Latest / Energy Empire / Inside California's Plan to Fix the Utility Business Model with Senator Josh Becker

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Inside California's Plan to Fix the Utility Business Model with Senator Josh Becker · Energy Empire

0:00
I'm so sorry, Josh, that like I had some role to play in getting
0:04
you down this rabbit hole. I mean, my God, is this getting
0:08
technical so quickly. But I mean, but it is super
0:11
important. I think we could actually really
0:13
increase credulization through this bill.
0:16
And listen, it's a it's a populist issue.
0:18
Figuring out affordability is a populist issue.
0:20
And you know, if we can say, hey, this is, this is right way
0:23
to do it, then we we can work together with them on it for
0:26
sure. Hello, my name is Jigar Shah and
0:33
I'm a clean energy entrepreneur. Hi, I'm Arnab Powell and I'm a
0:37
clean energy policy enthusiast. Wow.
0:41
And you're going to have to keep scripting that and trying new
0:44
things every time. Or not.
0:46
I know I still haven't gotten it yet.
0:49
Well, today we are going to have our good friend Josh Becker on
0:54
and talk a little bit about. You know what he's doing to
0:57
transform the state of California.
1:00
Sort of exciting times. Yeah, I mean, it's state Senator
1:03
Josh Becker for us, So we, we got to get that right.
1:06
Not only is he, I think, you know, one of the leaders in this
1:10
country on our issues and this space in general.
1:14
I he's just a, a, a very interesting human being.
1:17
And I think he's got a, a great background in life story and I
1:20
think he's really, you know, formed a community in the
1:23
legislature. So I think it'd be interesting
1:25
to just here where he thinks where we're at, because I think
1:28
in a in a world where we see a lot of negativity, I think he's
1:31
still doing a lot of positive things.
1:33
Well, one thing I was curious about though was, I mean, you're
1:36
also following closely. The governor's race, right,
1:38
because. I mean it.
1:39
Feels like a lot has changed, right?
1:41
Like Swalwell had to drop out. Now there's like a few other
1:45
candidates. But it still feels like a, you
1:47
know, like neck and neck race with three different people.
1:50
Yeah, I mean, in some ways the race is completely changed, and
1:53
in other ways, it's the exact same as where it's always been,
1:56
which no one really knows is going to be next governor of
1:58
California. It seems like former congressman
2:02
and Attorney General Becerra and, you know, your friend Tom
2:06
Steyer seemed to be in the lead here.
2:10
And then there's two Republicans who might have a chance that
2:13
normally wouldn't. So, you know, I think for the
2:16
first time in the generation, like people have no idea what
2:19
the governor of California is going to be.
2:20
That's crazy. Well, excited to talk to Josh
2:23
Becker. Thanks for joining us as always
2:25
or not, you're always the person who brings all the best insights
2:29
to these kind of conversations. Yeah, I, I don't know if that's
2:32
actually true, but I just like being on this podcast, so thanks
2:35
for having. Energy Empire empire is powered
2:43
by octopus energy. I hear it at every conference.
2:47
We need more generation, more transmission.
2:51
You're saying we don't? We do, but we're ignoring
2:54
something faster. Sitting in people's homes and EV
2:58
is basically a 60 kWh battery idle most of the day across the
3:04
US. That's gigawatts we're not
3:06
using. Utilities have pitched demand
3:08
response for 20 years and it still hasn't scaled.
3:13
Why is this time different? Because we're not asking
3:16
customers to change behaviour, we're automating it.
3:19
The grid treats customers like demand that actually distributed
3:23
infrastructure. Connect those assets and you can
3:25
shift load overnight at scale. So the constraint isn't
3:29
technology, it's coordination. The solutions already deployed,
3:34
we just need to use it. Thanks, Natasha.
3:37
That was Natasha Crowe, vice president of marketing and comms
3:41
for Octopus North America. If that's the version of the
3:45
Grid you want, check them out. The link is in the show notes.
3:54
Josh Becker as I live and breathe.
3:57
Welcome to the podcast. Good to be here.
4:00
You and I go so far back. I mean, I think we first met
4:03
probably in the arts. Right.
4:05
And then you were a venture. Capitalist, you did all sorts of
4:08
cool stuff. You served in government, right,
4:10
on an important committee, and now you're an elected senator
4:14
that not only is elected from one of the most important parts
4:18
of California, but you're actually, you know, like running
4:22
a lot of the energy policy in the state of California.
4:24
Yeah, I mean, ran for the legislature is the best thing
4:27
I've ever done. I mean, I love it here.
4:30
I love my colleagues getting good stuff done and it's a lot
4:33
of fun. Well, let's just jump right into
4:35
it. I think as you know, the climate
4:38
work in California continues. We have deployed so many
4:42
batteries, solar, wind power, clean energy broadly, and it
4:47
worked right. Wholesale market prices have
4:49
never been lower. And so we.
4:50
Have a huge amount of power, and so much so that we're actually
4:54
now sharing all that excess power with.
4:56
Friends in neighboring states like Nevada and Arizona and and
5:00
Oregon. But you know, but one of the
5:02
things that's been stubborn to deal with is, you know, the
5:06
wildfire costs and the the overbuild on the wire side,
5:10
which is really driven rates up. And you've got a whole bunch of
5:13
ideas on, you know, how to really start to control those
5:17
costs. So we'd love to hear more about
5:18
your agenda this year. Yeah, we got a lot of ideas.
5:21
We'll see what to see and get them passed.
5:23
But yeah, listen, I you know, we've all been at this a long
5:25
time. I remember I worked on EP as
5:28
first Clean Air Marketplace conference in 1992 and walking
5:33
around and saying, Oh my God, I'm sure all this great
5:36
technology will be deployed in no time, including these
5:38
electric vehicles and, and, and didn't happen.
5:41
So I realized, you know, we need both innovation and markets.
5:45
I mean, sometimes people promote and we love when we have friends
5:49
on the right who, who actually embrace clean energy, but they,
5:51
you know, they say, you know, innovation over regulation or
5:54
you know, markets not mandates. And the truth is we really need
5:58
both. I mean the success, even though
6:00
we have a cap and invest system here in California, really a lot
6:05
of our gains in electricity came because we had the renewable
6:07
portfolio standard. We said you have to have 5% of
6:10
clean energy for utilities, then 15%.
6:13
Nobody thought we'd get that, then 25%, then 50% and on up.
6:16
So it's been that combination here.
6:19
But what we're seeing now is a real concern in California
6:23
really across the country around rates.
6:26
And we've a number of different things that we'll, I'm sure
6:28
we'll talk about, about what we need to do.
6:31
But part of that is to use our existing grid more effectively.
6:35
So you've been a senator for some time.
6:38
I feel like when you were first elected, nobody really paid that
6:42
much attention to their electricity bill.
6:44
They didn't really understand all the components.
6:47
It now feels different, right? It feels like people have all
6:51
become investigative journalists and like actually.
6:55
Are digging deep into you know how where this is coming from
6:59
and it does feel like folks are starting to understand that
7:04
they're sort of taking on. The investment strategy of PG&E,
7:08
right, this isn't just about the number of kilowatt hours that
7:10
they're using I. Don't know how.
7:12
How is your constituents like? How have they evolved in terms
7:16
of their thinking about electricity?
7:17
I mean, the reality is, is just, we've already seen the, the, you
7:21
know, the warming in my area when I first moved to 25 years
7:24
ago, you know, you didn't need air conditioning, Nobody had air
7:27
conditioning. And then you need, we had one
7:29
wall unit because it fit, you know, my daughter's room face
7:31
the sun and then another wall unit.
7:33
And then we had a mobile unit and cost started to go up.
7:36
You know, fortune for us. We got heat pumps.
7:38
So we now have air conditioning as well as greenhouse gas free
7:42
heating. But you know, people just
7:44
started paying a lot more attention to the bill.
7:46
So they don't really know all the specifics.
7:48
They just know they're really unhappy.
7:50
So, you know, I think as California tries to electrify
7:53
the rest of the economy, you talked a little bit about, you
7:56
know, agriculture and some of these other things.
7:58
But I think. One of the things that we're
8:00
faced with right now is, as you know, gasoline prices have gone
8:03
through the roof, and folks are thinking about, you know, EVs
8:06
too, right? And so it feels like there's
8:09
unlikely bedfellows that have come together right now to
8:13
actually do big things, right, to actually change things in a
8:17
fundamental way such that we can reduce electricity bills by
8:21
2030%. You know, like, I think when Tom
8:23
Styer first said that in his campaign, maybe in January, we
8:27
said, oh, we can reduce rates by 25%.
8:28
I think people are like, he's being hyperbolic and now it
8:31
feels like everyone's talking about reducing rates by a lot.
8:34
That's certainly been the focus, you know, here in the
8:37
Legislature for a long time. With respect to Tom.
8:40
We've been working on this for a long time.
8:41
I mean, you take a look at the bill last year, for example, we
8:45
said that, you know, a lot of the utility spending is, you
8:47
know, on wildfire. We can't really make sure we're
8:49
getting the bang for the buck and aligning what's going to be
8:52
done at a local level, regional level, state level in terms of
8:56
the spending. Utilities are spending $10
8:58
billion a year on wildfire. Great.
9:00
But are they doing the hard stuff, right?
9:02
Are they doing the stuff they should be doing and are we
9:04
getting the bang for the buck in doing that?
9:06
We took $6 billion of their spend on wildfire.
9:11
We said you have to use to do that with securitized debt, not
9:13
with equity. So you can't rate base that
9:16
there's a lot of screaming and but you know, it did happen.
9:19
You know, really the big risk for utilities is the existential
9:24
risk is, you know, wildfire and bankruptcy.
9:26
And we, you know, started to take that off the table with a
9:30
wildfire fund that we set up. So and this year we'll have
9:33
taken another big look at sort of the liability piece of all
9:37
that. So you you put forward Senate
9:39
Bill nine O 5 and you really try to go directly at the utility
9:43
incentives. Do you want to talk a little bit
9:45
about the problem you're trying to solve with that bill?
9:47
Yeah, we're trying to get, you know, lectures raised down
9:50
again. And fundamentally, one thing I
9:54
learned, you know, being in the private sector, you know, it's
9:56
all about aligning the incentives.
9:58
And fundamentally right now, you know, the utilities are on
10:00
bigger profits and exactly have bigger bonuses by spending more
10:04
money. That's just the way the
10:05
incentives are are set up and we do see some good signs out
10:09
there. The PG&E is piloting a lot of
10:11
good ideas like flexible interconnections and try to work
10:14
smarter. But as they say, you know, I
10:16
hope it's not a strategy. We need to make sure that we
10:18
have the right incentives to though, you know, be incentives
10:22
to do the right thing. Now part of that is looking at
10:25
the return on equity. There's certain investments like
10:27
undergrounding, for example, that shareholders would agree
10:31
to, you know, demand a, a lower return on because those are
10:34
things that again, get to the fundamental existential risk of
10:37
utilities versus something like, you know, buying a new
10:40
transformer. So there's part in there to look
10:43
at having a different return on equity.
10:45
And you know, there's part around getting the, the
10:48
incentive structure of the VP level and higher the utilities
10:51
to keep rates below inflation because that's, you know, that's
10:54
at the end of the day the measuring stick that we're
10:56
trying to do. So there's a number of pieces in
10:59
there, but really trying to get those incentives right.
11:01
Well, one of the things that you keyed in on is also around
11:06
executive compensation, and you're really trying to link
11:10
executive compensation to controlling electricity cost.
11:14
How do you think that would work and why does it matter?
11:17
Well, instead of rewarding the people running utilities for
11:19
maximizing spending and profits, we want to create some cost
11:23
discipline. And this will say 20% of your
11:25
annual compensation is based on keeping rates from rising faster
11:29
than inflation. So we're not even talking about
11:31
lowering rates, just keeping them from rising in real terms.
11:34
If you can't do that, if you can't, you know, keep raising
11:37
rates, then you don't get the bonus.
11:39
So I think it's important because, you know, only the
11:41
people running the utility day-to-day and the people make
11:44
thousands decision what to do and what not to do.
11:46
They're the ones that figure out how to prioritize, how to be
11:48
more efficient, how to deliver safe, reliable, clean,
11:51
affordable power within a budget that doesn't raise rates.
11:54
So, you know, every business in the world has to figure out how
11:57
to operate within a budget of what their customers are willing
12:00
to pay. And we have a monopolistic
12:02
system here. And so they don't have some of
12:04
the same constraints. And so this will put some of
12:06
that discipline back in. Now the other thing that you
12:08
focused on is metrics. As you know, any good business
12:11
person knows you manage what you measure and you've got specific
12:15
things in there that you want them to measure.
12:17
We do want to go through that. Yeah.
12:18
I look at this really more of like a, you know, a dashboard
12:21
sort of school card. So you ask them to do a lot of
12:23
different things. So, you know, we don't want to
12:26
focus just one aspect of their performance.
12:28
So this is like a, you know, KPI that you would see at a company
12:32
for utilities. We care about safety,
12:34
reliability, cost drivers like spending and utilization of
12:38
assets, customer service like how quickly can they handle
12:42
customer requests or to interconnect new generators and
12:46
climate targets like what percent of electricity is coming
12:49
from zero carbon sources. So by laying out a set of
12:52
performance metrics, we just see this is just good government,
12:55
we're running clarity that these are the things that that we
12:58
really care about and we've seen that.
13:01
Again, just think this or this could be very helpful.
13:04
You know, I mean there does seem to be a very large anti utility
13:09
sentiment right as bills have gone.
13:11
Up and you know, I think for a while people thought it was a
13:14
California. Thing, but now you're seeing
13:16
that with Duke Energy in North Carolina, you're seeing that
13:18
with Con Ed in in New York City, you're seeing that with a lot of
13:21
places where people have had higher rates.
13:24
And I'm curious, you know, whether you think that, you
13:28
know, these bills are anti utility or anti investment.
13:31
Listen, you know the way our system is set up, we need health
13:34
utilities, their their ability to raise capital and do all the
13:38
important work that it takes to operate their grid while also
13:41
reducing the risk of fires switching over clean energy,
13:43
supporting low growth to power economy.
13:46
You know, they're vital to the success.
13:48
And ultimately, you know, their borrowing costs do affect the
13:51
costs that get passed on to to repairs as well.
13:56
But, you know, we need to trust them as partners in this
13:58
mission. Again, I think we have some some
14:00
good leadership now that we're working with, but we don't want
14:03
to constantly worry that they're trying to bloat their spending,
14:06
say as much as possible to maximize profits for investors.
14:09
So, you know, this is really like, OK, let's talk about how
14:12
we fix that problem. Let's align the incentives and
14:15
then get back to working together to deliver safe, a
14:18
reliable, affordable, a clean power.
14:21
So I I think that there is a way that again, we can work
14:25
constructively but within the right framework.
14:29
Well, you know, back in the 19. 70s Amber Lovin's talked about
14:32
the soft path, right, which was really energy efficiency and,
14:36
and all of that stuff. And California frankly, has led
14:38
the way on the soft path, right? And figuring out how to do more
14:41
with less. And it's grown its GDP
14:44
tremendously without having to grow electricity sales as much,
14:48
right? I, you know, part of where we're
14:50
headed now, as you referenced it earlier, is grid utilization.
14:54
And you know, and like figuring out how we actually use the
14:57
grid. We've already paid for more
14:58
efficiently before we build more stuff, which we will need to
15:01
build more stuff. But how do we use what we
15:03
already paid for more efficiently?
15:05
Do you think that that's too wonky?
15:06
I know we talked. About it with Line Vision and
15:09
our good friend Rachelle and you know, Arnab went through the
15:12
deploy action report that, you know, they had put out earlier
15:15
in a previous podcast. And so I don't know where do you
15:18
put that because, you know, energy efficiency obviously is
15:21
well known, but you know, gradualization feels a little
15:23
technical. Well, the way that.
15:26
I've been able to explain it that I think resonates with, you
15:31
know, most folks I've talked to is to say our grid is like,
15:33
think about like the Walmart parking lot.
15:36
They don't build the Walmart parking lot for, you know,
15:39
January 6th, Tuesday at 10:00 AM.
15:42
They have to build it for the Saturday before Christmas and
15:45
therefore, you know, most of the time there's a lot of excess
15:48
parking and our quids like that as well.
15:50
The quid is only strained, and this was a big realization for
15:53
me. In California, the quid is
15:56
strained around 40 hours a year. 40 hours, that's like less than
16:01
a half a percent right of the hours a year.
16:04
Yeah, but we can't fail. No governor wants to fail.
16:07
No legislature wants to have blackouts.
16:09
And so we have to meet that peak.
16:11
And so, you know, traditionally we just sort of build, build,
16:14
build to make sure we have that peak.
16:16
And that reality is we have massive excess capacity most of
16:20
the time. And so I think we explained it
16:22
that way, people that kind of brings out the light bulbs to
16:24
say, Oh yeah, OK, good. So we want to do 2 things.
16:28
One and this is, you know, we can align with utilities on
16:31
this, bring on beneficial load all the electric vehicle load a
16:35
data centers. If we do it the right way, which
16:37
I'm sure we'll talk about it, that can be beneficial load all
16:39
these. You know, I have a bill this
16:40
year around industrial. You know, there's emissions
16:43
generally 23% of California's emissions, it's an error.
16:46
We've made almost 0 progress, OK.
16:48
How can we provide the right incentives to electrify that of
16:52
that food processing plant in Fresno and get them on the grid,
16:56
give the incentives to at the time, especially the time of day
16:59
when we've got massive excess capacity.
17:01
So this caused beneficial load and then this other piece of
17:05
other ways of meeting that peak, right?
17:07
How can we cut it rather than just building, building,
17:10
building, how can we shift load during that peak and provide all
17:13
the all the right incentives, reward people for doing the
17:16
right thing. All those, you know, batteries
17:19
that people have now installed in their homes and ultimately
17:21
all those batteries that the Super powerful ones that are in
17:23
people's cars, How can we use that to shift the peak so that,
17:28
you know, again, we don't have to worry about about hitting
17:32
that mount. So we sort of explain it that
17:34
way. It seems to be resonating.
17:35
That's great. You know, the other thing I'm
17:37
curious about though is you were talking about metrics before.
17:40
Is this something else that we need to collect data on in terms
17:43
of gradualization and so that there's more transparency around
17:46
it? Yeah.
17:48
Well, we know today that California's generation capacity
17:50
is only used about 45% of capacity on average.
17:55
So that's pretty low, but it's not the main problem.
17:58
As we talked about, the spending problem is really happy mostly
18:01
the distribution level. Every time someone needs a panel
18:05
upgrade, the utility puts in a bigger pole transformer.
18:08
We're upgrading circuits and substations all over the state
18:11
with little regulatory oversight just to deal with a potential
18:14
problem forecast for some time in the next five years.
18:18
In some scenario when the utility is looking at a place on
18:23
distribution grid where there might be a problem 10 hours a
18:26
year, but most of the time the utilization is less than 50%.
18:29
Probably far cheaper to install a battery or make use of some
18:32
demand flexibility from customers in that area rather
18:34
than upgrade that infrastructure.
18:36
But that's not really happening today.
18:38
And that's what one thing I think that we need to change.
18:41
So kind of rate in the the the build baby build approach to
18:45
managing distribution system really to understand at a much
18:48
more granule level what the utilization is for all these
18:51
individualized circuits. And I think we're going to see
18:53
very low numbers. You know, Australia, they were
18:55
finding utilization rates less than 20%.
18:58
Oh yeah, no, I think in California PG&E is estimating
19:01
that their wires are used less than 35% of the time.
19:03
So it's it's pretty low. I totally agree.
19:06
So switching over to my hobby horse, you know, you've also
19:10
instituted or put forward Senate Bill 913.
19:14
And you know, I've been frustrated by the fact that
19:16
there's 3000 megawatts of behind the meter battery storage,
19:19
right? You've got the DSGS program,
19:21
you've got people with electric vehicles, you have people with
19:24
smart thermostats, you have people with smart appliances.
19:27
And there doesn't seem like there's actually any way for
19:31
them to get compensated for helping out their neighbor at
19:34
strategic times, particularly those 40 hours a year you were
19:37
talking about. So what's?
19:38
Broken in the current system. Yeah.
19:41
Well, first of all, you know, you've helped educate me on
19:44
this, you and Arna both over the last couple years.
19:47
And I think it's helped us focus in in this area.
19:52
You know, California's added 17 gigawatts of battery storage,
19:57
most of that just since I've been here in the last six years.
20:00
We have two, two and a half million EVs, very powerful
20:02
batteries, 2 million heat pumps, and we can, you know, continue
20:05
to add more distributed capacity resources each year.
20:09
And that, you know, process is largely due to the measural
20:13
benefits that people get. They're saving money through
20:15
price incentives. However, we really need to be
20:18
doing a better job to let them shift their behavior when the
20:21
grid needs it. So we have mechanisms to do
20:24
this. We have something called the
20:24
Resource Adequacy program in California and with Kaiso's
20:28
reliability markets, the problem is that the requirements for
20:32
participation in that program and RA program and Kaiso's
20:35
market rules have not evolved in a manner that considers the
20:39
attributes or operational characteristics of those
20:42
resources. So for example, the current
20:44
concert does not credit electricity that's exported past
20:48
the customer's utility meter. So RA valuation is currently
20:51
limited to how much electricity customers are using a joint
20:55
demand response events. So valing the exports past the
20:58
customer's utility meter will allow customer owned resources
21:01
to provide additional value, you know, beyond that reduction of
21:04
net. Demand I'm so.
21:06
Sorry, Josh, that like I had some role to play in getting you
21:10
down this rabbit hole. I mean.
21:12
My God, is this getting technical so quickly?
21:15
But I mean, but it is super important.
21:17
I think we could actually really increase gradualization through
21:20
this bill. Yeah, Yeah.
21:23
I mean the reality is, I mean, listen, to simplify it, it's
21:25
just like the market rules are not set up.
21:28
And we've been, you know, playing around with that for a
21:31
number of years trying to change this or that.
21:33
And you know, that's the problem we're trying to solve, solve
21:35
here. I mean, you know, they forecast
21:38
to give another 4 to 6 gigawatts of customer set of battery just,
21:41
you know, by 20-30 alone. And we mentioned, you know, EVs
21:44
are another resource with bidirectional charging.
21:46
So we have to change the market rules to allow those folks to
21:51
participate. Totally.
21:53
So you're saying the market rules aren't set up, You know,
21:57
why is that? And like, why don't they they
22:00
count today. Why are you having to do all
22:02
this? Well, I mean, listen, I mean, I
22:06
think for good reasons, they've set our rates or agencies have
22:09
set requirements for what qualifies as resource adequate
22:13
adequacy. They want to ensure that
22:14
utilities are procuring resources that help me local
22:18
system and all the resource out O that oversight is important.
22:22
But those same requirements you can make it really difficult for
22:25
these resources to count in the same way because they have
22:29
different attributes than traditional.
22:32
Well, I don't know. I'll interrupt you here, Josh.
22:34
And I'll say because you can't say it.
22:36
That the CPUC basically. Has gone to war with distributed
22:39
generation and didn't really like them participating.
22:43
And so even though the Federal Energy Regulatory Commission is
22:46
required under third quarter 2222.
22:49
You know, California independent system operator to provide this
22:52
benefit. They have done everything in
22:54
their power to sabotage how much people get paid.
22:57
I thank the Lord that you've decided to put this forward to
23:00
try to rectify a wrong here. I mean, it's crazy that people
23:04
have spent all this money on batteries and can't get
23:06
compensated to help their neighbor.
23:10
Yeah. I mean, listen, fundamentally, I
23:11
mean, they, you know, they say they're working on this and
23:13
they're, you know, they have a few pilot programs and things
23:15
like that. But yeah, this cuts to the
23:17
chase. You know, this requires them to
23:20
consider this atrophy, you know, allow flexible contract terms
23:22
and program rules and things that we need to make these
23:25
resources count. So I'm really excited about it.
23:28
I'm hopeful we can get this one through this year.
23:32
And you think 913 is what it's going to take for these home
23:37
batteries to to count the same as a big power plant for for RA
23:42
or are you it is it like the first step?
23:44
And then we have to work with the new governor and, you know,
23:47
work on implementation, Like, what does this look like?
23:49
Because you're good at passing bills.
23:51
But you're one piece of the puzzle here, right?
23:54
Yeah. I mean, I think that we have to
23:56
make it easy to sign up. And what's great is that, you
24:00
know, under the DSGS program kind of proved that, you know, I
24:03
had a friend who had a Powerwall and they received an alert, said
24:07
do you want to participate, you know, have your battery
24:09
participate in this program. And they said yes and clicked a
24:13
button. That was it.
24:14
I mean, it should be that easy to participate.
24:17
So, you know, again, it's about finding the incentive, you know,
24:20
changing the market rules so they're they're fair in this
24:24
way, but then also making it easy for people to sign up.
24:26
Well, and the reason it's so important?
24:28
As you and I have talked about is it's Looney Tunes to me that
24:32
all of these companies are based in your district.
24:34
They're all based in California, right?
24:36
They all got their start in California.
24:38
They've got their headquarters in California and their biggest
24:40
markets are in Massachusetts and Texas.
24:43
And so I really. Like the fact that you're
24:45
stitching all of this together in a way such that these
24:49
companies which have gotten their venture capital in
24:51
California can actually start to deploy their solutions in
24:53
California. And so, I mean, I think it's, I
24:56
think it's. Glorious work you're doing here
24:58
with SB-913. Yeah, that's.
24:59
Right. And we had a big win in
25:00
Virginia, as you guys know. You guys were a big part of
25:03
that. You know, Maryland and
25:06
California should be leading. That's actually one of my big
25:09
things is to actually, you know, especially in a time of the
25:12
headwinds from the federal administration with absolutely
25:15
backward policies on clean energy, we need to get the
25:18
leading edge climate states to work together to share ideas.
25:22
So I really enjoy that when I'm reaching out to other state
25:26
legislators in leading edge climate state to to share ideas.
25:29
And again, this is 1 where Virginia led and that's great.
25:33
And you know, you got to get California gear too.
25:36
And for the record, you know, Virginia got the first bill
25:39
signed by the governor, but you, you had a bill last year that
25:42
would have done some of the data elements of that.
25:44
So, so you do get some credit for going first even if we
25:47
didn't get it signed first, I'll take it.
25:52
I think that's exactly right. One of the things I'm also
25:55
curious about is it I, it feels like there's a bunch of
25:57
batteries going in, as you suggested between now and 2030
26:00
because of the NEM 3 point O fight, right?
26:03
Where basically all net metered systems now need to have
26:06
batteries. You've got a bunch of electric
26:08
vehicle manufacturers who are suggesting that they're going to
26:11
have vehicle to grid technology added to all of their cars.
26:14
Rivian just announced that, right, Because they want to be
26:16
able to help you run your house off your car if you know you're
26:20
an emergency situation. You've got Reem and AO Smith
26:23
saying that all new water heaters that they ship are going
26:25
to be smart water heaters, right?
26:27
You got Carrier coming out saying they've got all these
26:29
heat pumps now with a battery associated with it.
26:33
I mean, it's exciting times, right?
26:35
But one of the things that I find fascinating is that no one
26:38
seems to be including the the community choice aggregators,
26:42
right? I mean, how do you find we have
26:44
all these different people in California, right?
26:47
And you have the utilities, they're sort of responsible for
26:49
the wires. That's where the savings are.
26:51
But you got the community choice aggregators, which are host,
26:54
they're supposed to be prosumer, right?
26:55
They're supposed to be the ones who the customer likes, they get
26:58
their bill from them, etcetera. Yeah.
27:01
I mean, how do you bring it all together to to get Californians
27:05
to realize that this is really a revolution that they should be?
27:07
A part of. Yeah, well, the community, it's
27:12
a good point. The community choice
27:13
aggregators, like they're made-up.
27:14
Their board is all local electeds and that should be
27:18
their strength, right? They're closer to the ground, so
27:22
to speak. And I've actually said to my
27:23
team, you know, every newsletter I send out, I have 100,000
27:26
people that open my newsletter, you know, anytime that if they
27:28
have a promotion or an incentive or, you know, a program for
27:32
people to sign up to, you know, sign up their batteries,
27:34
whatever it is. Yeah.
27:35
That we help spread that word too.
27:37
So yeah, I think it's a good point.
27:41
We have to remember all this stuff is still kind of
27:43
relatively new where people hand batteries in their homes at all,
27:48
let alone batteries that could be then used to help and support
27:52
the grid and knit together to form critical infrastructure.
27:55
So you don't want to be too hard on ourselves, right?
27:57
This is all still, you know, relatively new stuff.
28:00
But I think, you know, we, we do have that opportunity.
28:04
This is simplifying the utility bill will also be helpful.
28:08
It's super confusing right now, you know, for my wife and I,
28:11
when we try to go through it, we have the climate credit that
28:14
comes from our cap and invest system.
28:17
We took some steps this year to both enlarge that and have it go
28:21
the times of the year when people really need that.
28:24
So, and hopefully be more prominent.
28:26
So they actually sort of feel that as well.
28:28
So I think there's a, a chance here.
28:30
We've stopped rates, you know, largely from from increasing.
28:34
And again, you know, kudos to some of the utilities who are
28:36
doing some good work on that area too.
28:38
But now we need to start actually lowering rates.
28:42
And, and then we that's, you know, how, how ultimately that
28:46
that trust has won. But I think that education piece
28:49
around this whole new area is really important because it's
28:52
most people still don't quite grok it just yet.
28:56
Yeah. And look, I, I think we should
28:57
look at this positively and I think we should look like, look
29:00
at like, what does success look like here?
29:03
I think you know, and we've talked so much in the weeds
29:05
about everything, but I do want to take a little bit of a step
29:08
back. You know, you're, you know, one
29:10
of the things I think you know is makes it easy to work with
29:13
you is you know, you're, you're you're pro climate, you're
29:16
you're pro consumer, you're pro technology.
29:20
All those sort of, I think positions are put you in a good
29:24
place to help bring down costs for folks.
29:27
But bringing down costs isn't always just a, a partisan issue.
29:31
I think there's plenty of Republicans that want to bring
29:33
down costs. And, you know, while you always
29:36
stick to your values, like you were always open with working
29:40
with progressives, moderates, Republicans, if it's in the name
29:43
of the things you, you believe in and care about.
29:46
And, and my longer winded question here is it may not
29:48
matter in California, but like, can we get Republicans to
29:52
support us on this stuff? Because it's pretty kitchen
29:56
table. It's pretty common sense.
29:58
Use more of your grid, bring down costs.
30:01
Like like where do you think they stand on this?
30:03
Yeah, I think, I think it got some.
30:05
I have to go back. I think, you know, certainly we
30:08
did the western grid. We got Republican votes for
30:10
that. Certainly we did get Republican
30:12
votes for, for for 913. So I think, you know, treated in
30:16
that way as like, hey, this is a way to save people money.
30:21
I mean, listen, it's a it's a populist issue, right?
30:24
How you know, figuring out affordability is a populist
30:26
issue. And you know, if we can say,
30:29
hey, this is this is right way to do it, then we we can work
30:32
together with them on it for sure.
30:33
OK, so if it's 2030 and you know, we now have what, less
30:38
than five years to 2030, the next four years, right?
30:41
You know, like what, what would you hope the average customers
30:46
electricity bill looks like? What's different about how they
30:50
deal and interact with the grid then how they currently do?
30:53
Well, this I think fundamentally the success is when you know,
30:57
people want that EV because they're going to save money.
31:01
They want that heat pump not only because it's great for the
31:04
environment, but because it's going to save money.
31:07
And honestly, really, you know, back to a day when, you know,
31:11
people aren't even thinking about their utility bill that
31:13
much, it won't be one of the the top issues on their mind because
31:18
they'll be both seeing the benefits of all these new
31:21
technologies, get the air conditioning with their heat
31:23
pub, all the advantages of it, EV, all the maintenance
31:26
advantages, all that while also saying, yeah, this is a really
31:30
good way to save, to save money. So I mean, I think that's the
31:35
vision. I mean, the great thing, you
31:36
know, I was really proud to represent our state and our
31:39
country at the climate change talks in in Belem in Brazil.
31:43
And, you know, I got to talk about how for, you know,
31:47
Californians, it's it's, you know, that clean energy's not
31:51
just a moral but a economic imperative.
31:55
And we've seen the benefits from conservation.
31:57
We saw those benefits early on as a state.
31:59
And we can be a leader in in these ways as well.
32:03
And you know, what's fun about it, As you said, the
32:05
technologies are here, a lot of the ideas are here.
32:08
It just kind of putting it all together now into place.
32:11
I think we know what we need to do.
32:13
And I'm just excited. We got some great colleagues.
32:16
We're at peak wonkiness here at the in the state Senate.
32:20
We've got a lot of really smart people.
32:21
My colleague Henry Stern, who I met doing clean tech for Obama
32:24
years ago, my colleague been out and you know, across the board,
32:28
our Pro Tem has been a wonderful leader on these issues.
32:31
So I think we've got the right people.
32:33
The other thing we just last thing we just hadn't talked
32:35
about, tell me if you want to talk about is fixing that
32:39
wildfire liability problems. We said a lot of the things is
32:42
stuff we stuck into rates. All of our public interest
32:44
programs are care and fair programs where low income
32:47
customers get discounts. That's stuck in a rate.
32:50
So that's a three $4 billion program.
32:53
And so one of the things that that we didn't mention that nine
32:57
O 5 does is it creates what we call a power fund and that's
33:01
really the vehicle to take those costs out of rates and into the
33:04
general fund. Now we have to wait till there's
33:06
actually money for the legislature to appropriate it,
33:08
but we're going to get that structure set up.
33:10
So if open AI goes public and Throbic goes public, if, if the
33:14
budgets are really high next year, we can power up that power
33:19
fund and we can take those things out of rates.
33:22
Otherwise it's a really regressive way to pay for those
33:27
programs. They should they benefit the
33:28
whole state, the wildfire prevention benefits the whole
33:30
state. We should pay that out of the
33:33
general fund, not out of rates. And that's, that would be really
33:36
helpful as well. So if we're if we could do that
33:38
as well as the pieces we're talking about using the existing
33:41
grid more effectively, then I really think we can lower rates
33:46
substantially while keeping our, you know, really world leading
33:49
progress in in clean energy going.
33:52
So I'm super excited. I'm very optimistic.
33:54
I think the the takeaways you would like to make electricity
33:59
bills boring and cheap again, right?
34:01
Yeah. I mean, that's it.
34:02
We, when people like, don't think about it honestly, then,
34:05
then we've won. Well, you know, I mean, you are
34:08
going to. Have SpaceX go public this year
34:10
so maybe they'll fund it. Yeah.
34:12
I mean, we've lost a couple of those taxpayers, but they're
34:15
actually 8000. I just heard the other day is
34:17
8000 SpaceX employees in in California.
34:22
So that'll also be good for our general fund.
34:25
You know, we're very income tax dependent states, so we could
34:28
have some good budgets ahead. You know, the other thing for me
34:31
honestly is that I just, you know, one of the things that I
34:35
find fascinating is 2025 was the year that, you know, President
34:40
Trump really politicized clean energy, right?
34:43
And I think before then it was largely A bipartisan issue,
34:47
right? It was really deep politicized.
34:48
I mean, you've got a lot of wind power from North Dakota all the
34:51
way down to the Texas Panhandle, right?
34:53
You've got a lot of solar power in Texas and lots of other
34:56
places. Folks are going solar and rural
34:58
America now just because, you know, it's a lot cheaper than
35:00
what they're of getting other things from.
35:02
So a lot of what I'm looking for out of, you know, your bills,
35:06
but also all of this momentum around the country is.
35:10
Really getting people to feel fully empowered by this
35:14
technology, right? Because I I do feel like a lot
35:17
of people believe that electric utility bills are a.
35:20
Tax, right, A tax. It just comes in the mail.
35:23
They have nothing that they can do to control it whatsoever.
35:27
And I think. A lot of what we're doing is in
35:30
we're empowering you, right We actually.
35:32
Are going to give you the. Keys to be able to control your
35:35
future, and I think that's going to be an exciting time.
35:38
Yeah, I mean, listen, we've seen, you know, there was
35:39
certain initial wave of this and I was there for that.
35:41
I was a seed investor in O Power basically just, you know, kind
35:46
of turn the the mark, the utility bill into marketing
35:49
document for energy efficiency compared people to their
35:52
neighbors said, hey, here's how much you could save if you're
35:54
doing just what your most efficient neighbors were doing.
35:56
And that was great and that, you know that for a while that
36:00
worked and showed you could lower bills, you know, 2 to 4%
36:03
just by just by doing that. And then there's another wave of
36:07
devices where we really try to like, say, Hey, we're going to
36:10
like empower people to understand, you know, exactly
36:12
how much their, you know, stove is, is, is using, you know,
36:17
versus this other appliance and this other appliance.
36:19
And the reality is it was still too complicated and people just
36:21
didn't care enough. But now, and we invested
36:24
billions of smart meters, but they just weren't really that
36:26
smart ultimately. But now we're seeing that next
36:29
wave of things where you could just prioritize things in your
36:31
home. And that way you don't have to
36:32
spend money on that costly electricity panel upgrade, But
36:36
there's no need to do it because you could say, Hey, I don't need
36:38
my car charging and my hot water heater going and my, you know,
36:43
induction cook top all at the same time, right?
36:45
I can prioritize those. So you know, there is AAI think
36:51
this wave will be sort of different than that previous
36:54
wave. So I think I get the last
36:56
question here, but I think I don't have to make it a two-part
36:59
question for you. The the first part, though, I
37:03
want to I want to click back to to a point that you you talked
37:06
about your colleagues. I think one of the things that
37:08
frustrates, I think people with politicians is they feel like
37:13
their problems aren't being addressed.
37:15
And I think Jigger and I have worked so closely in the
37:18
legislature with so many of your colleagues, not just the Senate
37:21
ones, but Assemblywoman Petrie Norris and Irwin and
37:25
Assemblywoman Boehner. And there's just so many people
37:28
who get this problem and they are actually trying to fix it.
37:34
And in a world where it's easy to be so cynical about
37:37
politicians, especially with the things you see coming out of
37:40
Washington, DC, like I, I think like it's just it's nice to know
37:44
that people are actually trying to make it better.
37:47
So I applaud you and all your colleagues for that.
37:50
That's not the question. Of course.
37:52
The two-part question is, you know, so like what?
37:57
And we talked about this a little bit, but if we get this,
38:02
you know, next phase of the energy transition, right?
38:05
You know, and we, the last phase was getting us to renewables,
38:08
reducing emissions. Like like what does the next
38:11
phase of success look like? First of all, I want to
38:14
acknowledge, you know, even in, in like the, the height of the,
38:18
the success, the IRA, you would come hang out in California,
38:20
right? And really get to know the
38:21
legislatures. And as you said, we've like
38:24
amazing people, like really terrific wonky people in the
38:28
depth and in the details working to figure all this out.
38:32
And you, you've seen that, acknowledge that.
38:34
And I appreciate, you know, and I think, you know, nationally
38:36
now folks are focusing on state legislators and I have
38:39
incredible colleagues in state legislators across state
38:42
legislators across the country. And that's really where the
38:44
action is, right? We've got the ability to do
38:47
this. And so ultimately, you know, we
38:49
focus on greenhouse gas reductions, right?
38:51
So when I started, we had 405 million metric tons and we got
38:54
to get to 0. So that's ultimately my metric.
38:57
We're down about 385 right now. And, and you know, you know,
39:02
our, our ambitious plan, you know, the, the scoping plan says
39:05
we got to get to 75,000,000 metric tons by 2045.
39:08
And then we need Cdr, which I've also spent a lot of time on
39:11
carbon dioxide removal to get to the rest.
39:13
So those are the ultimate metrics, you know, in this
39:16
space. But I think getting there, you
39:18
know, when the the first part is electrify everything, right?
39:20
We've adopted that mantra. We got to electrify everything
39:22
and we can't electrify everything if rates are really
39:24
high. So that's where we're focused on
39:26
lowering the rates, electrify everything while we continue to
39:29
build out that clean energy generation, you know, work on
39:33
permitting And I, you know, that's where I'm alive with
39:36
industry. You know, we have to streamline
39:38
permitting and sighting and get stuff done faster.
39:41
You know, we did the largest solar and storage project in the
39:45
world, the Darden project in under a year with the with the
39:49
new opt in, you know, 2O5 permitting process that we have.
39:52
So, you know, we, we have to do all those things.
39:55
But really let's try everything when we get the renewable and
39:57
then focus on some of these hard to decarbonize industries.
40:00
That's why I'm focused on industrial emissions.
40:02
It's not, you know, the sexiest thing, but we have to find ways
40:06
those are hard to decarbonize industries.
40:08
The very first bill I passed in the state legislature, working
40:12
with Ken Branson, my own old classmate.
40:15
He met with this men industry and spent a lot of time with
40:18
them and they said, yeah, we want to do this.
40:21
And we set a plan. We said passed a bill to for 40%
40:25
reduction by 20-30 emissions and and 100% by 2045.
40:29
And at the time is the only piece of the California economy
40:32
that had a net zero target on it after our bill was passed.
40:36
And so the way I look at it, my team and Erica, Isabel, we we
40:41
look and focus on what are the major source of admissions.
40:44
Of course, transportation is 50%.
40:46
So we spend a lot of time on this podcast talking about it.
40:49
But then you know, buildings and the 15%, the grid another 15%,
40:53
industrial agriculture 7%. So we have to tackle each piece
40:58
of that. And so I bills in all those
40:59
areas. Well, the thing that makes me so
41:01
inspired by what you're doing, Josh, is that you're anchored in
41:06
the science, but you like a good rock concert like anybody else
41:11
does. And, and we're in a place right
41:13
now where we're making this fun, right?
41:16
Like we really are. Like, I just think when you
41:18
think about how many entrepreneurs are coming up with
41:21
cool stuff, they're raising $100 million rounds.
41:23
They're going to go public this year right there.
41:26
But they're also changing the face of the electric utility.
41:29
Right we were. Dead set against any of this
41:32
stuff you know, just two years ago like everybody was just like
41:36
Nope, we're going to build new generation, you know, upgrade
41:38
transmission, upgrade distribution, right Today you
41:42
got the unions that are fully for distributed generation and
41:45
recognize that having a two way transactive grid where people
41:49
basically build micro grids in their house and help their
41:52
neighbors with those micro grids is the.
41:54
Future. That's a big.
41:55
Change in two years and I've talked to legislators around the
41:58
country and they are inspired by your work and they're inspired
42:02
by the work that you guys continue to do.
42:04
And so thank you. Thank you for all the work that
42:06
you're doing and all the work you're continuing to, you know,
42:10
push through. Yeah, well, it's fun, you know,
42:13
but in the past, I worked as, you know, you know, I was doing
42:16
startups and with my professional life and I do
42:19
politics, you know, on the side and then, you know, with clean
42:21
energy. And we did when we started with
42:23
clean tech for Obama, You realize you can combine those
42:25
passions, right? We can make the world a better
42:27
place and also, you know, create the conditions for this industry
42:30
to rise. And that's been super fun.
42:33
And, you know, this is a great place to do it.
42:35
And I just appreciate that You care about California.
42:38
You know you want you know, you know that California has to work
42:40
right. I always say like, you know, we.
42:43
It does. You can't be that, hey, we tried
42:45
hard and did some good stuff and, you know, but ultimately
42:48
didn't succeed. But California has to work as a
42:50
model. And I appreciate your
42:52
commitment, both of yours. And, you know, organizations
42:54
like deploy, getting people involved in the process and in
42:58
state legislatures, that can have a huge impact.
43:01
And you know, it's fun, as you said.
43:04
Well, have a fantastic legislative session, my friend.
43:07
OK. We'll talk to you guys again.
43:09
Sounds good. Energy Empire is supported by
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order has changed. Now what?
44:02
Well. That didn't disappoint.
44:04
Josh Becker always brings it, and it feels like he's got a
44:08
pretty full agenda. California.
44:10
Yeah, I mean, someone's got to have a full agenda somewhere,
44:13
and I'm glad our friend is the one who's carrying the the
44:17
mantle here. One of the things though, that I
44:19
found fascinating and we heard about this when we had did our
44:22
conference in Sacramento, was that, you know, pH and E is
44:26
really laying it out for people, right?
44:28
They're saying if you let us build data centers and you do it
44:31
by, you know, focusing on gradualization, right, then we
44:37
can get bills down by 20% for everybody because we can spread
44:40
the cost of wildfires and the cost of the wires that we
44:44
already paid for. Across a much.
44:46
Larger set of kilowatt hours. And so I thought that was
44:48
fascinating. And I'm, you know, like it feels
44:51
very esoteric and in the weeds. And so I wonder, you know,
44:56
whether you think, you know, we can really get.
44:58
The level of mindshare around, you know, pulling that off.
45:03
Look, we've met with PG&E multiple Times Now and they've
45:07
they've gone out of their way to sort of tell us what they're
45:10
doing. And look, I believe them.
45:12
I believe that they have a pathway to reduce rates.
45:16
Will they actually do it is what remains to be seen.
45:19
I believe that they are trying. I think the other thing that
45:22
I've told them directly, which I'll tell everyone here, is if
45:25
they go to the legislature and to the state and say, hey, we're
45:29
already doing this, we're going to try, no one's going to
45:32
believe them. So they have a technical problem
45:35
and they have a human problem that they have to deal with.
45:38
And a lot of. This is going to come down to
45:40
who wins the primary, I think within the governor's race,
45:43
right? Because some of those
45:44
candidates, I think are going to be a lot more aligned, I think
45:49
with that vision that PG E is putting forward, which frankly,
45:51
I'm aligned with. I mean, I, I mean, I, I'm not
45:54
sure that we're going to build 1500 MW data centers in
45:58
California that require, you know, 800 MW behind the meter
46:01
natural gas. To get built, but it does.
46:04
Feel like all of those 3000 megawatts worth of batteries
46:08
that are registered into the DSGS, you know, program that you
46:13
know, could be used in a virtual power plant could be used to
46:17
unlock a bunch of data center capacity.
46:19
Yeah. I think, look, a lot of this has
46:21
to be PG&E laying out what their intentions are and the other
46:25
utilities in California. I think them giving on some
46:29
things of understanding that the status quo and how we've sort of
46:33
had this model for years is no longer working and there needs
46:37
to be a new model which is could be good for everyone.
46:40
Part of that is this idea that they'll interconnect folks and
46:44
not serve them every minute of every hour of every day and ask
46:48
them require them to bring. Their well they don't now.
46:50
I mean with all the frequent public safety shut offs, I mean
46:53
folks are out of power for several days a year.
46:56
Yeah. Well, in this case, it would be
46:58
upfront understood with these, you know, larger loads.
47:01
But part of it is them agreeing to change the way that they plan
47:05
their resources, right? Like what we've been talking
47:08
about from the beginning is like they need to be like, hey, look
47:11
like we aren't just planning to, you know, meet demand at all
47:15
times. We aren't planning to only for
47:17
reliability. We're planning for reliability
47:19
and efficiency and that's going to totally change the way his
47:22
utilities work. And I think what what we've been
47:25
open to PG&E about is that you guys need to get on board with
47:28
that. And the same goes with Edison
47:30
and San Diego Gas and Electric and the other utilities.
47:32
And that'll be the first step to actually bringing down costs for
47:35
folks. Well, the one thing I think that
47:37
is confusing for everybody, which I think we have to keep
47:40
reminding everybody about, is that California generation costs
47:44
have never been lower. I mean, the fact that we've
47:46
built so much solar and wind power has actually reduced the
47:50
cost of generation in California.
47:51
I mean, you have negative prices a lot, right?
47:54
And then we built batteries. And so the duck curve is gone,
47:56
right? Like it doesn't look like a duck
47:58
anymore. It looks like it's flattening
48:00
out, right, with all that battery capacity.
48:02
And so this really is a wildfire problem, right, which is climate
48:05
related and a wires problem, right?
48:08
We got to get a lot more out of the grid that we've already paid
48:10
for. Yeah.
48:11
And look, we can do the best we can on the wildfire side, but
48:14
there's going to be some things that are out of out of our
48:16
control and we have to manage it better.
48:18
And I think there's a lot of smart people thinking about that
48:21
on the wire side. I think that's where we can we
48:23
can make a lot of progress, right.
48:25
And I think that's where we need to retool the business model,
48:29
retool how people plan, retool how, you know, large loads,
48:34
interconnect. And I think everyone's got to
48:37
join forces here or I think you're going to see all these
48:41
people that are upset right now in the state of California want
48:44
wholesale change. And, you know, maybe that's the
48:46
way we need to go. We'll see.
48:48
Well, Arnab, it is always a pleasure to have you on.
48:51
You always bring a lot of insights to what we're
48:53
discussing here, so thanks for being available.
48:56
Thanks for having me. Hello, welcome to Ask Jigger, a
49:05
weekly segment on Energy Empire where I answer your energy
49:08
questions. Ask Jigger is supported by our
49:10
friends at Octopus Energy. If you want to submit a
49:13
question, the link is in the show notes.
49:16
All right, let's get into it. Our first question is from our
49:19
good friend Andy Revkin and he asks when you were running the
49:23
energy loan program, there was an abundance in federal assets
49:26
for clean energy and efficiency. You wisely told me that the key
49:30
need was for a community based energy mavens to connect local
49:34
decision makers with federal resources.
49:36
What's your advice to local leaders now?
49:38
I would say that my advice is the same, right?
49:41
I mean, I think when you think about how much energy costs have
49:44
gone up and just how many solutions we have that are right
49:48
to go, whether it's solar and battery storage or whether it's
49:51
electric vehicles, whether it's heat pumps or insulation or you
49:55
know, these days there's next generation technologies for
49:58
heating, ventilation and air conditioning, right, to really
50:00
reduce your costs of managing your HVAC units at your work.
50:07
We have a lot of technologies that have paybacks that are less
50:10
than four years that just aren't being installed.
50:13
And when you ask people, they say, well, we've never heard of
50:16
them. We don't know those companies,
50:18
right? I mean, and so I talk about a
50:19
lot of those companies on my LinkedIn or on my podcasts or on
50:25
Twitter. But I think that we've got to
50:26
collect that information and we've got to go to City Council
50:30
meetings. We've got to go to County
50:31
Council meetings and we've got to go to the school board
50:34
meetings and say, hey, you know, this stuff is cost effective.
50:37
How about we figure out how to deploy it at this moment of an
50:41
energy crisis? The next question is from Joe
50:44
Murray. And he's a student at Duke
50:48
University, and he was talking about being at a Goldman
50:51
recruiting event this past fall and asking a managing director
50:56
what he thinks about virtual power plants and how it'll
50:58
influence valuations for utilities.
51:01
Look, I think that at the end of the day, the virtual power plant
51:05
grid utilization stuff that I'm working on, other people working
51:08
on is not going to reduce utility stock prices.
51:12
I think what it'll do is to get them to stop overspending on
51:16
infrastructure that is underutilized.
51:19
And so today, we're faced with 9% rate increases for as far as
51:23
the eye can see. Whereas if they deploy virtual
51:27
power plants, if they deploy grid enhancing technologies,
51:30
advanced conductors, lots of stuff that's lower cost, then
51:34
you could imagine using the grid that we've already paid for more
51:38
efficiently and keeping rates flat, right?
51:41
And then if you then add data center load growth, then you
51:45
might actually be able to reduce the utility bills by 10%, right?
51:48
So I think that this is not a bad thing for utilities as much
51:53
as it's a culture change. And they're used to doing things
51:56
the old, most expensive way. And we got to get them to do
51:59
things in a way that's smarter for their ratepayers and their
52:03
governors, frankly, many of whom are running for election right
52:06
now. The next one is from Rod Adams.
52:10
He asks, please explain why nuclear energy supporters should
52:14
love cheap battery storage. And the answer is because it's
52:19
not about nuclear and it's not about solar and it's not about
52:22
wind. It's not about natural gas or
52:24
coal or hydro. It's about the grid.
52:27
The grid is the greatest engineering accomplishment of
52:32
the 20th century, not any of those one technologies.
52:36
And battery storage actually allows you to manage the grid
52:41
better. So we have the largest commodity
52:43
supply chain in the world that doesn't feature storage in the
52:47
electric utility system. What do you think about our food
52:50
system? Or We're all learning about
52:52
storage with the Straits of Hormuz challenge in fuels or
52:55
whether we talk about other commodity supply chains, we
52:59
feature storage. But in the grid, we don't really
53:03
feature storage except for some, you know, like pumped hydro.
53:06
And so now I think we're adding storage.
53:08
And the storage helps nuclear, it helps solar, it helps wind,
53:12
it helps natural gas, it helps everything run better.
53:15
And higher grid utilization is how we get to lower electricity
53:19
bills for everybody. Our last question is from Karma
53:22
Dispensary from the energy subreddit on Reddit.
53:27
And he says or she says, I live in Northern California and the
53:33
utilities feel less reliable every year after buying a place.
53:36
We're in the process of getting enough solar and batteries to be
53:40
entirely self-sufficient. I know there are many benefits
53:43
to distributed grids. I can't shake the impression
53:46
that if everyone makes this decision, grids will be much
53:49
worse off. Fewer users to spread capital
53:53
investments over. Is mass disconnect something you
53:56
think about much and if it is a significant threat to the grid?
54:01
Look, I think mass affection is a.
54:04
Significant threat to the grid. As is not metering 2 point O as
54:09
you get to 10% of all the homes in California having solar on
54:13
them. But now we have NEM 3 point O.
54:15
NEM 3 point O features a much higher fixed cost and it also
54:20
features that you don't really get paid much to export power
54:24
back into the grid. So you're really running your
54:26
home more like a micro grid where you basically take it off
54:30
grid, right? That's awesome because remember
54:34
we are going to have to electrify everything.
54:36
So right now the United States, our primary energy is roughly
54:40
25% electricity, 75% non electricity.
54:44
China is at 35% electricity, 65% non electricity.
54:50
So we should be able to meet what China has done if we went
54:53
from 25% electricity to 35% electricity, right?
54:56
That means a lot more electric vehicles.
54:58
It means a lot more heat pumps, it means maybe induction stoves.
55:02
All of that is increased demand on the circuit that your home is
55:06
on. And the question becomes how do
55:08
we get the utility to use the battery that you're going to
55:12
install as part of the grid? And that's a lot of the work
55:15
that we've been doing in. California through a nonprofit I
55:18
support Condeploy Action. But it's also a lot of the
55:22
arguments that we're having across the country.
55:24
So when you think about data center load growth, when you
55:27
think about all these other things, figuring out how to do
55:30
virtual power plants with your battery is how we actually get
55:34
to electrify more of the grid, more of our primary energy while
55:39
reducing electricity costs for everybody.
55:42
So. Everybody should be.
55:44
Thanking you for putting solar and battery storage in and when
55:47
the utility finally offers you a virtual power plant, you should
55:51
opt in and get the discount that they.
55:53
Offer you for doing that that's it for this week's ask Jigar
55:58
thanks to our great friends at octopus energy for supporting
56:01
this segment if you've. Got a question you want me to
56:04
answer? Send it in.
56:06
The link is in the show notes. As usual, we want to thank our
56:14
podcast sponsors. We really just couldn't do it
56:17
without him and really want to thank Simon who is sitting there
56:21
behind the scenes just making us all sound good by selectively
56:24
editing out all the dumb things that I say.
56:27
And you can find us anywhere you listen to podcasts.
56:30
So, you know, Apple Podcasts, Spotify, YouTube, you know,
56:34
subscribe, send comments. It's actually super valuable.
56:39
And folks have been emailing us. Like crazy, which is great.
56:41
You can get to our e-mail address through our energy
56:45
Empire dot FM website. Super easy and we're actually
56:48
pretty responsive surprisingly to me.
56:50
But really want to thank everybody for being here.