1 00:00:00,440 --> 00:00:03,240 Speaker 1: This is Standra Perkins, and you're listening to Switch on 2 00:00:03,480 --> 00:00:07,280 Speaker 1: the podcast brought to you by BNF. The aging US 3 00:00:07,320 --> 00:00:10,360 Speaker 1: grid was built at a simpler time, meeting the needs 4 00:00:10,360 --> 00:00:14,000 Speaker 1: of a less diverse supply and demand mix on the grid, 5 00:00:14,360 --> 00:00:17,360 Speaker 1: but today it's struggling to keep up with the variety 6 00:00:17,520 --> 00:00:22,160 Speaker 1: of new energy projects coming online alongside new demand sources 7 00:00:22,239 --> 00:00:27,040 Speaker 1: like data centers and electric vehicle charging, leading to interconnection queues. 8 00:00:27,760 --> 00:00:31,600 Speaker 1: Upgrading the grid is essential as expectations for reliable and 9 00:00:31,720 --> 00:00:37,239 Speaker 1: flexible energy increase alongside what is seemingly endless energy demand. 10 00:00:37,680 --> 00:00:40,479 Speaker 1: On today's show, we bring you a discussion about the 11 00:00:40,520 --> 00:00:44,360 Speaker 1: future of the US energy grid from BNF's summit in Houston, 12 00:00:44,760 --> 00:00:48,479 Speaker 1: where BNF Head of Country and Policy Research Ethan Zindler 13 00:00:48,840 --> 00:00:53,720 Speaker 1: spoke with Paige Crahan, general manager Tapestry at x Alphabet, 14 00:00:54,440 --> 00:00:59,600 Speaker 1: Michael Skelly, co founder and CEO of Grid United, Frank Kreikenbaum, 15 00:00:59,720 --> 00:01:03,600 Speaker 1: c your, Vice president and chief of Engineering at Smart Wires, 16 00:01:04,000 --> 00:01:07,520 Speaker 1: and Rena Harris, vice president of Strategic Business, Growth and 17 00:01:07,640 --> 00:01:11,840 Speaker 1: Engagement for Centerpoint Energy. During the discussion, the panel addressed 18 00:01:11,920 --> 00:01:15,720 Speaker 1: what can be done not only to facilitate upgrading existing 19 00:01:15,760 --> 00:01:18,440 Speaker 1: grids and who should pay for it, but also what 20 00:01:18,480 --> 00:01:21,760 Speaker 1: efficiencies can be found to allow for the better use 21 00:01:21,920 --> 00:01:25,800 Speaker 1: of infrastructure that's already placed. They also highlight what can 22 00:01:25,800 --> 00:01:29,520 Speaker 1: be learned from outside of the US, from policy to 23 00:01:29,680 --> 00:01:34,440 Speaker 1: infrastructure upgrades, alongside new smart management technologies. If you'd like 24 00:01:34,440 --> 00:01:37,919 Speaker 1: to see agendas and videos from BNF summits taking place 25 00:01:37,959 --> 00:01:41,039 Speaker 1: around the world, including the summit in Houston, go to 26 00:01:41,200 --> 00:01:44,720 Speaker 1: BNAF dot com and check us out at our events tab. 27 00:01:45,080 --> 00:01:48,120 Speaker 1: Right now, let's head to Ethan's panel from BNF summ 28 00:01:48,120 --> 00:01:51,200 Speaker 1: at Houston, titled Revolutionizing the Grid. 29 00:02:01,160 --> 00:02:03,680 Speaker 2: Hi, Everybody, Ethan Zendlaer with Bloomberg and EF. 30 00:02:03,720 --> 00:02:03,800 Speaker 3: So. 31 00:02:04,720 --> 00:02:07,240 Speaker 4: Through the morning, we've been hearing a great deal about 32 00:02:07,280 --> 00:02:11,800 Speaker 4: all the exciting developments around the expansion of AI and 33 00:02:11,800 --> 00:02:14,520 Speaker 4: the potential that that provides, and of course, as the 34 00:02:14,560 --> 00:02:18,760 Speaker 4: top line, after least twenty years or so of no 35 00:02:19,000 --> 00:02:24,360 Speaker 4: real electricity demand growth, that is now obviously changing. But 36 00:02:24,440 --> 00:02:26,160 Speaker 4: what this panel is going to do is talk a 37 00:02:26,200 --> 00:02:29,520 Speaker 4: little bit about how we actually accommodate getting all those 38 00:02:29,560 --> 00:02:33,639 Speaker 4: electrons from where they're produced to where they're needed, and 39 00:02:33,760 --> 00:02:36,240 Speaker 4: what smart ways there might be to kind of organize the. 40 00:02:36,200 --> 00:02:38,680 Speaker 2: Delivery of those in a better way. 41 00:02:39,600 --> 00:02:45,200 Speaker 4: Ultimately, our grid at the moment is essentially overmatched and 42 00:02:45,320 --> 00:02:50,000 Speaker 4: dramatically underfunded. We have about two terrawatts of new projects 43 00:02:50,280 --> 00:02:52,639 Speaker 4: and various stages that want to get onto the grid. 44 00:02:52,800 --> 00:02:55,320 Speaker 4: For those who aren't electricity people, that's about twice as 45 00:02:55,400 --> 00:02:58,360 Speaker 4: much capacity as we actually have on the grid at 46 00:02:58,400 --> 00:03:02,320 Speaker 4: the moment. According to recent studies in the state of 47 00:03:02,600 --> 00:03:06,040 Speaker 4: the New York ISO, about forty percent of all of 48 00:03:06,080 --> 00:03:10,639 Speaker 4: the lines there are over thirty years old. And we've 49 00:03:10,639 --> 00:03:12,840 Speaker 4: seen similar stories around the world. So we have an 50 00:03:12,880 --> 00:03:15,639 Speaker 4: aging grid, and we have a great deal of additional 51 00:03:15,680 --> 00:03:18,600 Speaker 4: demand that's coming, and I have a fantastic panel that's 52 00:03:18,639 --> 00:03:21,600 Speaker 4: going to provide all the solutions to that. So I 53 00:03:21,639 --> 00:03:25,960 Speaker 4: want to start, though, first with Paige from Tapestry at 54 00:03:25,960 --> 00:03:28,840 Speaker 4: Google to talk really at a high level about some 55 00:03:28,919 --> 00:03:30,440 Speaker 4: of the work that you guys are doing in terms 56 00:03:30,440 --> 00:03:33,239 Speaker 4: of thinking about the system from a macro perspective. 57 00:03:33,440 --> 00:03:36,400 Speaker 5: Thank you so much, and perhaps I'll first share a 58 00:03:36,440 --> 00:03:40,840 Speaker 5: bit about what Tapestry is. So Alphabet is Google's parents. 59 00:03:40,840 --> 00:03:44,960 Speaker 5: Company has an innovation lab. It's called Google X. Our 60 00:03:45,040 --> 00:03:48,280 Speaker 5: job is to invent and launch radical technologies that will 61 00:03:48,280 --> 00:03:50,840 Speaker 5: make the world a better place and build businesses from 62 00:03:50,880 --> 00:03:56,160 Speaker 5: those technologies. Probably one of the best known graduates is 63 00:03:56,160 --> 00:04:00,280 Speaker 5: a company called Waimo that does self driving cars, and 64 00:04:00,320 --> 00:04:03,080 Speaker 5: so it is of that ilk that I started working 65 00:04:03,120 --> 00:04:07,440 Speaker 5: on this effort called Tapestry, which is our moonshot for 66 00:04:07,560 --> 00:04:11,760 Speaker 5: the electric rid. So taking that same thinking, you know 67 00:04:12,240 --> 00:04:15,600 Speaker 5: something that is not always present for us, but the 68 00:04:15,640 --> 00:04:20,720 Speaker 5: electric rid itself is humankind's largest machine, the biggest invention, 69 00:04:20,839 --> 00:04:24,520 Speaker 5: the most expensive, massive thing we've ever built as a species, 70 00:04:25,400 --> 00:04:29,360 Speaker 5: from how you generate, how you transmit, how you distribute, 71 00:04:29,800 --> 00:04:31,680 Speaker 5: to sort of what we might call the last mile, 72 00:04:31,800 --> 00:04:35,120 Speaker 5: how you consume electricity, and it is not. 73 00:04:36,839 --> 00:04:38,560 Speaker 6: Managed as a single system. 74 00:04:39,160 --> 00:04:41,760 Speaker 5: And that really is what Tapestry thinks about is Okay, 75 00:04:41,800 --> 00:04:45,479 Speaker 5: we have great things happening at any one of those 76 00:04:45,520 --> 00:04:50,600 Speaker 5: specific areas of our system. We have innovation happening in generation, 77 00:04:51,040 --> 00:04:55,839 Speaker 5: we have innovation happening in transmission and components, in critical minerals, 78 00:04:55,880 --> 00:04:58,320 Speaker 5: all the things that go into an innovation happening. On 79 00:04:58,360 --> 00:05:01,120 Speaker 5: the demand side, what are we using you know, when 80 00:05:01,120 --> 00:05:03,200 Speaker 5: should I charge my electric car if you have one? 81 00:05:03,839 --> 00:05:09,000 Speaker 5: But there is a gap in systems thinking technology, which 82 00:05:09,040 --> 00:05:11,240 Speaker 5: is what we're seeking to fill. And what are the 83 00:05:11,440 --> 00:05:17,080 Speaker 5: technologies that Tapestry and our software and machine learning team 84 00:05:17,120 --> 00:05:20,280 Speaker 5: can bring to bear to meet the needs of this 85 00:05:20,839 --> 00:05:26,320 Speaker 5: large Humankind's largest machine that needs to double in size. 86 00:05:26,880 --> 00:05:30,520 Speaker 5: Just for a perspective, we have about eighty million kilometers 87 00:05:30,560 --> 00:05:33,240 Speaker 5: of electric rid on planet Earth. It took us one 88 00:05:33,320 --> 00:05:36,040 Speaker 5: hundred and thirty years as a species to build about 89 00:05:36,040 --> 00:05:39,520 Speaker 5: eighty million kilometers, and we need to build eighty million 90 00:05:39,560 --> 00:05:42,800 Speaker 5: more kilometers in the next fifteen years to meet. 91 00:05:42,680 --> 00:05:43,560 Speaker 6: Our energy needs. 92 00:05:43,839 --> 00:05:46,839 Speaker 5: So in our mind, it is not just going to 93 00:05:46,880 --> 00:05:49,960 Speaker 5: be keep doing what you're doing to meet that need. 94 00:05:50,000 --> 00:05:52,600 Speaker 5: We need to do things differently, more intelligently, and in 95 00:05:52,600 --> 00:05:54,040 Speaker 5: a more coordinated fashion. 96 00:05:54,720 --> 00:05:58,440 Speaker 4: So thanks for that for and I think that eighty 97 00:05:58,480 --> 00:06:02,800 Speaker 4: million figure is both transmission and distribution. Distribution for those 98 00:06:03,160 --> 00:06:05,880 Speaker 4: is the last lines to the people's store. But my 99 00:06:06,000 --> 00:06:08,080 Speaker 4: understanding is that last year, I think we built three 100 00:06:08,160 --> 00:06:13,840 Speaker 4: hundred miles of high voltage transmission in the US. Michael, 101 00:06:13,920 --> 00:06:15,440 Speaker 4: I know you're trying to build a whole lot more 102 00:06:15,480 --> 00:06:17,080 Speaker 4: than that. Maybe tell us a little bit about Grid 103 00:06:17,200 --> 00:06:18,520 Speaker 4: United and the work that you're doing. 104 00:06:18,800 --> 00:06:19,520 Speaker 7: Great, thank you. 105 00:06:20,520 --> 00:06:26,160 Speaker 3: So we're working on big transmission lines to connect the grids. 106 00:06:26,200 --> 00:06:28,360 Speaker 3: So we have three grids in the continent of the 107 00:06:28,440 --> 00:06:33,599 Speaker 3: United states, Eastern, Western, and or cut and these are 108 00:06:33,720 --> 00:06:39,159 Speaker 3: very lightly or poorly connected. And if you want to 109 00:06:39,279 --> 00:06:45,640 Speaker 3: improve reliability, create more efficient markets, serve new load, and 110 00:06:45,839 --> 00:06:50,240 Speaker 3: integrate new sources of supply, one of the most cost 111 00:06:50,279 --> 00:06:52,920 Speaker 3: effective things that you can do is connect these grids 112 00:06:52,960 --> 00:06:57,200 Speaker 3: together like a lot of networks. Networks work better when 113 00:06:57,200 --> 00:07:00,159 Speaker 3: they're better connected, and so that's what we do. And 114 00:07:00,200 --> 00:07:05,479 Speaker 3: the reason that we are doing this is because traditionally 115 00:07:05,520 --> 00:07:06,960 Speaker 3: the way we plan the grid, well, we used to 116 00:07:06,960 --> 00:07:09,160 Speaker 3: plan it sort of by city. The city Houston would 117 00:07:09,160 --> 00:07:12,560 Speaker 3: plan a grid back in the last century. And then 118 00:07:13,160 --> 00:07:15,560 Speaker 3: over time we connected the grids and we started planning 119 00:07:15,560 --> 00:07:17,800 Speaker 3: the grid by states, and then we came up with 120 00:07:17,840 --> 00:07:22,520 Speaker 3: these regional transmission organizations to plan it by multi state 121 00:07:22,640 --> 00:07:26,600 Speaker 3: regions now, but there's never been sort of a national 122 00:07:26,680 --> 00:07:32,160 Speaker 3: plan to connect these grids. So that's what we're working on. 123 00:07:32,760 --> 00:07:38,480 Speaker 3: And our business model is to identify projects that we 124 00:07:38,560 --> 00:07:42,080 Speaker 3: think are promising and valuable to the system and then 125 00:07:42,240 --> 00:07:46,080 Speaker 3: work to get the rights away and permits and work 126 00:07:46,160 --> 00:07:48,840 Speaker 3: with like the millions of stakeholders that you need to 127 00:07:48,840 --> 00:07:52,320 Speaker 3: touch base with before you attempt something like this. Put 128 00:07:52,360 --> 00:07:56,160 Speaker 3: the pieces together, and then we will involve utilities on 129 00:07:56,400 --> 00:08:01,000 Speaker 3: either side of our line as the old owners of 130 00:08:01,200 --> 00:08:04,080 Speaker 3: some or all of the projects that we put together, 131 00:08:04,440 --> 00:08:08,600 Speaker 3: and so we're sort of agnostic with respect to outcomes 132 00:08:08,960 --> 00:08:12,240 Speaker 3: in terms of who owns the projects. But we know 133 00:08:12,400 --> 00:08:17,920 Speaker 3: that you know that that new big lines are incredibly helpful, 134 00:08:18,000 --> 00:08:19,520 Speaker 3: and so that's what we're trying to make happen. 135 00:08:19,720 --> 00:08:22,240 Speaker 4: Just real quick, Michael, maybe can you give a couple 136 00:08:22,280 --> 00:08:25,080 Speaker 4: of states where you're operating or in what state lines 137 00:08:25,120 --> 00:08:25,920 Speaker 4: you're trying to cross. 138 00:08:26,000 --> 00:08:29,440 Speaker 3: Yeah, so we're active in about almost a dozen states, 139 00:08:29,920 --> 00:08:35,000 Speaker 3: and so we're connecting the Eastern grid near Bismarck with 140 00:08:35,440 --> 00:08:40,200 Speaker 3: the Western grid near a town called colst of Montana Pueblo, 141 00:08:40,280 --> 00:08:44,920 Speaker 3: Colorado in the west, to Guymon, Oklahoma, and the east 142 00:08:45,040 --> 00:08:49,679 Speaker 3: and so on, and the mechanisms. The reason that these 143 00:08:50,040 --> 00:08:52,800 Speaker 3: just to explain a little bit more that these connections 144 00:08:52,800 --> 00:08:58,480 Speaker 3: are so valuable, is weather events are typically hundreds of 145 00:08:58,480 --> 00:09:00,000 Speaker 3: miles wide, but not. 146 00:09:00,080 --> 00:09:01,240 Speaker 7: Thousands of miles wide. 147 00:09:01,280 --> 00:09:03,640 Speaker 3: So if you connect the grids, like the Eastern grid 148 00:09:03,679 --> 00:09:06,199 Speaker 3: is getting hit with one weather event and there's power 149 00:09:06,200 --> 00:09:10,600 Speaker 3: in the west and vice versa. Similarly, you have different 150 00:09:10,679 --> 00:09:15,319 Speaker 3: generation patterns, so in the spring, there's lots of access 151 00:09:15,360 --> 00:09:18,880 Speaker 3: hydroelectric power in the Pacific Northwest, we provide an outlet 152 00:09:18,920 --> 00:09:24,920 Speaker 3: to the east. In fall nights or winter nights in 153 00:09:24,960 --> 00:09:28,200 Speaker 3: the Midwest, there's typically an excess of wind, and so 154 00:09:28,280 --> 00:09:29,480 Speaker 3: we give an access. 155 00:09:29,360 --> 00:09:32,120 Speaker 7: An outlet to that capacity going to the west. 156 00:09:33,679 --> 00:09:35,480 Speaker 4: Beskay, I want to come back on sort of how 157 00:09:35,520 --> 00:09:38,040 Speaker 4: well we're actually able to take advantage of those kind 158 00:09:38,080 --> 00:09:41,679 Speaker 4: of differences given the lack of interconnectedness at the moment. 159 00:09:41,679 --> 00:09:43,400 Speaker 2: But I want to move on to Frank. 160 00:09:43,840 --> 00:09:46,160 Speaker 4: To hear a little bit more about smart Wires and 161 00:09:46,200 --> 00:09:48,280 Speaker 4: the work that you're doing, because I think it's interesting. 162 00:09:48,480 --> 00:09:50,320 Speaker 4: I feel like we have two folks here on this panel. 163 00:09:50,360 --> 00:09:54,000 Speaker 4: We're very much involved in the actual delivery of electricity, 164 00:09:54,040 --> 00:09:55,880 Speaker 4: and then two were thinking about how to do the 165 00:09:55,920 --> 00:09:58,600 Speaker 4: whole job maybe a little more efficiently, including you, Fanks. 166 00:09:58,640 --> 00:10:00,960 Speaker 4: So maybe tell us a little bit about smart Wires. 167 00:10:01,200 --> 00:10:02,320 Speaker 7: Sure, thanks for having me. 168 00:10:02,800 --> 00:10:05,960 Speaker 8: And smart Wires is a fifteen year old company that 169 00:10:06,040 --> 00:10:09,840 Speaker 8: effectively is on a mission to better utilize the existing 170 00:10:09,880 --> 00:10:14,160 Speaker 8: capacity of the network. And when we talk about a 171 00:10:14,240 --> 00:10:17,160 Speaker 8: constraint limiting a data center connection or a new generation, 172 00:10:17,960 --> 00:10:20,520 Speaker 8: it always comes back in the form of in a study, 173 00:10:20,960 --> 00:10:24,200 Speaker 8: some line was thermally overloaded. But what we find in 174 00:10:24,240 --> 00:10:28,720 Speaker 8: the transmission network even under the peak condition peak top 175 00:10:29,000 --> 00:10:33,240 Speaker 8: most warm day with lines out of service, the rest 176 00:10:33,240 --> 00:10:36,559 Speaker 8: of the system is on average thirty percent utilized. So 177 00:10:36,600 --> 00:10:39,760 Speaker 8: it's such a tremendous amount of latent capacity in that network. 178 00:10:40,480 --> 00:10:43,160 Speaker 8: But until now there are not effective ways to route 179 00:10:43,240 --> 00:10:47,760 Speaker 8: power away from those overloaded assets and onto underutilized assets. 180 00:10:48,240 --> 00:10:49,360 Speaker 7: And for the last. 181 00:10:49,200 --> 00:10:53,080 Speaker 8: Fifteen years we've been commercializing and advancing that technology and 182 00:10:53,280 --> 00:10:56,960 Speaker 8: have now done commercial projects delivering a total four gigawats 183 00:10:57,000 --> 00:11:02,480 Speaker 8: of capacity globally. Recently that work was mostly based in 184 00:11:02,520 --> 00:11:05,720 Speaker 8: Europe and Latin America, but for some of the drivers 185 00:11:05,760 --> 00:11:09,679 Speaker 8: we've talked about today, the US market is suddenly very 186 00:11:09,679 --> 00:11:12,440 Speaker 8: interesting and we're seeing a lot of up to we've 187 00:11:12,480 --> 00:11:17,880 Speaker 8: seen primarily renewable connection, generation connection, and most importantly recently, 188 00:11:17,960 --> 00:11:20,920 Speaker 8: data center connection is driving this and we've done some 189 00:11:20,960 --> 00:11:24,080 Speaker 8: projects where we've helped connect data centers in half the 190 00:11:24,160 --> 00:11:26,000 Speaker 8: time of other. 191 00:11:25,880 --> 00:11:28,480 Speaker 7: Solutions that utilities have at their disposal. 192 00:11:28,960 --> 00:11:31,680 Speaker 8: And so for US, it's about being one solution of 193 00:11:31,720 --> 00:11:36,680 Speaker 8: many that utilities can use to bridge and then also 194 00:11:37,080 --> 00:11:42,240 Speaker 8: make their longer term capital plans more effective and more 195 00:11:42,320 --> 00:11:44,520 Speaker 8: compelling from a value perspective. 196 00:11:44,760 --> 00:11:47,760 Speaker 4: And that's one one quick clarifying question, which is just 197 00:11:47,800 --> 00:11:50,320 Speaker 4: to say four gigaots of capacity, but you're not building 198 00:11:50,360 --> 00:11:53,200 Speaker 4: new transmissions, So what does that mean that you're able 199 00:11:53,200 --> 00:11:56,840 Speaker 4: to sort of reroute four gigaotts of electrons and various 200 00:11:56,880 --> 00:11:58,800 Speaker 4: directions so that that accommodates for it. 201 00:11:59,360 --> 00:12:01,760 Speaker 8: So we may we make physical hardware that sits inside 202 00:12:01,840 --> 00:12:06,080 Speaker 8: utility substations, fully owned and controlled by utilities, and in 203 00:12:06,120 --> 00:12:10,000 Speaker 8: real time that hardware will direct power onto or off 204 00:12:10,040 --> 00:12:14,200 Speaker 8: of utility assets, usually overheadlines, but could be an underground cable, 205 00:12:14,280 --> 00:12:16,720 Speaker 8: could be a transformer that's overloaded that takes too long 206 00:12:16,760 --> 00:12:21,000 Speaker 8: to replace. And so what that means is when you 207 00:12:21,080 --> 00:12:23,400 Speaker 8: do the studies and you say how much capacity can 208 00:12:23,440 --> 00:12:26,880 Speaker 8: I import from North Texas into Houston. If the number 209 00:12:26,960 --> 00:12:30,480 Speaker 8: is eleven point two gigawats, you make some modifications to 210 00:12:30,520 --> 00:12:32,960 Speaker 8: the flow of the system and that number could go 211 00:12:33,040 --> 00:12:34,920 Speaker 8: to twelve, fourteen, sixteen. 212 00:12:34,960 --> 00:12:36,000 Speaker 7: We've done some work in the UK. 213 00:12:36,120 --> 00:12:39,440 Speaker 8: We literally had a constraint at eleven gigawatts and we 214 00:12:39,480 --> 00:12:42,200 Speaker 8: took that number up to sixteen gigwats just putting these 215 00:12:42,200 --> 00:12:43,840 Speaker 8: devices in substations. 216 00:12:45,360 --> 00:12:47,079 Speaker 4: Thanks for that, Andriena, I want to bring you into 217 00:12:47,160 --> 00:12:50,120 Speaker 4: the conversation. Centerpoint Obviously you do a bunch of things, 218 00:12:51,080 --> 00:12:54,920 Speaker 4: and maybe I come to you last only because you 219 00:12:55,000 --> 00:12:57,480 Speaker 4: literally do the last mile on distribution that I know 220 00:12:57,480 --> 00:13:01,080 Speaker 4: you're also involved in transmission as well. So maybe tell 221 00:13:01,120 --> 00:13:03,080 Speaker 4: us a little bit about the role that you play 222 00:13:03,080 --> 00:13:05,040 Speaker 4: in all of this and maybe some of the unique 223 00:13:05,080 --> 00:13:09,160 Speaker 4: circumstances that you have in URCOT that maybe the rest 224 00:13:09,200 --> 00:13:10,840 Speaker 4: of us outside of this region don't have. 225 00:13:11,600 --> 00:13:16,760 Speaker 9: Yeah, absolutely, well for small, good afternoon everyone. So you know, 226 00:13:16,920 --> 00:13:20,880 Speaker 9: Centerpoint Energy is headquartered here in Houston. We operate in 227 00:13:21,480 --> 00:13:26,440 Speaker 9: four states, serve natural gas across Minnesota, Indiana, Ohio, and Texas, 228 00:13:26,480 --> 00:13:29,840 Speaker 9: but Texas is our biggest market for electricity, so we 229 00:13:29,920 --> 00:13:33,839 Speaker 9: only provide electricity in Texas and Indiana and Indiana. We're 230 00:13:33,920 --> 00:13:39,080 Speaker 9: vertically integrated, so we do generation and we deliver in Texas, 231 00:13:39,320 --> 00:13:42,760 Speaker 9: specifically around the twelfth County Houston area. We're kind of 232 00:13:42,760 --> 00:13:45,400 Speaker 9: the Amazon of power, right, so we don't generate it, 233 00:13:45,440 --> 00:13:48,480 Speaker 9: but we do deliver it. So our role in the 234 00:13:48,600 --> 00:13:53,280 Speaker 9: ERCOT market is quite unique. One of the things that 235 00:13:53,320 --> 00:13:55,240 Speaker 9: I will say is that over the past few years, 236 00:13:55,240 --> 00:13:57,560 Speaker 9: and I'll admit that I've moved to Houston a couple 237 00:13:57,600 --> 00:14:00,440 Speaker 9: of years ago. So I have some you know, lineup 238 00:14:00,440 --> 00:14:03,120 Speaker 9: side to how other markets operate in the growth that 239 00:14:03,240 --> 00:14:07,480 Speaker 9: other areas experience. In the Greater Houston area, the growth 240 00:14:07,520 --> 00:14:09,600 Speaker 9: that we see here in Texas and then the air 241 00:14:10,040 --> 00:14:14,720 Speaker 9: market is just absolutely unbelievable. Just over the past year, 242 00:14:15,640 --> 00:14:18,720 Speaker 9: you know, like our interconnection queue has doubled with a 243 00:14:18,760 --> 00:14:23,680 Speaker 9: lot of the onset of AI and advanced manufacturing life sciences. 244 00:14:24,560 --> 00:14:29,320 Speaker 9: Houston traditionally has been known for growth. 245 00:14:29,400 --> 00:14:31,560 Speaker 6: We grow at two percent year over year. 246 00:14:32,200 --> 00:14:36,320 Speaker 9: So you know, the grid in Texas, in the Greater 247 00:14:36,400 --> 00:14:41,200 Speaker 9: Houston area, you know, is capable of handling really great 248 00:14:41,200 --> 00:14:44,040 Speaker 9: amounts of power, but it took us one hundred years 249 00:14:44,040 --> 00:14:47,680 Speaker 9: to get here, right, so we support twenty two viigoatts 250 00:14:47,680 --> 00:14:51,280 Speaker 9: of peak demand power today. Took us one hundred years 251 00:14:51,280 --> 00:14:54,080 Speaker 9: to get here, and then over the next ten years, 252 00:14:54,240 --> 00:14:57,720 Speaker 9: we're projecting that that will double with the onset of 253 00:14:57,760 --> 00:15:01,760 Speaker 9: all of these new technologies. So we're doing a lot 254 00:15:01,840 --> 00:15:06,120 Speaker 9: of different things, I think collaboration and partnerships in a 255 00:15:06,200 --> 00:15:09,640 Speaker 9: number of ways. Obviously ARCOT working with ARCOT, working with 256 00:15:09,680 --> 00:15:12,280 Speaker 9: our regulators on policy and everything we need to do 257 00:15:12,360 --> 00:15:15,160 Speaker 9: with them to ensure that we have the right tools 258 00:15:15,160 --> 00:15:19,520 Speaker 9: in place to really move a light speed speed to 259 00:15:19,560 --> 00:15:21,320 Speaker 9: market is the name of the game, right, And so 260 00:15:21,880 --> 00:15:24,280 Speaker 9: I have the pleasure of being up here with you know, 261 00:15:24,360 --> 00:15:27,880 Speaker 9: all of these colleagues that are going to help us 262 00:15:27,960 --> 00:15:32,320 Speaker 9: be even better. So they're part of the solution in Texas. 263 00:15:32,360 --> 00:15:35,680 Speaker 9: And then you know, obviously we have an amazing ecosystem 264 00:15:35,800 --> 00:15:39,760 Speaker 9: with the partners that we have, whether they're you know, 265 00:15:40,240 --> 00:15:41,800 Speaker 9: energy advisors. 266 00:15:41,200 --> 00:15:42,200 Speaker 6: I know new markets here. 267 00:15:42,280 --> 00:15:46,040 Speaker 9: They were helpful in getting center point up here on 268 00:15:46,080 --> 00:15:49,520 Speaker 9: the panel. But we have a lot of economic development coalitions, 269 00:15:49,600 --> 00:15:54,200 Speaker 9: we have land developers, we have state local so it 270 00:15:54,520 --> 00:15:57,400 Speaker 9: really is a regional approach to be able to really 271 00:15:57,440 --> 00:16:00,240 Speaker 9: deliver power and advocate for the. 272 00:16:00,080 --> 00:16:02,400 Speaker 6: Right policies to go fast. 273 00:16:03,840 --> 00:16:05,600 Speaker 9: And so that's what we're here to do, is just 274 00:16:05,640 --> 00:16:09,240 Speaker 9: to figure out how do we support this awesome ecosystem 275 00:16:09,360 --> 00:16:11,720 Speaker 9: to continue to grow at the pace that is in 276 00:16:11,760 --> 00:16:12,240 Speaker 9: front of us. 277 00:16:13,240 --> 00:16:15,920 Speaker 4: Look, I think if we established that the need for 278 00:16:16,200 --> 00:16:20,880 Speaker 4: more electricity and supply and more transmission distribution to get 279 00:16:20,880 --> 00:16:22,480 Speaker 4: it there is going. 280 00:16:22,480 --> 00:16:23,160 Speaker 2: To be required. 281 00:16:23,320 --> 00:16:26,120 Speaker 4: I guess the next question I have is who's going 282 00:16:26,160 --> 00:16:30,200 Speaker 4: to pay for this and how does that work? I mean, 283 00:16:31,560 --> 00:16:33,400 Speaker 4: Michael may be starting with you on the assumption that 284 00:16:33,440 --> 00:16:35,280 Speaker 4: we have some number of people who are maybe not 285 00:16:35,440 --> 00:16:40,479 Speaker 4: electricity people, how to train how do transmission operators get compensated? 286 00:16:40,680 --> 00:16:43,240 Speaker 4: And maybe also how would you like to get compensated 287 00:16:43,280 --> 00:16:45,360 Speaker 4: if the way it's set up right now isn't the best? 288 00:16:46,040 --> 00:16:50,880 Speaker 3: Yeah, okay, so we so Traditionally the way we pay 289 00:16:50,920 --> 00:16:52,160 Speaker 3: for the grid i e. 290 00:16:52,280 --> 00:16:53,800 Speaker 2: All the wires that you see. 291 00:16:54,800 --> 00:16:59,520 Speaker 3: As you drive around is that we you have grid planners, 292 00:16:59,600 --> 00:17:02,040 Speaker 3: like in let's take an example of Arcot because we're 293 00:17:02,520 --> 00:17:09,040 Speaker 3: a comeback unit here, and the system planners look at, Okay, 294 00:17:09,080 --> 00:17:10,560 Speaker 3: how much power are we going to need, where do 295 00:17:10,600 --> 00:17:12,840 Speaker 3: we need it, how we're going to get it, where's 296 00:17:12,840 --> 00:17:17,320 Speaker 3: generation likely to come from? And then the archive plans 297 00:17:17,400 --> 00:17:23,520 Speaker 3: a grid to meet those needs, and episodically, the legislature 298 00:17:23,680 --> 00:17:26,200 Speaker 3: and you heard about SB six on a panel on 299 00:17:26,200 --> 00:17:29,800 Speaker 3: an earlier panel, but episodically the legislature says. 300 00:17:29,840 --> 00:17:32,359 Speaker 2: Hey, we want a little more of this or a 301 00:17:32,359 --> 00:17:33,080 Speaker 2: little bit less. 302 00:17:33,119 --> 00:17:36,600 Speaker 3: And so in the two thousands there was something called 303 00:17:36,680 --> 00:17:40,080 Speaker 3: KRES which was designed to get wires built out to 304 00:17:40,840 --> 00:17:46,080 Speaker 3: rural areas to tap renal energy. And that happened and 305 00:17:46,119 --> 00:17:49,240 Speaker 3: that was a big burst. And then recently there was 306 00:17:50,000 --> 00:17:55,040 Speaker 3: a direction for the legislature to help electrify the premium basin, 307 00:17:55,160 --> 00:17:56,080 Speaker 3: so they stepped in. 308 00:17:56,280 --> 00:17:58,520 Speaker 7: And you see these types of interventions elsewhere. 309 00:17:58,560 --> 00:18:01,320 Speaker 3: But generally speaking, the grid planners look at what the 310 00:18:01,359 --> 00:18:03,960 Speaker 3: needs are and then they plan the grid, and sometimes 311 00:18:04,040 --> 00:18:07,680 Speaker 3: they adjust like the maximum voltage because hire the voltage 312 00:18:07,720 --> 00:18:09,479 Speaker 3: and the more power than you can use, and then 313 00:18:09,520 --> 00:18:12,040 Speaker 3: the costs for all that when they decide to build 314 00:18:12,080 --> 00:18:16,399 Speaker 3: a new line, those get spread across all customers. And 315 00:18:16,960 --> 00:18:19,800 Speaker 3: that's how we've built the grids for the last you know, 316 00:18:19,920 --> 00:18:23,800 Speaker 3: one hundred and some years. And then occasionally we have times, 317 00:18:23,800 --> 00:18:26,479 Speaker 3: for example, during World War Two and during the sixties 318 00:18:26,520 --> 00:18:29,720 Speaker 3: and seventies when we had big grid expansions, and those 319 00:18:29,800 --> 00:18:34,640 Speaker 3: grid expansions were the political consensus was, yeah, let's all 320 00:18:34,640 --> 00:18:38,320 Speaker 3: pay for them because we all benefit for them, either 321 00:18:38,359 --> 00:18:42,080 Speaker 3: for national defense or economic growth reasons. And now we 322 00:18:42,160 --> 00:18:44,480 Speaker 3: have it, we're sort of at a new moment, and 323 00:18:45,119 --> 00:18:48,159 Speaker 3: it's a little bit of a different question because we 324 00:18:49,800 --> 00:18:54,360 Speaker 3: need to build out the grid to support large, very 325 00:18:54,440 --> 00:19:00,680 Speaker 3: concentrated loads. Okay, and so under the inciple of sort 326 00:19:00,680 --> 00:19:06,400 Speaker 3: of causality, people, some people are commissions. Public utility commissions 327 00:19:06,440 --> 00:19:09,239 Speaker 3: will ultimately decide who's going to pay and what's going 328 00:19:09,280 --> 00:19:11,879 Speaker 3: to get author us. They look at these these new 329 00:19:12,359 --> 00:19:17,280 Speaker 3: loads that cause impacts to the system, that require upgrades 330 00:19:17,280 --> 00:19:19,600 Speaker 3: to the system. A few years ago they say, this 331 00:19:19,640 --> 00:19:22,280 Speaker 3: is great, we get this AI center. Let's all pay 332 00:19:22,280 --> 00:19:25,080 Speaker 3: for that. This is economic development. They're going to pay taxes. 333 00:19:25,320 --> 00:19:28,879 Speaker 3: And furthermore, this new load is going to be paying 334 00:19:29,000 --> 00:19:32,840 Speaker 3: for this, paying into the system because they're going to 335 00:19:32,920 --> 00:19:35,840 Speaker 3: use the grid for many, many years to come. That 336 00:19:35,920 --> 00:19:39,560 Speaker 3: consensus has shifted in the last couple of years, and 337 00:19:40,080 --> 00:19:43,879 Speaker 3: there's big questions where the you know, regulators and so 338 00:19:43,960 --> 00:19:45,760 Speaker 3: on are asking, well, okay, we're going to pay for 339 00:19:45,800 --> 00:19:49,520 Speaker 3: these upgrades, but what if you know, Meta goes away 340 00:19:49,560 --> 00:19:51,600 Speaker 3: in five years and then we got this whole system 341 00:19:51,680 --> 00:19:54,639 Speaker 3: that you know, we're all paying for and they're not 342 00:19:54,760 --> 00:19:56,640 Speaker 3: there to contribute their share. 343 00:19:56,880 --> 00:19:59,200 Speaker 2: So there's been sort of a revisiting. 344 00:19:59,119 --> 00:20:06,639 Speaker 3: And in general there's a movement toward large new loads 345 00:20:07,080 --> 00:20:13,879 Speaker 3: paying for they're required, not just punctual, you know, point 346 00:20:13,920 --> 00:20:18,119 Speaker 3: source upgrades, but large upgrades to the grid. And that 347 00:20:18,200 --> 00:20:22,760 Speaker 3: discussion is unfolding really across the country at the level 348 00:20:22,800 --> 00:20:25,639 Speaker 3: of pretty much every public utility commission around the country. 349 00:20:25,680 --> 00:20:26,840 Speaker 7: We're trying to sort this out. 350 00:20:27,280 --> 00:20:30,680 Speaker 2: So that's one sort of pay for question. 351 00:20:31,160 --> 00:20:34,000 Speaker 3: The other really big pay for question that we're trying 352 00:20:34,000 --> 00:20:36,879 Speaker 3: to sort out. And Toby Rice referred to some of 353 00:20:36,920 --> 00:20:41,760 Speaker 3: the discussions around permit reform and EPRA. If you're a 354 00:20:41,800 --> 00:20:45,080 Speaker 3: nerd like me and you followed the permit bill in 355 00:20:45,119 --> 00:20:48,120 Speaker 3: the last Congress, there were provisions in there that said, hey, 356 00:20:48,119 --> 00:20:50,800 Speaker 3: you know what, the grid is not keeping up while 357 00:20:50,840 --> 00:20:54,840 Speaker 3: we're upgrading, while we're figuring out this permitting, let's come 358 00:20:54,920 --> 00:20:59,000 Speaker 3: up with mechanisms to expand the grid, and to come 359 00:20:59,080 --> 00:21:02,800 Speaker 3: up with mechanism so that you know, beneficiaries who might 360 00:21:02,840 --> 00:21:05,240 Speaker 3: be a few states away but who might benefit from 361 00:21:05,480 --> 00:21:08,280 Speaker 3: grid upbradge, they get to contribute to that as well. 362 00:21:08,359 --> 00:21:10,960 Speaker 3: So break down some of the regional barriers that I 363 00:21:11,080 --> 00:21:15,520 Speaker 3: mentioned and come up with a national mechanism to get 364 00:21:15,520 --> 00:21:17,359 Speaker 3: the grid that we that we really need. 365 00:21:17,440 --> 00:21:20,200 Speaker 4: So clear, that's legislation that has not passed, that has 366 00:21:20,240 --> 00:21:23,000 Speaker 4: not passed and may never pass and may never pass. 367 00:21:23,080 --> 00:21:25,920 Speaker 3: But look, we talked about it before the show here 368 00:21:26,200 --> 00:21:29,000 Speaker 3: and we're all octivists up here, so we think good 369 00:21:29,040 --> 00:21:30,200 Speaker 3: things like that are going to happen. 370 00:21:30,560 --> 00:21:32,280 Speaker 2: I mean, I see you nodding over there. 371 00:21:32,280 --> 00:21:35,920 Speaker 4: I mean, are you having similar conversations with data center 372 00:21:35,960 --> 00:21:40,720 Speaker 4: providers and and I guess the question is who's paying 373 00:21:40,920 --> 00:21:46,440 Speaker 4: for for all this new new infrastructure required to accommodate them, Yes, 374 00:21:46,480 --> 00:21:48,520 Speaker 4: and is it going to be rate payers? Because I 375 00:21:48,520 --> 00:21:50,480 Speaker 4: think that's a question a lot of us are wondering about. 376 00:21:50,920 --> 00:21:53,680 Speaker 9: So affordability is always something that utilities have to think 377 00:21:53,680 --> 00:21:57,800 Speaker 9: about because we're highly regulated and so you know, all 378 00:21:57,840 --> 00:22:00,280 Speaker 9: of our costs have to be prudent and justify us 379 00:22:00,359 --> 00:22:04,160 Speaker 9: and useful, and you know, whenever there's not a lot 380 00:22:04,160 --> 00:22:06,080 Speaker 9: of jobs that are maybe brought to the community and 381 00:22:06,200 --> 00:22:08,359 Speaker 9: small community, you know, all those costs go back to 382 00:22:08,400 --> 00:22:10,200 Speaker 9: the rate payers. So depending on what kind of market 383 00:22:10,240 --> 00:22:12,639 Speaker 9: you're in and how large your service territory is and 384 00:22:12,680 --> 00:22:18,280 Speaker 9: how it impacts the residential rate the commercial rate industrials, right, 385 00:22:18,359 --> 00:22:22,320 Speaker 9: so we just have to create models, which there are 386 00:22:22,359 --> 00:22:26,600 Speaker 9: several that are out there. You know, each jurisdiction probably 387 00:22:26,680 --> 00:22:29,320 Speaker 9: does a little bit differently based on their tariffs and 388 00:22:29,400 --> 00:22:33,359 Speaker 9: their regulations. But you know, a lot of the costs 389 00:22:33,400 --> 00:22:38,120 Speaker 9: are being born back onto the data centers and oftentimes 390 00:22:38,400 --> 00:22:41,040 Speaker 9: again it's speed to market, so they're willing to pay 391 00:22:42,040 --> 00:22:45,240 Speaker 9: not saying that cost isn't important. Cost obviously is important 392 00:22:45,240 --> 00:22:49,040 Speaker 9: to everyone, but sometimes pay to play is the name 393 00:22:49,080 --> 00:22:51,440 Speaker 9: of the game, but not always the case. 394 00:22:52,520 --> 00:22:54,680 Speaker 4: Frank one to bring you in and ask you how 395 00:22:54,720 --> 00:22:58,439 Speaker 4: your business model works, because historically, energy efficiency within the 396 00:22:58,440 --> 00:23:00,639 Speaker 4: grand site of things is something that's not always easy 397 00:23:00,680 --> 00:23:03,959 Speaker 4: to get compensated for. If you're providing an efficiency service 398 00:23:04,000 --> 00:23:06,000 Speaker 4: to the grid, how do you guys lay money? 399 00:23:06,280 --> 00:23:08,880 Speaker 8: Yeah, so we're not an efficiency provider. We're not out 400 00:23:08,880 --> 00:23:12,520 Speaker 8: there managing people's thermostats, are lowering voltage to get more efficiency, 401 00:23:12,920 --> 00:23:17,920 Speaker 8: and we fundamentally allow transmission owners to get more out 402 00:23:17,920 --> 00:23:21,640 Speaker 8: of their system. And for most of our projects, those 403 00:23:21,680 --> 00:23:23,040 Speaker 8: have been rate based projects. 404 00:23:23,960 --> 00:23:25,440 Speaker 7: But I do have a couple of reflections. 405 00:23:25,480 --> 00:23:29,200 Speaker 8: I started my career as a consultant to renewable developers 406 00:23:29,680 --> 00:23:31,840 Speaker 8: and so I'm very familiar with pay to play. And 407 00:23:31,880 --> 00:23:33,840 Speaker 8: you get a study back from your ISO, except for 408 00:23:33,880 --> 00:23:40,679 Speaker 8: in Texas that says your proposed generation project is going 409 00:23:40,720 --> 00:23:44,480 Speaker 8: to increase the cost of this system because these three 410 00:23:44,520 --> 00:23:48,080 Speaker 8: lines have to be reconductor and win those costs for 411 00:23:48,200 --> 00:23:51,879 Speaker 8: minimal And you put in a five hundred megal application, 412 00:23:52,000 --> 00:23:53,720 Speaker 8: you got one three mile line that. 413 00:23:53,680 --> 00:23:54,720 Speaker 7: Need to be reconducted. 414 00:23:55,359 --> 00:23:57,520 Speaker 8: You were fine with pay to play, right, but the 415 00:23:57,960 --> 00:24:00,000 Speaker 8: generation businesses had to deal with this for a long time. 416 00:24:00,200 --> 00:24:02,640 Speaker 8: So the data center businesses could learn a lot from 417 00:24:02,720 --> 00:24:06,160 Speaker 8: that experience and the pain that those entities had. The 418 00:24:06,160 --> 00:24:09,919 Speaker 8: reality is today, it's not you come back with, oh, 419 00:24:10,000 --> 00:24:12,160 Speaker 8: it's a couple million dollars upgrade, we'll get it done 420 00:24:12,200 --> 00:24:15,480 Speaker 8: in twelve months. It's everything is so close to its limit. 421 00:24:15,520 --> 00:24:18,040 Speaker 8: Oh we think it's at its limit that you're getting 422 00:24:18,080 --> 00:24:21,320 Speaker 8: these huge sums back. And what we're seeing in the 423 00:24:21,440 --> 00:24:23,679 Speaker 8: projects we've dealt with data centers and helping data centers 424 00:24:23,680 --> 00:24:26,760 Speaker 8: get online, it's not about the dollars per se, even 425 00:24:26,760 --> 00:24:29,080 Speaker 8: though there are trade offs because they're building portfolios of 426 00:24:29,160 --> 00:24:32,480 Speaker 8: projects across multiple sites, so they will pick the best cost. 427 00:24:32,760 --> 00:24:36,040 Speaker 8: It's about the timeline. They cannot afford the timeline. So 428 00:24:36,880 --> 00:24:39,159 Speaker 8: what we need to do as an industry is find ways, 429 00:24:39,240 --> 00:24:42,280 Speaker 8: whether it's tablishry, whether it's us, whether it's other solutions 430 00:24:42,520 --> 00:24:45,600 Speaker 8: that allow you to get more out of that existing network. 431 00:24:46,040 --> 00:24:49,680 Speaker 8: So the ticket that we're handing over to the developer, 432 00:24:49,800 --> 00:24:53,520 Speaker 8: whether it's a manufacturer, data center generator, is not the 433 00:24:53,640 --> 00:24:55,679 Speaker 8: number of today, but the number of ten to fifteen 434 00:24:55,720 --> 00:24:59,479 Speaker 8: years ago, where business could proceed at a timescale that 435 00:24:59,520 --> 00:25:02,600 Speaker 8: was managed and a cost that was manageable. So that's 436 00:25:02,640 --> 00:25:05,040 Speaker 8: the first side of it. It's rate based business. But 437 00:25:05,040 --> 00:25:08,960 Speaker 8: we still have better offerings to our interconnecting partners for 438 00:25:09,040 --> 00:25:09,919 Speaker 8: progress to proceed. 439 00:25:09,960 --> 00:25:11,520 Speaker 7: We heard about that a couple panels back. 440 00:25:11,560 --> 00:25:13,560 Speaker 8: If we don't do that, we're going to lose some 441 00:25:13,600 --> 00:25:16,560 Speaker 8: of these global races. The other side of it is 442 00:25:17,000 --> 00:25:19,359 Speaker 8: in the UK market specifically, and this is only the 443 00:25:19,359 --> 00:25:20,919 Speaker 8: work that we've done. In the UK, they do have 444 00:25:20,960 --> 00:25:24,919 Speaker 8: a different regulatory model and they basically say, this is 445 00:25:24,960 --> 00:25:26,800 Speaker 8: the rate of return that we're going to allow utilities 446 00:25:26,880 --> 00:25:31,159 Speaker 8: to do to achieve for a period five ten year period. 447 00:25:31,440 --> 00:25:34,160 Speaker 8: But if you're able to achieve better performance of that 448 00:25:34,440 --> 00:25:37,800 Speaker 8: than that, because you deploy a technology that's one third 449 00:25:37,800 --> 00:25:41,119 Speaker 8: of the cost of your best in class previously, you 450 00:25:41,440 --> 00:25:43,919 Speaker 8: as a utility get to keep half of that value 451 00:25:44,280 --> 00:25:47,239 Speaker 8: and society gets to keep the other half. And what 452 00:25:47,280 --> 00:25:51,600 Speaker 8: we've seen is that the regulator will set price points 453 00:25:51,600 --> 00:25:55,679 Speaker 8: for this particular boundary Nor Texas to Central Texas. We 454 00:25:55,720 --> 00:25:58,120 Speaker 8: assume that to Adam Meg out there, it's a five 455 00:25:58,160 --> 00:26:01,199 Speaker 8: thousand dollars for that maywa if they can do it 456 00:26:01,200 --> 00:26:03,679 Speaker 8: for two thousand. They keep that delta right, and so 457 00:26:03,760 --> 00:26:06,400 Speaker 8: that's a model that has encouraged a lot of activity. 458 00:26:06,600 --> 00:26:08,760 Speaker 8: I know that's not the right model for every jurisdiction, 459 00:26:08,840 --> 00:26:11,360 Speaker 8: but I just we need to learn from others when 460 00:26:11,400 --> 00:26:13,520 Speaker 8: it makes sense that there are other models available if 461 00:26:13,560 --> 00:26:15,359 Speaker 8: you really want to incent action, and that's one of 462 00:26:15,440 --> 00:26:16,600 Speaker 8: them that has been very effective. 463 00:26:17,000 --> 00:26:22,359 Speaker 3: Yeah, that's a great point. I mean, the way we 464 00:26:22,400 --> 00:26:28,080 Speaker 3: pay for the grid in the US is typically pay 465 00:26:28,160 --> 00:26:30,719 Speaker 3: you know, you invest x dollars, you get x percent 466 00:26:30,840 --> 00:26:33,880 Speaker 3: ready to return on that and overdone. And we were 467 00:26:33,920 --> 00:26:37,520 Speaker 3: not very creative. And Frank's referring to off Chen of 468 00:26:37,600 --> 00:26:42,400 Speaker 3: the UK. They have very innovative mechanisms to where by 469 00:26:42,640 --> 00:26:45,320 Speaker 3: transmission owner bear some of the risk and get some 470 00:26:45,359 --> 00:26:48,160 Speaker 3: of the upside and that results in a system which 471 00:26:48,200 --> 00:26:49,280 Speaker 3: is less costly. 472 00:26:49,320 --> 00:26:50,560 Speaker 7: So part of the pay for is. 473 00:26:52,080 --> 00:26:54,080 Speaker 2: Figuring out who's going to pay. 474 00:26:54,240 --> 00:26:57,240 Speaker 3: And then another part of the equation that we sort 475 00:26:57,240 --> 00:27:01,199 Speaker 3: of ignore, I think at our peril is how do 476 00:27:01,280 --> 00:27:06,160 Speaker 3: we comble with with pay for mechanisms that put more 477 00:27:06,160 --> 00:27:08,600 Speaker 3: of the risk on well, on people like us, for example. 478 00:27:09,960 --> 00:27:11,960 Speaker 4: I want to bring you into the conversation as well 479 00:27:12,080 --> 00:27:15,919 Speaker 4: on this one. We're just talking about the UK. I 480 00:27:15,960 --> 00:27:19,280 Speaker 4: know tapipe's been reactive in Chile. I believe New Zealand 481 00:27:19,280 --> 00:27:21,840 Speaker 4: as well, maybe less so in the US. 482 00:27:22,040 --> 00:27:23,000 Speaker 2: Is there a reason for that? 483 00:27:23,920 --> 00:27:25,840 Speaker 6: Yeah, Well, we are US cased, so we would like 484 00:27:25,880 --> 00:27:27,240 Speaker 6: to be very active in the US. 485 00:27:27,800 --> 00:27:31,840 Speaker 5: And there are reasons, I think when we think about 486 00:27:32,480 --> 00:27:35,359 Speaker 5: the big problem, which is how do we deliver electricity 487 00:27:35,600 --> 00:27:38,199 Speaker 5: to meet humanities needs? Now we have load growth, but 488 00:27:38,240 --> 00:27:40,119 Speaker 5: we also needed to be reliable and affordable. 489 00:27:40,240 --> 00:27:41,480 Speaker 6: We have to do both of those things. 490 00:27:42,160 --> 00:27:45,320 Speaker 5: That's global certainly happening for a lot of reasons. Big 491 00:27:45,320 --> 00:27:48,600 Speaker 5: problem also means big opportunity. If you fix it, great 492 00:27:48,600 --> 00:27:51,719 Speaker 5: things will happen. There are some places in the world 493 00:27:51,800 --> 00:27:56,159 Speaker 5: that allow a company like US that starts from the 494 00:27:56,200 --> 00:27:58,879 Speaker 5: technical like, what is the technology that could unlock what 495 00:27:59,000 --> 00:28:03,800 Speaker 5: is really a systems problem? Economics, the social license, regulatory 496 00:28:03,880 --> 00:28:05,320 Speaker 5: you know, how does this business model work? 497 00:28:05,560 --> 00:28:08,440 Speaker 6: It is truly one of the deepest systems problems. 498 00:28:08,760 --> 00:28:11,119 Speaker 5: But when we thought about is there a technology that 499 00:28:11,160 --> 00:28:14,399 Speaker 5: would sort of allow us to solve this thing more efficiently? 500 00:28:14,960 --> 00:28:18,199 Speaker 5: There are places in the world that we're far easier 501 00:28:18,200 --> 00:28:20,160 Speaker 5: for Tapestry to start learning as quickly as. 502 00:28:20,080 --> 00:28:22,000 Speaker 6: We could if our technology was useful. 503 00:28:22,359 --> 00:28:24,479 Speaker 5: I say all the time, you know, the physics are 504 00:28:24,480 --> 00:28:27,000 Speaker 5: the physics when I simulate a grid, the laws of 505 00:28:27,000 --> 00:28:30,359 Speaker 5: physics in New Zealand, we work in the UK, in 506 00:28:30,640 --> 00:28:33,680 Speaker 5: New Jersey, in Chile, those are the laws of physics. 507 00:28:33,920 --> 00:28:36,159 Speaker 5: And so the faster that I can learn what is 508 00:28:36,200 --> 00:28:39,320 Speaker 5: going to happen when you know, three wind farms are 509 00:28:39,680 --> 00:28:40,920 Speaker 5: located next to each other. 510 00:28:40,800 --> 00:28:42,239 Speaker 6: And it's a hot day and we have a lot 511 00:28:42,280 --> 00:28:43,000 Speaker 6: of electric. 512 00:28:42,800 --> 00:28:45,719 Speaker 5: Vehicles, then the next grid doesn't have to learn that 513 00:28:45,760 --> 00:28:49,600 Speaker 5: same lesson or wait and simulate and test. 514 00:28:49,800 --> 00:28:51,760 Speaker 6: We just say this is what happens. We've seen this, 515 00:28:51,800 --> 00:28:52,360 Speaker 6: we model this. 516 00:28:52,800 --> 00:28:56,160 Speaker 5: And so the reason Tapestry, you know, looked at, you know, 517 00:28:56,200 --> 00:28:58,080 Speaker 5: outside of the US to start is what is the 518 00:28:58,080 --> 00:29:01,760 Speaker 5: fastest place that I can learn and how can I 519 00:29:01,800 --> 00:29:05,080 Speaker 5: scale that learning? And Chile was an incredible example. We 520 00:29:05,120 --> 00:29:09,480 Speaker 5: work with the National System Operator there. They have a 521 00:29:09,520 --> 00:29:13,560 Speaker 5: system that is similar to URKAT, which where interconnection ques aren't. 522 00:29:13,320 --> 00:29:14,120 Speaker 6: As big of an issue. 523 00:29:14,160 --> 00:29:17,040 Speaker 5: It's it's you show up, you connect to the grid, 524 00:29:17,080 --> 00:29:19,160 Speaker 5: and you manage what happens afterwards. 525 00:29:20,440 --> 00:29:23,880 Speaker 6: Their issue was planning, expansion planning, and so. 526 00:29:25,040 --> 00:29:30,240 Speaker 5: The data about their national grid is publicly available. I'm 527 00:29:30,280 --> 00:29:32,560 Speaker 5: not advocating for or against. It is just a statement 528 00:29:32,600 --> 00:29:34,240 Speaker 5: of fact. When I looked at how could I learn 529 00:29:34,280 --> 00:29:36,960 Speaker 5: as quickly as possible, we were like, wow, we can 530 00:29:36,960 --> 00:29:39,800 Speaker 5: start simulating this grid tomorrow, you know, loosely, and then 531 00:29:39,840 --> 00:29:42,680 Speaker 5: what I can learn, you know, benefits that the Chilean 532 00:29:42,960 --> 00:29:44,840 Speaker 5: you know, citizens and national and grid. But also I 533 00:29:44,840 --> 00:29:48,760 Speaker 5: can take those lessons, those technology lessons outside, and so 534 00:29:48,840 --> 00:29:50,320 Speaker 5: when I think about things that we can do in 535 00:29:50,320 --> 00:29:53,080 Speaker 5: the US, we have to make it easier to innovate. 536 00:29:53,360 --> 00:29:57,600 Speaker 5: We've got incredibly brilliant people building amazing things that are 537 00:29:57,640 --> 00:30:00,840 Speaker 5: getting stuck with, you know, even. 538 00:30:00,640 --> 00:30:02,960 Speaker 6: Something as simple and road as the procurement. 539 00:30:02,480 --> 00:30:05,800 Speaker 5: Process like the by the time you fill out your 540 00:30:05,880 --> 00:30:08,320 Speaker 5: form of how you're going to apply AI to transform 541 00:30:08,360 --> 00:30:11,720 Speaker 5: the network, it's two years after you fill out the form. 542 00:30:11,520 --> 00:30:12,920 Speaker 6: And the technology is already outdated. 543 00:30:13,520 --> 00:30:16,840 Speaker 5: And that is unacceptable for in my opinion, for a 544 00:30:16,920 --> 00:30:20,000 Speaker 5: challenge this big. And so yes, we have looked Tapestry 545 00:30:20,040 --> 00:30:22,400 Speaker 5: is looked outside the US to start, and we're super 546 00:30:22,440 --> 00:30:25,200 Speaker 5: excited about bringing those lessons as quickly as we can, 547 00:30:26,000 --> 00:30:27,800 Speaker 5: you know, sort of globally. And now we're working in 548 00:30:28,080 --> 00:30:31,120 Speaker 5: the US in PJAM which which for those of you 549 00:30:31,160 --> 00:30:33,000 Speaker 5: who spend a lot of time in the US will 550 00:30:33,000 --> 00:30:35,160 Speaker 5: know that's sort of the northeastern part of the grid. 551 00:30:36,120 --> 00:30:40,320 Speaker 5: Seventy percent of the world's Internet runs through that network, 552 00:30:41,200 --> 00:30:45,520 Speaker 5: and you know, sixty seven million people interconnection queue you know, 553 00:30:45,680 --> 00:30:49,240 Speaker 5: years long and so long that PJM had to sort 554 00:30:49,280 --> 00:30:51,680 Speaker 5: of say, we can't look at these these applications as 555 00:30:51,720 --> 00:30:55,000 Speaker 5: quickly as we'd like to. And so that's what Tapestry 556 00:30:55,040 --> 00:30:57,240 Speaker 5: is working on now, is we're applying some of the 557 00:30:57,240 --> 00:31:01,280 Speaker 5: best technology that we can possibly sort of discover. And 558 00:31:01,320 --> 00:31:05,000 Speaker 5: by the way, that is changing every two weeks. I mean, 559 00:31:05,280 --> 00:31:10,160 Speaker 5: you really need to understand how quickly technology is moving 560 00:31:10,280 --> 00:31:10,720 Speaker 5: right now. 561 00:31:10,960 --> 00:31:11,320 Speaker 2: It is. 562 00:31:11,400 --> 00:31:13,840 Speaker 5: It is breakneck and it is amazing if we use 563 00:31:13,840 --> 00:31:16,240 Speaker 5: it properly, and we're we're moving as quickly as we 564 00:31:16,280 --> 00:31:19,680 Speaker 5: can to apply that technology to this incredible challenge of 565 00:31:19,720 --> 00:31:23,240 Speaker 5: looking at interconnection cues and transmission planning in pj M 566 00:31:23,720 --> 00:31:25,400 Speaker 5: and for us on the on the on the kind 567 00:31:25,400 --> 00:31:28,520 Speaker 5: of who who pays for this? We think about we 568 00:31:28,560 --> 00:31:30,640 Speaker 5: have got to build more, of course, you know, we 569 00:31:30,680 --> 00:31:31,280 Speaker 5: have load growth. 570 00:31:31,360 --> 00:31:32,920 Speaker 6: We have a lot to do and we need to 571 00:31:32,920 --> 00:31:35,040 Speaker 6: do it quickly, and we've got to use more of 572 00:31:35,080 --> 00:31:35,400 Speaker 6: what we have. 573 00:31:35,680 --> 00:31:38,200 Speaker 5: I mean, it's just really sort of basic first principles, 574 00:31:38,520 --> 00:31:39,280 Speaker 5: use more of what we have. 575 00:31:39,920 --> 00:31:40,000 Speaker 2: Uh. 576 00:31:40,240 --> 00:31:42,440 Speaker 6: And I always think, can I turn more nose into 577 00:31:42,480 --> 00:31:42,800 Speaker 6: a yes? 578 00:31:42,840 --> 00:31:44,440 Speaker 5: If someone says I want to connect to the grid 579 00:31:44,480 --> 00:31:47,320 Speaker 5: and the answer comes back, hopefully it's not years later. 580 00:31:47,400 --> 00:31:48,920 Speaker 5: Let's say we can do it in a couple of days, 581 00:31:49,480 --> 00:31:51,480 Speaker 5: and the answer comes back, No, it shouldn't be. 582 00:31:51,520 --> 00:31:53,480 Speaker 6: I don't know why it should be. Here are ten 583 00:31:53,520 --> 00:31:55,400 Speaker 6: things you can do to make it a yes. You 584 00:31:55,440 --> 00:31:57,600 Speaker 6: could use you know, these other technologies. And so that's 585 00:31:57,640 --> 00:32:00,160 Speaker 6: how we think about applying lessons. 586 00:32:00,600 --> 00:32:04,240 Speaker 2: Great At the risk of being the skunk at the picnic. 587 00:32:04,280 --> 00:32:07,640 Speaker 4: Here for a second, We've heard all morning about this 588 00:32:07,680 --> 00:32:10,520 Speaker 4: incredible demand growth for AI, and I'm struck by just 589 00:32:10,600 --> 00:32:12,440 Speaker 4: how quickly this conversation has. 590 00:32:12,400 --> 00:32:14,480 Speaker 2: Changed about sort of load growth, load. 591 00:32:14,240 --> 00:32:17,600 Speaker 4: Growth in the last eighteen months or so. What if 592 00:32:17,640 --> 00:32:20,920 Speaker 4: we wake up tomorrow and it turns out that, let's say, 593 00:32:20,920 --> 00:32:24,520 Speaker 4: the next Nvidia chip is unbelievably more efficient, or it 594 00:32:24,560 --> 00:32:26,600 Speaker 4: turns out there isn't as much demand for all these 595 00:32:26,640 --> 00:32:29,280 Speaker 4: AI services as we think, where does that leave all 596 00:32:29,280 --> 00:32:32,160 Speaker 4: of you in the transmission and systems game? 597 00:32:32,240 --> 00:32:36,200 Speaker 2: I mean, really quick, Michael, if you yes, so, first racket. 598 00:32:36,720 --> 00:32:40,040 Speaker 3: So we study that, we run scenarios on it, and 599 00:32:40,160 --> 00:32:45,240 Speaker 3: our lines are valuable to the system with or without 600 00:32:45,280 --> 00:32:48,840 Speaker 3: this big load growth. That's sort of the quick answer. 601 00:32:49,120 --> 00:32:52,080 Speaker 3: And then I think the national answer to that question 602 00:32:52,240 --> 00:32:56,120 Speaker 3: is it's the devil is in the details of who 603 00:32:56,320 --> 00:32:59,800 Speaker 3: is paying these incremental costs to the system. And if 604 00:32:59,840 --> 00:33:04,480 Speaker 3: it an AI provider and they're paying for the upgrades 605 00:33:05,040 --> 00:33:07,560 Speaker 3: and they don't show up, then thank you very much, 606 00:33:07,640 --> 00:33:10,800 Speaker 3: y'all we get some no free grid stuff. 607 00:33:12,360 --> 00:33:12,880 Speaker 2: Frank Send. 608 00:33:13,240 --> 00:33:15,760 Speaker 7: Yeah, So I would say that. 609 00:33:17,200 --> 00:33:23,560 Speaker 8: AI maybe there's fifty gigawatts of declared interconnection capacity that's 610 00:33:23,680 --> 00:33:26,360 Speaker 8: in the queue. There's another maybe sixty behind the meter. 611 00:33:26,600 --> 00:33:28,240 Speaker 8: It's a debatable. It's hard to know what's behind the 612 00:33:28,280 --> 00:33:31,440 Speaker 8: meta right now. Self supply, I just want to remind 613 00:33:31,440 --> 00:33:34,240 Speaker 8: folks that we have two point three terra watts of 614 00:33:34,640 --> 00:33:38,200 Speaker 8: generation in the queue right now, so twenty three hundred gigawats. 615 00:33:38,400 --> 00:33:42,800 Speaker 8: So we're gonna have plenty to do on the generation side, 616 00:33:42,840 --> 00:33:46,200 Speaker 8: even if AI doesn't connect at the levels that people 617 00:33:46,280 --> 00:33:49,200 Speaker 8: are thinking about. And then you've got the whole manufacturing sector, 618 00:33:49,240 --> 00:33:51,840 Speaker 8: you've got electrification more broadly, like there's a lot of 619 00:33:51,880 --> 00:33:54,760 Speaker 8: activity that's placing stress on the system, and people have 620 00:33:54,760 --> 00:33:57,280 Speaker 8: been talking about those stresses well before AI showed up. 621 00:33:57,640 --> 00:34:00,280 Speaker 8: We're really happy to be working with AI partners bring 622 00:34:00,320 --> 00:34:03,959 Speaker 8: an urgency to the equation that wasn't there before and 623 00:34:04,000 --> 00:34:06,640 Speaker 8: it's been great and we've helped a number of parties 624 00:34:06,960 --> 00:34:09,880 Speaker 8: in pgen elsewhere solve those solutions. 625 00:34:09,960 --> 00:34:13,600 Speaker 7: But it's not the only thing that's happening in this sector. 626 00:34:13,920 --> 00:34:14,839 Speaker 2: Lead the same for you. 627 00:34:14,880 --> 00:34:17,080 Speaker 4: Poles and wires are going to be needed, like just 628 00:34:17,120 --> 00:34:18,879 Speaker 4: the demand is going to rise, regardless. 629 00:34:20,320 --> 00:34:22,279 Speaker 9: I didn't hear that last part, but I think the 630 00:34:22,360 --> 00:34:25,840 Speaker 9: question was what happens if we become more efficient, do 631 00:34:25,880 --> 00:34:29,279 Speaker 9: we still need all this poles, wires, transmission? And I 632 00:34:29,280 --> 00:34:32,239 Speaker 9: think the short answer is absolutely. You know, just as 633 00:34:32,239 --> 00:34:36,839 Speaker 9: an example again, I'll lean on Texas Houston. While we've 634 00:34:36,840 --> 00:34:41,680 Speaker 9: seen such enormous growth in certain technology sectors advanced manufacturing, 635 00:34:42,120 --> 00:34:44,560 Speaker 9: I mean, we've seen growth here in a lot of 636 00:34:44,600 --> 00:34:48,479 Speaker 9: other segments that we're so diversified, whether it's gas and oil, 637 00:34:48,520 --> 00:34:54,080 Speaker 9: whether it's medical logistics, electrification, whether it's on the industrial 638 00:34:54,120 --> 00:34:58,120 Speaker 9: side or the ev side, transportational electrification. There's just so 639 00:34:58,320 --> 00:35:02,160 Speaker 9: much happening all the time. I mean, there's certainly enough 640 00:35:03,400 --> 00:35:04,160 Speaker 9: to go around. 641 00:35:05,080 --> 00:35:07,160 Speaker 2: Okage anything to add on that, No, I would just. 642 00:35:07,080 --> 00:35:10,279 Speaker 6: Say, let's think about what the point? 643 00:35:10,360 --> 00:35:10,919 Speaker 2: What is the point? 644 00:35:10,960 --> 00:35:13,080 Speaker 5: I mean if you were at this conference three years 645 00:35:13,080 --> 00:35:15,480 Speaker 5: ago we had been talking about bitcoin mining and blockchain. 646 00:35:15,520 --> 00:35:17,560 Speaker 6: Oh my gosh, is what's gonna happen with crypto? How's 647 00:35:17,600 --> 00:35:18,720 Speaker 6: the grid going to handle it? 648 00:35:18,760 --> 00:35:19,400 Speaker 7: Is it too big? 649 00:35:19,600 --> 00:35:21,560 Speaker 6: Then it was electric vehicles and now it's AI. 650 00:35:21,760 --> 00:35:24,239 Speaker 5: And yes, AI is a big low and growth, but 651 00:35:24,880 --> 00:35:26,080 Speaker 5: we need more electricity. 652 00:35:26,120 --> 00:35:26,400 Speaker 2: Period. 653 00:35:26,480 --> 00:35:29,560 Speaker 6: Let's get to solving it and figure out as we're 654 00:35:29,560 --> 00:35:29,839 Speaker 6: in it. 655 00:35:30,239 --> 00:35:32,840 Speaker 2: Please join me and thanking. This's excellent panel. 656 00:35:33,000 --> 00:35:41,480 Speaker 4: I think we troubled a lot of ground. 657 00:35:44,360 --> 00:35:47,479 Speaker 1: Today's episode of Switched On was produced by Cam Gray 658 00:35:47,719 --> 00:35:51,320 Speaker 1: with production assistance from Kamalas Shelling. Bloomberg n EF is 659 00:35:51,360 --> 00:35:54,440 Speaker 1: a service provided by Bloomberg Finance LP and its affiliates. 660 00:35:54,520 --> 00:35:57,200 Speaker 1: This recording does not constitute, nor should it be construed 661 00:35:57,239 --> 00:36:01,040 Speaker 1: as investment and vice investment recommendations, or a recommendation as 662 00:36:01,080 --> 00:36:03,920 Speaker 1: to an investment or other strategy. Bloomberg ANNIAFF should not 663 00:36:03,960 --> 00:36:06,960 Speaker 1: be considered as information sufficient upon which to base an 664 00:36:07,040 --> 00:36:10,160 Speaker 1: investment decision. 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