 --> 0:11:27.720 recognizing what the actual problems are, not what they pitch 0:11:27.800 --> 0:11:30.000 to the press, and then figure out how they work 0:11:30.080 --> 0:11:33.120 through them. These are real cost allocation issues. Do you 0:11:33.120 --> 0:11:35.080 want rape payers to pay for them? Or do the 0:11:35.120 --> 0:11:38.280 customers who want that new transmission capacity have to pay 0:11:38.280 --> 0:11:41.960 for them? And there's arguments on both sides. I understand it, 0:11:42.040 --> 0:11:45.440 but let's not trivialize these conversations and say it's just permitting. 0:11:45.880 --> 0:11:50.359 So since we out talking about increasing the transmission capacity, 0:11:50.440 --> 0:11:53.760 that's part of the plan. Biden has spoken about it. 0:11:53.800 --> 0:11:56.640 What's the way out? This debate can go on for 0:11:56.679 --> 0:11:59.360 a long time, But what's your recommended solution. 0:12:00.280 --> 0:12:02.960 Well, it's not my recommended solution. We have ten reports 0:12:02.960 --> 0:12:06.120 we've written on this solution, and the answer is cost allocation, 0:12:06.400 --> 0:12:08.960 Like someone has to pay for this new capacity. What 0:12:09.000 --> 0:12:11.760 the utilities are saying is we don't need this new capacity. 0:12:11.800 --> 0:12:14.480 We can use cold and natural gas and potentially nuclear 0:12:14.520 --> 0:12:17.080 in the future within our existing transmission And there are 0:12:17.080 --> 0:12:19.520 others that are saying, no, we need a three XR 0:12:19.640 --> 0:12:23.160 capacity so we can build a lot more solar and wind. Great, okay, Well, 0:12:23.200 --> 0:12:26.040 then then who pays for all that extra capacity? You 0:12:26.080 --> 0:12:28.599 can't just socialize it when the utilities are saying we 0:12:28.640 --> 0:12:31.280 don't need it. So then the question becomes who pays, 0:12:31.360 --> 0:12:33.320 and so we have to decide who pays, and then 0:12:33.480 --> 0:12:35.320 maybe they pay for fifty percent of the cost, maybe 0:12:35.320 --> 0:12:36.800 they pay for one hundred percent of the cost. But 0:12:36.920 --> 0:12:39.439 like it can't be well, we want it for free 0:12:39.520 --> 0:12:41.880 because that's what we're used to and we're just going 0:12:41.920 --> 0:12:44.240 to stand in the queue, in the interconnection queue for 0:12:44.320 --> 0:12:48.880 seven years, okay, But like I just feel like sometimes 0:12:48.920 --> 0:12:52.080 we try to like say these things are simple to solve, 0:12:52.520 --> 0:12:55.080 and they could be simple to solve. It's like a 0:12:55.080 --> 0:12:56.760 straightforward answer. 0:12:56.520 --> 0:12:58.080 But it's not. It's not easy. 0:12:58.120 --> 0:13:01.320 When they say it's it's simple, not easy, and that's true. 0:13:01.400 --> 0:13:03.160 We know what the answer is, but it's not easy 0:13:03.160 --> 0:13:03.800 to implement it. 0:13:04.120 --> 0:13:07.320 Do you have any projects in queue that are impacted 0:13:07.360 --> 0:13:08.920 by the interconnection queue? 0:13:09.360 --> 0:13:09.960 Not really. 0:13:10.080 --> 0:13:12.920 I mean the loan Program's office in general doesn't do 0:13:13.360 --> 0:13:16.720 established technologies, right, so solar and wind, so we don't 0:13:16.720 --> 0:13:18.680 have a lot of impact there. And frankly, most of 0:13:18.679 --> 0:13:21.000 the rest of our projects, whether it's the nuclear plants 0:13:21.240 --> 0:13:24.840 or the geothermal facilities or hydro facilities, they actually have 0:13:25.120 --> 0:13:28.000 access to interconnection, so that hasn't been a challenge, But 0:13:28.240 --> 0:13:30.840 I do think we have a really big problem around 0:13:31.040 --> 0:13:33.160 like figuring out how we do big thing right and 0:13:33.200 --> 0:13:35.400 how we give people certainty around how to do it. 0:13:35.440 --> 0:13:38.640 But I do think that we can actually perform NEPA 0:13:38.679 --> 0:13:41.600 in a very efficient way. Our office runs NEPA for 0:13:41.960 --> 0:13:44.080 projects on private land and we're able to do it 0:13:44.080 --> 0:13:46.040 in less than eighteen months usually, So I think we 0:13:46.080 --> 0:13:48.040 can be very efficient about things. I think there are 0:13:48.080 --> 0:13:51.160 ways for us to work with tribes and local communities 0:13:51.160 --> 0:13:52.120 to make sure that their. 0:13:52.080 --> 0:13:52.840 Voice is heard. 0:13:53.080 --> 0:13:56.920 But I do think that we allow for properly permitting 0:13:57.000 --> 0:14:00.000 projects to continue to be sued and sometimes you get 0:14:00.200 --> 0:14:02.280 more delays there, and so we should figure out how 0:14:02.320 --> 0:14:05.400 we prevent these projects who don't like the answer that 0:14:05.440 --> 0:14:08.800 comes out of the process from continuously delayed from lawsuits. 0:14:09.200 --> 0:14:12.560 So shifting the focus back to LPO, I had like 0:14:12.640 --> 0:14:17.000 one question trying to understand what has changed in the 0:14:17.080 --> 0:14:20.720 last twelve to eighteen months. If Elon Musk was starting 0:14:20.720 --> 0:14:23.360 his business today and came to you for an ev loan, 0:14:23.480 --> 0:14:26.240 what would be his chances of success and how soon 0:14:26.280 --> 0:14:27.080 would he get the money? 0:14:27.520 --> 0:14:29.520 Well, it depends on how prepared he is to get 0:14:29.520 --> 0:14:31.880 through the office. So we have of the one hundred 0:14:31.880 --> 0:14:35.080 and thirty four our application applications that we've received, I 0:14:35.080 --> 0:14:37.160 think I've said in the past, about thirty five of 0:14:37.200 --> 0:14:39.320 them are prepared to get through the office in sixty 0:14:39.600 --> 0:14:41.640 six to eight months. And those we can get through 0:14:41.680 --> 0:14:44.560 they have professional representation, they not answer our questions with 0:14:44.560 --> 0:14:46.560 twenty four hour response time all that stuff. And then 0:14:46.600 --> 0:14:48.840 we have almost one hundred applicants who probably can't get 0:14:48.880 --> 0:14:50.760 through the office in that amount of time, and they 0:14:50.880 --> 0:14:54.200 need to hire professional representation, They need to upgrade some 0:14:54.240 --> 0:14:56.880 of their staff to be able to like do commercial debt. 0:14:56.960 --> 0:14:59.840 They're experts in raising equity, which is great, but that's 0:14:59.880 --> 0:15:03.200 not the same as us. Right, So in general, I'd say, 0:15:03.240 --> 0:15:05.800 you know, like I think Syrah Resources got through the 0:15:05.800 --> 0:15:08.280 office in four months because they were really well prepared. 0:15:08.360 --> 0:15:11.400 And then there are others that I think were borderlined 0:15:11.480 --> 0:15:13.200 two years. I think if you talked to Rob Hanson, 0:15:13.240 --> 0:15:15.800 a model of materials, he'll say that with borderline two 0:15:15.840 --> 0:15:17.840 years and he wasn't ready when he first came into 0:15:17.840 --> 0:15:20.720 the office, And we help his organization take a more 0:15:20.760 --> 0:15:25.080 professional approach to under the underlying risks of his project. 0:15:25.160 --> 0:15:27.560 And his company is better for it, and we're equally 0:15:27.600 --> 0:15:30.880 excited about both types of applicants. So I don't mind 0:15:30.920 --> 0:15:32.880 spending twenty four months with somebody, but I don't want 0:15:32.880 --> 0:15:36.680 their expectations to be they can come with less preparation 0:15:36.840 --> 0:15:38.720 and then get through the office in six months. 0:15:38.840 --> 0:15:40.760 So that was one of the things that I wanted 0:15:40.800 --> 0:15:44.320 to ask you. Are you getting like is the percentage 0:15:44.320 --> 0:15:48.000 of applications that are more complete? Has that increased over 0:15:48.040 --> 0:15:50.880 the last few months or no? 0:15:51.120 --> 0:15:53.920 I mean, I mean, certainly with the seventeen oh six program, 0:15:54.000 --> 0:15:56.720 we have more electric utilities coming in and other more 0:15:56.800 --> 0:15:59.200 established players coming in, and they have the staff to 0:15:59.200 --> 0:16:01.200 be able to do a lot of this stuff. So 0:16:01.360 --> 0:16:04.600 those are higher quality applications. But there's still a huge 0:16:04.680 --> 0:16:07.960 number of extraordinary entrepreneurs and innovators in our country who 0:16:08.080 --> 0:16:11.880 don't have the ecosystem support that they need to be 0:16:11.880 --> 0:16:13.760 able to get through our office efficiently. And so we 0:16:13.840 --> 0:16:16.280 continue to work on the big accounting firms and the 0:16:16.280 --> 0:16:18.920 big services companies and others to try to get them 0:16:19.000 --> 0:16:22.480 to set up an LBO specific division to help those companies. 0:16:22.560 --> 0:16:25.080 But we can't lower our standards to rush them through 0:16:25.080 --> 0:16:27.440 a process. Right our standards are set by Congress, and 0:16:27.480 --> 0:16:29.680 so we have to get everyone up to those standards. 0:16:29.720 --> 0:16:32.840 And we think that all of these people can. If 0:16:32.880 --> 0:16:34.560 we don't think they can, we tell them that and 0:16:34.600 --> 0:16:36.720 we encourage them not to apply. But for all the 0:16:36.760 --> 0:16:38.840 one hundred and thirty four applications we have now, we 0:16:38.960 --> 0:16:41.200 believe that they can hit our standards, but they still. 0:16:41.000 --> 0:16:41.520 Have to do it. 0:16:41.680 --> 0:16:45.720 You said, it's not easy to make you happy, but 0:16:45.960 --> 0:16:48.840 I was. I really wanted to ask you in terms 0:16:48.880 --> 0:16:51.760 of pace of applications. I just looked at some data. 0:16:51.800 --> 0:16:55.720 So March twenty twenty two you had seventy seven applications 0:16:55.760 --> 0:16:59.080 and seventy six billion dollars in loans requested. And the 0:16:59.200 --> 0:17:01.560 latest update, it is, the one I have is March 0:17:01.600 --> 0:17:04.639 twenty twenty three is one thirty applications and one hundred 0:17:04.680 --> 0:17:08.159 and eighteen billion in loans requested. And of course you 0:17:08.240 --> 0:17:10.520 have the sectors that keep going up and down, and 0:17:10.640 --> 0:17:14.800 the last time business mostly up in terms of like 0:17:14.920 --> 0:17:15.919 the number one sector. 0:17:16.080 --> 0:17:18.280 So yeah, that's true on a relative basis. 0:17:18.680 --> 0:17:21.879 Yeah, so that is not a pace you're happy with, 0:17:22.160 --> 0:17:23.720 Like where would you like it to be? 0:17:24.200 --> 0:17:26.840 Well, I mean, we have four hundred and twelve billion 0:17:26.960 --> 0:17:28.760 or so to put out the door. And so in 0:17:28.840 --> 0:17:30.560 order to put that much money out the door, we're 0:17:30.560 --> 0:17:33.000 going to need at least that much in loan applications, 0:17:33.400 --> 0:17:35.880 and probably more than that because some people fall through. 0:17:36.000 --> 0:17:38.600 And so I think that the US has the ability 0:17:38.680 --> 0:17:40.879 to do big things. I think we have a tremendous 0:17:41.000 --> 0:17:44.040 number of entrepreneurs and innovators here that need us to 0:17:44.040 --> 0:17:46.320 do big things for their companies to be successful. But 0:17:46.400 --> 0:17:49.399 also we have a number of foreign companies who want 0:17:49.440 --> 0:17:52.040 to come to the United States for their technology to 0:17:52.080 --> 0:17:54.360 be commercialized, and so we want them to come here 0:17:54.400 --> 0:17:56.600 as well. And so I have a lot more work 0:17:56.600 --> 0:17:58.600 to do. Look, I mean we have. We have been 0:17:58.640 --> 0:18:01.040 given these resources by congres I don't think that they 0:18:01.240 --> 0:18:04.439 chose these numbers randomly. They believe that in order to 0:18:04.520 --> 0:18:07.240 unlock ten trillion dollars worth of investment, we have to 0:18:07.280 --> 0:18:10.439 do this first four hundred billion to unlock folks across 0:18:10.440 --> 0:18:13.520 the bridge to bankability. And we've used these lift off 0:18:13.520 --> 0:18:17.080 reports to help understand where we are on that continuum. 0:18:17.119 --> 0:18:19.720 So I'm very happy with my team. I think they 0:18:19.720 --> 0:18:22.199 do an extraordinary job and they work really hard, but 0:18:22.440 --> 0:18:24.320 we have to continue to do better. To hit these 0:18:24.359 --> 0:18:25.240 absolute targets. 0:18:25.440 --> 0:18:26.640 How big is your team now? 0:18:26.720 --> 0:18:27.960 We're up to about two hundred. 0:18:27.720 --> 0:18:29.840 And fifty people, so it's pretty exciting. And we have 0:18:29.880 --> 0:18:32.880 about one hundred new FED positions that'll be posted over 0:18:32.880 --> 0:18:35.960 the next few months, and so we're excited about the 0:18:36.000 --> 0:18:39.080 long term prospects of how we're building this place up 0:18:39.080 --> 0:18:39.760 as an institution. 0:18:40.320 --> 0:18:44.400 In terms of choosing projects, is kaling up a big 0:18:44.440 --> 0:18:46.840 part of the decision, the potential to scale up. 0:18:47.080 --> 0:18:49.359 I mean to be clear, we don't choose any projects. 0:18:49.400 --> 0:18:51.520 What we do is say to people, do you have 0:18:51.560 --> 0:18:54.399 a project that fits within the four milestones on the 0:18:54.440 --> 0:18:57.400 bridge to bankability? And then they submit a Part one application, 0:18:57.600 --> 0:18:59.959 and then we say do you meet the statutory required 0:19:00.440 --> 0:19:03.080