WEBVTT - PG&E CEO Talks Energy Demand; AI

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Of course, the rise in AI services also driving demand

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<v Speaker 2>for electricity, Growing computing power and the rise of EVS

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<v Speaker 2>have traders looking for ways to invest in the energy grid.

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<v Speaker 2>Pleased to say that. Joining us now is Patty Poppy

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<v Speaker 2>of Peach and Eight joining us around the table.

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<v Speaker 3>Patty, good morning to you, Good morning John, great to

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<v Speaker 3>be with.

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<v Speaker 2>You, fantastical catch up with you. We're going to see

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<v Speaker 2>massive demand potentially evs data centers. Can you help frame

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<v Speaker 2>that for us? How big is this going to be

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<v Speaker 2>over the next few years.

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<v Speaker 4>Yeah, we forecast, in fact, we shared with investors here

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<v Speaker 4>in New York this week, a doubling of demand between

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<v Speaker 4>now and twenty forty. That's a keeger of about four

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<v Speaker 4>percent year over year. And we think that's a great

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<v Speaker 4>opportunity because we see ways of serving that load while

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<v Speaker 4>reducing costs for all customers on the grid.

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<v Speaker 2>That's a big challenge. So help us understand how youre

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<v Speaker 2>going to make that challenge.

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<v Speaker 4>Yeah, so our grid today is underutilized. We actually the

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<v Speaker 4>utilization factor of the grid today is about forty five percent.

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<v Speaker 4>We see that growing to sixty seventy eighty percent, even

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<v Speaker 4>and so imagine more fully utilizing existing assets lowers the

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<v Speaker 4>unit cost.

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<v Speaker 3>That's what happens in every other business, but energy.

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<v Speaker 4>We've built the grid big. We've built it big decades ago.

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<v Speaker 4>Now we get to utilize it and make it smarter.

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<v Speaker 4>So with modern computing, we can actually optimize how we

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<v Speaker 4>utilize resources on the grid and use them more efficiently.

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<v Speaker 1>So utilities have been sort of the hotbed. It's basically

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<v Speaker 1>been the way for people to go into AI in

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<v Speaker 1>a new way to represent some of the power usage.

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<v Speaker 3>It's going to be necessary.

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<v Speaker 1>I know the PG and E has lied behind a

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<v Speaker 1>little bit of the broader rally that we've seen in utilities.

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<v Speaker 1>What are you telling shareholders in terms of how you're

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<v Speaker 1>going to close that gap, what sort of pieces you're

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<v Speaker 1>going to really lean on.

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<v Speaker 3>To catch up.

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<v Speaker 4>Yeah, what we share with investors is that we have

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<v Speaker 4>we are on track on our turnaround. PG and has

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<v Speaker 4>been through some very difficult times in the last decade,

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<v Speaker 4>and we have put the company on a new and

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<v Speaker 4>solid footing.

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<v Speaker 3>Over the last four years.

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<v Speaker 4>We have implemented a safety and financial safety both physical

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<v Speaker 4>and financial safety framework for the company that has now

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<v Speaker 4>given investors' confidence to come back in, So we have

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<v Speaker 4>both the benefit of the new demand and closing our

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<v Speaker 4>discount all at the same time, which makes us both

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<v Speaker 4>one of the growthiest utilities and the ability to reap

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<v Speaker 4>some of the benefits of our turnarounds.

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<v Speaker 1>What will be the contours of the utility companies that

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<v Speaker 1>benefit most from the AI boom. I know that you

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<v Speaker 1>talk to the likes of Apple, you talk to all

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<v Speaker 1>of the California tech companies in your state, after all,

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<v Speaker 1>but there's really a question of what it takes to win.

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<v Speaker 4>Yeah, we're proud to serve Silicon Valley, we serve the

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<v Speaker 4>Bay Area of California, We serve northern and central California.

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<v Speaker 4>So all of those great tech companies are our customers,

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<v Speaker 4>and so we're very tightly knitted with them and helping

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<v Speaker 4>deliver on their demands. We think that we can serve

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<v Speaker 4>their load with mainly transmission and distribution. There will be

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<v Speaker 4>some new generation added, but the utilities who win are

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<v Speaker 4>those that own and operate transmission and distribution systems where

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<v Speaker 4>there is data center demand and EV demand.

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<v Speaker 3>It might surprise you that in.

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<v Speaker 4>Santa Clair County specifically, forty three percent of new vehicles

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<v Speaker 4>sold last year were electric that's flexible demand. The first

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<v Speaker 4>form of flexible demand on the grid. The lights come

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<v Speaker 4>on when it's dark, air conditioning comes on when it's hot.

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<v Speaker 4>EV's can charge any time we send the right price

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<v Speaker 4>signal we've got excess power in the middle of the day.

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<v Speaker 4>Because we have distributed solar, we can fill as I say,

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<v Speaker 4>the belly of the duck with EV demand and that

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<v Speaker 4>costs nothing. That is utilization of existing assets to the

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<v Speaker 4>benefit of all customers, not just at EV driver, but

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<v Speaker 4>all customers on the grid get a lower unit cost

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<v Speaker 4>of energy.

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<v Speaker 2>If someone told me recently they cald of phone, you

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<v Speaker 2>have the second most expensive pound rights in the United States.

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<v Speaker 2>Can you help me understand why that's the case.

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<v Speaker 4>Yeah, Rates are a reflection of how much energy you use.

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<v Speaker 4>We all have a grid that has to be built

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<v Speaker 4>for a peak day. So if you have a grid

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<v Speaker 4>and like ours in California, doesn't get stressed, but a

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<v Speaker 4>handful of days of a year versus a Southwest or

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<v Speaker 4>a Southeast utility where they have heat every day, we

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<v Speaker 4>have to build the grid for that peak day. That's

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<v Speaker 4>why evs and dynamic demand are such a benefit, especially

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<v Speaker 4>for PGNE customers, because we have an underutilized grid that

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<v Speaker 4>drives a rate up, but their actual average bill is

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<v Speaker 4>not nearly as high as much of the country.

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<v Speaker 2>Could we talk a little bit about power plants as well.

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<v Speaker 2>How easy is it to build and connect new power

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<v Speaker 2>plants in places like California.

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<v Speaker 4>Well, it depends what you think of when you say

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<v Speaker 4>power plant. In California, we think of clean energy. So

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<v Speaker 4>last year in the California Independent System Operator Zone, we

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<v Speaker 4>added nine gigawatts.

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<v Speaker 3>Of new power supply. That surprises people.

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<v Speaker 4>Nine gigawatts added in California last year that serves nine

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<v Speaker 4>million customers. That nine gigawatts was mainly renewables. Mash with storage.

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<v Speaker 4>Storage is the game changer. In fact, April sixteen, think

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<v Speaker 4>storage was the number one resource utilized in California. Again

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<v Speaker 4>masched with solar. We have great solar penetration massed with storage.

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<v Speaker 4>That's a new kind of energy supply. One hundred percent

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<v Speaker 4>of the energy that pg NEED delivered to our customers

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<v Speaker 4>last year was carbon free. We have a modern energy

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<v Speaker 4>system in California, and PCG is so proud to serve California,

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<v Speaker 4>where I think it's the golden era of energy for

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<v Speaker 4>all energy providers, but particularly in the Golden State and

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<v Speaker 4>we get to power the Golden State and we're proud

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<v Speaker 4>of that.

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<v Speaker 1>How much time are you spending in Washington, DC and

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<v Speaker 1>how much to Washington DC policies really change the way

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<v Speaker 1>you approach some of this in terms of what the

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<v Speaker 1>different potential subsidies are for grete energy or not, and

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<v Speaker 1>also where solar panels are coming from and how much

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<v Speaker 1>they cost, given that a majority of them are produced

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<v Speaker 1>in China.

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<v Speaker 4>Yeah, I don't spend much time in Washington DCO.

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<v Speaker 3>I wear boots. I wear boots in a hard had.

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<v Speaker 4>I had to do my hair special for today to

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<v Speaker 4>be with you. Listen, I'm boots on the ground with

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<v Speaker 4>my team. We are building the grid of the future

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<v Speaker 4>and a lot of that it depends on us. We

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<v Speaker 4>have a saying performance is power. When we perform and

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<v Speaker 4>as we perform at PGE, we can deliver the power

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<v Speaker 4>that people need.

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<v Speaker 1>But to that point, how much is your business model

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<v Speaker 1>challenge depending on what comes out of say tariffs on

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<v Speaker 1>solar panels, that you will need to deploy for some

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<v Speaker 1>of these energy purposes.

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<v Speaker 4>Yeah, because our grid, again is underutilized, we have a

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<v Speaker 4>lot of the resources we need.

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<v Speaker 3>What we need to use them smarter.

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<v Speaker 4>So I need to be with my tech companies because

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<v Speaker 4>we're building a digital grid. We're building resources that are

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<v Speaker 4>technical that are small bets, not big bet asset deployments,

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<v Speaker 4>but leveraging the grid and serving customers in a much

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<v Speaker 4>more dynamic way. It's a smarter, faster, more affordable grid,

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<v Speaker 4>and we don't need much help from out of state

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<v Speaker 4>to do that.

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<v Speaker 2>Part of this was fantastic, fantastic. I see you in

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<v Speaker 2>person without the hot hat.

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<v Speaker 3>Yeah, anytime, anytime, John, I'll come back.

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<v Speaker 1>Bring it.

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<v Speaker 4>It's okay, okay, good, next time I'm wearing it.

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<v Speaker 2>I think that would be nice some people in financial

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<v Speaker 2>markets wearing tin hats, because that's a very different reference. Paddy,

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<v Speaker 2>Pappy there the PG and e CEO