Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Of course, the rise in AI services also driving demand
Speaker 2: for electricity, Growing computing power and the rise of EVS
Speaker 2: have traders looking for ways to invest in the energy grid.
Speaker 2: Pleased to say that. Joining us now is Patty Poppy
Speaker 2: of Peach and Eight joining us around the table.
Speaker 3: Patty, good morning to you, Good morning John, great to
Speaker 3: be with.
Speaker 2: You, fantastical catch up with you. We're going to see
Speaker 2: massive demand potentially evs data centers. Can you help frame
Speaker 2: that for us? How big is this going to be
Speaker 2: over the next few years.
Speaker 4: Yeah, we forecast, in fact, we shared with investors here
Speaker 4: in New York this week, a doubling of demand between
Speaker 4: now and twenty forty. That's a keeger of about four
Speaker 4: percent year over year. And we think that's a great
Speaker 4: opportunity because we see ways of serving that load while
Speaker 4: reducing costs for all customers on the grid.
Speaker 2: That's a big challenge. So help us understand how youre
Speaker 2: going to make that challenge.
Speaker 4: Yeah, so our grid today is underutilized. We actually the
Speaker 4: utilization factor of the grid today is about forty five percent.
Speaker 4: We see that growing to sixty seventy eighty percent, even
Speaker 4: and so imagine more fully utilizing existing assets lowers the
Speaker 4: unit cost.
Speaker 3: That's what happens in every other business, but energy.
Speaker 4: We've built the grid big. We've built it big decades ago.
Speaker 4: Now we get to utilize it and make it smarter.
Speaker 4: So with modern computing, we can actually optimize how we
Speaker 4: utilize resources on the grid and use them more efficiently.
Speaker 1: So utilities have been sort of the hotbed. It's basically
Speaker 1: been the way for people to go into AI in
Speaker 1: a new way to represent some of the power usage.
Speaker 3: It's going to be necessary.
Speaker 1: I know the PG and E has lied behind a
Speaker 1: little bit of the broader rally that we've seen in utilities.
Speaker 1: What are you telling shareholders in terms of how you're
Speaker 1: going to close that gap, what sort of pieces you're
Speaker 1: going to really lean on.
Speaker 3: To catch up.
Speaker 4: Yeah, what we share with investors is that we have
Speaker 4: we are on track on our turnaround. PG and has
Speaker 4: been through some very difficult times in the last decade,
Speaker 4: and we have put the company on a new and
Speaker 4: solid footing.
Speaker 3: Over the last four years.
Speaker 4: We have implemented a safety and financial safety both physical
Speaker 4: and financial safety framework for the company that has now
Speaker 4: given investors' confidence to come back in, So we have
Speaker 4: both the benefit of the new demand and closing our
Speaker 4: discount all at the same time, which makes us both
Speaker 4: one of the growthiest utilities and the ability to reap
Speaker 4: some of the benefits of our turnarounds.
Speaker 1: What will be the contours of the utility companies that
Speaker 1: benefit most from the AI boom. I know that you
Speaker 1: talk to the likes of Apple, you talk to all
Speaker 1: of the California tech companies in your state, after all,
Speaker 1: but there's really a question of what it takes to win.
Speaker 4: Yeah, we're proud to serve Silicon Valley, we serve the
Speaker 4: Bay Area of California, We serve northern and central California.
Speaker 4: So all of those great tech companies are our customers,
Speaker 4: and so we're very tightly knitted with them and helping
Speaker 4: deliver on their demands. We think that we can serve
Speaker 4: their load with mainly transmission and distribution. There will be
Speaker 4: some new generation added, but the utilities who win are
Speaker 4: those that own and operate transmission and distribution systems where
Speaker 4: there is data center demand and EV demand.
Speaker 3: It might surprise you that in.
Speaker 4: Santa Clair County specifically, forty three percent of new vehicles
Speaker 4: sold last year were electric that's flexible demand. The first
Speaker 4: form of flexible demand on the grid. The lights come
Speaker 4: on when it's dark, air conditioning comes on when it's hot.
Speaker 4: EV's can charge any time we send the right price
Speaker 4: signal we've got excess power in the middle of the day.
Speaker 4: Because we have distributed solar, we can fill as I say,
Speaker 4: the belly of the duck with EV demand and that
Speaker 4: costs nothing. That is utilization of existing assets to the
Speaker 4: benefit of all customers, not just at EV driver, but
Speaker 4: all customers on the grid get a lower unit cost
Speaker 4: of energy.
Speaker 2: If someone told me recently they cald of phone, you
Speaker 2: have the second most expensive pound rights in the United States.
Speaker 2: Can you help me understand why that's the case.
Speaker 4: Yeah, Rates are a reflection of how much energy you use.
Speaker 4: We all have a grid that has to be built
Speaker 4: for a peak day. So if you have a grid
Speaker 4: and like ours in California, doesn't get stressed, but a
Speaker 4: handful of days of a year versus a Southwest or
Speaker 4: a Southeast utility where they have heat every day, we
Speaker 4: have to build the grid for that peak day. That's
Speaker 4: why evs and dynamic demand are such a benefit, especially
Speaker 4: for PGNE customers, because we have an underutilized grid that
Speaker 4: drives a rate up, but their actual average bill is
Speaker 4: not nearly as high as much of the country.
Speaker 2: Could we talk a little bit about power plants as well.
Speaker 2: How easy is it to build and connect new power
Speaker 2: plants in places like California.
Speaker 4: Well, it depends what you think of when you say
Speaker 4: power plant. In California, we think of clean energy. So
Speaker 4: last year in the California Independent System Operator Zone, we
Speaker 4: added nine gigawatts.
Speaker 3: Of new power supply. That surprises people.
Speaker 4: Nine gigawatts added in California last year that serves nine
Speaker 4: million customers. That nine gigawatts was mainly renewables. Mash with storage.
Speaker 4: Storage is the game changer. In fact, April sixteen, think
Speaker 4: storage was the number one resource utilized in California. Again
Speaker 4: masched with solar. We have great solar penetration massed with storage.
Speaker 4: That's a new kind of energy supply. One hundred percent
Speaker 4: of the energy that pg NEED delivered to our customers
Speaker 4: last year was carbon free. We have a modern energy
Speaker 4: system in California, and PCG is so proud to serve California,
Speaker 4: where I think it's the golden era of energy for
Speaker 4: all energy providers, but particularly in the Golden State and
Speaker 4: we get to power the Golden State and we're proud
Speaker 4: of that.
Speaker 1: How much time are you spending in Washington, DC and
Speaker 1: how much to Washington DC policies really change the way
Speaker 1: you approach some of this in terms of what the
Speaker 1: different potential subsidies are for grete energy or not, and
Speaker 1: also where solar panels are coming from and how much
Speaker 1: they cost, given that a majority of them are produced
Speaker 1: in China.
Speaker 4: Yeah, I don't spend much time in Washington DCO.
Speaker 3: I wear boots. I wear boots in a hard had.
Speaker 4: I had to do my hair special for today to
Speaker 4: be with you. Listen, I'm boots on the ground with
Speaker 4: my team. We are building the grid of the future
Speaker 4: and a lot of that it depends on us. We
Speaker 4: have a saying performance is power. When we perform and
Speaker 4: as we perform at PGE, we can deliver the power
Speaker 4: that people need.
Speaker 1: But to that point, how much is your business model
Speaker 1: challenge depending on what comes out of say tariffs on
Speaker 1: solar panels, that you will need to deploy for some
Speaker 1: of these energy purposes.
Speaker 4: Yeah, because our grid, again is underutilized, we have a
Speaker 4: lot of the resources we need.
Speaker 3: What we need to use them smarter.
Speaker 4: So I need to be with my tech companies because
Speaker 4: we're building a digital grid. We're building resources that are
Speaker 4: technical that are small bets, not big bet asset deployments,
Speaker 4: but leveraging the grid and serving customers in a much
Speaker 4: more dynamic way. It's a smarter, faster, more affordable grid,
Speaker 4: and we don't need much help from out of state
Speaker 4: to do that.
Speaker 2: Part of this was fantastic, fantastic. I see you in
Speaker 2: person without the hot hat.
Speaker 3: Yeah, anytime, anytime, John, I'll come back.
Speaker 1: Bring it.
Speaker 4: It's okay, okay, good, next time I'm wearing it.
Speaker 2: I think that would be nice some people in financial
Speaker 2: markets wearing tin hats, because that's a very different reference. Paddy,
Speaker 2: Pappy there the PG and e CEO