Latest / Factor This / California left the nation's largest VPP in limbo. What's next? | Factor This Policycast

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California left the nation's largest VPP in limbo. What's next? | Factor This Policycast · Factor This

• 0:04
  SPEAKER_00: There is a better way to utilize our grid than just building more and charging rate pairs to build more.
• 0:10
  SPEAKER_01: We're at this point that is untenable, and whatever ideas or notions we've had about the past, we kind of have to forge forward in the future and make the system work as is.
• 0:19
  SPEAKER_01: More delays are adding more costs, and Californians are saying we're tired of that.
• 0:35
  SPEAKER_02: Launched in 2022, California's Demand Side Grid Support Program coordinates more than one gigawatt of dispatchable capacity for more than 200,000 unique customer sites enrolled across every single legislative district in the state.
• 0:50
  SPEAKER_02: The program leverages customer-sided resources like home batteries, solar systems, and smart thermostats to bring clean, flexible, and responsible energy resources online during grid emergencies.
• 1:02
  SPEAKER_02: Since the DSGS program began, the California Independent System Operator, or CAISO, has not only avoided blackouts, it hasn't issued a single flex alert, its call for voluntary energy conservation, in more than four years.
• 1:17
  SPEAKER_02: Despite its impact, the DSGS program was never intended to be permanent, and California's last legislative session ended without dedicating new funding.
• 1:27
  SPEAKER_02: While still operational through the end of the year, its fate in 2027 and beyond is uncertain at a critical moment, this nexus of rising electricity demand, more frequent extreme weather, and mounting affordability challenges.
• 1:41
  SPEAKER_02: This episode of the Factor This Policycast, presented as always in partnership with National Business Association, Advanced Energy United, explores the future of the DSGS program.
• 1:52
  SPEAKER_02: I'm Factor This Content Director Paul Gurke, joined by two special guests, Brandon Garcia, Advanced Energy United's California Director, and Lauren Nevitt, Senior Director of California Policy and Energy Markets at Sunrun.
• 2:04
  SPEAKER_02: They'll address some critical questions as DSGS lingers in the lurch, including, can California's policymakers establish a durable long-term market pathway to support the nation's leading VPP?
• 2:17
  SPEAKER_02: What role do DERs play in the state's energy future?
• 2:20
  SPEAKER_02: And what can California's next governor do to buoy DSGS before it can't pay its participants?
• 2:27
  SPEAKER_02: Plus, we'll get into some very timely news items further demonstrating the scale and impact of VPPs, but we'll begin with some warmer introductions.
• 2:34
  SPEAKER_02: Brandon, welcome to the policy cast, making your debut.
• 2:37
  SPEAKER_02: Can you tell the people a little bit about yourself and your relevant expertise?
• 2:41
  SPEAKER_01: Yeah, thanks for having me on.
• 2:44
  SPEAKER_01: So my name, as you mentioned, right, my name is Brandon Garcia.
• 2:46
  SPEAKER_01: I am the California Director for Advanced Energy United, uh Clean Energy Trade Association.
• 2:51
  SPEAKER_01: We have a lot of members that are businesses and we work to advance energy in all across uh different parts of the country and here in California.
• 2:59
  SPEAKER_01: Uh so I lead uh our organization's legislative and political work here in this state.
• 3:06
  SPEAKER_01: So I get to work with a lot of folks like Warren and other members in our um advocacy to really lobby the uh governor's office, legislators, legislative staff, really just any kind of decision makers on why uh they should be taking a uh, I would say a modern view of the grid.
• 3:24
  SPEAKER_01: I think that encompasses a lot of what we do, uh, more than just VPPs, but for this uh obviously topic, very VPP focused.
• 3:32
  SPEAKER_01: Um and I I used to actually be a staffer in the building for five years.
• 3:36
  SPEAKER_01: So I'm very familiar with kind of the legislative process from the staff side.
• 3:40
  SPEAKER_01: Uh and I try to make it less intensive on my former workers to not be so annoying.
• 3:45
  SPEAKER_01: But hey, sometimes you got to do what you got to do.
• 3:47
  SPEAKER_02: And thank you for joining the show, Brandon.
• 3:49
  SPEAKER_02: If you're interested in how California's last legislative session shook out, you should go to factorthis.com.
• 3:54
  SPEAKER_02: We just published an article from Brandon breaking down some of the clean energy bills this past session and what they mean for all of our stakeholders here uh watching and listening this program.
• 4:02
  SPEAKER_02: Lauren from Sunrun, uh, let's get a warmer introduction to you.
• 4:06
  SPEAKER_02: Tell me a bit about yourself and what Sunrun's doing and why it's so important to figure out this mess in California.
• 4:11
  SPEAKER_00: Hey, Paul, thanks so much and happy to be here with you and Brandon this morning.
• 4:15
  SPEAKER_00: Um, Sunrun is the nation's leading residential solar and storage um provider.
• 4:20
  SPEAKER_00: We have nearly 1.2 million customers nationally.
• 4:23
  SPEAKER_00: A huge portion of that is here in California.
• 4:25
  SPEAKER_00: We were a California-founded company back in 2007.
• 4:29
  SPEAKER_00: Pioneering really how do we get rooftop solar in the hands of all Californians, you know, regardless of income level.
• 4:36
  SPEAKER_00: So really pioneering solar as a service.
• 4:38
  SPEAKER_00: And, you know, several years ago really pivoted towards a storage first approach.
• 4:42
  SPEAKER_00: So it's really fun to kind of lead the California Policy Worker Sunrun here, because California has such a huge penetration of rooftop solar, increasingly huge penetration of storage.
• 4:52
  SPEAKER_00: Um, and I get to sit here thinking and working with folks like Brandon like how do we how do we make these resources really work for the grid and leverage all the private investment and consumer-focused investment and make that something that's a solution for all ratepayers.
• 5:07
  SPEAKER_00: Um, you know, frankly, my road um here to Sunrun is not a straight line.
• 5:11
  SPEAKER_00: It's actually my first job in the rooftop solar and storage industry.
• 5:14
  SPEAKER_00: I am a recovering lawyer and have been uh, you know, in private practice, actually a government attorney for many years, a utility attorney for a number of years.
• 5:24
  SPEAKER_00: Um, and so so Sunrun is my first foray into to really in this policy and political world.
• 5:30
  SPEAKER_00: And it's been super fun.
• 5:31
  SPEAKER_00: Um I've been at Sunrun for almost five years now and just never-ending challenges in California.
• 5:37
  SPEAKER_00: I think a lot of folks think California is the easy, you know, distributed energy resource-friendly state.
• 5:43
  SPEAKER_00: And frankly, when we look at uh, you know, where everything is nationally, California really has has fallen behind a bit.
• 5:49
  SPEAKER_00: Um so we we are Brandon and I are fighting at the good fight to catch us up in California and and to build on the success of of DSGS and other programs.
• 5:57
  SPEAKER_00: So excited for the conversation.
• 5:59
  SPEAKER_02: I promise that Brandon and I won't hold your checkered past as a lawyer against you too much in this conversation.
• 6:06
  SPEAKER_02: Thank you for joining us, Lauren.
• 6:07
  SPEAKER_02: You talked about um adoption in California.
• 6:10
  SPEAKER_02: I think that's a great place to start because VPPs are in the headlines right now.
• 6:14
  SPEAKER_02: California and Governor Gavin Newsom touting that they survived their highest electricity use in California in four years without implementing any emergency measures, in part largely because of demand response.
• 6:27
  SPEAKER_02: Let's talk about that hot September day in particular that California has now taken to the headlines championing uh the sort of success of programs just like DSGS.
• 6:37
  SPEAKER_02: Um, Lauren, your reaction to the way that California has been able to uh implement VPPs at this scale to stave off having to issue any of those emergency alerts, even when uh they're at their peak energy usage.
• 6:50
  SPEAKER_00: Yeah, I the number the number of times I say the acronym DSGS is probably way too many these days and has been for a couple of years.
• 6:57
  SPEAKER_00: But really, the program was created just a few years ago and in a couple of years has has scaled massively, right, to the largest VVP in the world.
• 7:04
  SPEAKER_00: Um we saw huge test events last year.
• 7:07
  SPEAKER_00: Um it was a really cool summer, so there was not a single Merit event for DSGS, but every provider has to dispatch on a monthly basis just to prove that the resource is there and ready to be dispatched when we need it to be.
• 7:18
  SPEAKER_00: And you referenced um that history making day last year, um back in, I guess, July and September last year, we had over 580 megawatts uh dispatched to the grid through the Demand Side Grid Support Program, and um, you know, which is unmatched by this year, where we've had, and we just actually announced this morning, some really record-breaking um dispatches that were true merit events called by DSGS last uh last week.
• 7:47
  SPEAKER_00: The Demand Side Grid Support Program is a really special program and honestly really unique in the rest of the country.
• 7:52
  SPEAKER_00: Um, it has an affordability trigger.
• 7:55
  SPEAKER_00: So when the price of wholesale electricity exceeds$200 per megawatt hour, the program is called upon.
• 8:00
  SPEAKER_00: And so you referenced that we haven't really had a flex alert event in California.
• 8:04
  SPEAKER_00: And a lot of that is frankly because we have really significant utility scale storage on the grid now, which is a major and massive achievement.
• 8:12
  SPEAKER_00: And we're in this moment in time where we need an kind of all hands-on-deck approach to energy in California.
• 8:18
  SPEAKER_00: And so where demandside grid support program really kicks in is when we're in those really hot summer days, like we had last week in October, um, and the price of wholesale electricity gets too high, right?
• 8:29
  SPEAKER_00: So DSGS becomes a true affordability mechanism for the state, and that's what happened last week.
• 8:34
  SPEAKER_00: And our fleet, um, Sunrun and Tesla's fleet were called upon through this program, and actually in combination with another program, which is the emergency load reduction program run by the PUC, our fleet um dispatched 669 megawatts on October 5th.
• 8:51
  SPEAKER_00: And then again, on October 6th, even more record-breaking, 745 megawatts dispatched to the grid.
• 8:58
  SPEAKER_00: And just for reference, I mean, those numbers are so massive.
• 9:00
  SPEAKER_00: We think of a nuclear power plant as like a gigawatt generally.
• 9:04
  SPEAKER_00: Diablo Canyon's a little bit bigger.
• 9:06
  SPEAKER_00: Um, but that is just at that scale.
• 9:08
  SPEAKER_00: We have proven time and time and again that these resources, you know, that are sitting in people's homes and in their garages are incredibly reliable and scalable.
• 9:17
  SPEAKER_00: And so every time the fleet's called upon, we're just, we're seeing new, we're setting new records every time.
• 9:22
  SPEAKER_00: So the the success of the program, I think, is cannot be disputed.
• 9:26
  SPEAKER_00: Um, and it's it's a really exciting time as we think about how do we how do we build upon this.
• 9:31
  SPEAKER_02: Brandon, despite those really obvious successes that are in the headlines right now, we started the show by mentioning that DSGS failed to attract new funding in the last legislative session.
• 9:42
  SPEAKER_02: Take me through what happened and why legislators would choose not to fund a program that's making such an obvious difference on the grid.
• 9:51
  SPEAKER_01: Um I want to start actually by maybe correcting that last statement is uh I would actually say a lot of legislators were very interested in funding this program.
• 9:59
  SPEAKER_01: Um we had spent the entirety of the legislative session and even a little bit before, like uh putting this on legislators' radar so that they were aware of what such what a successful program that they've created.
• 10:13
  SPEAKER_01: And I say they've created it because, as was mentioned, like the program was created in 2022, but it wasn't created just like in a vacuum because someone wanted it.
• 10:22
  SPEAKER_01: The governor had asked the legislature to extend Diablo Canyon, and the legislature, because I I worked there at the time, responded with yes, and we have to invest in the grid so that it's more flexible.
• 10:34
  SPEAKER_01: Part of that negotiation, part of that compromise was let's create a program where we can create a flexible reliability program.
• 10:42
  SPEAKER_01: Therefore, DSGS was created.
• 10:45
  SPEAKER_01: So it really was the legislature that really pushed for this program in the beginning and largely has been its biggest champion.
• 10:51
  SPEAKER_01: I I can point to you, I think, many different committee hearings where the chairs even had to stop and say, like, listen, I'm going to give the administration the opportunity to defend its proposal to not fund it past this year because we all, and I'm I'm kind of paraphrasing, but this was almost a quote from Assembly Member Bennett in committee.
• 11:10
  SPEAKER_01: And he's like, We are all very big fans of this program.
• 11:13
  SPEAKER_01: Can you tell us why we should like why this is not why we shouldn't fund this program, why it shouldn't go this way?
• 11:18
  SPEAKER_01: Uh the Senate committee did the same thing.
• 11:20
  SPEAKER_01: I I say that because legislators did really want this.
• 11:22
  SPEAKER_01: To say that it got caught up in larger politics, I think is putting it nicely, right?
• 11:27
  SPEAKER_01: Like uh, if anyone was paying attention towards the end of session in California, we had a really big proposal, or at least the legislature had a proposal from the governor to decide how to address the utility liability that was impacting the state.
• 11:41
  SPEAKER_01: And, you know, we don't need to send like go into all those details, but it was very controversial.
• 11:45
  SPEAKER_01: It was very clear that legislators had differing opinions from both the assembly and the Senate on like how to approach this.
• 11:52
  SPEAKER_01: And while they really were supportive of the program and they in committee publicly signing like almost everything they can do, had it been on the floor for them to vote on, I think it would have been a very resounding yes.
• 12:05
  SPEAKER_01: There just were some key folks in the administration that just weren't convinced for a lot of different reasons, I guess, um, that this is not a program worth funding.
• 12:14
  SPEAKER_01: However, like objectively, through metrics of like how much it can dispatch, how much it's scaled, the cost savings it can it can and has produced, overwhelmingly it's it's been a success.
• 12:25
  SPEAKER_01: So I it really did fall to like larger politics, but there was also, and I'll say it, there was also, I think, a lingering idea that maybe these resources aren't really as good as everyone says that they are.
• 12:37
  SPEAKER_01: Maybe they can't perform at the level that we that the industry says they can.
• 12:42
  SPEAKER_01: And if your familiarity with solar and storage is like basically around 2020, 2019, may maybe, and that's a big maybe, I'd be willing to give you that.
• 12:52
  SPEAKER_01: But like the industry has grown so much.
• 12:53
  SPEAKER_01: Even the governor in his press releases said like we went from 700 megawatts of storage to like over 23,000, I think is the number he cited.
• 13:02
  SPEAKER_01: So like I think there is an acknowledgement that the industry has grown.
• 13:05
  SPEAKER_01: I don't know if the mentality about the industry has grown, really.
• 13:09
  SPEAKER_01: And I think that's a really big aspect because as I think as Lauren mentioned, everyone thinks California is like, well, you know, you have sun all the time.
• 13:18
  SPEAKER_01: Everyone's, you know, loves clean energy and this is like their thing.
• 13:21
  SPEAKER_01: And I think the answer is yes.
• 13:22
  SPEAKER_01: You ask the average person and they love it.
• 13:25
  SPEAKER_01: That has not always translated to the political level or or the legislative level.
• 13:29
  SPEAKER_01: And uh sometimes I don't really understand, other times I'm like, I kind of get it.
• 13:33
  SPEAKER_01: But it it does feel like previous politics and a outdated mentality really kind of soured some folks on the program.
• 13:40
  SPEAKER_01: But from from a effectiveness standpoint, I don't think you can argue that it was not a success.
• 13:46
  SPEAKER_00: Yeah, Brandon, I I think what you're saying is makes, you know, I agree wholeheartedly with everything you said.
• 13:50
  SPEAKER_00: And Brandon and I work so closely on this and other priorities all session.
• 13:55
  SPEAKER_00: But I guess, you know, Brandon, to pick up on what you're saying, the reality is that California has just such a huge untapped resource, right?
• 14:03
  SPEAKER_00: We know Sunron and Tesla and Everyday Electric formerly renew home.
• 14:07
  SPEAKER_00: We're in partnership and we have 4.6 gigawatts of resources just sitting in homes today, right?
• 14:12
  SPEAKER_00: So California doesn't really have a deployment issue.
• 14:15
  SPEAKER_00: Um, those resources are there.
• 14:17
  SPEAKER_00: So even if we didn't install another storage, you know, system or a solar panel on a home in California, 4.6 gigawatts is massive.
• 14:25
  SPEAKER_00: So really what we have is an implementation issue, right?
• 14:27
  SPEAKER_00: We have these policy barriers, and I think Brandon was very tactfully kind of you know dancing around some political rhetoric that I think has dogged the rooftop solar industry for years.
• 14:38
  SPEAKER_00: And frankly, Sunrun is, we don't even really characterize us ourselves as a rooftop solar company anymore, right?
• 14:44
  SPEAKER_00: We're a storage company.
• 14:45
  SPEAKER_00: Um, solar is is clearly the clean generation that that um you know fuels the batteries that can be put to work for the grid.
• 14:54
  SPEAKER_00: But you know, California really what has dogged this program, and I think DERs in general in California is some really, really stale rhetoric about who rooftop solar and storage customers are, how they get paid, um, what the incentives look like.
• 15:08
  SPEAKER_00: And frankly, incentive is such a dirty word as far as I'm concerned.
• 15:12
  SPEAKER_00: When we think about DSGS and other programs, our customers are getting paid for performance the same way as a power developer, right, gets paid for the megawatts and the electrons that they send to the grid, customers get paid.
• 15:24
  SPEAKER_00: They're not receiving incentives.
• 15:26
  SPEAKER_00: They're literally just getting paid for the energy sent back to the grid.
• 15:29
  SPEAKER_00: And so why we treat that more differently, you know, or why we treat consumers differently than we treat a power developer is is really beyond me.
• 15:37
  SPEAKER_00: Um and so not only is it a, you know, what we've developed through DSGS, is it a tool to kind of keep um rates under control for customers, right?
• 15:46
  SPEAKER_00: Because we're we're setting the program up to succeed when the price of wholesale electricity becomes too high.
• 15:51
  SPEAKER_00: But we also have an opportunity to really kind of help consumers with their energy burdens.
• 15:56
  SPEAKER_00: Um and the other thing I just I think, Brandon, to pick up on what you were talking about, the legislature really understands this.
• 16:03
  SPEAKER_00: And we we really saw a big change, I think, in the understanding this session in particular, um, especially as kind of additional folks came into the big tent, I think, of the coalition really pushing for VPPs in California.
• 16:15
  SPEAKER_00: And we saw new research from folks like UC Santa Barbara and the 2035 project there that really dug into who are DSGS customers, who are particip who is participating in this program.
• 16:26
  SPEAKER_00: And we found that overwhelmingly, this is not a program for white coastal elites, you know, a lot of the rhetoric that's always put on us.
• 16:34
  SPEAKER_00: This is a program where we have lower and middle income folks in the Central Valley and the IE, the inland empire, um participating at massive levels, right?
• 16:44
  SPEAKER_00: Because they're the folks that really need solar and storage on their homes.
• 16:47
  SPEAKER_00: They have high electricity bills, they want to participate and help their neighbors out.
• 16:52
  SPEAKER_00: Um, and that's really who a lot of the participants are.
• 16:55
  SPEAKER_00: And I think the legislature has really come to understand that.
• 16:58
  SPEAKER_00: So we're seeing a lot more understanding and and kind of support from our legislative and policymakers.
• 17:04
  SPEAKER_00: And the real blockers, you know, ultimately are the California Public Utility Commission and and folks in the administration that have just continued to like latch on to this rhetoric that is, you know, frankly, really outdated.
• 17:18
  SPEAKER_02: When we talk about funding for the DSGS program, just to make it clear for our listeners and viewers, we're talking about those incentives, that dirty word that Lauren talked about, that goes back to those who are actually discharging back to the grid.
• 17:31
  SPEAKER_02: That's the pot of money that's about to run out.
• 17:34
  SPEAKER_02: And the program was initially earmarked for something north of$314 million.
• 17:40
  SPEAKER_02: California reduced that down to$195 million in 2024 via clawbacks and cut attempts by lawmakers.
• 17:47
  SPEAKER_02: There's been a small recent injection in the program, but their coffers are starting to run out.
• 17:52
  SPEAKER_02: Uh California says it's going to run through the end of 2026, but beyond that is a bit of a question mark.
• 17:57
  SPEAKER_02: Brandon, do we have any idea how much money is left and what the status is about injecting future funds to keep this thing afloat while legislature uh figures out what its longer-term future looks like?
• 18:11
  SPEAKER_01: Yeah.
• 18:11
  SPEAKER_01: So in June of this year, the legislature allocated$27 million to DSGS.
• 18:19
  SPEAKER_01: Uh, and that was exactly for the purpose that you said, right?
• 18:22
  SPEAKER_01: To keep it running until the end of the year.
• 18:24
  SPEAKER_01: Uh, and that was, you know, running until the end of the year assumed like a couple different events, and and maybe there'd be some holdover money.
• 18:31
  SPEAKER_01: Last year we there was no money in the program, and there was some leftover money after certain dispatch events.
• 18:35
  SPEAKER_01: So it was difficult to say how much would be left.
• 18:38
  SPEAKER_01: However, as kind of Laura mentioned, there's been a there was a massive heat wave in Southern California earlier, maybe a couple weeks ago, maybe even last week, uh, that really kind of stressed out the grid and required dispatch events.
• 18:52
  SPEAKER_01: Like those thresholds, those price thresholds that we talked about earlier were hit and the program was um activated to respond to those.
• 19:00
  SPEAKER_01: Given that all of those happened, it's unclear actually uh how much money would be left, if any, uh given how much it's being used.
• 19:09
  SPEAKER_01: And like a lack of funding in in 2027 means one, that the program has been uh not only just successful, but like imp instrumentative in addressing grid costs and grid needs, right?
• 19:23
  SPEAKER_01: If there was no need for the program, then we would have the full$27 million.
• 19:27
  SPEAKER_01: But it got used, people needed it, that's kind of where we're at.
• 19:31
  SPEAKER_01: In terms of where we are next year, I I can't anticipate how much funding will be left.
• 19:36
  SPEAKER_01: I imagine a very minimal amount.
• 19:37
  SPEAKER_01: But in terms of what the next governor, the next legislature needs to or has to do, you know, it's it's critical for them to be able to allocate funding as quickly as possible.
• 19:47
  SPEAKER_01: I think if I had my magic wand, uh early budget action is what we would use the term in California as a way to like fund this program.
• 19:55
  SPEAKER_01: Um and that's not unprecedented, right?
• 19:57
  SPEAKER_01: Like early budget action has occurred when the state feels like we're responding to what I call verifiable emergencies.
• 20:04
  SPEAKER_01: Uh, the LA fires, for example, a couple years ago.
• 20:06
  SPEAKER_01: The legislature, within its first month back in session, allocated funding and made policy changes to try to respond to that.
• 20:13
  SPEAKER_01: Um, I know there's been different federal actions that have warranted the governor to want to go to the legislature and do that.
• 20:19
  SPEAKER_01: Um, it's possible something like that may happen in the beginning of the year and that would require that.
• 20:24
  SPEAKER_01: I I'm not wishing ill on uh our state, but Super El Nino is coming.
• 20:29
  SPEAKER_01: Like people have been talking about that as a big weather event.
• 20:32
  SPEAKER_01: And if this is not the extreme weather event that dictates some level of necessity and importance to fund a reliability program that works and keeps rates at a decent price, I don't know what else could be, but uh I think we certainly would want to identify like, hey, this program has been successful, it's been valuable.
• 20:49
  SPEAKER_01: We've been using it after the legislature got out of session.
• 20:53
  SPEAKER_01: There is a warrant to want to keep this program running as smoothly as possible through all of next year.
• 20:58
  SPEAKER_01: And we shouldn't wait until, you know, the so to speak, barbarians are at the door waiting to sack Rome, you know, scenario for us to be able to like, let's turn it on.
• 21:09
  SPEAKER_01: Um, so I I do think there is a warrant for it.
• 21:12
  SPEAKER_01: I will admit, you know, even in my policy guys, it is very difficult to ask for early budget action unless there is kind of that emergency.
• 21:20
  SPEAKER_01: Um, but I'm also an optimist.
• 21:22
  SPEAKER_01: So I think, you know, I think there's an opportunity where we can get there.
• 21:25
  SPEAKER_01: And it just, it's just about the right people being in the right place at the right time.
• 21:29
  SPEAKER_02: Brandon, you mentioned those uh large-scale dispatch events that Lauren had talked about earlier.
• 21:34
  SPEAKER_02: Let's get into that a little bit more, Lauren, because I'm just so impressed by how Sunrun and Tesla and that network has been able to scale its dispatch.
• 21:42
  SPEAKER_02: I I wrote a couple years ago about the then largest ever dispatch event in California.
• 21:47
  SPEAKER_02: It was a test that you guys had run over the summer.
• 21:49
  SPEAKER_02: And now it seems like we're writing about a new record every week.
• 21:53
  SPEAKER_02: And then sometimes you're including two in the same press release.
• 21:56
  SPEAKER_02: So when do we get to that gigawatt scale and uh Is this a pr I mean I feel like I'm answering my own question, but is this proof in the pudding that technology is not the hurdle?
• 22:07
  SPEAKER_00: Yeah, Paul, I think that's like completely the the perfect way to put this.
• 22:11
  SPEAKER_00: Um technology is not the problem.
• 22:13
  SPEAKER_00: Like deployment of the assets is not the problem, as I alluded to before.
• 22:17
  SPEAKER_00: It is a massive amount of energy being dispatched to the grid.
• 22:20
  SPEAKER_00: And like it's a little bit of a pinch-me moment, I think, for for the industry and for regulators and policymakers to really look at this.
• 22:27
  SPEAKER_00: Like what DSGS was set out to do was to really prove that these resources could be reliable and scale.
• 22:34
  SPEAKER_00: And it's done just that.
• 22:36
  SPEAKER_00: So I mean, there is no other way to frame DSGS as other than a resounding success.
• 22:41
  SPEAKER_00: Um and I, you know, to your point, like last year we we had a 580 megawatt dispatch in September.
• 22:48
  SPEAKER_00: And that was that was a test event, as I mentioned, where Sunrun and Tesla coordinated, and we we dispatched our batteries in a test event because it was hot and the batteries weren't were needed, even though it was in a quote unquote merit event.
• 22:59
  SPEAKER_00: And then just last week, and the press release that we were talking about, you know, it talks about October 5th and 6th.
• 23:05
  SPEAKER_00: We actually had some events on October 3rd as well.
• 23:07
  SPEAKER_00: Um, and it's a little bit muddy because we participate both in the emergency load reduction program, as I mentioned earlier, and that's a PUC run program, and that's just a pure emergency program.
• 23:16
  SPEAKER_00: So the investor-owned utilities have to do bilateral contracts with an aggregator like Sunrun.
• 23:22
  SPEAKER_00: And then they can let you know, like, hey, we really, really could use an injection of your resources onto the grid.
• 23:27
  SPEAKER_00: And so that happened at the same time that the DSGS Merit event was being called.
• 23:32
  SPEAKER_00: So we had both the investors-owned utilities recognizing the need for these resources to show up last week during those.
• 23:38
  SPEAKER_00: I live in Los Angeles, so it was crazy hot here, um, suffering through Dodgers games and ridiculous heat.
• 23:44
  SPEAKER_00: Um, but that aside, on October 5th, um, it was both a full suite of the ELRP program being called and the Demand Sycred Support program being called.
• 23:55
  SPEAKER_00: And so that was a 669 megawatt event on October 5th.
• 23:59
  SPEAKER_00: And then just the next day, October 6th, we hit we hit 745 megawatts.
• 24:04
  SPEAKER_00: And so Sunrun alone has 120,000 batteries enrolled in California VPP programs.
• 24:10
  SPEAKER_00: Um, that number, again, is really just the tip of the iceberg.
• 24:13
  SPEAKER_00: We could do so much more.
• 24:14
  SPEAKER_00: Um, but it is, you know, it is really exciting.
• 24:17
  SPEAKER_00: And I think what this proves, you know, in California and nationally and you know, internationally too, is that these resources are true grid assets.
• 24:25
  SPEAKER_00: And they're there is a better way to utilize our grid than just building more and charging ratepayers to build more.
• 24:33
  SPEAKER_00: So the utility business model, you know, is always incentivizing to build a new transmission line or to build a new, you know, a you know, project in the desert somewhere and to carry that electricity to our population centers.
• 24:46
  SPEAKER_00: That business model is important, right?
• 24:47
  SPEAKER_00: That's the backbone of the grid.
• 24:49
  SPEAKER_00: But it also, when we think about grid utilization and this moment in time where we are in an all-hands-on-deck moment, we have an unprecedented amount of electricity growth and demand growth.
• 25:00
  SPEAKER_00: Um, and and it's really a once-in-a-generation moment.
• 25:03
  SPEAKER_00: So I think it's really incumbent to look at what we've done through such an important program like DSGS and to figure out how do we, I think as we your intro put it, Paul, like how do we create the durable program structure that we need and how do we move past these year-to-year funding battles where we're just trying to prop up a program and and really instead move towards um what we hope is is a more durable and kind of long-term vision for the state and what other states are already moving towards, which is, you know, getting these resources to participate in wholesale markets.
• 25:34
  SPEAKER_00: So so we've we've done it.
• 25:36
  SPEAKER_00: We've shown, we've proven um DSGS is is really important.
• 25:39
  SPEAKER_00: And as Brandon said, like we have no funding right now.
• 25:42
  SPEAKER_00: So unless the new administration and uh our policymakers figure out how to fund the program, there is no stopgap um for next year.
• 25:50
  SPEAKER_01: The amount of power we're talking about, like it sounds big, like 500, 600, 800 megawatts, like that in a vacuum, like sure, that sounds like a lot of power.
• 25:58
  SPEAKER_01: Like 500 around 500 megawatts is what it takes to run the entire city of San Francisco, right?
• 26:04
  SPEAKER_01: Like 600, 800 megawatts means that you're running like massive California cities on just residential batteries on their own, or you have the ability to just do that.
• 26:15
  SPEAKER_01: And if you just picture, like if you just look at a picture of San Francisco and you're like, wow, that's a big city.
• 26:20
  SPEAKER_01: Like, imagine all of the energy it takes to run that city, its infrastructure, like all of that.
• 26:26
  SPEAKER_01: You can do that with just residential batteries.
• 26:28
  SPEAKER_01: And people in these programs were able to do it like on demand, on call when needed to do so.
• 26:34
  SPEAKER_01: And that piece, I think, is something that like we don't talk about enough.
• 26:37
  SPEAKER_01: It's like, yeah, it's a lot of power, yes, it's valuable, like it showcases the technology, but like what it powers, I think is really the important part, right?
• 26:45
  SPEAKER_01: Because like these are urban centers.
• 26:47
  SPEAKER_01: We we like to say as Californians, we have like the pinnacle of American civilization.
• 26:52
  SPEAKER_01: We have all of these like systems all together.
• 26:54
  SPEAKER_01: Like, if we can run our state, our so-called greatest state in the nation on these resources and do it fairly cost competitively.
• 27:02
  SPEAKER_01: Like, I think that's really the the selling point here is like we like people will laugh at us and be like, you can't run a state on renewables or it's intermittency or blah, blah, blah.
• 27:12
  SPEAKER_01: Like that, those are all great talking points if it's 2005 and you're still worried about whether Bush is president.
• 27:17
  SPEAKER_01: But like here, we're proving you can do this at a massive scale.
• 27:20
  SPEAKER_01: And I think more people should be excited about it.
• 27:22
  SPEAKER_01: Like, I'm excited about it because you know it's part of my job.
• 27:24
  SPEAKER_01: But like just picturing a world in which you could run a world on clean renewable power to me is like if you told me that as a child, it'd be like a fantasy.
• 27:33
  SPEAKER_01: And now you can just see it and we can make it happen.
• 27:35
  SPEAKER_01: And I think that's just sorry, I just wanted to gush out, but like that I think needed to be said, and I think it's kind of cool to talk about.
• 27:41
  SPEAKER_00: Brandon, I mean, I I totally agree.
• 27:42
  SPEAKER_00: And I mean, thank you so much for hammering that point home.
• 27:44
  SPEAKER_00: I mean, on our press release when we talked about the 745 megawatts from last week.
• 27:48
  SPEAKER_00: I mean, it's so important to put this in scale, right?
• 27:51
  SPEAKER_00: So that's enough for San Jose and San Francisco, right, for their peak energy demands.
• 27:55
  SPEAKER_00: And that that's a wild stat and so important to grasp.
• 27:59
  SPEAKER_00: The other thing that we haven't talked about just yet, and as Brandon was hammering home important points, I was thinking, you know, these programs have scaled so quickly, but it's not just that DS has scale to 745 megawatts in a single dispatch in a few years.
• 28:14
  SPEAKER_00: You know, we're able to enroll customers and get them up and running in a in a virtual power plant program in less than six months, right?
• 28:20
  SPEAKER_00: So when we think about um speed to power and the needs that the grid has, whether it's DSGS or, you know, a pilot that we're doing with PGE for a you know, for data centers or, you know, whatever the solution is or the problem is that we need a solution for, um, we can do it really quickly.
• 28:38
  SPEAKER_00: And that's unmatched, right?
• 28:40
  SPEAKER_00: Anywhere in, you know, building new infrastructure, getting permits, those types of things create bottlenecks that can last five to ten years.
• 28:47
  SPEAKER_00: And we have these resources, like I said, 4.6 gigawatts of resources sitting in homes that can just scale, you know, in a matter of months.
• 28:54
  SPEAKER_00: So also really huge to point out there.
• 28:58
  SPEAKER_02: Like Lauren, I also have a dark past.
• 29:00
  SPEAKER_02: I wasn't always working in energy.
• 29:01
  SPEAKER_02: I used to be in television news and sports as a broadcaster.
• 29:05
  SPEAKER_02: As long as I've been in this energy industry space, though, Lauren and Brandon, we always run into the same bottlenecks over compensation.
• 29:14
  SPEAKER_02: Programs like this, it's like, how do you compensate both the homeowner and the folks like Tesla and and Sunrun that are wrangling the resources?
• 29:23
  SPEAKER_02: How do the utilities get made whole?
• 29:26
  SPEAKER_02: It seems like we reached this tricky spot and then everyone's like, oh, we can't figure it out.
• 29:30
  SPEAKER_02: And and now programs like this are still relying on funding when we all see the opportunity for a self-sustaining marketplace here.
• 29:38
  SPEAKER_02: Putting you both on the spot, how do we get there?
• 29:41
  SPEAKER_02: Any bold suggestions as to how we really actually establish uh a marketplace that can self-sustain?
• 29:49
  SPEAKER_01: Yeah, well, I think we're lucky that in our state we've finally gotten the uh legislature and the administration to agree we should start doing that.
• 29:58
  SPEAKER_01: So we were able and we worked on a bill earlier this year, SB 913, by Senator Becker.
• 30:04
  SPEAKER_01: Got to give him a shout-out, really big champion on our issues, and and he's the only one who could who could have got it done because clearly he's the only one who has.
• 30:11
  SPEAKER_01: Um but that bill is going is directing the CPUC to begin a process to figure out how do you incorporate the uniqueness of these resources, the value that they provide to the grid.
• 30:22
  SPEAKER_01: And to your point, figure out this like compensation mechanism because uh very clearly, like you don't want it to be so high that it's you know not economically sustainable at the same time.
• 30:34
  SPEAKER_01: In the same way that a utility needs a certain amount to be able to maintain its robust business model without going into massive debt, you also need these resources to be compensated in an appropriate manner so that they are properly incentivized to give back to the grid because you are agreeing to give a portion of your power as an aggregated DER program, a VPP, if you will.
• 30:54
  SPEAKER_01: Um, and making sure you hit that balance is the right note.
• 30:57
  SPEAKER_01: I think really what I would encourage or press upon folks, stakeholders, regulators at all, is like we can have opinions and feelings about how much certain people should get paid for what, and like that can should inform a proper policy.
• 31:11
  SPEAKER_01: At the same time, it's very difficult to hold that level of uh maybe idealism, ideology, whatever you want to call it, and not acknowledge we have super high rates, we're not connecting systems as fast as we could, like costs are being added to the system just by delays, not even by doing anything wrong or bad, but just not acting adds costs.
• 31:34
  SPEAKER_01: And if we feel comfortable with the direction rates are going in in the next five, 10, even three years, uh, then maybe we can ha sit around and be like, maybe they shouldn't receive so much.
• 31:44
  SPEAKER_01: But if there is a way to get this much clean energy on the system and you can figure out a way that you can compensate them appropriately without ballooning too many costs, to me, that feels like a much bigger North Star to achieve towards and much, and I think it sends people to a more pragmatic standpoint to say, listen, if you talk to average Californians, they'll say the utility bills are too high.
• 32:04
  SPEAKER_01: I don't really care how you do it, lower them as much as possible.
• 32:07
  SPEAKER_01: I think we saw that very clearly, and our seeing seen that very clearly on the campaign trail for our govern gubernatorial election, which is happening this year.
• 32:15
  SPEAKER_01: Uh, I think an acknowledgement by Secretary Becerra that he wants to provide two hours of free power to all Californians really sends a signal that we're at this point that is untenable.
• 32:26
  SPEAKER_01: And whatever ideas or notions we've had about the past, we kind of have to forge forward in the future and make the system work as is.
• 32:32
  SPEAKER_01: Because I think we've gotten to the point where we can't afford to just keep debating about these things and add more delays.
• 32:38
  SPEAKER_01: More delays are adding more costs, and Californians are saying we're tired of that.
• 32:42
  SPEAKER_01: So I'll get off my soapbox for a second.
• 32:45
  SPEAKER_01: But I think it really does mean that the commission's work is as ever more important to make sure they get this right.
• 32:51
  SPEAKER_01: And more importantly, I think it's on us as the industry to really come forward with, you know, ideas, evidence as much as we can to just showcase why we think this would work in the way that we feel it should.
• 33:03
  SPEAKER_01: And I think that you have an open mind.
• 33:06
  SPEAKER_01: I think you have the right people that want to solve problems, and I think we can get there.
• 33:09
  SPEAKER_00: Yeah, Brandon, I I I agree wholeheartedly with everything you said.
• 33:12
  SPEAKER_00: And I I guess I would just, you know, also add that, you know, to your point, a lot of the, and we've we've kind of danced around this for a lot of this conversation, a lot of the rhetoric, the old rhetoric, right, about net energy metering battles and what the right amount is to pay a rooftop solar customer, like those are still things that are dogging the unlock of these resources that we know are true affordability drivers.
• 33:36
  SPEAKER_00: So we, you know, I'm really looking forward to a fresh take from a fresh administration building on, you know, the concept of power hour that candidate Pacera and Secretary Bacera has has kind of thrown out there.
• 33:49
  SPEAKER_00: There are real tools.
• 33:50
  SPEAKER_00: Um, and I think that's a really exciting one to think about, really kind of highly differentiated time of use rates, right?
• 33:57
  SPEAKER_00: Where power could be free for a couple hours during the day.
• 34:00
  SPEAKER_00: And the reason that power could be free for a couple hours during the day is because you know, we have such high solar penetration in the state.
• 34:07
  SPEAKER_00: We actually are, I think it's about 10% of our solar generation is getting shipped off to other states currently, right?
• 34:13
  SPEAKER_00: So we might as well use that, create these really strong incentives for customers to charge their cars during the day, to, you know, pre-cool their homes, to use their rooftop solar to, you know, save all that energy in the storage and their battery on their home that they can be using to discharge and self-consume later today.
• 34:35
  SPEAKER_00: And really where the cal where the state of California has gone and a lot of this rhetoric is leading us to is this question is is self-consumption of your own generated electricity a cost shift?
• 34:46
  SPEAKER_00: And I think that's what's really being teed up in a lot of these conversations.
• 34:50
  SPEAKER_00: And it's it's a pretty ugly conversation that other states are just frankly moving past because they know that these resources are true resources for scalable and affordable solutions for the grid.
• 35:02
  SPEAKER_00: Um, we had also mentioned earlier, Paul, this this new report that Braddle just came out with, and I think it was just a few days ago.
• 35:07
  SPEAKER_00: Um, and they found actually that the total value created by a virtual power plant, this isn't specific to DSGS.
• 35:13
  SPEAKER_00: I think this is they created a model of a virtual power plant, but basically it's the total value created by a VPP is seven, is over seven times the cost of enabling it.
• 35:23
  SPEAKER_00: And the majority of that value goes back to consumers as performance payments, right?
• 35:28
  SPEAKER_00: So we're thinking about using consumers as real drivers of innovation and putting the power to the people to save our grid and to create their, you know, the right, um, make the right choices for how to support their family, reduce their own energy burden, and then also, you know, support their neighbors and the grid at large.
• 35:48
  SPEAKER_00: It's a really exciting conversation.
• 35:50
  SPEAKER_00: And, you know, I you you alluded to my dirty past.
• 35:53
  SPEAKER_00: I think my dirty past um gives me perspective on the fact that these questions, you know, and and looking at the energy transition from the vantage point of government to a utility to now kind of sunrun and what our CEO Mary Powell likes to call the consumer-led revolution, um, it's a really exciting moment because you realize that our systems are not built for change, um, but people are built for change, right?
• 36:17
  SPEAKER_00: And so if we can put the power in the hands of the people to make the decisions that work for their family, for their community, and then to give that power back to the grid and to get paid for it, instead of paying a utility a 10% rate of return to build a new transmission line, instead of paying a long-term RP, you know, PPA to uh a large-scale energy developer that's not gonna come online for 10 years when we need the power now.
• 36:44
  SPEAKER_00: Like these are real questions that I think our new administration is gonna have to grapple with.
• 36:48
  SPEAKER_00: Um, and and they're not really that hard, frankly.
• 36:51
  SPEAKER_00: I think a lot of the challenge and the, you know, kind of hand-wringing over double compensation and what are the incentives or, you know, I like to say performance payments, they're not incentives.
• 37:04
  SPEAKER_00: Um, you know, how do we structure all that?
• 37:05
  SPEAKER_00: Like these are we've we've done harder things than this, right?
• 37:08
  SPEAKER_00: Like we we can do hard things in the state of California.
• 37:11
  SPEAKER_00: We can figure out what the right balance is in terms of what payments customers should get.
• 37:16
  SPEAKER_00: Um, I really don't see those as real barriers.
• 37:18
  SPEAKER_00: We just need folks who are leading our administrative agencies and our regulatory agencies to actually want to have a real conversation and find a real solution.
• 37:27
  SPEAKER_02: I'm glad you brought that Bradle report back up.
• 37:30
  SPEAKER_02: There's some math in there that really highlights just how much of an impact these could make.
• 37:34
  SPEAKER_02: Uh, just extrapolating the model that the researchers put together, an additional 25 gigawatts of additional demand flexibility is worth between four and seven billion dollars per year to U.S.
• 37:46
  SPEAKER_02: households.
• 37:47
  SPEAKER_02: That's a staggering sum, especially considering a lot of this capacity is already sitting on rooftops and in buildings and is just waiting to be tapped into.
• 37:56
  SPEAKER_02: When we talk about the larger opportunity here, Lauren, I wanted to mention that there is beyond California at play here, what they're doing with EDAM, the extended day ahead market out west.
• 38:07
  SPEAKER_02: We could, in a real pie in the sky world, be talking about organizing these distributed energy resources for a much larger footprint and talking about the entire Western United States that's able to get much more competitive time of use rates and taking advantage of these renewable resources when they're at their peak capacity.
• 38:26
  SPEAKER_02: Let's paint a more doomsday scenario, though.
• 38:30
  SPEAKER_02: What happens if we don't find funding?
• 38:32
  SPEAKER_02: There's no early action, as Brandon mentioned, and the coffers have run out.
• 38:37
  SPEAKER_02: Is there anything that we can do to make sure that this doesn't lead to calls for conservation or rolling blackouts?
• 38:44
  SPEAKER_00: Yeah, I mean, I think I think the doomsday scenario is one that needs to be considered, right, for DSGS.
• 38:50
  SPEAKER_00: And I'm not convinced that that we're gonna do the right thing and find some kind of patchwork funding for the program.
• 38:56
  SPEAKER_00: Um I think where we stand at Sunron really is that we we really want to move beyond these kind of one-off programs.
• 39:03
  SPEAKER_00: And so as as important as DSGS has been, if it's not funded, it just points to the need to find another vehicle, right, for these resources.
• 39:12
  SPEAKER_00: Um there is that emergency load reduction program that I alluded to earlier.
• 39:16
  SPEAKER_00: That is um currently the CPC has proposed two years of bridge funding for that program.
• 39:21
  SPEAKER_00: So even that program, which is like even more of a backstop than DSGS, will run out of funding in the next couple of years.
• 39:28
  SPEAKER_00: And Brandon pointed to SB 913, which is a bill that we both worked really hard on.
• 39:32
  SPEAKER_00: And it is really important.
• 39:34
  SPEAKER_00: Um, and it's important to get it right.
• 39:36
  SPEAKER_00: So the legislature did its job.
• 39:38
  SPEAKER_00: It signaled to, and Governor Newsom signed it and did his job, right?
• 39:42
  SPEAKER_00: And we now have a very clear signal to the Public Utilities Commission that they need to figure this out in coordination with the Energy Commission, who is the the agency that runs the demand site grid support program and has tons of learnings and has kind of been pushed to the side, right, as the DSGS conversation continues to get pushed to the side by the PC and the administration.
• 40:04
  SPEAKER_00: And 913 is a clear signal, right?
• 40:07
  SPEAKER_00: Figure this out, figure this out with CAISO, right?
• 40:09
  SPEAKER_00: We have EDAM now, we have we have the all the learnings from DSGS and figure out how to create the right market signals for these resources to participate in wholesale markets.
• 40:20
  SPEAKER_00: And really what that is, is these resources should be receiving resource adequacy credit.
• 40:24
  SPEAKER_00: They should be being able to be used by utilities and CCAs for their resource planning purposes because they are, and what DSGS has done, and we keep saying this, is has proven that they're scalable and reliable, right?
• 40:37
  SPEAKER_00: So there should be no further issue on that point.
• 40:41
  SPEAKER_00: Um, folks will probably want to make it an issue.
• 40:44
  SPEAKER_00: But I think, you know, if if there's a will, there's a way.
• 40:47
  SPEAKER_00: And we know that these resources are here.
• 40:50
  SPEAKER_00: Again, 4.6 gigawatts is a massive number that, you know, CCAs are very eager to be able to figure out how to use in their for their planning purposes.
• 40:59
  SPEAKER_00: And the IOUs should be as well.
• 41:01
  SPEAKER_00: Um and so I think implementation of 913 is is critical for the state to get it right.
• 41:07
  SPEAKER_00: And frankly, if we get it wrong, California will fall further behind than we've already fallen on figuring out how to make use of DERs.
• 41:14
  SPEAKER_00: Um 913, I'm looking at the text right now that I wanted to make sure I got the date right.
• 41:19
  SPEAKER_00: Um basically the deadline is June 30th, 2028, for the agencies to come up with a framework.
• 41:26
  SPEAKER_00: Um so that, you know, it feels like a far ways away, but two years is pretty quick.
• 41:30
  SPEAKER_00: So at the very least, hopefully we'll have ELRP bridge funding and we'll have a real backstop for of with that.
• 41:35
  SPEAKER_00: My hope is that we also have DSGS because what DSGS does that ELRP does not do is have this affordability trigger, right, when the price gets too high.
• 41:44
  SPEAKER_00: Um and so that's that's really important for the state, right, to be able to use a lower cost resource.
• 41:49
  SPEAKER_00: So without DSGS, there's no way to do that.
• 41:52
  SPEAKER_00: Um, but you know, in the interim, let's get to to work and let's make sure our agencies have the clear direction they need from from hopefully our new governor who will tell them you got to figure this out.
• 42:03
  SPEAKER_01: And then just one last thing there in terms of like the doomsday scenario.
• 42:07
  SPEAKER_01: Um, you know, you alluded to like, you know, a lack of DSGS funding as a reliability program.
• 42:12
  SPEAKER_01: Like, what does that mean for blackouts?
• 42:13
  SPEAKER_01: What does it mean for grid safety?
• 42:15
  SPEAKER_01: Um, I think largely given how much power you put on the grid, uh, blackouts may still be on the table.
• 42:21
  SPEAKER_01: I can't definitely rule that out.
• 42:22
  SPEAKER_01: I think more likely though, and the impact that more folks will feel is the state will just buy power from another source that's more expensive.
• 42:32
  SPEAKER_01: And really, that's like the big doomsday scenario is like if you're worried that your rates are high now, like without a reliability program with a price trigger to add additional power that is like there, right?
• 42:44
  SPEAKER_01: The state will just have to figure out like where do I go?
• 42:46
  SPEAKER_01: Kaisa will go tell the IOUs, hey, go procure X amount of power.
• 42:50
  SPEAKER_01: We're we're almost in the red.
• 42:52
  SPEAKER_01: And the state might avoid a flexoler or might avoid uh a blackout, but then you get your utility bill the next month and you're like, wow, this is like what much higher than I envisioned.
• 43:02
  SPEAKER_01: And like that's a piece I think like needs to be said as well.
• 43:05
  SPEAKER_01: Like, yeah, we might avoid blackouts.
• 43:07
  SPEAKER_01: Maybe you know, we're not having some Mad Max style scenario, but that doesn't mean that people aren't gonna suffer more.
• 43:14
  SPEAKER_01: And if folks already are struggling to pay their bills, to even just provide for their families, like adding more cost to them unnecessarily so, right?
• 43:23
  SPEAKER_01: You could argue, like, well, some costs are necessary, maybe we just gotta tough it out.
• 43:26
  SPEAKER_01: Like, this is not one of those things where it's like we need to take like ratepayers need to just take this on and and move forward.
• 43:32
  SPEAKER_01: Like, this is a this is an avoidable problem with a very simple solution.
• 43:37
  SPEAKER_01: And that's really the dupe, like the do it maybe it sounds less doomsday, but like more people having to pay more just because the the state failed to act, to me, feels like a doomsday scenario because it's uh it's known, it's avoidable, we have the solution.
• 43:51
  SPEAKER_01: It it's just like the stroke of a pen.
• 43:53
  SPEAKER_01: That really is the big difference between uh this program working and it not working is uh someone signing a bill that makes it law.
• 44:00
  SPEAKER_01: We could figure out how to find funding, and we already have a lot of ideas of where that funding could come from.
• 44:05
  SPEAKER_01: So like it really is just someone signing, pass, done, and and I think we're we'll done there.
• 44:10
  SPEAKER_01: So that just wanted to make sure that that was emphasized if I didn't say already.
• 44:14
  SPEAKER_02: Yeah, otherwise it's death by a thousand cuts for the ratepayer.
• 44:18
  SPEAKER_02: And it's a slightly whether it's intentional or not, more insidious way to hurt the ratepayer because they don't notice it like blackouts.
• 44:24
  SPEAKER_02: When your power goes out and you want to point a finger at somebody, you're gonna get down to the bottom of it.
• 44:28
  SPEAKER_02: But that rate hike, that creep, the bill gets higher and higher, you don't necessarily have a direction to point that finger in, and it's still impacting you uh very much so.
• 44:37
  SPEAKER_02: And Lauren, I have to imagine somebody's gonna come for that capacity.
• 44:40
  SPEAKER_02: I know California is not the most robust data center market, but we've seen elsewhere that these distributed energy resources are being wrangled and used for data center capacity.
• 44:50
  SPEAKER_02: And if Californians aren't gonna use it, I'm sure somebody will find.
• 44:54
  SPEAKER_02: They'll find an off taker somewhere.
• 44:56
  SPEAKER_00: Yeah, I mean, I think the the data center conversation is, you know, is is the sister conversation to the one that we're having right now, right?
• 45:02
  SPEAKER_00: When we're thinking about, you know, both on like in PJM and in California, where we do have some data centers being considered, that's really important, right, to think about speed to power and bring your own clean capacity and those types of solutions.
• 45:15
  SPEAKER_00: I just threw out some like wonky energy terms, but but that's really those are the buzzwords of the day, right?
• 45:21
  SPEAKER_00: When we think about how do we protect ratepayers from data centers.
• 45:25
  SPEAKER_00: And a conversation I was having with somebody yesterday was again, like California is falling behind in the data center conversation.
• 45:32
  SPEAKER_00: We did pass, and Governor Newsom did sign a few data center bills requiring disclosure of water use, you know, and making sure uh costs aren't getting passed on to ratepayers.
• 45:43
  SPEAKER_00: But like frankly, it's the bare minimum, right?
• 45:45
  SPEAKER_00: We other states are looking at bring your own clean capacity requirements.
• 45:49
  SPEAKER_00: And what that really means is, you know, again, using those distributed energy resources that exist in homes already, um, and potentially even, you know, forcing uh a data center developer to pay the community to host, you know, to give them new heat pumps, to give them new battery storage so that they can, you know, better utilize the locational grid around that data center.
• 46:12
  SPEAKER_00: Um, and then also to aggregate all the resources, right, and provide a VPP to support the grid and that data center and avoid the need for costly um infrastructure improvements, you know, just to handle some peak load on the one hour of the one day of the year where the utility thinks load will be in excess of what they can handle.
• 46:33
  SPEAKER_00: Um, and we're actually already doing that in California.
• 46:35
  SPEAKER_00: So that's that's the kind of corollary conversation to the emergency VPP grid conversation, which is what we're having on um virtual power plants.
• 46:42
  SPEAKER_00: But it's it's how do we make these resources more flexible for all kinds of purposes and move out of this kind of bilateral contract paradigm, which is what we're in right now in California.
• 46:53
  SPEAKER_00: Um, despite the paradigm of being in a bilateral contract environment, um, we are doing some interesting things.
• 47:00
  SPEAKER_00: There's this new pilot called PGE Share.
• 47:03
  SPEAKER_00: Um and I I can't, for the life of me, remember exactly what the acronym of SHARE stands for, but it's basically for a Google RD facility in San Jose that is still yet to be approved by the PUC.
• 47:14
  SPEAKER_00: But it's it's you know, uh it's a lesson worth following, I think.
• 47:18
  SPEAKER_00: You know, we can do these things for data centers too.
• 47:21
  SPEAKER_00: Um, and it would be really great to have, again, these more durable market signals where California could actually do something and send the right signals to data center developers and the clean energy marketplace for how um a VPP could be put to use for a community um that would potentially be hosting a data center.
• 47:38
  SPEAKER_00: So again, other states are doing this.
• 47:40
  SPEAKER_00: Like we're seeing like Virginia and Governor Spanberger just put together a really comprehensive energy plan that was released a couple of weeks ago and considers all these things.
• 47:49
  SPEAKER_00: We're seeing, you know, Illinois under the uh leadership of Governor Pritzker, um, Governor Cheryl in New Jersey.
• 47:56
  SPEAKER_00: I mean, pick your governor around the country.
• 47:58
  SPEAKER_00: We just we are not seeing that kind of leadership out of California right now.
• 48:02
  SPEAKER_00: And I'm very hopeful.
• 48:03
  SPEAKER_00: I'll I'll put on Brandon Brandon's optimistic hat and try to be hopeful that a new administration in California will actually do some bold things.
• 48:12
  SPEAKER_02: We got to be careful about sharing hats.
• 48:13
  SPEAKER_02: I've got a nearly one-year-old at home, and we we don't want to teach that lesson too early.
• 48:18
  SPEAKER_02: But but Brandon, if you want to put that hat back on um for a second and share some some larger thoughts about California's legislative session.
• 48:26
  SPEAKER_02: Uh, I know that it wasn't all good news, but it seemed like there were some good things that did come out.
• 48:30
  SPEAKER_02: If you would want to wrap those up, you can read about them once again.
• 48:33
  SPEAKER_02: One more plug on his article on fact of this, too.
• 48:36
  SPEAKER_02: But also you could listen to the man himself.
• 48:38
  unknown: Cool.
• 48:38
  SPEAKER_01: Yeah, no, I appreciate that.
• 48:39
  SPEAKER_01: Thanks, Paul.
• 48:40
  SPEAKER_01: Uh yeah, I mean, uh, you know, SB 913 was like what probably one of the bigger policy things that we were able to accomplish this year.
• 48:47
  SPEAKER_01: But as you mentioned, like, you know, that wasn't the only one.
• 48:49
  SPEAKER_01: I think, you know, we also saw uh SB 868 get signed by Governor Newsom, and that allows more folks to have portable energy devices in their homes.
• 48:59
  SPEAKER_01: I think one of the biggest criticisms, and I'll and I'll include myself in this former camp, like one of the biggest criticisms of the industry was really you have to be a homeowner to access this.
• 49:09
  SPEAKER_01: And that feels very inequitable, it feels very inaccessible.
• 49:13
  SPEAKER_01: So I think the industry and some other uh stakeholders were like, well, let's challenge that assumption.
• 49:18
  SPEAKER_01: Like, let's make it so renters can have access to solar.
• 49:22
  SPEAKER_01: And that bill, you know, put some safeguards and safety protections on like how you put that in, but really is meant to be like, what how do we get renters to access solar, to access store, like to be able to access this savings, this green energy, this, you know, you know, however you want to phrase it.
• 49:37
  SPEAKER_01: Like that was a bill by Senator Wiener.
• 49:39
  SPEAKER_01: Um, and I really appreciate that like there are folks who are like, you know what, like I am a big supporter of the industry, but there are things we can improve on.
• 49:47
  SPEAKER_01: And these type of devices, these type of policies are things that we want to see more of.
• 49:52
  SPEAKER_01: We saw SB 905 get adopted also by Senator Becker.
• 49:56
  SPEAKER_01: Uh, and we're really excited about that, right?
• 49:58
  SPEAKER_01: Like, there's going to be a publication of grid utilization metrics in California so that we are aware of how much the distribution grid is being used.
• 50:06
  SPEAKER_01: And for those of you who are just like, well, what why does a map or why does like a stat sheet of just how much power is being used matter?
• 50:13
  SPEAKER_01: It's simply this.
• 50:14
  SPEAKER_01: If, and this is true, like a lot if a lot of high rates are being or high rates are rising because of infrastructure costs that are embedded into your utility bill, right?
• 50:24
  SPEAKER_01: How much we build, how much that gets added on.
• 50:27
  SPEAKER_01: If you can avoid those costs by using more of the infrastructure you already have rather than building something new, there is a cost saving that is generated just from that planning exercise.
• 50:38
  SPEAKER_01: And the only way to make that planning exercise more than just an exercise is to be aware of how much capacity the grid has, when is it being used, at what points?
• 50:48
  SPEAKER_01: Energy nerds are gonna love this.
• 50:49
  SPEAKER_01: Like this is gonna be like their holy grail of like now, I can tell where the distribution system is.
• 50:54
  SPEAKER_01: But that bill beyond that piece, which we were really excited about.
• 50:58
  SPEAKER_01: There is also some considerations for the CPC to look at how much utilities should be earning a rate of rate of return there or sorry, a rate of equity.
• 51:06
  SPEAKER_01: There should be an analysis of what are different ways to fund transmission, generation, distribution.
• 51:14
  SPEAKER_01: Like there is an effort to look at really like what is the role of the utility, how should it be financing?
• 51:21
  SPEAKER_01: Because I think at for LaunchParts, we were just like the utility's job is to go finance and go procure and go do it.
• 51:26
  SPEAKER_01: And we trust them, right?
• 51:27
  SPEAKER_01: They're the main entity, they're the regulated monopoly that we allow to exist in our system to build on the system.
• 51:34
  SPEAKER_01: Now we're like, maybe we should take a maybe we should have a proactive look of how much an appropriate rate of return is.
• 51:40
  SPEAKER_01: In some cases, you know, it could be higher, it could be lower.
• 51:42
  SPEAKER_01: I don't know.
• 51:43
  SPEAKER_01: But having the CPC have that process, conduct that analysis, really provide that information to people, to Californians, I think is very valuable and a big step towards like more utility accountability, better use of resources.
• 51:57
  SPEAKER_01: I think one other bill I want to make sure we emphasize is uh it's not just on the distribution level that we want to make sure these delays are are being addressed, right?
• 52:06
  SPEAKER_01: Like 2498 to be a buddy similar to Peachy Norris.
• 52:09
  SPEAKER_01: She had a bill about a transmission auditor, right?
• 52:12
  SPEAKER_01: Like transmission really is the key part that connects large utility scale projects to the grid.
• 52:20
  SPEAKER_01: And as I mentioned before, the longer they're delayed, the more costs they get added on.
• 52:24
  SPEAKER_01: And right now, the average cost is like seven years to get or seven timeline is seven years to get these projects online.
• 52:31
  SPEAKER_01: Like, why why is why does it take like almost a decade to get just a project to connect to the grid?
• 52:36
  SPEAKER_01: Not even to build it, just to like fully integrate it.
• 52:40
  SPEAKER_01: And like there should be someone in the CPU C that audits that and looks at that and you know figure out ways to reduce delays, right?
• 52:47
  SPEAKER_01: Like like these are all bills that we were able to pass this year and really implement.
• 52:52
  SPEAKER_01: And you know, some of them are addressing things on the margins, like like could we address bigger form?
• 52:57
  SPEAKER_01: I'm always a person that goes to go big and go bold.
• 53:00
  SPEAKER_01: That's what the that's what the B in my name stands for, by the way, if those are who are unaware.
• 53:04
  SPEAKER_01: But yeah, fun fact.
• 53:06
  SPEAKER_01: Uh, you know, Brandon, the B in Brandon stands for bold and brave.
• 53:10
  SPEAKER_01: Uh, I think we could always do more when we can go bigger.
• 53:13
  SPEAKER_01: Um, but to say that these are not impactful, I think would be uh would be a disservice to certainly the the people who worked on it and the legislators that spent a lot of time on those.
• 53:20
  SPEAKER_01: So I we do want to make sure we emphasize those bills and those uh successes.
• 53:26
  SPEAKER_01: But you know, we have a lot uh stuff left.
• 53:29
  SPEAKER_01: I know the utility liability stuff is gonna come back in January, uh, as it has to, right?
• 53:33
  SPEAKER_01: Like given all the commotion that happened at the end of session.
• 53:37
  SPEAKER_01: Um we will likely debate some extension of Diablo Canyon.
• 53:42
  SPEAKER_01: I know that was people were talking about that towards the end and even the middle of session and didn't come to fruition.
• 53:48
  SPEAKER_01: But hey, uh a new gov even the even Governor Newsom was like, hey, like I'm almost on my way out, let's let's leave that to the next guy.
• 53:54
  SPEAKER_01: Um so I, you know, you know, uh a future governor I think is gonna have to deal with these things, and there's a lot of things on the horizon, but we we've accomplished a decent amount, and I I'm excited for the future, maybe more than a long time.
• 54:07
  SPEAKER_01: But I I do feel very confident that whoever the next governor is, they're gonna take a very proactive approach to address these things.
• 54:13
  SPEAKER_01: And it won't be by a lack of work.
• 54:15
  SPEAKER_01: There's certainly a lot of stuff on the table, and I'm excited to just to see how that pans out.
• 54:20
  SPEAKER_01: But like this is this is a tie I think we can really go big without any regrets.
• 54:25
  SPEAKER_01: Like this the situation we're in right now, I think is so untenable that people want change.
• 54:29
  SPEAKER_01: And uh, and this is more than just California.
• 54:31
  SPEAKER_01: I think we could talk about this on a later standpoint.
• 54:33
  SPEAKER_01: But I think people want change, people want differences, and I know energy doesn't always sound super interesting to like the average person, but like there's a lot of change you can make and there's a lot of things you can improve on.
• 54:44
  SPEAKER_01: And maybe I again maybe it's just my old optimism, but like we can make the world better, and I don't know why we're scared to do so.
• 54:50
  SPEAKER_00: All right, Paul, I'm giving Brandon back his optimistic hat and I'll I'll I'll keep that off for now because I'm gonna be a little cynical.
• 54:56
  SPEAKER_00: I mean, I think the legislature has done its job, right?
• 54:59
  SPEAKER_00: Um, as Brandon has said.
• 55:00
  SPEAKER_00: And at the end of the day, all of this is coming back to the Public Utilities Commission.
• 55:04
  SPEAKER_00: And I have very little faith that the Public Utilities Commission, as it stands today, with the current mix of commissioners and staff, are gonna do what the legislature has directed them to do.
• 55:15
  SPEAKER_00: We've seen time and time again that the legislature, whether it's on community solar or, you know, you name your energy program, the the PUC has not followed through.
• 55:24
  SPEAKER_00: Um and so I think that is going to be incumbent in the next administration to make sure that the administrative agency is following the directive of a legislature and and really frankly of the people, right?
• 55:37
  SPEAKER_00: And not just answering to the armies of utility lawyers that walk its halls.
• 55:41
  SPEAKER_00: And so I I'm, I am, I want to be optimistic that there could be change afoot, um, whether it's SB913 implementation or 905, the gradientization bill.
• 55:51
  SPEAKER_00: I mean, I think what gives me hope, and especially with 905, is that there's transparency there, right?
• 55:57
  SPEAKER_00: A lot of this and a lot of the decisions that get made um on Van S Street in San Francisco, um where the PUC is headquartered, are you know in the cover of darkness, right?
• 56:06
  SPEAKER_00: Rate reform design is, you know, developed by staff.
• 56:10
  SPEAKER_00: There's a rate design proceeding right now that will have no evidentiary hearings.
• 56:14
  SPEAKER_00: Um, there's a lot that gets done in darkness at that agency, and it's really um concerning.
• 56:20
  SPEAKER_00: And I hope that with these new directives that the legislature has has handed the PUC that and hopefully the will of a new administration that they'll actually do the bidding of the people and of the the people that the the people that the people have elected, right, to um to represent them because they are telling the PUC that you you need to change.
• 56:41
  SPEAKER_02: Undercover of darkness, uh a reference to a Strokes song, not on the Strokes album pictured behind Brandon in his background.
• 56:48
  SPEAKER_02: But I had to Google it to make sure because if it was, I was going to be like, that was a real subliminal uh callback to the strokes song.
• 56:55
  SPEAKER_02: Anyway, we we could chat about music or the albums that Brandon's been listening to all day, but we do have to take a turn on this uh edition of the Factor This Policy Cast and head toward the home stretch.
• 57:05
  SPEAKER_02: I know we've covered a lot of ground today, and maybe your last comments were a great place to leave it because they they kind of summed up the issue from a national perspective and and looked at where we need to go.
• 57:15
  SPEAKER_02: But if you'd like to add anything else, maybe harp on a point that you've already made or throw a little more kindling onto the fire, something we didn't have a chance to get to, I'd love to open up the platform one last time for each of you to do so.
• 57:26
  SPEAKER_02: Uh Lauren, if you'd like to get us started.
• 57:29
  SPEAKER_00: Yeah, I guess I'll just say, and I think I I hit on this earlier, Paul, but I I'm really excited.
• 57:33
  SPEAKER_00: Um I think it's a really exciting time to be an energy nerd like the three of us are.
• 57:38
  SPEAKER_00: Um I we're in the midst of a once-in-a-generation opportunity really to reenvision our electricity system to meet today's moment where we're seeing just skyrocketing demand.
• 57:47
  SPEAKER_00: And and to do that, we have to do something more than just use the the energy system of the 1800s that our grandparents built.
• 57:55
  SPEAKER_00: And we have a real opportunity to do something fresh and new and and to deliver real affordability solutions um powered by people.
• 58:02
  SPEAKER_00: So I'm super excited about it.
• 58:03
  SPEAKER_00: I think we'll have a hopefully uh a turning of the page in California where I spend all of my time.
• 58:09
  SPEAKER_00: Um and yeah, look forward to to working more with Brandon next session.
• 58:13
  SPEAKER_01: Yeah, I'll just say I'm I'm glad you brought up the undercover of Doctor's reference, because if you didn't, I was gonna when Lauren said that I'm like, yeah, she set me up perfectly.
• 58:21
  SPEAKER_01: But um My husband is a strokes fan.
• 58:24
  SPEAKER_01: I'm sorry to steal your thunder then, Brandon.
• 58:26
  SPEAKER_01: Man, I just didn't want it to fall through the cracks.
• 58:27
  SPEAKER_01: No, no.
• 58:28
  SPEAKER_01: I I'm like I said, I'm glad someone said it.
• 58:30
  SPEAKER_01: As someone who saw them recently, um they're still very much top of mind.
• 58:34
  SPEAKER_01: They were great in New York.
• 58:35
  SPEAKER_01: Anyway, not not not the topic to talk about, but I think my addition here is like beyond wanting to go, you know, big and bold, as I said earlier, and really want to like make a lot of change, I like I do think there is some level of appetite from the legislature, from likely voters, to want to make their agencies more efficient.
• 58:54
  SPEAKER_01: Like that's not something, like that's not something a political person would normally tell you is like, man, the people really yearn for administrative reform.
• 59:01
  SPEAKER_01: But I think at a certain point, like you kind of get to that point where it's like, okay, as we said earlier, who's the bad guy?
• 59:07
  SPEAKER_01: Who are we pointing fingers to?
• 59:08
  SPEAKER_01: You can continuously point to like the IOUs, you can point to the state, you can point to whoever.
• 59:13
  SPEAKER_01: At a certain point, it is someone's job.
• 59:15
  SPEAKER_01: The buck has to stop somewhere.
• 59:17
  SPEAKER_01: And I think the legislature does want the buck to stop at them.
• 59:22
  SPEAKER_01: Like, I don't think they want to keep pointing to an agency and be like, they're not doing their job and they're not doing their job.
• 59:27
  SPEAKER_01: Because again, I as someone who used to work for an elected, you're the one who has to go and answer two voters.
• 59:32
  SPEAKER_01: Like voters are the ones who are gonna be like, it's your job to do this.
• 59:35
  SPEAKER_01: If you can't do it, we'll get someone else to do it.
• 59:37
  SPEAKER_01: And I think that like mentality, I think, is boiling to a point where I think we might be able to see some level of administrative reform.
• 59:45
  SPEAKER_01: At least maybe this is my optimism talking.
• 59:47
  SPEAKER_01: But I think that people in the legislature do want to see that.
• 59:50
  SPEAKER_01: I think that is something we should be looking for.
• 59:52
  SPEAKER_01: And I don't think this should be looked at as a bad thing.
• 59:54
  SPEAKER_01: Like if you work at an agency, like I'm not saying you don't want to do your job right or like you have some malicious interests, but you know, government is not always known to be modern or to be doing things as effectively and efficiently as possible.
• 1:00:07
  SPEAKER_01: And to say with a straight face that there's nothing we can improve on with the state, come on.
• 1:00:13
  SPEAKER_01: Like I that that that would be a very laughable scenario to be like the state is working perfectly as intended.
• 1:00:18
  SPEAKER_01: There's no changes it could ever make.
• 1:00:19
  SPEAKER_01: Like I think we should take that mentality and just be like, we can make things better, we can make things more efficient, we can point fingers later after we're done doing the work, but we can make things better, and I think we should try to strive for that.
• 1:00:32
  SPEAKER_01: And I'm excited that a new administration could do that.
• 1:00:34
  SPEAKER_01: I'm excited that a new legislature with more new members could do that.
• 1:00:37
  SPEAKER_01: Uh-huh.
• 1:00:38
  SPEAKER_01: And really, I think what I would want to say is like we should take a modern view of the modern view of the grid.
• 1:00:43
  SPEAKER_01: Like we should, like to Lawrence's point, like we shouldn't assume that like the grid of the past should be the grid of the future.
• 1:00:49
  SPEAKER_01: Like our telling a telling someone who's getting their first job to go to some random store and ask for an in-person application, I think is an outdated way to give career advice.
• 1:01:00
  SPEAKER_01: In the same way that we wouldn't give someone that like if if me when I was a teenager wouldn't give a teenager today, that's how you go get a job, then we shouldn't be telling the grid and and regulator shouldn't be like, well, we've been doing this for so long, there's no reason to change it.
• 1:01:13
  SPEAKER_01: Changing it is kind of the point, right?
• 1:01:15
  SPEAKER_01: Like because we've been doing it so long is because we should change it.
• 1:01:18
  SPEAKER_01: And I'll just leave it there.
• 1:01:19
  SPEAKER_01: Like a a let's build a modern grid, let's take a modern view.
• 1:01:23
  SPEAKER_01: Modern problems require modern solutions.
• 1:01:25
  SPEAKER_02: I was worried that we were going to get through a whole episode of the Factor This Policy Cast without coming up with a new energy t-shirt slogan.
• 1:01:32
  SPEAKER_02: But Brandon, you came through there.
• 1:01:33
  SPEAKER_02: There were a few great choices at the end.
• 1:01:35
  SPEAKER_02: I think my favorite though, the people yearn for administrative reform.
• 1:01:39
  SPEAKER_02: I I could just see that on a t-shirt.
• 1:01:42
  SPEAKER_02: Anyway, appreciate the conversation that we had today and the input from both of you.
• 1:01:46
  SPEAKER_02: Lauren and Brandon um really learned a lot today.
• 1:01:49
  SPEAKER_02: I hope that if you're listening or watching this program, you did too.
• 1:01:53
  SPEAKER_02: That's it for this edition of the Factor This Policy Guest, presented as always with Advanced Energy United.
• 1:01:58
  SPEAKER_02: Uh, if you enjoyed what you listened to or or watched here, we do a new one of these every other Thursday.
• 1:02:04
  SPEAKER_02: They come out at 6 a.m.
• 1:02:06
  SPEAKER_02: Eastern Time.
• 1:02:06
  SPEAKER_02: So uh keep your eyes on your podcast feed or on factorthhis.com where these things are posted.
• 1:02:12
  SPEAKER_02: If you've got a suggestion, uh a future topic for the show, please feel free to drop a line and reach out.
• 1:02:17
  SPEAKER_02: I'm not hard to find on the uh the old internet.
• 1:02:20
  SPEAKER_02: Neither is Brandon or Lauren.
• 1:02:21
  SPEAKER_02: Go give them a follow on LinkedIn and support all of their efforts out in California.
• 1:02:25
  SPEAKER_02: Uh that's it for me, Factor This content director Paul Gurky.
• 1:02:28
  SPEAKER_02: Be good, everybody.
• 1:02:29
  SPEAKER_02: We'll see you back here for another episode, just like this one, sometime in the near future.