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Speaker 2: In terms of earnings outs, it's another big day for
Speaker 2: the big banks Bank of America and Morgan Stanley Alson
Speaker 2: Williams joins us. She is the senior bank analyst for
Speaker 2: Bloomberg Intelligence. She is the expert on these big banks. Alex,
Speaker 2: let's start with one of my former employers, Bank of America,
Speaker 2: Merrill Lynch. I'm going to keep that name in the
Speaker 2: in the name, there wouldn't be an investment bank that
Speaker 2: work for Merrill Lynch.
Speaker 3: Talk to us about what we saw the Bank of America, Allison, So.
Speaker 4: I think the Merrill Lynch side of things did very well,
Speaker 4: so making you proud there. Thank the wild fees came
Speaker 4: in better than expected. Equities trading and equities fees also
Speaker 4: better than expected. So continuing to build on some of
Speaker 4: those investments in the investment banks. So everything going well there,
Speaker 4: and actually on the net interest income sort of a
Speaker 4: standout result in the sense that their net interest income
Speaker 4: actually increased from the prior quarter. It was better than expected.
Speaker 4: So that all sounded great until we got to the
Speaker 4: conference call and the bank really just kept their guidance
Speaker 4: study and so I think that's what the stock maybe
Speaker 4: reacting to today. But really, I mean, that's consistent with
Speaker 4: the other banks, and frankly, I think makes sense. We
Speaker 4: had look at the change we had since the last
Speaker 4: time the banks reported. Last time they reported, it was
Speaker 4: six to seven cuts expected. Today, I mean it's been
Speaker 4: three and drifting lower, right, So those expectations keep getting
Speaker 4: pushed out, and with things changing so dramatically, I don't
Speaker 4: think it's surprising that they kept their guidance stable. I
Speaker 4: would point out that their guidance is a little bit
Speaker 4: more positive in the sense that they do expect growth
Speaker 4: in the second half. I think just maybe ahead of
Speaker 4: the call, people got excited and thought, you know, could
Speaker 4: we have already seen the trough and they're saying, no,
Speaker 4: second quarter is going to.
Speaker 3: Be the troughs.
Speaker 5: Maybe it was the seventeen uses of strong in a
Speaker 5: statement that kind of raised that expectation. Also, what was interesting, though,
Speaker 5: was the charge off so that increased by about three
Speaker 5: hundred and six million dollars to one and a half billion.
Speaker 5: Can you talk us through I know that's the that's
Speaker 5: the bank side of the business, the everyday banker side
Speaker 5: of the business.
Speaker 6: But what's that what's that going on there?
Speaker 4: And that you know, that is the other part of it.
Speaker 4: And so you know, when we think about core lending income,
Speaker 4: it's the net interest income is the revenue side, and
Speaker 4: provisions are a key part of the cost side of things.
Speaker 4: Obviously operating costs the other part. And what we saw
Speaker 4: was charge us came men higher than expected. Part of
Speaker 4: that was Card. We do expect that from Card. It's
Speaker 4: a seasonally higher quarter. Delinquencies tend to be lower, and
Speaker 4: they are signaling improvement from here. So that's a negative.
Speaker 4: But as I said, sort of in line with the
Speaker 4: trends on the commercial real estate, charge offs higher than expected,
Speaker 4: and the bank talked about changing some of their revaluation
Speaker 4: and their models sort of feeding into this. But basically,
Speaker 4: you know, looking forward to the future quarters, they think
Speaker 4: that things might look a little bit better, but for
Speaker 4: the quarter, things weaker. On commercial real estate. We know
Speaker 4: that that's a hot button issue for investors. It's something
Speaker 4: we've said, it's going to be a long story to
Speaker 4: play out, so sometimes a little better, sometimes a little worse.
Speaker 4: But Wells Fargo we did actually see some improvement in
Speaker 4: their non performers, and so I think that was more
Speaker 4: negative for Bank of America.
Speaker 3: Also, what is Bank of America saying about loan growth?
Speaker 3: I mean, are their.
Speaker 2: Corporate bankers are they making loans or do the customers
Speaker 2: need capital?
Speaker 3: What are they seeing they are?
Speaker 4: But it's your friends at Merrill Lynch that are making
Speaker 4: the loans and not you know, sort of that middle back,
Speaker 4: middle market, asset based type of business. So we saw,
Speaker 4: you know, the debt issue ince this quarter we saw
Speaker 4: very strong and we've heard mixings from banks in terms
Speaker 4: of if they think some of that has been pulled forward.
Speaker 4: But the bottom line is capital markets very strong, but
Speaker 4: you know, the bread and butter lending business, those loan
Speaker 4: balances coming in weak and weaker than expected. And so
Speaker 4: that's another piece to the interest income is you know,
Speaker 4: how much of it relates to securities and higher yielding securities,
Speaker 4: whereas the loan growth you know, has been weak, and
Speaker 4: if we don't get those fed cuts, you know, are
Speaker 4: we going to get some improvement, and so Bank of
Speaker 4: America I think has some improvement baked into its net
Speaker 4: interest income guidance. But I think there could be some
Speaker 4: skepticism out there, you know, if the rates stay high.
Speaker 4: You know, we're already seeing that impacting demand. Could that
Speaker 4: continue to be soft?
Speaker 5: And then wrapping up here, Morgan Stanley, that stocks up
Speaker 5: by about three point seven percent.
Speaker 6: What stood out to you? They seem to kind of
Speaker 6: fire on all the cylinders they did.
Speaker 4: I mean, they delivered on all of their key metrics.
Speaker 4: Number one, the wealth flows. We had really strong wealth
Speaker 4: flows first half of last year. That's softened, so we're
Speaker 4: showing a little bit of a rebound. So that's definitely
Speaker 4: a positive. Equity trading coming in better than expected, Equity
Speaker 4: fees coming in better than expected pretty much, you know,
Speaker 4: all of the investment banking lines except for M and
Speaker 4: A coming in better, so that's all good. And then
Speaker 4: the profit margin, which is the other key thing investors
Speaker 4: focus on, coming in you know, about twenty six percent,
Speaker 4: and so that's in line with the revised guidance. Keep
Speaker 4: in mind they do have a thirty percent target near term.
Speaker 4: They said, excuse me, long term near term, they said
Speaker 4: it's going to be a little bit lower because of investments,
Speaker 4: So coming in beating the consensus and within their target.
Speaker 4: So you know, there are some select modest negatives in
Speaker 4: the quarter, but in general hitting all the high points
Speaker 4: and some I think restoring some confidence for Morgan Stanley.
Speaker 2: So Allison, where are we just in terms of the
Speaker 2: big investment banks in terms of headcount? Are they where
Speaker 2: they need to be? Do they need more downsizing?
Speaker 3: Where are they?
Speaker 4: I think, Paul that really is going to depend on
Speaker 4: if we can get some sustained momentum investment banking fees.
Speaker 4: So you know, all the managements generally spoke very positively
Speaker 4: in terms of what we're seeing, you know, talking about
Speaker 4: the IPO is getting better reception. Maybe there's some better
Speaker 4: outlook there. Morgan Stanley today just talking about the fact
Speaker 4: that you know, at some point companies need to execute
Speaker 4: on things that they need to do in terms of
Speaker 4: either going public or doing deals, et cetera. But I
Speaker 4: do think that a lot of the headcount has really
Speaker 4: been conservative in terms of the cuts we've seen since
Speaker 4: the boom, because we had such a scramble in that
Speaker 4: you know, record a twenty twenty one time period. As
Speaker 4: you recall all the headline stories about the scramble for
Speaker 4: talent and ratcheting up of pay of junior talent, and
Speaker 4: so it's really going to depend on if we can
Speaker 4: see that sustained momentum and investment banking, and then that
Speaker 4: that headcount gets put to work. If we are disappointed,
Speaker 4: there could be sort of another look at things.
Speaker 5: Unfortunately, and didn't they all they paid up for that though,
Speaker 5: right Like I feel like they had to definitely shell
Speaker 5: out the money to those bankers this quarter in a
Speaker 5: different way, No.
Speaker 4: And compensate revenue in general has been a lot stickier,
Speaker 4: and so we definitely saw that last year. This quarter
Speaker 4: we saw the compensation ratios coming in, you know, about
Speaker 4: in line, showing some good cost control at companies like
Speaker 4: Morgan Stanley and Goldman where we have the most visibility. However,
Speaker 4: keep in mind it was a really strong revenue quarter,
Speaker 4: so again we're going to want to see that revenue
Speaker 4: continue to support the compensation.
Speaker 3: Hey, just real quickly thirty seconds.
Speaker 2: I see the City Group is the best performing of
Speaker 2: the big banks here here to date. Is this finally
Speaker 2: Jane Fraser getting listening moving?
Speaker 4: I mean I think it is, and I think they
Speaker 4: do have you know, they have a positive story and
Speaker 4: they have the most potential for improvement. So even though
Speaker 4: their returns are the weakness, they have a path and
Speaker 4: you know, Jane Frasier really making some tough moves. We
Speaker 4: know that City Group has been you know, a story
Speaker 4: of restructuring it seems like forever, but really making some
Speaker 4: dramatic cuts and layers, you know, focusing on the core businesses,
Speaker 4: you know, really taking an acts to some poor markets.
Speaker 4: So I think there there is a story there.
Speaker 3: Also.
Speaker 4: Credit Card, as we said, you know, we've talked about
Speaker 4: cart is the business that's growing in loans, not the
Speaker 4: commercial and so that's helping City Group.
Speaker 3: They're the most exposed. They're a big player there. Yep.
Speaker 2: All right, Allison, great stuff has always Alison Williams, senior
Speaker 2: bank analysts for Bloomberg Intelligence breaking down some of the
Speaker 2: big banks again today Morgan Stanley Bank of America.
Speaker 3: We had JP Morgan.
Speaker 2: Last week, So some pretty solid results coming out of
Speaker 2: the big banks.
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Speaker 5: So we're here at the Bloomberg and EF Annual Energy
Speaker 5: and Climate Summit. So it brings together corporate executives, government officials,
Speaker 5: industry leaders to talk about the stuff that's going on
Speaker 5: in the energy industry, in particular clean power, trade, federal
Speaker 5: US policy, hydrogen, clean tech, all the stuff. Now, a
Speaker 5: key figure in all of this comes from DC and
Speaker 5: his name is David Crane. He's Under Secretary for Infrastructure
Speaker 5: in the US Department for Energy. He was also CEO
Speaker 5: of NRG for about twelve years back in the day.
Speaker 5: And his job is to make all of this stuff
Speaker 5: work in a realistic fashion.
Speaker 6: Good luck, David, that's a gun.
Speaker 3: Thank you. Well. I said, there's a lot of stuff, a.
Speaker 6: Lot of stuff.
Speaker 5: So something was you had a speech and a panel
Speaker 5: and something that you said that really stuck out. You said,
Speaker 5: demand growth in the US for power is going to
Speaker 5: be more than we thought for the last ten years.
Speaker 5: So twenty twelve to twenty twenty two, power demand was
Speaker 5: up just fifty basis points a year, and now we're
Speaker 5: looking at five to six percent a year.
Speaker 6: I tell that to Paul and his eyes glaze over.
Speaker 6: But it's really important. What does that actually mean?
Speaker 7: Well, five to six percent in our world is huge.
Speaker 7: I mean that's that's like tiger economies from the nineteen nineties.
Speaker 7: And because of the long lead time of most things
Speaker 7: in the electricity sector, those five to six percent per
Speaker 7: year pile up if you're not if you're not getting
Speaker 7: after it. So what it means is and what's very
Speaker 7: important all this as we look at these transitioning to
Speaker 7: the clean energy economy, all these new technologies, is you
Speaker 7: always have to ask the time question, what you need
Speaker 7: and what time frame, and what are the solutions that
Speaker 7: fit that land within that time frame?
Speaker 3: You know.
Speaker 2: A couple of summers ago, my summer read was the
Speaker 2: Grid Frame Wires between Americans and our Energy Future. I
Speaker 2: read that on the beach and people are laughing me
Speaker 2: like a geek. So I feel like I know what
Speaker 2: I'm talking about here, and what I know is we
Speaker 2: need constant investment in our energy grid. And if Alex
Speaker 2: is right, the energy demand is going to keep increasing.
Speaker 3: That's even more so.
Speaker 2: What are some of the key issues that you need
Speaker 2: to tackle or trying to tackle at least in the
Speaker 2: short term.
Speaker 7: Here, Well, first of all, I need to tackle what
Speaker 7: your summer reading is each Paul, I think you got
Speaker 7: to get a life exactly.
Speaker 3: If that's what.
Speaker 7: I think, well, I mean one big one, the missing link,
Speaker 7: and I mentioned this on stage as well, is permitting reform.
Speaker 7: I mean, we're very supportive permitting reform. It takes a
Speaker 7: lot of different permutations. I'm personally not a policy person.
Speaker 7: I'm the implementation person. But we just need to do
Speaker 7: things faster because just the scale of infrastructure that exists
Speaker 7: under this new legislation, just in my area, by the
Speaker 7: end this year, we will have invested in over one
Speaker 7: hundred infrastructure projects that are over one hundred million dollars
Speaker 7: each and so we're straining the system in many different ways.
Speaker 7: But permitting it should not be the bottleneck.
Speaker 5: So to break that down a little bit. When we
Speaker 5: say permitting, what are we talking about? I say that
Speaker 5: in terms of like, are we going to have to
Speaker 5: move power lines underground? For example, do we need more
Speaker 5: transmission lines if we're going to set up that hydrogen
Speaker 5: hub or a new nuclear facility, and we need to
Speaker 5: get that to the grid. Does it mean we need
Speaker 5: to just try less start over and like do a
Speaker 5: new grid. Like there's a lot of ways that infrastructure
Speaker 5: can be used. What does it actually mean for you?
Speaker 7: Well, of the two that you mentioned specifically, any of them, okay, Well,
Speaker 7: I would leave aside undergrounding wires because that's more of
Speaker 7: a climate mitigation thing.
Speaker 3: It's where you need to do it.
Speaker 7: It's very important. But in terms of solving the demand issue,
Speaker 7: the transmission thing breaks into sort of two parts, and
Speaker 7: the answer is yes and yes we need both. One
Speaker 7: is we need more transmission lines to move the energy
Speaker 7: around the country or at least around regions. But then
Speaker 7: we also need this thing which is grid innovation, which
Speaker 7: is a series of technologies which are not in the
Speaker 7: popular mindset, things like reconductoring, where you basically taking existing
Speaker 7: rights away in the towers and you take down the
Speaker 7: ceramic circular things and in some cases the wires and
Speaker 7: you what we call reconductoring, and you can get two
Speaker 7: to three times the amount of power over the same
Speaker 7: line and you don't need a ride away. It's cheaper
Speaker 7: and that's good for rate payers. And we just in
Speaker 7: fact publish a report about this today at the DOE
Speaker 7: called the Grid Innovation Liftoff Report, and so there's that,
Speaker 7: and there's a host of other things, but basically we
Speaker 7: need all of the above right now.
Speaker 2: And is this a federal funded issue or is this
Speaker 2: a federal end state issue?
Speaker 3: Doesn't go how local does it get? Because I think of.
Speaker 2: Texas with its own grid, and I'm wondering how should
Speaker 2: they be integrated, for example, the national grid.
Speaker 7: I mean going to want that, Yeah, exactly, Yeah, Paul,
Speaker 7: that's what I'm not touching. I mean, there's a reason
Speaker 7: that Texas is a sovereign onto itself when it comes
Speaker 7: to their electric system. But most so, we have a
Speaker 7: lot of financing tools in the tool chest, but most
Speaker 7: of them are set up as sort of matching funds.
Speaker 7: We put up up to fifty percent against fifty percent
Speaker 7: coming from basically anywhere else that's not federal government. So
Speaker 7: we say fifty plus percent from non federal sources, and
Speaker 7: if it states, if it's the private sector, that's all
Speaker 7: good with us.
Speaker 6: And that's what you need to see in order to
Speaker 6: commit the money after that. Yes, yeah, so how does
Speaker 6: this all square?
Speaker 5: So the stuff you're talking about, like reconstituting the grid
Speaker 5: like that, Like that's not sexy cool stuff like clean
Speaker 5: tech and hydrogen.
Speaker 6: Right, how much of your job.
Speaker 5: Is on the energy that we're going to need in
Speaker 5: fifty years, and how much of that is how do
Speaker 5: we get more transmission mechanisms, how do we get that
Speaker 5: plug that we can't get so we can change the grid?
Speaker 7: You know, Alex, I was getting a little hung up
Speaker 7: on what's actually sexy in the world of electricity. But
Speaker 7: I'm glad that you can distinguish between hydrogen on one
Speaker 7: in transmission. But what I'd say is, first of all,
Speaker 7: nothing that if I thought that what I was doing
Speaker 7: was just affecting the twenty fifty like you know, at
Speaker 7: my age, I wouldn't be doing it.
Speaker 3: But we are.
Speaker 7: We're aiming for the Biden administration goal of zero carbon
Speaker 7: electric sector by twenty thirty five, and so, but you're
Speaker 7: the premise of your question is correct because of this
Speaker 7: new awareness of demand issues. I would say that what
Speaker 7: I've been focused on my two years at the DOE
Speaker 7: is what does the system look like sort of between
Speaker 7: twenty twenty eight to twenty thirty five, first of a kind,
Speaker 7: fast following commercial but because of this new concern, I
Speaker 7: think we're gonna be even looking at more three to
Speaker 7: five year solutions. And that's where things like the grid
Speaker 7: innovations are important, because that's a three to five year solution.
Speaker 2: David, what are you seeing from the major utility companies
Speaker 2: in the United States? Are they making the investments they
Speaker 2: need to make to make this transition?
Speaker 6: Will they be allowed to maybe allow exactly.
Speaker 7: Well, it's I mean, first of all, I think what
Speaker 7: I would say just in the last year and talking
Speaker 7: to the utility cos and I would bet a lot
Speaker 7: of money that you're going to be talking to some
Speaker 7: here on your show today so they can probably speak
Speaker 7: for themselves, is first of all, there's now universal concern
Speaker 7: about this, where that didn't exist a year before. I
Speaker 7: think they're still in the situation where their chief financial
Speaker 7: officers are saying, look, this is a really expensive time
Speaker 7: to raise money in the private sector. And we have
Speaker 7: a program within our Loan Program Office called the seventeen
Speaker 7: oh six program, which utilities qualify for and at current
Speaker 7: prevailing interest rates, the interest advantage, but I'm told by
Speaker 7: utilities is somewhere between one hundred and fifteen and two
Speaker 7: hundred basis points and we go large. I mean, we
Speaker 7: have two hundred and fifty billion dollars of loan capacity.
Speaker 7: So we're working with a bunch of utilities to see
Speaker 7: if that could become part of their cap structure. But
Speaker 7: as you say, they're under pressure not to raise rates.
Speaker 7: And it's just the nature of investment in electric infrastructure
Speaker 7: is like you build something today, you know it has
Speaker 7: to be paid for today. The benefits of it, you know,
Speaker 7: play out over fifty years.
Speaker 3: But so it is attention.
Speaker 7: But no one wants to run out of power.
Speaker 5: No, And I guess one of the key issues that
Speaker 5: I feel like has really pivoted interest in the sector
Speaker 5: is AI and data centers. Right, Like we all knew
Speaker 5: you got to plug in an EV that's going to
Speaker 5: use electricity. We all knew that stuff. But now that
Speaker 5: people really seem to care, because tech companies care. Do
Speaker 5: you spend a lot of time talking in tech companies?
Speaker 5: Do they call you oral they call someone else in
Speaker 5: your office?
Speaker 7: Increasingly? If you would, I would say, you know the
Speaker 7: dee why I got their head? Sort of their natural constituencies,
Speaker 7: like you know, traditional energy companies, new energy companies, but
Speaker 7: the tech companies have loomed larger and larger and have
Speaker 7: become more and more frequent visitors and at very high
Speaker 7: levels too, not just you know, the data center person,
Speaker 7: like the senior executives of these and that's very important
Speaker 7: because I think they're a huge partner in this. And
Speaker 7: you know, the thing about electricity is we always say
Speaker 7: the era of big power plants, supply would be added
Speaker 7: in big chunks, but demand would grow and there'd be
Speaker 7: occasional imbounces. But now with these data centers, demand is
Speaker 7: growing in these big chunks and in specific places which
Speaker 7: they won't tell you where they are, right because that's
Speaker 7: that's one of their competitive secrets, right, So we need
Speaker 7: to have a partnership with them, and overall, I think
Speaker 7: it's a great thing.
Speaker 5: All right, David, thanks a lot. It was really great
Speaker 5: to get your perspective. I really enjoyed talking to you.
Speaker 5: Thank you so much for David Crean, Undersecretary for Infrastructure
Speaker 5: at the DOE.
Speaker 6: You really read that book, I'm I did.
Speaker 3: Yep. Keith grossmaner recommendation, you win, yeps. Very good.
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Speaker 5: Paul and I we are here in our Continental Hotel
Speaker 5: right here in midtown Manhattan at the Bloomberg a NEF Summit.
Speaker 5: We have global leaders, you have thought leaders, you have
Speaker 5: CEOs kind of getting together and discussing the clean energy,
Speaker 5: green energy transition, how to get there, and also how
Speaker 5: to satisfy the demand for power that we're seeing right now,
Speaker 5: which is enormous. Joining us here now on site is
Speaker 5: Pedro Pizarro, President and CEO of Edison International. And that's
Speaker 5: just two buckets for you, right like, how do you
Speaker 5: decarbonize the grid and get to that goal? And then
Speaker 5: how do you match the power demand today from data
Speaker 5: centers AI to people wanted charging their evs at home.
Speaker 5: Let's go to the ladder first. What kind of demand
Speaker 5: are you seeing? Who's calling you up?
Speaker 8: Well, I can tell you from a Southern California Edison perspective,
Speaker 8: our utility we had had flat growth for the last
Speaker 8: fifteen years. We're now seeing something like two percent load
Speaker 8: growth and in our state, a lot of vatas transportation,
Speaker 8: electrification I'm also chair of the Edison Electric Constitute, which
Speaker 8: represents the investor own utilities across the country, about seventy
Speaker 8: percent of the load UH. Two years ago, EI members
Speaker 8: were forecasting something like a two percent load growth over
Speaker 8: the next years ahead. The most updated numbers are four
Speaker 8: point seven percent, and I have colleagues in some states
Speaker 8: that are seeing five six seven percent. So who's who's
Speaker 8: calling it is electrification in places like California more broadly
Speaker 8: across the country, but I think we're more leading edge there.
Speaker 8: It is data center growth that you read a lot
Speaker 8: about that. And then it's also the repatriation of manufacturing.
Speaker 8: You know, the bipartisan Infrastructure Law is working and it's
Speaker 8: bringing back a lot of you know, manufacturing into the country.
Speaker 8: And that's another source.
Speaker 2: Oh interesting, So can you, being your company and your industry,
Speaker 2: can you handle that increase in load?
Speaker 9: Yes?
Speaker 8: There will be there, yes, and there will be some
Speaker 8: bumps in the road, right. I was sharing with Alex
Speaker 8: earlier that it's not the first time in our history
Speaker 8: of the industry we've seen this, right, rural electrification, air
Speaker 8: conditioning load, So we lived through these periods. It's been
Speaker 8: the last fifteen years or so that it's been fairly flat.
Speaker 8: So how do we handle it in the near term? Right,
Speaker 8: you see a lot of focus of utilities working in
Speaker 8: their various regions' power companies, working with regional transmission organizations,
Speaker 8: and you know, working with customers to make sure we're
Speaker 8: using every tool available. Demand site management is important. Energy
Speaker 8: efficiency is important, but so is making sure that we
Speaker 8: can maintain and in some cases expand existing resources, and
Speaker 8: ultimately we need to add new resources to the system.
Speaker 6: How do you pay for that?
Speaker 5: Because as yields have moved higher, stock moves lower and
Speaker 5: then it's more expensive to borrow.
Speaker 6: How do you do it?
Speaker 8: Well, you know, it is an investment in infrastructure that's needed,
Speaker 8: and this is an industry that's been investing for a
Speaker 8: long time. Our members at EI have invested over a
Speaker 8: trillion dollars over the last decade on infrastructure, one hundred
Speaker 8: and sixty eight billion dollars last year alone.
Speaker 6: Right, So it's eventually the right pair, right.
Speaker 8: It isn't eventually the rate pair, right, and so we
Speaker 8: have a responsibility to make sure that that investment is
Speaker 8: economics being done thoughtfully. It's been doing done efficiently, but importantly,
Speaker 8: this investment has multiple users. Right, there is the near
Speaker 8: term need to keep up with demand, but there's also
Speaker 8: the longer term need for investing tordsy carbonization.
Speaker 9: Right.
Speaker 8: Then, the industry's been going as clean as we can,
Speaker 8: as fast as we can, but while maintaining reliability and affordability.
Speaker 8: And so those investments are the same investments that are
Speaker 8: needed to build out the transmission grid, to add renewable resources,
Speaker 8: to add storage, and that helps with climate change mitigation.
Speaker 8: There's also investment that we're needing to put in to
Speaker 8: deal with climate change adaptation, right, the effects of extreme weather,
Speaker 8: the effects we've seen initially in California and now across
Speaker 8: the country in wildfire. Right, so my own company has
Speaker 8: been investing billions of dollars to redesign the system to
Speaker 8: harden it against wildfires. Other colleagues are having to do
Speaker 8: that now. So all of these investments accrue to the
Speaker 8: customer customer benefit, whether it's to keep the system safer,
Speaker 8: keep community safer, and also to support the demand growth
Speaker 8: that we're seeing.
Speaker 2: So Pedro just before early this morning, Alison and I
Speaker 2: spoke to David Crane, under Secretary for Infrastructure at the
Speaker 2: US Department of Energy and he said, one of his
Speaker 2: major goals over the next several years is to make
Speaker 2: permitting easier, presumably to allow companies like yours to make
Speaker 2: these investments that maybe in a quicker manner.
Speaker 3: Are you seeing that or what do you need to see?
Speaker 8: Absolutely need it? Okay, And so if you gave me
Speaker 8: a magic one, then gave me one wish for the industry,
Speaker 8: it would be that.
Speaker 6: Okay, I don't blame you, all right, And.
Speaker 8: We have other challenges supply chain, labor availability, but it's
Speaker 8: really citing and permitting the needs the most help. Just
Speaker 8: to frame it for you little bit, Paul, the analysis
Speaker 8: that we've done as Edison for California and what we'll
Speaker 8: take to the carbonics the whole California economy by twenty
Speaker 8: forty five, you know, it says stas net zero goal
Speaker 8: still feasible, right, but it will require significant investment for renewables,
Speaker 8: for storage for the grid, three hundred and seventy billion
Speaker 8: dollars of investment state wide through twenty forty five. That analysis,
Speaker 8: by the way, from an affordability person, back to your
Speaker 8: comment earlier, Alex, we do see that that will put
Speaker 8: pressure pressure on electric rates and bills, but because it's
Speaker 8: a transition, right, A lot of that electrification will be
Speaker 8: removing uses in the economy that they are using combustion
Speaker 8: processes with fossil fuels. These are more efficient technologies, right.
Speaker 8: The electric car is more efficient than an internal combustion
Speaker 8: engine car. We see the total energy build for our
Speaker 8: average customer electric plus gas plus gasoline going down by
Speaker 8: forty percent in real turns between now and twenty forty five.
Speaker 8: So that goes to these investments having a co benefit
Speaker 8: of affordability. And so as we look at how we,
Speaker 8: you know, proceed with this kind of investment, you know,
Speaker 8: we have to keep in mind that it has those
Speaker 8: multiple benefits.
Speaker 5: So all of it has to work at the same
Speaker 5: time for that to be that forty CLINEB.
Speaker 8: Solute, and we need to be able to get the
Speaker 8: steel in the ground through setting and permitting, and so
Speaker 8: part of our analysis showed that the rate at which
Speaker 8: we add transmission will need to be four times the
Speaker 8: annual rate that it's been historically. The rate at which
Speaker 8: we add distribution the lower voltage wires will it to
Speaker 8: be ten times a rate. So when David Crane talked
Speaker 8: about its heading on permitting, absolutely needed and it's help
Speaker 8: that we need at both the federal and the state
Speaker 8: and even the local levels.
Speaker 6: Before we let you go.
Speaker 5: When you talk about types of energy, what are you
Speaker 5: looking at? What means green to you?
Speaker 8: A lot of things and we need all of it right.
Speaker 8: It's the traditional renewables that are commercially available today, like
Speaker 8: onshore wind, solar, geothermal. It's new technologies offshore wind, next
Speaker 8: generation geothermal that might be using you horizontal drilling techniques.
Speaker 8: It's nuclear right because nuclear is carbon free, and so
Speaker 8: investments needed their storage.
Speaker 3: Today we're really.
Speaker 8: Relying on lithium ion chemistry. We need different chemistries and
Speaker 8: the Department of Energy has been a prime mover in investing,
Speaker 8: putting our tax dollars to good work to find alternate chemistries.
Speaker 8: So it really is all of the above.
Speaker 2: If I'm an investor, do I invest in the utility industry?
Speaker 2: It seems like you guys got years and years and
Speaker 2: years of investment. What do you tell investors as to
Speaker 2: the returns that you try to deliver.
Speaker 8: It's a long, good road ahead in terms of the
Speaker 8: infrastructure investment that's needed through our industry. At our company,
Speaker 8: we talk about how we have set a you know,
Speaker 8: growth rate guidance five to seven percent earnings per share
Speaker 8: growth rate from mouth through twenty twenty eight. We see
Speaker 8: that that need for investment is supported both by these
Speaker 8: immediate needs but also by long term state policy in California.
Speaker 8: I think, you know, my peers across the country are
Speaker 8: all seeing a similar sort of phenomenon where the investment
Speaker 8: is absolutely needed. It's core to the economy. The electric
Speaker 8: sector is five or six percent the GDP, but it
Speaker 8: powers the other ninety four to ninety five percent.
Speaker 3: There you go, all right, Pedro Pizzaro, thank you so
Speaker 3: much for joining us. Really appreciated.
Speaker 2: Pedro Pisato, President and Chief executive Officer of Edison International,
Speaker 2: here at the Bloomberg New Energy Finance Conference here in
Speaker 2: the Intercot at the Hotel in Midtown Manhattan, looking at
Speaker 2: the energy transition to cleaner energies.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on applecar Play and Android
Speaker 1: Auto with the Bloomberg Business app. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: just Say Alexa, playing Bloomberg eleven thirty.
Speaker 5: We are live from an Intercontinental Hotel right here on
Speaker 5: fortieth Street in Midtown Manhattan. We're at Bloomberg's any F
Speaker 5: annual Energy and Climate Summit, bringing together corporate executives, government officials,
Speaker 5: and industry leaders all to talk about how we get
Speaker 5: to clean energy, what the policy is like, what the
Speaker 5: clean power is like, and how we get there. A
Speaker 5: big part of that story is actually going to be technology.
Speaker 5: It's the AI and the data centers that are in
Speaker 5: part responsible for the huge bump and power demand that
Speaker 5: we're going to see over the next few years. So
Speaker 5: luckily we have someone who has to deal with this
Speaker 5: on a day to day basis. We're joined now by
Speaker 5: Amanda Peterson Coreo. She's a global head of Data Center
Speaker 5: Energy at Google.
Speaker 6: So great to be here with you.
Speaker 10: Thank you so much for having me.
Speaker 3: My pleasure.
Speaker 5: So you're the person that has to power the data
Speaker 5: centers and call up the power providers and energy companies
Speaker 5: and be like, guys, help me out.
Speaker 6: It's not me, it's a whole team of people.
Speaker 10: So I am not the sole person doing that, but
Speaker 10: yes that our job is really to figure out how
Speaker 10: do we enable Google to grow and how do we
Speaker 10: do that in a way that's sustainable load growth over time.
Speaker 2: All right, So what we hear what Alex and I
Speaker 2: hear from really we've just started learning about this over
Speaker 2: the last couple of years, is the demand from a
Speaker 2: lot of these technology companies. And we've had CEOs of
Speaker 2: utilities say, I'm talking to you tech executives these days.
Speaker 3: I've never talked to them in the past. Yeah, what
Speaker 3: are you trying to do?
Speaker 2: You think about the next five to ten years of
Speaker 2: Google's energy needs.
Speaker 3: You're not just going to plug into a coal plant,
Speaker 3: I'm guessing now, absolutely, what are you thinking about these days?
Speaker 10: So I think we're doing a number of things, right.
Speaker 10: We see, as you mentioned, a wave of demand growth
Speaker 10: that we haven't seen in the last two decades in
Speaker 10: the US, it's been pretty flat to stagnant. Data centers,
Speaker 10: as you mentioned, are getting a lot of attention. But
Speaker 10: actually they're just a part of really what's reindustrialization and
Speaker 10: electrification of manufacturing, transport, heating, right, and digitization is just
Speaker 10: one role of that. And so we have to look
Speaker 10: at that and think about how are we going to
Speaker 10: grow in this new market landscape.
Speaker 3: We do a few things.
Speaker 10: We see our role in working in partnership with our
Speaker 10: utilities to figure out how can we bring new firm capacity,
Speaker 10: so not just clean energy, but firm clean capacity to
Speaker 10: the grid so that we can really meet those demand
Speaker 10: needs over the next decade. We also look at how
Speaker 10: we can do things more efficiently because really what we're trying,
Speaker 10: what the challenge we're seeing is the amount of growth
Speaker 10: we have over the next decade total collectively on the system.
Speaker 10: So what we're trying to do is make new efficient processes.
Speaker 10: So last year we innovate a new way to buy
Speaker 10: and sell electricity, reducing the time by eighty percent with
Speaker 10: our partners at Level ten Energy, and this enabled us
Speaker 10: to get one and a half gigawatts again in eighty
Speaker 10: percent of the time it used to take us in
Speaker 10: just one year. So things like this is how we're
Speaker 10: working in partnership to meet that need.
Speaker 6: Oh so many questions.
Speaker 5: Okay, so the first one is do you is it
Speaker 5: going to be just for the data centers we take
Speaker 5: that Is it going to be let me just plug
Speaker 5: that data center into the grid, or is it going
Speaker 5: to be that these data centers become their own sort
Speaker 5: of mini power generators, either by having like a small
Speaker 5: nuclear reactor near them to power it.
Speaker 6: How do you see that relationship evolving?
Speaker 10: Yeah, I mean there's many forms to get power as
Speaker 10: you as you pointed out, the most efficient and the
Speaker 10: best is to be grid connected.
Speaker 3: Right.
Speaker 10: The reason we have an electricity grid is the evolution
Speaker 10: of is it doesn't make sense to have all of these.
Speaker 5: But does that imply that if you turn on your
Speaker 5: data center, I lose my electricity?
Speaker 10: Absolutely not, not at all. Actually, data centers actually provide
Speaker 10: a lot of voltage stabilization to the grid because as
Speaker 10: we're a firm and constant load over time. Now when
Speaker 10: we connect to a grid, we ensure that we're also
Speaker 10: bringing in new generation, new transmission to help power and
Speaker 10: expand the grid. Definitely not take away from the electricity
Speaker 10: that's already providing services to others.
Speaker 3: So I'm guessing you can't do it alone.
Speaker 2: I'm guessing there's can be some partnerships along the way,
Speaker 2: and they've got one with Microsoft and new Core.
Speaker 3: Yeah. Tell us about that and how that could be
Speaker 3: a template for Yeah.
Speaker 10: So one of the challenges we saw is exactly what
Speaker 10: I just touched on, that we're seeing a lot of
Speaker 10: intermittent capacity from new clean generation but we're not seeing
Speaker 10: the same uptick and firm clean capacity onto the grid.
Speaker 10: And that's because this technology is still more nascent relative
Speaker 10: to more traditional thermal assets like gas generators. And so
Speaker 10: we said, we've got to show that the demand is there,
Speaker 10: and so we've partnered with Microsoft and new Core to say,
Speaker 10: let's aggregate our demand and think about how we can
Speaker 10: can drive scale basically for this new and get that
Speaker 10: onto the grid faster. So we announced this a few
Speaker 10: weeks ago. We're here with them today. We're going to
Speaker 10: speak out a lunch session today to say more about
Speaker 10: what we're looking for, how we can help and really trying.
Speaker 6: To drive that.
Speaker 5: Going back to how data centers provide stability to the grid,
Speaker 5: how I've heard that a lot that like a data
Speaker 5: center can help provide electricity because you price sensitive, I
Speaker 5: don't know, I've heard lots of things.
Speaker 6: How do you help?
Speaker 10: I mean part of it is that unlike you who
Speaker 10: may be turning on your lights early in the morning
Speaker 10: or late at night and then dropping the day, that's
Speaker 10: hard for the grid to manage and frequency regulation, a
Speaker 10: data center is predictable and having predictable load is something
Speaker 10: that utilities and the grid greatly value because then they
Speaker 10: can plan better around it and not have to turn
Speaker 10: on and off generation resources.
Speaker 6: I see, okay, all.
Speaker 2: Right, So when I look at the capex line of
Speaker 2: Google and it's the GDP of more than most countries
Speaker 2: here and a lot of us building new data centers
Speaker 2: and capacity there, do they come to you like day
Speaker 2: one and say we're going to get the cheapest energy,
Speaker 2: We're going to get the most efficient energy. How does
Speaker 2: the energy aspect come into all the capex that they're
Speaker 2: spending in terms of day data entergy.
Speaker 3: Yeah.
Speaker 10: Absolutely, they were part of the data center team that
Speaker 10: goes out and decides where do we cite our next
Speaker 10: data center? What makes sense and power is absolutely at
Speaker 10: the core of everything we do. As mentioned, it's where
Speaker 10: do we have access to that clean capacity that can
Speaker 10: really deliver us growth, but also what markets can we
Speaker 10: participate in that give us the ability to have customer choice.
Speaker 10: We operate in over eighty electricity grids around the world.
Speaker 10: No two unfortunately are the same, but some we have
Speaker 10: a lot of choice and deregulated markets and ourtos, But
Speaker 10: there's a lot more we can do and partner with
Speaker 10: and in markets that are fully regulated we were looking
Speaker 10: to partner with our utilities to say, hey, how can
Speaker 10: we innovate, how can we evolve? How can we take
Speaker 10: what the same old tariff that we did for ten years,
Speaker 10: how do we make that different to meet the needs
Speaker 10: of our time.
Speaker 6: That's what I was wondering about.
Speaker 5: Being your own little power generator, like partnering with a
Speaker 5: company and having its own your own nuclear power station,
Speaker 5: for example, to power that data center. Is that something
Speaker 5: that we're going to see that kind of model.
Speaker 10: I think we're exploring absolutely all options. As you've seen,
Speaker 10: it's been very hard to grow nuclear in this country,
Speaker 10: so we have to look at that and we're hoping
Speaker 10: that's one of the technologies we're absolutely looking at in
Speaker 10: this partnership with Microsoft and New course.
Speaker 6: Have you had to be turned away at all?
Speaker 5: Like have you like been sourcing an area and then
Speaker 5: you talk to the utility and until he's like, I
Speaker 5: can't do this for you.
Speaker 6: I'm sorry. Is that happened yet? I think it's more.
Speaker 10: You know, I like to talk about the grid and
Speaker 10: meeting capacity is you can do it with time. So
Speaker 10: it's just a matter of when do you need to
Speaker 10: serve load versus how quickly can you build whatever it is,
Speaker 10: transmission or generation to serve that load. And so what
Speaker 10: we have found is maybe we can't always meet our
Speaker 10: time schedules on the time that we would like, and
Speaker 10: so we have to look at a tion that's interesting.
Speaker 3: How's the US grid versus others you've seen around the world.
Speaker 10: Oh boy, that is a big question that we do
Speaker 10: not have time today. Well, first of all, the US
Speaker 10: is it one grid, as you know, it's minigrids and
Speaker 10: so I think in explaining that to people, it's hard
Speaker 10: for them to understand. Again, you have a mix of
Speaker 10: everything here in the US, which is very different when
Speaker 10: we talk about the rest of the world.
Speaker 3: We talk about Europe.
Speaker 10: Europe is a really interesting integrated system because you're actually
Speaker 10: going cross countries and I think it actually there's a
Speaker 10: lot of things that work really well there within our
Speaker 10: own country. We have trouble going across states y Okay
Speaker 10: and building that transmission to deliver the generation to where
Speaker 10: the loads are actually located. So I think that's some
Speaker 10: of the interesting challenges other places in the world. Each
Speaker 10: country really has its own unique system. It's only Europe
Speaker 10: that you really see that multi country grid really playing out.
Speaker 6: Something that works for Europe.
Speaker 5: Honestly, that's something you're usually known here before we let
Speaker 5: you go. When you talk about sort of the advanced
Speaker 5: clean technology and how you're working with Microsoft and new Core,
Speaker 5: what do you think those advanced clean technologies are.
Speaker 10: Yeah, there's a number of them. We talked about maybe
Speaker 10: seeing advanced nuclear. We already last year just had our
Speaker 10: first enhanced geothermal extraction project come online with Ferbo here
Speaker 10: in the US, and so we're buying energy from that project.
Speaker 10: We're also looking at new texts, including carbon sequestration. It's
Speaker 10: going to have to be part of the solution in
Speaker 10: our view, and we continue to look at hydrogen and
Speaker 10: in long duration energy storage.
Speaker 6: So interesting, Amanda, Thank you so much.
Speaker 5: Madam Peterson COOREO, Global head of Data Center Energy over
Speaker 5: at Google.
Speaker 6: You don't get much sleep, do you?
Speaker 3: I do not.
Speaker 6: Actually I took a red eye here, so.
Speaker 3: Oh, there we go.
Speaker 6: Okay, I was just kidding, but I guess that's true.
Speaker 5: That's just so interesting because I feel like when I
Speaker 5: talk to my energy guys, you need these guys. You
Speaker 5: need big tech companies to say take this seriously or
Speaker 5: else it's gonna be very hard to move the needle.
Speaker 3: So what is your summer book going to be? The Grid?
Speaker 6: The Grid, The Grid. I will read it and we
Speaker 6: will compare notes.
Speaker 2: Yes, the could talk to now, we could talk to Amanda,
Speaker 2: like at a little higher level.
Speaker 6: Okay, we'll do that. We'll do that.
Speaker 3: It's actually a pretty good grid.
Speaker 2: I learned a lot about electricity in the United States.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on applecar Play and Android
Speaker 1: Auto with the Bloomberg Business app. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station
Speaker 1: just say Alexa playing Bloomberg eleven thirty.
Speaker 5: I'm Alexi alongside paulse meeting. We are at Bloomberg Intelligence
Speaker 5: Radio and we are live in an Intercontinental hotel right
Speaker 5: here in Midtown Manhattan for Bloomberg an ef summit where
Speaker 5: we talk to all the leaders and policymakers and CEOs
Speaker 5: and how we get from where we are now and
Speaker 5: then to decarbonize in the next three decades. Well, joining
Speaker 5: us now is a very special guest, Ethan Zindler, Climate
Speaker 5: Counselor for the US Department of Treasury, which is already cool.
Speaker 5: But the cooler part is he used to work at
Speaker 5: Bloomberg an EF and it's been a while, so they've
Speaker 5: seen you.
Speaker 6: How are you?
Speaker 9: I'm good? How are you?
Speaker 6: How's your different job in DC?
Speaker 9: It's definitely different.
Speaker 3: But it's great.
Speaker 6: Do they have snacks like they did?
Speaker 9: I bring bags of almonds.
Speaker 3: In from time to time. He doesn't get them, which
Speaker 3: we share.
Speaker 6: Well, that's one that's so nice. All right, So let's
Speaker 6: talk about what you're working on right now.
Speaker 5: What is your job as a climate counselor to the
Speaker 5: US Department of Treasury.
Speaker 9: So you know, the Treasury Department is across a lot
Speaker 9: of different things in the climate space, and we have
Speaker 9: multiple divisions that are working on things everything from the
Speaker 9: International Affairs Office, Domestic Finance Office. We have a Federal
Speaker 9: Insurance Office that thinks about some of these climate issues
Speaker 9: as well. So my job really is to try to
Speaker 9: coordinate some of those activities across the department, to collaborate
Speaker 9: on some of the key issues, and most often that's
Speaker 9: been on the Inflation Reduction Act, but other things as well,
Speaker 9: and also to provide some council to the Secretary, as
Speaker 9: the title implies, on some of these key issues.
Speaker 2: What are the key issues you guys are focusing on now?
Speaker 2: What are the most important mandates right now as we
Speaker 2: try to navigate this change.
Speaker 9: Yeah, so there's a lot of things going on, but
Speaker 9: certainly the implementation of the Inflation Reduction Act as front
Speaker 9: and center for US Treasury a good deal, and the
Speaker 9: majority of the funds overall that are aimed at clean
Speaker 9: and green initiatives would go through the tax code with
Speaker 9: all the rules written and implemented over time, and so
Speaker 9: a lot of what we spent our time on doing
Speaker 9: is writing some of those rules. So that's one thing.
Speaker 9: Other things, indeed, on the international front, working with some
Speaker 9: of our partners and some of the multilateral development banks
Speaker 9: on some of the work that they're doing around evolution
Speaker 9: and thinking more around climate issues. The Treasury also works
Speaker 9: very closely with the Green Climate Fund and the other
Speaker 9: funds that are focused on multi climate development, so working
Speaker 9: with them on that stuff. And then finally, maybe one
Speaker 9: last topics on insurance, which you've been doing a lot
Speaker 9: of work and thinking about as well.
Speaker 5: So let's go the IRA for a moment, because the
Speaker 5: big hubblebloo was about hydrogen for a little while, so
Speaker 5: was how do you qualify for the hydrogen tax credit.
Speaker 5: Does a hydrogen need to come from clean energy? Can
Speaker 5: it be sort of carbon captured natural gas or can
Speaker 5: it be to straight up natural gas? That part of
Speaker 5: it sort of skated by, okay, But then everyone started
Speaker 5: talking about how you qualified clean energy when it comes
Speaker 5: to hydrogen an hour for hour or like sort of
Speaker 5: a yearly base load, and that was a big deal
Speaker 5: for a lot of these producers. And talk me through
Speaker 5: how you guys thought about it, would you think about it?
Speaker 6: What the problem was?
Speaker 3: Sure?
Speaker 9: So first I'm going to stop and take credit for
Speaker 9: the fact that the IRA is, to be clear, the
Speaker 9: most important piece of climate legislation ever passed in the
Speaker 9: United States, and the level of investment that we've seen
Speaker 9: overall has been really pretty terrific. Two hundred and fifty
Speaker 9: billion by one count in the first twelve months after
Speaker 9: it passed, and we've seen over six hundred billion in
Speaker 9: manufacturing since the start of this term. On the specifics
Speaker 9: of the forty five V Hydrogen Tax Credit, look, the
Speaker 9: way we wrote the rules, and to be clear, a
Speaker 9: draft version of the rule and we've drafted it, was
Speaker 9: that we effectively took our Q entirely from the law,
Speaker 9: and the law is very clear about saying that you
Speaker 9: had to think about what CO two emissions were and
Speaker 9: referenced the clean air. It also referenced not to get
Speaker 9: too wonky, a particular model for tracking emissions called the
Speaker 9: Greek model, and so we really wrote our draft guidance
Speaker 9: to be as compliant with that as we could, and
Speaker 9: that included taking into account what we called induced emissions,
Speaker 9: that's emissions that might be created by taking some of
Speaker 9: existing zero carbon generation and allocating it to something else.
Speaker 9: So we really sought to be, you know, as clear
Speaker 9: as we could. But again, to be clear, it's draft guidance,
Speaker 9: and we've certainly received comments. We've received I would say
Speaker 9: no less than thirty thousand comments plast I checked. So
Speaker 9: we're working our way through those and standby will eventually
Speaker 9: have the final rule drafted this this year.
Speaker 2: So Ethan, as we make this transition to a cleaner
Speaker 2: sourcing of energy, one of the objectives I think is
Speaker 2: to reduce reliance on China and maybe some other folks
Speaker 2: around the world and maybe Onshore or Friendshire more of
Speaker 2: our energy infrastructure.
Speaker 3: How does that factor into your work?
Speaker 9: Quite a lot, I mean, and I think it's something
Speaker 9: that the second Scretary has been very out front on.
Speaker 9: I was with her last month in Chile where we
Speaker 9: were having conversations with government leaders there about some of
Speaker 9: the opportunities around so called French shoring, and we visited
Speaker 9: a lithium hydroxide processing plant where those that lithium is
Speaker 9: being exported to the US and elsewhere to make batteries.
Speaker 9: We are also the Secretary has also had some very directing,
Speaker 9: candid conversations with Chinese leadership and just got back from
Speaker 9: Beijing last Wednesday, and these issues around over supply and
Speaker 9: ore for capacity or things that have come up. But
Speaker 9: it's also our view that it's a very important and
Speaker 9: productive to continue to have conversations, and so actually at
Speaker 9: this literally almost at this very moment, we're continuing with
Speaker 9: those back at the Treasury Department through two working groups
Speaker 9: that we have ongoing with the Chinese to continue those conversations.
Speaker 5: I was at an energy function in Houston a couple
Speaker 5: of weeks ago and Secretary of Grand Home was there
Speaker 5: and she was basically like, guys, there is money in DC,
Speaker 5: come get it. Are we spending too much money in
Speaker 5: a short of amount of time, like, not that we
Speaker 5: don't need the money over time, but there's a condensed
Speaker 5: period with which it can be spent. Are you worried
Speaker 5: about throwing money into bad stuff for things that aren't
Speaker 5: going to get the job done? Are things that not
Speaker 5: going to return as much?
Speaker 9: I would just say this that I think this is
Speaker 9: a really critical and important time. I think the Inflation
Speaker 9: Reduction Act has created an inflection point where we have
Speaker 9: an opportunity now to be supportive of these technologies in
Speaker 9: the way we've never done before. And it's important that
Speaker 9: we see that going forward. And I think we feel
Speaker 9: pretty good that we're doing that.
Speaker 3: At this point.
Speaker 9: There's a lot more work to be done, and to
Speaker 9: be honest with you, we're working around the clock the
Speaker 9: rest of this year and beyond. But no, I think
Speaker 9: that this is a unique opportunity. And look that the
Speaker 9: clock's not you know, the clock's not getting any quieter
Speaker 9: on climate change, and we really need to have these
Speaker 9: technologies developed further and deployed further, particularly some of the
Speaker 9: ones and the harder to decarbonized sectors like industrial processes.
Speaker 2: Ethan just thirty seconds, what's the next mile post? People
Speaker 2: like me should be looking for people that don't track
Speaker 2: this every day.
Speaker 3: Good question.
Speaker 9: I mean, I think you know, we work in increments,
Speaker 9: I guess of the Treasury Department, where you're kind of
Speaker 9: on a day to day basis trying to get as
Speaker 9: much out as we can. I think I certainly would
Speaker 9: want to keep an eye on the levels of private
Speaker 9: capital flows. And like I said, we feel quite good
Speaker 9: about that and we want to see more of that
Speaker 9: going forward. There was a lot raised by venture funds
Speaker 9: several years ago. I think we'd like to see more
Speaker 9: of that investment taking place. We'd like to continue to
Speaker 9: see financial institutions think about how they can take into
Speaker 9: account the energy transition. But I wish I could pick
Speaker 9: a single moment, but we're kind of working data down.
Speaker 3: It's a big story.
Speaker 5: Arthin thanks a lot. It's so good to see you
Speaker 5: in a different role. Really good to catch up with you.
Speaker 5: We give Smiler from the Treasury Department. He is a
Speaker 5: Climate counselor the West Treasury Department, formerly of Bloomberg and
Speaker 5: ef YEP.
Speaker 2: That's right enough here at the Enough conference here in
Speaker 2: midtown Manhattan, talk about the transition to cleaner energy.
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