WEBVTT 1 00:00:15.519 --> 00:00:19.039 Hello, and welcome to the Texas Tribune trip Cast for Tuesday, 2 00:00:19.120 --> 00:00:22.480 September thirtieth, twenty twenty five. I'm Matthew Watkins, editor in 3 00:00:22.559 --> 00:00:26.000 chief of the Texas Tribune, and joined as usual by 4 00:00:26.239 --> 00:00:28.399 Eleanor Klibanoff Lawn politics reporter. 5 00:00:28.440 --> 00:00:32.320 Hello Eleanor, Hello Matthew. I have no banter for you today. 6 00:00:32.560 --> 00:00:35.920 Well, I think September thirtieth could be government shutdown day. 7 00:00:37.000 --> 00:00:39.679 That's right, you know, we'll wait and see end of 8 00:00:39.920 --> 00:00:40.759 Also the end. 9 00:00:40.640 --> 00:00:44.560 Of Q three, Yes, yeah, there you go. 10 00:00:44.640 --> 00:00:45.840 Do you have any goals for Q four? 11 00:00:47.479 --> 00:00:49.439 Just no legislative sessions. 12 00:00:49.479 --> 00:00:52.679 No legislative sessions. Yeah, that's my goal too. So let's 13 00:00:52.719 --> 00:00:55.520 hope it's our good lawmaker's goal, our governor's goal. 14 00:00:55.640 --> 00:00:59.600 Yes, exactly, exactly. All right, Well, today we are going 15 00:00:59.679 --> 00:01:04.000 to talk talk about renewable energy and the grid in Texas, 16 00:01:04.000 --> 00:01:08.959 and we are joined by Eric Goff, a Austin based 17 00:01:09.000 --> 00:01:11.840 the founder of GoF Policy and Austin based advocacy and 18 00:01:11.920 --> 00:01:16.280 advisory firm focused on energy and infrastructure policy. Welcome, Eric, 19 00:01:16.439 --> 00:01:18.359 thank you so much for having me. Thank you for 20 00:01:18.400 --> 00:01:21.560 being here. Okay, so I want to set this up 21 00:01:21.640 --> 00:01:23.480 just a little bit. We of course, all know, all 22 00:01:23.480 --> 00:01:27.760 our listeners know that Texas is the fossil fuels powerhouse 23 00:01:28.159 --> 00:01:30.439 in the US, and our state leaders for have a 24 00:01:30.439 --> 00:01:34.439 long time been pretty publicly skeptical, if not aggressively opposed 25 00:01:34.439 --> 00:01:38.040 to the idea of a transition toward cleaner sources of energy. 26 00:01:38.319 --> 00:01:40.200 But a funny thing has happened in the past half 27 00:01:40.319 --> 00:01:44.599 decade or so, which is amid all that opposition, Texas 28 00:01:44.599 --> 00:01:48.159 has sort of become a renewable energy powerhouse as well, 29 00:01:48.239 --> 00:01:53.599 at least for the United States. A statistic since twenty 30 00:01:53.680 --> 00:01:56.879 twenty one, ninety two percent of the power supply capacity 31 00:01:56.920 --> 00:01:59.959 that's been added to the grid has come from wind, solar, 32 00:02:00.159 --> 00:02:03.680 or batteries, And in twenty twenty four, Texas produced about 33 00:02:03.760 --> 00:02:08.120 fifty percent more renewable energy than California, a state that 34 00:02:08.199 --> 00:02:12.719 you know, obviously its leaders are much more excited about 35 00:02:12.800 --> 00:02:15.800 renewables than Texas. That growth has helped shore up our 36 00:02:15.840 --> 00:02:18.879 power grid. You know, energy demand continues to climb in 37 00:02:18.960 --> 00:02:22.840 Texas six percent per year since Winterstorm earned Uri. But 38 00:02:22.960 --> 00:02:29.800 it is also you know, you know, the state. It 39 00:02:29.800 --> 00:02:33.560 has basically essentially helped the state avoid having this summer 40 00:02:33.879 --> 00:02:37.919 a single power conservation notice, which you know, is somewhat 41 00:02:38.000 --> 00:02:40.840 rare these days. Of course, a somewhat mild summer helped 42 00:02:40.840 --> 00:02:45.879 with that too, but it's been an interesting summer. The 43 00:02:45.960 --> 00:02:49.199 legislative session kicked off with a lot of lawmakers filing 44 00:02:49.280 --> 00:02:52.800 bills targeting the renewable industry. The people in the industry 45 00:02:52.840 --> 00:02:55.599 breathed a sigh of relief when those bills bills did 46 00:02:55.599 --> 00:02:57.560 not pass, and then a couple of weeks later, the 47 00:02:57.599 --> 00:03:01.319 big beautiful bill in Congress passed and wiped out a 48 00:03:01.360 --> 00:03:03.560 lot of clean energy tax credits and things like that. 49 00:03:03.919 --> 00:03:06.879 And so we're going to discuss today the growth of 50 00:03:06.879 --> 00:03:09.879 that industry and also what's going to happen to it beyond. 51 00:03:10.080 --> 00:03:12.639 And Eric going to start with you, and I want 52 00:03:12.639 --> 00:03:15.800 to look backward before we start forward. Can you just 53 00:03:15.840 --> 00:03:17.759 talk a little bit, tell us a little bit about 54 00:03:18.360 --> 00:03:22.400 how this renewable industry has grown so much in Texas 55 00:03:22.560 --> 00:03:25.159 despite the fact that there's been, you know, some vocal 56 00:03:25.199 --> 00:03:27.400 opposition from from the political power in the. 57 00:03:27.319 --> 00:03:31.039 State happy to do that. And it's a long history. 58 00:03:31.120 --> 00:03:37.360 It starts with Governor George W. Bush and he pushed 59 00:03:37.560 --> 00:03:41.360 for inclusion of some sort of wind credit or requirement, 60 00:03:41.759 --> 00:03:46.199 and the original restructuring bill you know that opened this up, 61 00:03:46.240 --> 00:03:52.479 you know, twenty five thirty years ago, and that initially 62 00:03:52.599 --> 00:03:57.159 led to some investment and when but pretty soon federal 63 00:03:57.199 --> 00:03:59.759 tax credits came in and made the much bigger difference 64 00:03:59.800 --> 00:04:03.039 than the state program, and that led to an enormous 65 00:04:03.120 --> 00:04:09.639 boom uh in which led to costs of the construction 66 00:04:10.319 --> 00:04:16.920 and the components coming down pretty dramatically, solar battery when 67 00:04:17.079 --> 00:04:23.680 price costs all came down, and and now the most 68 00:04:23.759 --> 00:04:28.040 economically rational investment to make in many cases is solar 69 00:04:28.040 --> 00:04:28.839 plus storage. 70 00:04:29.439 --> 00:04:34.120 Is that is that largely you know, early Biden infrastructure 71 00:04:34.240 --> 00:04:36.279 bills that really kicked started it, or or. 72 00:04:36.600 --> 00:04:40.439 It went back even further than that. There's been a 73 00:04:40.480 --> 00:04:45.439 long history, uh until recently of having federal tax credits 74 00:04:45.480 --> 00:04:48.600 for production or investment in. 75 00:04:50.439 --> 00:04:52.639 And clean energy. 76 00:04:53.120 --> 00:04:55.360 Do you agree with sort of my assessment that I 77 00:04:55.399 --> 00:04:57.639 made up front, that that a lot of that growth 78 00:04:57.680 --> 00:05:00.839 has really helped put Argrid in a better position than 79 00:05:00.839 --> 00:05:02.120 it was four or five years ago. 80 00:05:02.680 --> 00:05:07.639 For sure, solar keeps costs down. 81 00:05:07.839 --> 00:05:10.240 As you know, the fuel cost of the sun is 82 00:05:10.279 --> 00:05:16.199 pretty low, and the cost of the equipment is also 83 00:05:16.360 --> 00:05:22.079 coming down dramatically. It's fairly predictable, so you can plan 84 00:05:22.160 --> 00:05:22.560 around it. 85 00:05:22.800 --> 00:05:25.399 The sun. We know what time the sun will set, 86 00:05:25.480 --> 00:05:26.439 you know, seven. 87 00:05:26.240 --> 00:05:31.560 Years from now, and there is you know, variability, but 88 00:05:31.720 --> 00:05:33.360 that can be accounted for pretty easily. 89 00:05:34.480 --> 00:05:35.240 What it does do. 90 00:05:35.399 --> 00:05:41.759 Is it pushes some of the issues around balancing the 91 00:05:41.759 --> 00:05:46.120 grid until after the sunsets when that resource is not available, 92 00:05:46.639 --> 00:05:51.439 and so as demand for electricity goes up after sunset, 93 00:05:51.920 --> 00:05:55.480 that's still something that Arcot has to manage, and so 94 00:05:55.560 --> 00:05:58.399 farther doing that with natural gas and batteries. 95 00:05:59.079 --> 00:06:01.920 Right, So let's let's talk about this because, like we said, 96 00:06:01.920 --> 00:06:04.480 there's been you know, even as this growth has happened, 97 00:06:04.519 --> 00:06:07.480 there's been a considerable amount of skepticism in our state 98 00:06:07.519 --> 00:06:10.480 government around whether this is a good thing, you know, 99 00:06:10.560 --> 00:06:13.720 whether it's sort of pricing out more fossil fuel backed 100 00:06:14.800 --> 00:06:18.680 power that you know, some would argue is more reliable. 101 00:06:19.079 --> 00:06:22.079 It feels to me like the two sort of criticisms 102 00:06:22.120 --> 00:06:24.319 of this, and I'd be interested in hearing your perspective 103 00:06:24.319 --> 00:06:26.639 on both, the first one being sort of what you 104 00:06:26.639 --> 00:06:30.680 talked about. It's actually less reliable. Right, you have a 105 00:06:30.920 --> 00:06:35.879 winter storm, the wind stops blowing, you know, not as 106 00:06:35.959 --> 00:06:38.279 much sun during the day and all of a sudden, 107 00:06:38.279 --> 00:06:40.279 we're in trouble. You can't turn the sun on at 108 00:06:40.360 --> 00:06:44.439 three am if you're having this crisis. It seems as 109 00:06:44.519 --> 00:06:47.399 though maybe batteries have helped with that a little bit. 110 00:06:47.399 --> 00:06:49.480 But talk about that concern and is that still a 111 00:06:49.519 --> 00:06:50.720 concern in twenty twenty five. 112 00:06:51.879 --> 00:06:54.560 For sure, it's still something that has to be actively managed. 113 00:06:54.720 --> 00:06:58.360 But we have a choice of do we manage it 114 00:06:58.399 --> 00:07:04.319 through like or you know control, command and control of 115 00:07:04.399 --> 00:07:05.720 exactly what's happening, or. 116 00:07:05.639 --> 00:07:07.360 Do we manage it through market forces. 117 00:07:07.680 --> 00:07:12.959 And that's a key question that drives outcomes. Since when 118 00:07:13.000 --> 00:07:15.560 a storm ury, we've been managing it with you know, 119 00:07:15.680 --> 00:07:23.519 urcot command and control. But in principle, if solar is 120 00:07:23.560 --> 00:07:26.199 not available when you need it, then it doesn't get 121 00:07:26.240 --> 00:07:28.800 paid to the very high prices that happen when you 122 00:07:29.399 --> 00:07:32.079 have a shortage of power, and so on average it 123 00:07:32.120 --> 00:07:36.000 gets paid less than a dispatchable power plant that is 124 00:07:36.079 --> 00:07:40.160 available during those high priced hours. So this, in my opinion, 125 00:07:40.199 --> 00:07:44.360 there's not a need to fix anything. If solar wants 126 00:07:44.399 --> 00:07:48.439 to earn money during those high priced hours, then they 127 00:07:48.560 --> 00:07:51.920 add storage. There's a natural market incentive to do. 128 00:07:51.839 --> 00:07:56.959 That, and this idea basically is building big batteries, connecting 129 00:07:57.040 --> 00:08:00.439 them to the grid, charging those batteries during this sunny, 130 00:08:01.000 --> 00:08:04.399 you know, hot or whatever windy times, and then waiting 131 00:08:04.519 --> 00:08:09.560 until you're in a situation where there's not as much 132 00:08:09.720 --> 00:08:12.600 supply in the system, where the prices will go up, 133 00:08:12.639 --> 00:08:14.920 and then you can make more money by right searching it. 134 00:08:15.240 --> 00:08:17.560 And that can be you know, tens of dollars per 135 00:08:17.600 --> 00:08:19.720 making what hour on a you know, a normal day 136 00:08:19.959 --> 00:08:22.240 or on a tight day, can be hundreds or thousands 137 00:08:22.279 --> 00:08:24.560 of dollars per make what hour, which can make you know, 138 00:08:24.600 --> 00:08:25.680 an investors whole year. 139 00:08:26.439 --> 00:08:29.160 It just very briefly, let's take a step back and 140 00:08:29.240 --> 00:08:32.960 explain sort of the ERCOT system here. It's you know, 141 00:08:33.039 --> 00:08:37.600 the the deregulated system, the system where you know, basically, 142 00:08:37.799 --> 00:08:43.039 right power suppliers are paid to feed the grid and 143 00:08:43.240 --> 00:08:46.679 they are paid based on how much demand and supply 144 00:08:46.759 --> 00:08:50.679 there is at the time. So when say you're in 145 00:08:50.720 --> 00:08:53.320 a winter storm and you know half the natural gas 146 00:08:53.360 --> 00:08:57.679 plants are out of line, you're making tons of money, 147 00:08:58.080 --> 00:09:01.960 right if you're able to supply that grid. Whereas if 148 00:09:02.000 --> 00:09:04.720 it's a three o'clock on a windy day, in a 149 00:09:04.759 --> 00:09:09.360 sunny day and there's all this you know, renewable energy 150 00:09:09.360 --> 00:09:11.480 being fed in the amount that you're getting paid for 151 00:09:11.519 --> 00:09:14.879 suplying that grid is significantly right. 152 00:09:14.919 --> 00:09:17.720 And I would argue that adds up to benefits to 153 00:09:17.799 --> 00:09:22.960 consumers because there's this intense competition that drives costs down. 154 00:09:24.480 --> 00:09:27.039 And the other side of that coin, when you said, 155 00:09:27.039 --> 00:09:29.519 if you're available during the high priced hours and winners 156 00:09:29.559 --> 00:09:32.200 from ury or some similar hour, you make a bunch 157 00:09:32.200 --> 00:09:34.240 of money. If you had sold your power in advance, 158 00:09:34.240 --> 00:09:37.320 which many power plants do, you were losing a bunch 159 00:09:37.320 --> 00:09:40.600 of money because you sold and now you have to 160 00:09:40.639 --> 00:09:42.440 fill in a gap that you don't have and you 161 00:09:42.440 --> 00:09:44.840 have to buy it back for thousands of dollars. So 162 00:09:45.759 --> 00:09:49.360 that risk of having to buy back that power also 163 00:09:49.480 --> 00:09:51.720 creates a strong incentive to try to make sure your 164 00:09:51.720 --> 00:09:52.960 power plants are reliable. 165 00:09:53.639 --> 00:09:56.039 It's basically the idea here is the invisible hand of 166 00:09:56.080 --> 00:09:56.960 the market is. 167 00:09:57.240 --> 00:10:00.440 Yeah, and we see it happening. I know there's you 168 00:10:00.480 --> 00:10:03.000 know a lot of people that here you know markets 169 00:10:03.000 --> 00:10:06.399 and kind of get skeptical, but like, we have real 170 00:10:06.440 --> 00:10:09.320 world evidence of it working in the power markets. 171 00:10:09.399 --> 00:10:14.720 Okay, So the other argument here has been essentially this 172 00:10:14.799 --> 00:10:17.320 isn't a free market system because there has been so 173 00:10:17.440 --> 00:10:21.919 much government government support for solar and wind and everything 174 00:10:21.960 --> 00:10:25.159 like that, and that basically the government, the federal government 175 00:10:25.200 --> 00:10:28.159 in particular, should sort of get its foot off the scale, 176 00:10:28.600 --> 00:10:32.759 which would make it more cost effective for natural gas plants, 177 00:10:32.919 --> 00:10:35.679 which they argue are more reliable because you can turn 178 00:10:35.720 --> 00:10:39.799 them on in the middle of the night to create 179 00:10:39.840 --> 00:10:41.759 a better system for Texas. What do you think about 180 00:10:41.759 --> 00:10:42.720 that sort of argument. 181 00:10:43.399 --> 00:10:48.080 So there's something to it. When you subptionalize something, you 182 00:10:48.120 --> 00:10:51.480 get more of that thing, But it doesn't change the 183 00:10:51.519 --> 00:10:58.240 fact that, you know, when things actually get tight and 184 00:10:58.519 --> 00:11:00.480 prices get high, it doesn't matter matter if you are 185 00:11:00.480 --> 00:11:04.559 subsidized to exist. It matters if at that moment you're available. 186 00:11:05.120 --> 00:11:07.000 If you're available at that moment, you can get paid 187 00:11:07.000 --> 00:11:10.759 those high prices, and if you're broken down, you don't 188 00:11:10.759 --> 00:11:11.879 get paid those high prices. 189 00:11:13.440 --> 00:11:14.240 So there. 190 00:11:16.039 --> 00:11:18.799 How you earn money in in that what's called the 191 00:11:18.879 --> 00:11:22.399 real time market, which when those prices can get high, 192 00:11:22.960 --> 00:11:25.840 directly contributes to whether or not you're willing to invest 193 00:11:26.039 --> 00:11:31.840 in UH solar or storage or natural gas. And frankly, 194 00:11:33.360 --> 00:11:36.919 it's been difficult lately for those prices to materialize for 195 00:11:36.960 --> 00:11:42.480 a natural gas in part because there are more expensive 196 00:11:42.519 --> 00:11:45.639 resource than solar and storage. We are seeing some new 197 00:11:45.720 --> 00:11:48.919 natural gas now with all the enormous load growth we've had, 198 00:11:49.320 --> 00:11:52.039 and so it's you know, policymakers that are looking for that, 199 00:11:53.440 --> 00:11:55.840 you know, should you know, be happy to see it happening. 200 00:11:55.840 --> 00:11:58.759 Finally, I mean when you talk about these like the 201 00:11:58.960 --> 00:12:00.919 foot on the gas idea of the federal subsidies. I 202 00:12:00.960 --> 00:12:03.320 spent some time this summer on an unrelated story out 203 00:12:03.320 --> 00:12:05.120 in parts of West Texas that are being just like 204 00:12:05.399 --> 00:12:08.399 entirely sort of remade in some ways with these giant 205 00:12:08.440 --> 00:12:11.840 wind farms and the batteries and and all of that. 206 00:12:12.120 --> 00:12:15.879 And it is like there is obviously like a political 207 00:12:16.000 --> 00:12:19.399 underpinning to this that people feel like there is a 208 00:12:19.639 --> 00:12:22.519 part like generally, I feel like they feel like, oh, 209 00:12:22.559 --> 00:12:25.159 the Democrats are more likely to subsidize, you know, these 210 00:12:25.200 --> 00:12:29.200 sort of things. They want more subsidies for these renewable energy, 211 00:12:29.440 --> 00:12:32.440 and in Texas that is often seen as a bad thing. 212 00:12:32.679 --> 00:12:33.919 But I do feel like a lot for a lot 213 00:12:33.919 --> 00:12:37.679 of you know, people in the industry, they're sort of like, well, 214 00:12:37.720 --> 00:12:39.919 what's gonna what's going to get me paid a little bit? 215 00:12:40.000 --> 00:12:43.399 You know, Like yeah, and it's not just in the 216 00:12:43.440 --> 00:12:46.279 industry about what's going to get me paid. But you 217 00:12:46.320 --> 00:12:50.639 know these investments are you know, creating an enormous tax 218 00:12:50.639 --> 00:12:53.279 space and rural counties that didn't have it previously. 219 00:12:53.639 --> 00:12:55.799 Right, it's like if it you know, it's ultimately good 220 00:12:55.799 --> 00:12:58.720 for the consumer, you know, like benefits the consumer, benefits 221 00:12:58.919 --> 00:13:01.440 some of these landowners, and if it's people working in 222 00:13:01.440 --> 00:13:04.639 these industries, how much of that resistance is Do you 223 00:13:04.639 --> 00:13:07.840 think it's like it's sticky and or just sort of 224 00:13:07.879 --> 00:13:09.799 goes away if the money starts making sense, so. 225 00:13:10.120 --> 00:13:11.919 You know that, you know, maybe it's a good way 226 00:13:11.919 --> 00:13:15.440 to transition to what happened last session where there were 227 00:13:16.600 --> 00:13:22.360 bills that were filed that would change the way some 228 00:13:22.799 --> 00:13:26.600 prior law that was going to increase costs for clean 229 00:13:26.720 --> 00:13:31.480 energy would have worked. It was called firming, and firming 230 00:13:31.559 --> 00:13:38.639 basically came out of HB fifteen hundred two sessions ago, 231 00:13:39.080 --> 00:13:44.519 and it's. 232 00:13:42.799 --> 00:13:44.879 Really vaguely written. 233 00:13:44.879 --> 00:13:47.720 It's not totally clear what it means, but it essentially 234 00:13:47.759 --> 00:13:53.720 means that they expect generators to perform above average during 235 00:13:54.120 --> 00:13:58.120 times of low reserves. But the way it was written, 236 00:13:58.120 --> 00:14:02.080 it was only for new generation for existing generation, and 237 00:14:02.159 --> 00:14:06.639 so it would be a new requirement for new investors, 238 00:14:06.840 --> 00:14:10.080 and generally that's a good way to do thing. Investors 239 00:14:10.080 --> 00:14:12.240 don't trust you if you impose new costs on their 240 00:14:12.320 --> 00:14:15.360 existing assets. They start to question whether or not you're 241 00:14:15.399 --> 00:14:19.799 a reliable place to invest. Anyway, there was a proposal 242 00:14:19.879 --> 00:14:23.440 the past session to make it retroactive, and that got 243 00:14:23.480 --> 00:14:27.559 through you know, the relevant House committee. And the fact 244 00:14:27.559 --> 00:14:31.840 that it you know, advanced, you know, surprise a lot 245 00:14:31.879 --> 00:14:35.039 of people because there had just been a compromise two 246 00:14:35.120 --> 00:14:40.799 years before. So it led to pretty much the whole 247 00:14:40.879 --> 00:14:44.840 Texas economy coming out and saying, please don't pass this bill. 248 00:14:45.200 --> 00:14:48.720 It would raise costs, it would not help reliability, we. 249 00:14:48.679 --> 00:14:49.320 Don't need it. 250 00:14:49.840 --> 00:14:56.120 And it was an enormous effort where you know, almost 251 00:14:56.159 --> 00:15:00.480 every industry came out, you know, to express concerns about 252 00:15:00.639 --> 00:15:05.559 the proposal. It ended up not advancing after you know 253 00:15:06.039 --> 00:15:10.240 a lot of back and forth, but it forced people 254 00:15:10.240 --> 00:15:13.720 to kind of go on the record because it almost passed, 255 00:15:13.840 --> 00:15:20.279 so you know, that was interesting, and it also didn't pass, 256 00:15:20.759 --> 00:15:22.559 and that's an important story. 257 00:15:22.759 --> 00:15:27.000 So yeah, and it's it's an interesting situation, right because 258 00:15:27.840 --> 00:15:31.240 I think one of the things maybe we felt like 259 00:15:31.320 --> 00:15:34.559 we learned about that whole process is that it might 260 00:15:34.679 --> 00:15:39.039 make good politics to sort of bash the idea of 261 00:15:39.080 --> 00:15:42.960 the Green New Deal or targeting fossil fuels in Texas 262 00:15:43.120 --> 00:15:51.279 or you know, the hardcore environmental right, I mean sorry left. 263 00:15:52.039 --> 00:15:56.159 But then when you get down to evaluating what is 264 00:15:56.200 --> 00:15:58.960 the actual impact of these renewables where you know, once 265 00:15:59.399 --> 00:16:02.279 you build them, once you build the solar panels, once 266 00:16:02.320 --> 00:16:06.360 you are put in the wind farms, they're quite cheap 267 00:16:06.559 --> 00:16:10.759 to you know, at generating electricity. And also there is 268 00:16:10.840 --> 00:16:15.519 a major there are major concerns as data centers come online, 269 00:16:15.759 --> 00:16:18.879 as bitcoin mining comes into the state, and also just 270 00:16:18.960 --> 00:16:22.440 the state grows in general, that there's going to be massive, 271 00:16:22.480 --> 00:16:24.960 massive needs for power over the coming years, and that 272 00:16:25.440 --> 00:16:28.919 wind and solar might be the solution to this. And so, 273 00:16:30.159 --> 00:16:32.279 you know, I think you had a lot of folks thinking, 274 00:16:33.679 --> 00:16:36.559 you know, I might get a short term benefit for 275 00:16:36.639 --> 00:16:39.919 saying we stuck it to those like liberal environmentalists, but 276 00:16:40.279 --> 00:16:43.399 I also might face the long term frustration of my 277 00:16:44.120 --> 00:16:48.279 constituents who are paying more for electricity, or worrying about 278 00:16:48.320 --> 00:16:51.879 another twenty twenty one winter storm from happening. 279 00:16:52.559 --> 00:16:54.000 Or like had a chance to sell their land to 280 00:16:54.120 --> 00:16:56.480 wind farm, or it's like seeing a you know the text, 281 00:16:56.519 --> 00:16:59.559 you know, benefits from a big battery plant or something. 282 00:16:59.639 --> 00:16:59.879 Yeah. 283 00:17:00.240 --> 00:17:03.720 Yeah, when it came down to it, there's an opportunity 284 00:17:03.759 --> 00:17:07.039 to pass you know, this bill that would have been damaging, 285 00:17:07.160 --> 00:17:10.759 and the legislature, in a bipartisan fashion, chose not to. 286 00:17:11.640 --> 00:17:19.799 But then yeah, so then then Congress happened, and so 287 00:17:20.599 --> 00:17:23.920 there have been you know, one of the things that 288 00:17:23.960 --> 00:17:28.400 President Trump said he would do is, you know, reverse 289 00:17:28.599 --> 00:17:34.119 all of the Biden policies around you know, the Inflation 290 00:17:34.200 --> 00:17:37.680 Reduction Act and has said, you know, the Green New 291 00:17:37.720 --> 00:17:41.440 Deal is you know, not good for anybody, and you 292 00:17:41.440 --> 00:17:44.640 know other things along those lines. And you know, one 293 00:17:44.640 --> 00:17:48.200 of the things I've learned recently is you know, when 294 00:17:48.759 --> 00:17:50.519 the president says you're going to do something, you should 295 00:17:50.559 --> 00:17:52.039 believe him. 296 00:17:52.599 --> 00:17:59.279 And so the bill passed. 297 00:17:59.519 --> 00:18:02.720 You know, Democrats were hopeful that the way that Biden 298 00:18:02.759 --> 00:18:04.839 structured it, by having a lot of the benefits to 299 00:18:04.920 --> 00:18:09.400 crew in red congressional districts, would you know, inoculate it 300 00:18:09.440 --> 00:18:18.359 against being overturned. That didn't happen, And there's now the 301 00:18:18.400 --> 00:18:23.359 remaining tax credits. There's a scramble towards construction because in 302 00:18:23.440 --> 00:18:26.079 order to get them, you have to have to demonstrate 303 00:18:26.079 --> 00:18:29.519 the under construction in almost every case. The exception is 304 00:18:30.039 --> 00:18:32.119 I think if you're under one point five megawatts, you 305 00:18:32.119 --> 00:18:36.640 don't have to do that. That's small, and so the 306 00:18:36.680 --> 00:18:39.079 other thing people doing is maybe doing more small projects 307 00:18:39.200 --> 00:18:44.640 because that's easier. But in my opinion, what's happening is 308 00:18:45.000 --> 00:18:49.400 there's actually a rush to qualify for the remaining credits. 309 00:18:49.799 --> 00:18:52.960 When did those expire? Gosh, that's a good question. 310 00:18:53.000 --> 00:18:58.000 Okay, soon soon, soon Again the fast approaching deadline. 311 00:18:58.039 --> 00:19:07.079 Yeah, the very fast approaching deadline, and the once they expire, 312 00:19:09.160 --> 00:19:12.759 then we're going to be in a new world. Historically, 313 00:19:14.039 --> 00:19:16.880 they've been set for expiration and then extended and extended 314 00:19:16.920 --> 00:19:22.599 and extended, and I'm really curious to see what happens. 315 00:19:23.200 --> 00:19:27.039 I still think we'll still see investment in solar and storage, 316 00:19:28.240 --> 00:19:34.079 especially in places with load growth, because it's just a 317 00:19:34.160 --> 00:19:38.480 fact that you can't consume a megawatt unless someone makes 318 00:19:38.480 --> 00:19:42.880 a mega wat, and so that means that in order 319 00:19:42.880 --> 00:19:45.480 to keep up the demand, we have to build new 320 00:19:45.559 --> 00:19:51.559 facilities and solar and storage. Because the impacts that we've 321 00:19:51.559 --> 00:19:54.640 had of those costs coming down for many years are 322 00:19:54.720 --> 00:19:59.039 still in the money. It's going to raise the cost 323 00:19:59.200 --> 00:20:03.160 of buying those because they won't be subsidized, But especially 324 00:20:03.200 --> 00:20:07.640 in areas with load growth, I think we'll still see purchases, 325 00:20:07.640 --> 00:20:10.920 maybe not to the same level, but at least enough 326 00:20:10.960 --> 00:20:12.119 to keep up a load growth. 327 00:20:14.720 --> 00:20:18.559 This is maybe too complicated of a question to answer 328 00:20:18.680 --> 00:20:23.160 in a quick but I'm curious whether you have any 329 00:20:23.240 --> 00:20:28.279 insight on you know, once these credits expire, does it 330 00:20:28.400 --> 00:20:33.279 flip the equation of whether it's more efficient economically efficient 331 00:20:33.519 --> 00:20:39.119 to build a solar farm or a wind farm compared 332 00:20:39.160 --> 00:20:40.400 to a natural gas plant. 333 00:20:40.680 --> 00:20:43.319 So it's not a black and white question like that. 334 00:20:43.359 --> 00:20:47.000 We're seeing right now investment in both solar and storage 335 00:20:47.039 --> 00:20:51.400 and natural gas as it relates to all of load growth. 336 00:20:51.720 --> 00:20:53.079 And that's because. 337 00:20:54.519 --> 00:20:57.039 In the wholesale market, the people that are responsible for 338 00:20:57.079 --> 00:21:01.559 covering that load growth need to cover the possiabilities. So 339 00:21:01.559 --> 00:21:04.119 solar and storage can take you a long way and 340 00:21:04.160 --> 00:21:09.160 it's cheap, but you need to be able to physically 341 00:21:09.240 --> 00:21:12.519 have enough energy to get you through whatever conditions you 342 00:21:12.599 --> 00:21:16.720 know might arise. And so we're seeing investment in everything. 343 00:21:16.559 --> 00:21:19.640 Right now that makes sense. 344 00:21:20.119 --> 00:21:26.720 So one of the questions then, I have is what 345 00:21:26.799 --> 00:21:30.039 does this mean for the reliability of our ur cut 346 00:21:30.240 --> 00:21:31.559 grid moving forward. 347 00:21:31.400 --> 00:21:33.559 Right, So. 348 00:21:35.400 --> 00:21:41.400 Air Cut is kind of actively managing the problem of 349 00:21:42.680 --> 00:21:46.519 how do we deal with data center growth that get 350 00:21:46.720 --> 00:21:48.000 technical pretty quickly. 351 00:21:48.039 --> 00:21:49.240 So I'm going to set that aside. 352 00:21:49.240 --> 00:21:51.279 But they're doing a bunch of studies that will be done, 353 00:21:52.119 --> 00:21:54.559 you know, later this year, and then they'll react to 354 00:21:54.599 --> 00:21:55.559 whatever those studies say. 355 00:21:57.119 --> 00:22:03.759 But beyond that, there's. 356 00:22:03.559 --> 00:22:12.519 A question of whether or not Urkott lets the market participants, 357 00:22:12.640 --> 00:22:16.000 you know, follow incentives and see what comes out of 358 00:22:16.039 --> 00:22:19.200 that and just trust, you know that markets will lead 359 00:22:19.240 --> 00:22:23.079 to the right mix, or for them to be heavy 360 00:22:23.079 --> 00:22:25.680 handed and lean in. And ever since wenters from URI, 361 00:22:26.240 --> 00:22:28.960 they have kind of had their hands on the reins. 362 00:22:29.599 --> 00:22:34.240 And recently at an Urkott board meeting, the chairman of 363 00:22:34.279 --> 00:22:40.200 the Public Utility Commission, Thomas Gleeson, said that it's time 364 00:22:40.279 --> 00:22:43.960 to reconsider whether or not we kind of control the 365 00:22:44.000 --> 00:22:46.519 market as tightly as we have, and that's called they've 366 00:22:46.519 --> 00:22:50.319 been calling it conservative operations, and he said, maybe it's 367 00:22:50.359 --> 00:22:54.920 time to reevaluate that. I'm excited by that because I 368 00:22:54.920 --> 00:22:58.319 think it will lead to more investment and you know, 369 00:22:58.359 --> 00:22:59.920 all kinds of capacity. 370 00:23:00.559 --> 00:23:04.359 Because one of the things that conservative operations has one 371 00:23:04.400 --> 00:23:07.279 of the causes of that, or one of the effects 372 00:23:07.279 --> 00:23:10.799 of it is it makes prices go up for the 373 00:23:11.200 --> 00:23:11.960 average consumer. 374 00:23:12.119 --> 00:23:13.799 Well they not necessarily. 375 00:23:14.240 --> 00:23:18.680 They buy more reserves and so costs go up, but 376 00:23:18.839 --> 00:23:20.720 prices don't necessarily go up. 377 00:23:20.799 --> 00:23:23.000 It's just a quantity issue, right. 378 00:23:26.079 --> 00:23:30.480 But what investors want to see is higher prices occasionally, 379 00:23:30.559 --> 00:23:32.680 so that way they can earn those higher prices by 380 00:23:32.680 --> 00:23:39.279 being available during those conditions. So by buying fewer reserves, 381 00:23:40.759 --> 00:23:44.559 you're buying the total quantity and the bill goes down. 382 00:23:44.720 --> 00:23:47.400 Plus this is the opportunity for these higher prices to 383 00:23:47.400 --> 00:23:51.359 materialize that investors can earn. So it could, if they 384 00:23:51.559 --> 00:23:55.240 do it right, result in lower costs and more investment. 385 00:23:56.079 --> 00:24:00.759 Are we moving off of conservative operations because like we 386 00:24:00.799 --> 00:24:03.359 have strengthened the systems and we've learned our lessons and 387 00:24:03.400 --> 00:24:06.480 things are better, or just because when the winter storm 388 00:24:06.519 --> 00:24:08.720 is so far in the rear view mirror that you know. 389 00:24:08.920 --> 00:24:10.640 Yeah, it's a little bit of both. 390 00:24:10.960 --> 00:24:16.039 But the state has made significant progress on responding to 391 00:24:16.079 --> 00:24:18.839 Winterstorm Muri. There was some real low hanging fruit on 392 00:24:18.880 --> 00:24:24.400 what to fix weatherization of generators in the natural gas system. 393 00:24:25.119 --> 00:24:31.000 There is a procedure to shut down consumers to match 394 00:24:31.039 --> 00:24:34.319 apply and demand, there's not enough generation. That's called rotating outages, 395 00:24:35.000 --> 00:24:39.839 and unfortunately, some of the outages that they rotated were 396 00:24:39.880 --> 00:24:47.039 onto natural gas systems, and so it led to unintentionally 397 00:24:47.079 --> 00:24:52.000 cutting off natural gas going into the power plants. We're 398 00:24:52.039 --> 00:24:54.079 never going to do that again because we're like, oh, 399 00:24:54.119 --> 00:24:56.720 that was a mistake, let's fix it. And so that 400 00:24:56.839 --> 00:24:59.759 was that's a real easy thing to fix. Plus there's 401 00:24:59.759 --> 00:25:05.319