Latest / Not Another Energy Podcast / Can Energy Ever Be Free?
Transcript
- Bethany Ruhe: Hello, hello, hello and welcome to your new favorite show, Not Another Energy Podcast. I'm Bethany. Teresa Ringenbach: and I'm Teresa. Bethany Ruhe: And together we are Bloom Energy Partners. Teresa, today I want to take our listeners on a little kind of thought exercise with us. I people to kind of open their minds and try to think about a future where not only is energy not skyrocketing, ⁓ the for it, for like the American rate payer, the American customer, ⁓ not is it not skyrocketing, but it's free. ⁓ Teresa Ringenbach: Yes. Bethany Ruhe: Could energy, free of cost, not free like free as the wind, right? But which get into that, ⁓ but of cost. Is there a scenario in this world where the United States could achieve a goal where no American citizen is paying for their energy? And I understand it's a big leap, but we're gonna talk through it. And I'm actually gonna turn it over to you to kick off how you feel we could or could not possibly achieve that goal. Teresa Ringenbach: Freak. So. This is Teresa and her bleeding heart capitalist pushing back against. Can anything be free? All right, let's start at the beginning. Energy is a big business in the United States of America. ⁓ part that touches energy is a business. And I'm not just talking about monopoly utilities. I'm talking about the people that generate the electricity, the wires companies, the people that manufacture the wires that go into those wires companies, the electricians. And fun fact, most utilities don't actually hire their own linemen in-house. Most of them contract out to other companies who have that expertise. So... On the backs of the last two weeks in listening to all of these companies, they have put out their earnings, they've had their analyst calls. A lot of the utilities have exceeded their ⁓ expectations, which I find really interesting in a world of can we make energy affordable? ⁓ Fun fact though, shout out to First Energy whose CEO was very clear that their rates are 20 % below other utilities in the same markets that they're in and he intends to keep them there. So thank you for doing the right thing, Brian Tierney. Bethany Ruhe: Well, earning that millions and millions and millions of dollars he makes every year. Thanks, buddy. Teresa Ringenbach: I yeah, not as much as some though. I think he was pretty far down the investor on the utility list on how much money he makes. But can it be free? OK, I get this all the time. ⁓ is free. ⁓ sun is free. mean, great marketing claims, but you still have to pay for the technical side of moving that power. ⁓ Bethany Ruhe: Yeah, and collecting it too, right? mean, solar panels aren't free. Wind turbines aren't free. None of those, which are essential to actually harnessing the energy, is free. Teresa Ringenbach: Right, exit. Yes, yes. And I mean, I always love like the big claims of, you know, put your solar panels on and they're going to pay back in 10 years. Fun fact for those who are looking at solar panels, ask how long your panels last because it is not. So. Bethany Ruhe: Is it not 10 years? So solar panels and heat pumps, people, make sure you're asking about the life cycle. Teresa Ringenbach: Yes, yes. And again, get it if you want it. There is value there, but it's not going to make everything free. At the end of the day, there is a business behind all of this, and those people need to be paid. Also, there are a number of people who are employed in the energy industry, so it's not like this is some big bad situation. mean, you know, a good chunk of the American economy and people who are employed are in some form employed in the energy industry. So let's not forget that part of it. Yes, true, true. Bethany Ruhe: present company included. Teresa Ringenbach: So, you know, was always this interesting thing back in the day where people were like, well, I'm in marketing. How do I participate in energy? ⁓ There's so many companies out there that need marketing skills. I'm in accounting. I'm in ⁓ graphic design. Right. Like there's always a place for somebody in energy. And I don't think people really think about it that way. But. Bethany Ruhe: Yeah. Teresa Ringenbach: Because of that, energy can't be free. It is a commodity. It is bought and sold. And on that same note, I get the same other question, is, well, what about competition? Isn't that a way to get in there and make things free? Sure, but those same entities still have to produce the power, pay to deliver the power, and when it shows up at your house, there was probably that marketing graphic design person that convinced you to buy it. Bethany Ruhe: Yeah, yeah, I sat right next to our marketing team back in our direct energy days here in Pittsburgh. So I know a lot about what went into these campaigns. So it was a whole team. You're right. Teresa Ringenbach: Yes, and you look at. Constellation and NRG and some of the bigger publicly traded competitive businesses, their earnings costs were very interesting to me. still very bullish on building generation and supporting more power flowing to the grid. But they're also looking at things like virtual power plants ⁓ inside your home technologies to help you use your power smarter. They are ⁓ your traditional utilities. They're not just counting on you. use a kilowatt hour, I make money. Instead, they're thinking about if you use less, I can make money and share that with you. And that is a very new twist on how you might be paying your energy bills. And it's something that I would encourage everybody to look into. I think every state now has some version of a VPP situation for residential. We were in Montana this week and I was actually talking about PSEG's program for ⁓ one of the people we were talking about there, ⁓ Tribal Nation in New York. I was like, you guys at least taking advantage of what PSEG has, which is just sign up and you get $85. is that free? ⁓ Is it less than you would have paid otherwise? ⁓ ⁓ you contributing back to the grid to get that? ⁓ ⁓ there's ways to improve your bill by changing how you participate instead of just looking for free. Bethany Ruhe: So let me ask you this though, in these scenarios where you are installing devices in people's homes, encouraging them to use less energy and then sharing the spoils of that with them, if you will, do you feel like they're setting it up in an equitable way that there's a mutual benefit or is this definitely a scenario where, well, the utility's gonna get what they get and then you're gonna get like a little bit, like here you go. Thanks for playing. Teresa Ringenbach: ⁓ If they is an investor-owned utility, typically you're not getting the benefit that you think you're going to get. These programs have been around for a while. My favorite one was like... I don't know, about eight years ago, one of the utilities had this program that was like, I'll give you $50 to throw out your old refrigerator, except you paid more than $50 a year into the program as an individual customer. So one, if you didn't have a refrigerator that qualified, you were just paying into a program and you got no benefit. And two, even if you got rid of one refrigerator and it felt good to get $50, if you were paying $70, $75 a year for that you're out the money Bethany Ruhe: Yeah, you've just lost $25 and you have to buy a new fridge. Teresa Ringenbach: Yes, and unfortunately a lot of these programs when they're looked at, they're looked at on this like one-off who used it basis versus the tally of the total amount that you paid in. And I would like to think that that's changing, but we still see those programs across the country. You know, let me give you a free thermostat. Okay, and what do I get in return? ⁓ I got $40 for the year for my thermostat and I'm paying $80 into the program. I could have just bought my own thermostat. Bethany Ruhe: Yeah, and you're also probably monetizing my data. And I'm also not getting a chunk of that either. Teresa Ringenbach: True, true. So that's a nice way of saying I'm not a fan of the investor on utility programs. I'm not saying that all of them are bad. think California, and we've talked about SMUD before, CPS, I think they do a really good job because they're actually sharing the wealth. ⁓ If I was a customer and I'm in a co-op, so I don't have this option right now, but if I was a customer in a place where I could shop, I would be looking at some of the programs like NRG and other IGS. ⁓ the programs they're offering where they're not just giving you a flat amount, but they actually share what they make with you. It's obviously a variable amount because it depends on what's going on in the grid and how often you participate. So if you're hot and you override your thermostat in Texas, you're not gonna make as much money. Let's just be honest, right? It's a sim... Yes, yes, it's a symbiotic relationship. You do your part, I'll pay you. ⁓ Bethany Ruhe: You have to be willing to literally sweat it out a little bit. Teresa Ringenbach: But I think those programs are better because it's not just pay, pay, pay, pay, pay and get some flat amount that doesn't offset what you paid in. It's do this one thing and in return I'll pay you for it. Bethany Ruhe: So let's kind of back it up a little bit here because to me, when I think about possible ways to make energy free, obviously I'm thinking about renewables. Current administration, notwithstanding, ⁓ do you think are some barriers to ⁓ renewables be a bigger part of this potential solution? I do you see a future where ⁓ are exponentially ramping up our renewables? I mean, yes, you were talking about generation earlier, but. not a lot of people are talking about renewables in those scenarios, right? They're, you know, gas power plants and things of that nature. So how does, you know, mass adoption and embracing of renewables kind of play into this? Teresa Ringenbach: I think they're one again, I'm just going to keep saying this and nobody's going to like me saying it. It's never going to be free. But if you have a battery and you're using your solar panels to charge your battery because there's not enough space for them to actually service your entire home, then your battery isn't being charged from the grid. Technically. Bethany Ruhe: Right. Teresa Ringenbach: technically your battery is getting free power from the sun. If you set aside that you had to pay for the battery and the solar panels and all of that. So your fuel is free in that situation. And if your power goes out or you decide that you want to shift and use your battery to reduce your main electric bill, then that's also a dual benefit. You charged it for free with your solar panels and you used it during certain times to reduce your utility bill. Is that free? ⁓ Not sort of, but it doesn't cost you less in the long run, probably. The problem is, there's a few problems with that. ⁓ is ⁓ coding in certain areas, ⁓ you know, even the township where I live right now, sometimes they won't even let you put that sort of situation together. I've talked about this before. ⁓ are a lot of ⁓ departments who do not like batteries in homes. ⁓ They, and this is, there's a legitimate reason for it. A lot of times they have to be specially trained to deal with those when there's a fire. They need to know where they're at. So when they show up at your house, because there is a fire, they know how to deal with it. So there's a lot of catch up that needs to happen. ⁓ sometimes these ⁓ are sold as look at this great thing that you can do and it's locked onto your house. And then you as the homeowner are sort of stuck ⁓ catch up with all the code and the other requirements. Bethany Ruhe: So basically buyer beware. that's kind of on like a single, ⁓ go ahead, go ahead. You look very passionate. Teresa Ringenbach: Or talk to your fire department first. Go sit down with the fire chief. Say, I want to do this. What do you guys need? There's lots of grants out there for fire departments to get this type of training, but most of them don't because they don't think that this stuff is showing up in the area they serve us. Right. Bethany Ruhe: Yeah, they don't think it's going to apply to them anytime soon. So that's kind like on a single family home sort of scenario. What about larger, like either utility scale renewable options or community options? I mean, is there scenarios where, and again, obviously probably never going to zero it out to free, but like say a cul-de-sac gets together and they've got a big field behind where they are and they want to put up a big solar field and that's what they're going to use. Teresa Ringenbach: So, okay, let's set aside all the implications of an investor on utility now saying you can't do that in my backyard, which they all do, right? That is taking money out of their pockets and their earnings calls these last two weeks would look very different. But. Bethany Ruhe: Right. Teresa Ringenbach: They could, the cul-de-sac could do that. They could get together. Community solar is a great example, right? Everybody gets together, they own a little bit of it. Instead of it going everywhere, the community part of it is paid for by each house. Maybe the HOA owns it and then everybody pays for their HOA dues. Now, you still have to have the wires to move that power. You could probably sell it and just do the credits like traditional communities solar. But if I was in that situation, I would say, then let's all get batteries and charge our batteries and do what I was just talking about. not an impossible thing. think your problem there has more to do with regulations and state laws that prohibit stuff like that unnecessarily. I ⁓ say that. I think it is unnecessary ⁓ states ⁓ investor-owned utilities from technologies that would allow people to control their own energy. That is a very Teresa passionate statement. But ⁓ you'd asked me what is the number one thing that stops technology in the energy space ⁓ the Bethany Ruhe: Right. Yeah. Teresa Ringenbach: United States actually being its own independent from all energy sources. It is investor-owned utilities who say, not in my yard. Bethany Ruhe: And does it really boil down to just profits? mean, I'm sure they're also saying like, well, it could be threatening our resiliency or our infrastructure or, you know, I'm sure they have any number of arguments, which may or may not be valid. But at the end of the day, I think it's really about protecting their position and their profits. Teresa Ringenbach: I think you're right. Truthfully, they should be a plug. They should be the thing that says, as long as it's not gonna blow up my substation and it works for you, I will work with you. But that's not what they do. I don't think it's the right direction and I actually think it's gonna be the thing that's gonna destroy some of the investor and utilities in the next eight years. Because... As we learned from AT &T, you either embrace the technology or you disappear. ⁓ think we're at that tipping point. I think there are so many things that you can attach directly onto your home. ⁓ natural gas fired generators that run 24 seven. You've got your own base load power source. Not free, still gotta pay for the natural gas, right? But ⁓ ⁓ know, we live in this world today where Bethany Ruhe: Yeah. Teresa Ringenbach: Transmission is being built out over the next eight years. It's driving utility bills through the roof. Nobody's acknowledging that transmission is a major driver of cost increases. They're pointing at the data centers and like, ⁓ we don't have enough gen. But the reality is if you actually look at where the money's coming from, it's transmission. It's a huge expense. But if you're a reporter, how do you explain transmission? It's a lot easier to say like, ⁓ it's the solar field over there, or it's the data center. Bethany Ruhe: Right. Yeah, I mean, I definitely think in terms of the general public's perception, it's easier to have a bogeyman that they understand, that they can see and kind of point fingers to a vilify. speaking ⁓ the public perception. So, you know, we both recently shared with each other and I'll link to them in the show notes these articles about the ridiculous salaries that some of these CEOs are making. You in Ohio, me in Pittsburgh, ⁓ you know, Governor Shapiro, our governor here at Sood PJM, which we don't need to get into right now. But, you know, I think that there is just in general, think people are really starting to become more more discontent because we're seeing our energy prices go up and up and up and up. We are not seeing any tangible benefits or rewards for us, right, as the consumer. And then we're seeing these CEOs take home like millions and millions and millions of dollars. And, you know, you were on the investor calls. I mean, did did any of that stuff come up? And also, how many investor calls were you on? Teresa Ringenbach: ⁓ So super energy nerd and I like to know what's going on. I listened to about seven of them. OK, so there's two sides to this. ⁓ is just do CEOs make too much money in general? ⁓ they getting paid more? There's one very specific article about AEP's CEO. Bethany Ruhe: Yeah. Yes. Teresa Ringenbach: and loathe to defend this company, but at the same time, I would point out that if he made, if he didn't make the bonus that was put in that article, the equivalent back to all of the ratepayers is about $70 total for the year. some people say I will still take $70 for the year, but ⁓ doesn't funnel down in the way that people would think. It's not going to slash your bills in half by him not getting that bonus is my is my point. Bethany Ruhe: Yeah. Yeah, and I get that. just think it's more, you know, the outsiders that are reading these stories and reading these articles and aren't understanding the connection of the dots. You know, it's hard. It's a bitter pill to swallow when you're paying your $600 electric bill and then you're reading an article about the CEO of your utility making like $86 million a year or whatever. You know, it's tough. Teresa Ringenbach: Yeah. Yes. Yes, but then there's the flip side. I'm in a co-op. Our CEO is not making millions and millions of dollars. It's basically a nonprofit. My bill has doubled because of transmission costs. So know I keep pointing people there, but ⁓ also why your energy is never gonna be free, because you're relying on all these wires that have to go across all of these regions. Bethany Ruhe: Yeah. Teresa Ringenbach: And at the end of the day, somebody's getting paid to build the wires, to site the wires. And ⁓ really want to reduce your bill, ⁓ would push everybody towards microgrids, ⁓ you kind of did with your cul-de-sac. Bethany Ruhe: Yeah. Teresa Ringenbach: But instead of it still being connected to the broader grid, just something that you can island all by yourself. is a test bed in Louisiana where a community, kudos to ⁓ that commission down there who actually allowed this to happen. They actually did take a neighborhood and they turned it into its own microgrid and it had its own power source. And all of the residents maintained power. It was more about reliability. But in that scenario, think about it. If you and your neighbors, all you had to do was pay to do the maintenance on a microgrid. maybe you have some ⁓ form of fuel cost, depending on how you're going to do it. But let's assume wind and solar. your bill should be very, very low, because all you're paying for is to maintain that system. And you get more reliability because you're not relying on this huge grid all around you where, you know, some random person runs into a poll and your whole power is out. Bethany Ruhe: Yeah, yeah. also I feel like in that scenario you have to like your neighbors, which that's a whole other episode. ⁓ got ⁓ be some ironclad stuff in those agreements. We'll ⁓ on about the case for the public good, right? So like when I think about things like interstates and highways, ⁓ things everybody has to have in need and the federal government and state governments and local governments take care of all of that. I mean, I know there's toll roads and blah, blah, blah, blah. ⁓ But can't energy Teresa Ringenbach: True this yeah, yeah Bethany Ruhe: treated the same way? mean, it's essential, right? It's an essential service. So why isn't it the same way other ⁓ national infrastructures are? Teresa Ringenbach: Well, one, think it's too far gone on the competitive side. Two, ⁓ the reasons that we talked about earlier, think technology is going to ⁓ all of that at some point. I know you can't own your own road. That's technically not feasible, but you can own your own power source. Technically, you can do that. ⁓ I also, again, bleeding heart capitalists, right? If you've met me, you know how I feel about these things. ⁓ I don't know if you've ever driven on the roads in Cleveland, Ohio, but I would not want that to be my electric grid. Bethany Ruhe: your electric and I have not but I will be soon I'm going to the Rock and Roll Hall of Fame. We had a sinkhole here at one of our we had a sinkhole in Pittsburgh a couple years ago a port authority will announce Pittsburgh Regional Transit bus fell into it. Yeah. Teresa Ringenbach: They had a sinkhole, Bethany, in Ohio. Right. See? This is what I'm talking about. Do you really want that with your power? Bethany Ruhe: I mean, we're getting closer and closer all the time to some kind of catastrophe happening because we have this aging grid and we're electrifying more and we're limited on generation. Teresa Ringenbach: Because we started out with the public good being we're going to have these monopolies and they're the only ones that are going to control it. And now we have sinkholes on our grid because they've stood in the way of technology and competition. Bethany Ruhe: I'm gonna go ahead and end it there. I like that. So basically no your energy is never gonna be free There's I mean unless you know, it could be less it could always be less It could also always be more but yeah there I agree with you T I wish that we lived in a reality where there were more and more utilities that were working on driving costs down Teresa Ringenbach: Ha ha! It can be less. It can be less. Yes. Bethany Ruhe: ⁓ just because it's the right thing to do and energy prices are completely out of control right now, but they're certainly never going to let us live in a world where it's going to be free. Teresa Ringenbach: Sure, sure. And if you live in a co-op in our Muni, enjoy your low bills, because you guys have the best of all worlds right now. Yes. Bethany Ruhe: See, so it could be. If everybody was just a co-op or a muni, oh, we could dream, Teresa, we could dream. All right, well, thanks for listening, guys. Thanks for joining us. We're always so glad that you're here. And always feel free to drop us a note. If there's something you want me and Teresa to talk about, please feel free, email me at biru at bloomadvisorypartners.com. I'll put my email on the show notes. What do you want to hear us yap about? We'd love to know. So for now, signing off, I'm Bethany. Teresa Ringenbach: So good, nonprofits. I'm Teresa. Bethany Ruhe: And remember, energy is never just about energy.