Energy Capital Podcast

Will McAdams, former Texas Public Utility Commissioner, shares his insights on preparing Texas for another winter after the chaos of Winter Storm Uri. He highlights the cascading failures of the past and explains how recent reforms improve grid reliability. McAdams emphasizes the importance of managing skyrocketing energy demand and integrating innovative solutions like batteries to stabilize the system. He also discusses the role of distributed resources and how tech improvements can make residential energy management more efficient.

Texas is not short on energy.Texas is short on time.New load is arriving faster than the grid can plan, permit, and build, raising a question that will shape our state’s future: can Texas grow without sacrificing reliability or pushing costs onto the wrong people?That was the backdrop for our first Energy Capital roundtable with Matt Boms, Joshua Rhodes, and Micalah Spenrath.The Defining Story of 2025When we talked about the biggest energy story of 2025, everything circled back to load. Not just more demand, but uncertain demand.Planning gets harder when projections keep shifting. Transmission, interconnection, and long-term investments all depend on forecasts, and those forecasts suddenly feel less stable.And yes, data centers are at the center of it.As Josh put it, you almost cannot talk about energy anymore without talking about data centers. They are reshaping how fast demand shows up and where reliability pressure lands.Markets still matter, but speed does tooTexas remains an energy-only market. Resources still need to compete on cost, reliability, and performance.But markets only work if the system underneath them can move fast enough.ERCOT and the PUC are working to plan for the future, but compressed timelines make responsible planning harder. Speed is no longer just a project challenge. It is becoming a grid constraint.What constraints unlockThis is about more than just generation — ERCOT’s transmission system also is racing to keep up with rising load. Given such constraints, Texas needs to embrace fast, close-to-home energy strategies, including:* Distributed energy resources (DERs)* Demand response* Backup power* Energy waste reductionAs Josh noted, constraints force innovation. When the old approach cannot keep pace, the economics for flexibility get much clearer.What we’re watching in 2026Looking ahead, Micalah, Matt, and Josh kept returning to a few basic themes:* Clean, firm power that can scale* Backup power and resilience* The untapped potential of DERsThese policy solutions sit at the intersection of reliability, affordability, and speed, which is exactly where the grid debate is heading.Texas is going to build a lot of infrastructure in coming years. That brings real benefits, especially to rural communities, but also real impacts.Micalah framed it simply: this is about balance and fairness. Growth works best when communities understand the trade-offs — and they trust that costs and benefits are being shared responsibly.Closing ThoughtsTexas is entering a build-fast era where speed itself becomes a grid resource.That does not mean cutting corners. It means prioritizing the highest-value infrastructure, being honest about who pays for what, and using every available tool to maintain reliability and affordability.Moving forward, we’ll keep these conversations grounded, curious, and practical. If you have thoughts on what Texas should prioritize next, jump into the comments.Timestamps:* 00:06 – Welcome, roundtable kickoff* 01:49 – Micalah origin story, policy path* 03:54 – Josh background, technical roots* 04:08 – Host reactions, early framing* 13:19 – SB 6, PUC, building infrastructure* 15:27 – Data centers, speed-to-power reality* 18:58 – Siting, community benefits and burdens* 20:37 – Pushback, bad actors, headlines* 22:03 – AI hype, narratives, who shapes perception* 24:12 – ADER, DER potential, batteriesResources:Guest & Company* Matt Boms - LinkedIn * Texas Advanced Energy Business Alliance - LinkedIn * Joshua Rhodes - LinkedIn* Webber Energy Group* IdeaSmiths* Micalah Spenrath - LinkedInTranscript:Matt Boms (00:05.966)Hi everybody, welcome to the Energy Capital podcast. I’m Matt Boms and I’m here for our first round table today with Dr. Josh Rhodes and Michaelis Benrath. I’m gonna ask each of you to introduce themselves and then we’ll get started. Josh, you wanna kick us off? Joshua Rhodes (00:22.894)Sure, sounds good. Hey everybody, my name is Joshua Rhodes. I wear a bunch of different hats. I’m research scientist at the University of Texas at Austin where I study electricity system, the grid, just energy writ large, CTO of Ideasmus, as well as commissioner for Austin Energy. And yeah, just excited to be here. Micalah Spenrath (00:40.0)All right. Hi, everybody. My name is Micalah Spenrath. I also wear lot of hats, but my main and biggest hat is that I am a Deputy Director of Policy and Energy at the Houston Advanced Research Center, where I spearhead our legislative and regulatory engagement, specializing in energy policy. So happy to be here. Matt Boms (00:56.824)Well, I’m really excited to be with you both. And we’ve been tasked with this enormous responsibility of co-hosting this podcast. And I’m happy that we all have the chance today to talk. And I want to get into each of your backgrounds and ask each of you to just explain kind of how you got into the energy world, what inspired you to get into this topic and kind of how did it all start? What’s your origin story? Josh, Micalah, whoever wants to kick us off. Micalah Spenrath (01:21.758)Mine was actually already previewed on LinkedIn. So I’ll give you the Spark Notes version. I actually did not intend to get into energy policy. It just happened kind of serendipitously. I went to grad school for engineering, dabbled in some law and policy courses and was really inspired. And then I got some guidance from a mentor who said you should really look into getting into policy. He didn’t specify which kind, but Micalah Spenrath (01:48.888)Considering I’m very interested in climate action and things like that, I figured energy would be a great place to plug in. So yeah, I got a job with Matt. And then that was years ago now, and I’ve just been getting such positive feedback from the community and the work is so rewarding and intellectually challenging. And yeah, why mess with a good thing? I think I’m going to keep this going for a while. Joshua Rhodes (02:16.376)Yeah, so I didn’t start out with the idea of getting into energy. Like I like science, I like STEM. My undergrad and master’s are actually in mathematics. It’s Stephen F. Austin in Texas A And really every time I kept getting out of school was like during an economic recession. And so there was like no jobs to be had. And it was kind of like, well, I’m pretty good at the school thing. So I guess I’ll just keep going. Cause I found that if you keep going to school, you don’t have to pay your loans back. Like they just keep going. Joshua Rhodes (02:44.332)And so I just kept going and going and going, but after I got to like the masters in math, was like, well, I just don’t want to do this for like the math stake anymore. So I switched to engineering to try to be a bit more applied when I came to the University of Texas. One of the first classes I took was a thermodynamics course. And it took the math that I had learned and like knew, and it put it in terms of real systems, how systems use energy, like how nothing’s a hundred percent efficient. There are no perpetual motion machines. Just kind of made it all make sense. Joshua Rhodes (03:13.638)And from then I started working with Dr. Michael Weber at the University of Texas who does a bunch of energy stuff and first got into like how buildings consume energy. Did my dissertation work, you know, based on that topic from like American recovery and reinvestment funds from ARA funds. And then when I graduated, kind of switched more to the supply side. So I’ve been doing more grid modeling and other types of stuff, but it’s just like, I’ve just always been fascinated with just how Joshua Rhodes (03:40.898)we do things and it’s like the energy side of things let me kind of put my interest in kind of how things work and the math side into like doing something good, doing something good for people, for society and all that. Here we are. Micalah Spenrath (03:54.296)sounds very similar to my story as well. And actually thermodynamics was one of my favorite classes in college. So I double click on thermodynamics, but we won’t dive too much into that. Joshua Rhodes (03:56.632)Yeah, absolutely. Joshua Rhodes (04:07.608)would love to actually, but we won’t. Man, that’s a rarity to hear to be honest with you. Matt Renison. Micalah Spenrath (04:12.238)All right, pitching it to Matt. Matt Boms (04:15.534)Well, it’s fun to hear how everyone kind of gets into energy through the back door. Like a lot of us didn’t necessarily intend to work in this industry, but here we are and we’re kind of neat in energy issues. came into it through economics, like trying to study local economic development and understand how some communities are left behind while others seem to thrive. And I think energy plays a huge role in that. think, you know, working in Texas, we have a first row seat to Matt Boms (04:44.856)kind of how the state has undergone this amazing development over the past few decades. And a lot of that is really, you can draw a straight line between that and energy, right? Just the abundance of energy that we have in Texas. So I wanted to ask both of you, in your experience, the way that people think about energy in Texas, what is the most common misperception or how do you think about energy and how is that different from how the average person thinks about energy in Texas? Micalah Spenrath (05:14.54)I can start with that because I used to just be an average person not too long ago. And quite frankly, I just didn’t even think about it. Outside of thinking about emissions and cost, of course, because we all paid utility bills, I really did not consider utility regulation. I did not think about reliability. I didn’t think about ERCOT, except when they were asking me to voluntarily conserve multiple times a year, which was fun. Micalah Spenrath (05:43.64)Having that frame of reference is completely a 180 to have, think, about energy now. In fact, I think it’s one of the most integral aspects that we can focus on to provide better futures for communities, for individuals, and for the planet if we really wanted to tackle decarbonization. So it’s right up there with transportation, if I recall correctly, in terms of sector emissions. Micalah Spenrath (06:07.328)If you really want to plug in to climate, the environment, and community wellbeing, it’s hard not to see how energy isn’t a player in that. So I think about it from a regulatory standpoint now. I think about it in terms of affordability and also legislation. So seeing how, you know, our lawmakers are basically setting the ground rules when it comes to how our energy system works. And that impacts my bill at the end of the day. Micalah Spenrath (06:36.108)So it really does behoove us to keep an eye on what’s happening. yeah, that’s pretty much where I’m at now, which never really appeared in my mind prior to getting into energy policy, but it is so important. Joshua Rhodes (06:50.06)I think most people used to really only to consider energy like gasoline because it’s the big number that’s kind of on billboards everywhere as you’re driving around. really in Texas, I think since, you know, when winter storm Uri hit, really shoved the electricity sector like front and center. I used to have to explain what ERCOT was, what the grid was. And then, you know, after that didn’t really have to. Sometimes when I said that I’ve worked on that, I’d have to duck afterwards. You know, energy is really kind of in the Texas psyche now. Joshua Rhodes (07:19.298)We’ve always been the energy state. mean, we produce and consume pretty much the most of all forms of energy. And we’d be in top 10, you know, if we were a country. But like, it’s so much more to the average Texan than it is to other, other folks. You’re just given, you how many people work in the industry, whether it’s the oil and gas industry or electricity or renewables or all these other kinds of things. Like, I think it’s probably more front and center. Joshua Rhodes (07:41.28)nowadays and it has been in the past and now even more so with things like all the data centers and electricity growth and like affordability, like it’s even becoming even more kind of front and center. Matt Boms (07:51.416)Yeah, you raised that Josh and I wanted to ask you both about as this year comes to an end and you know, what really was the top story in 2025 when it comes to energy? it, to me at least it feels like a lot has changed from this time last year and we’re in a completely different energy paradigm than we were a year ago. So for you both, what was the big story of 2025? Micalah Spenrath (08:16.512)Well, the biggest story for me was certainly the changes to federal policy related to a lot of different energy technologies, particularly wind, solar, but also batteries, looking at some of these large programs like the Solar for All program, which was intended to deploy distributed solar and storage in communities that were really energy burdened. And unfortunately, that has been a very bumpy road. Micalah Spenrath (08:44.946)And a lot of changes that aren’t necessarily positive have occurred based on the changes that we saw in the One Big Beautiful Bill Act. So that’s the biggest story for me is that federal policy does actually make a difference. And having an all of the above energy strategy within the state is of course advantageous. But having that mirrored on the federal level, we can achieve so much more. Micalah Spenrath (09:09.762)So I think for moving forward over the next few years, I’m really hoping that we can align those two visions between our state and the federal level and really make progress on a diversified energy strategy that brings down cost and enhances reliability and affordability. Cause I think both are important. So that was the biggest story for me. And even though the changes were fairly negative from a lot of the renewable side, I’m optimistic that, you know, markets will continue to work. Micalah Spenrath (09:39.0)consumers will continue to be heard and say that we want what we’re paying for essentially and we don’t want to have prices rising for ideological reasons, for example. Joshua Rhodes (09:52.75)absolutely. I mean, so much happened in Texas this year around energy. mean, I think one of the big ones for me, for sure, and this has been for everyone else is like, just watching the graph for the number of large loads and data centers just continued to like tick, tick, tick, tick, tick, tick, tick, like up faster and faster and faster. I mean, I didn’t even think the numbers last year were reasonable and now they’ve even just gotten more unreasonable. Right. And so just like how that’s going to impact everything that we are doing. It makes it hard to plan. Joshua Rhodes (10:21.422)It makes it hard to figure out where the system needs to grow. Our peak demand is 85 and a half gigawatts, but there’s 225 gigawatts of large load in the cube by 2030. And given the pace at which the utilities move and all this kind of stuff, there’s just no way we can triple the grid in five years. But at the same time, like we’re building stuff, right? Like we approve like these 765 KVA lines, these huge power lines to go out into far west Texas to electrify oil and gas operations. Joshua Rhodes (10:48.334)This kind of reminds me of the Cres lines that we built to like go get the wind out in West Texas. I mean, it gets a lot of things up in the air, but it’s a lot of big numbers and like a lot of us pointing towards good stuff, I think. Micalah Spenrath (11:01.132)Yeah, I do want to double click on that. Like in Texas, we are still building things and you cannot point to every single state and have that same perspective. So I think even with the uncertainty, even with the changes that we’re seeing, it seems that Texas by design is quite resilient. And I’m really optimistic that we’re going to continue our energy leadership and really show what we can achieve when you are tech neutral, when you are an energy only market, when you allow resources to compete. Micalah Spenrath (11:31.45)on cost and showing up and reliability and affordability, not necessarily if you’re a fuel-based resource or if you’re intermittent and things like that. So I think, yeah, I’m a bit optimistic about it. Matt Boms (11:46.146)Yeah, I agree with both of you. And I think, you know, when Josh was mentioning Winter Storm URI and you think about how far we’ve come in the last four years, right? Almost five years now. I want to hear if you both agree with me on this, but I think ERCOT deserves a little more credit than it normally gets. And the reason I say that is because a lot of the projections that came out of it was house bill 5066 that was allowing the utilities to essentially inflate the Matt Boms (12:15.2)load projections and ERCOT came in and adjusted those projections and took a serious look at how much of this load is legitimate. Like how many of these data centers are really coming to do business in Texas because just from an operations standpoint, they need a number to work off of and that determines how much generation we need to build out. And it also determines how much transmission we need to build out, which again, I think ERCOT and the PUC deserve a lot of credit for a more forward thinking. Matt Boms (12:42.838)mindset than we’ve had traditionally in Texas, at least over the past decade or so, trying to work with all this load growth, figure out how much of it is really coming to Texas and then what do we need in order to meet the new demand that’s coming. Joshua Rhodes (12:55.182)So you’re sticking with the transmission lines. I think to the state’s credit, these are economic enablers, right? There’s no one individual project or group of projects that would justify this, but you basically make the sandbox bigger for everyone to work. Again, if you build this infrastructure, it is going to benefit all kinds of energy across the state, from oil and gas to renewables and et cetera. Micalah Spenrath (13:18.794)Yeah, Micalah Spenrath (13:19.164)so my perspective is that we really have started to lay the foundation to integrate large loads in a much more sustainable fashion with Senate Bill 6. And the PUC is doing a lot of great work on that. They have several projects that are dockets that are open and they really are taking it seriously and they’re making progress with the capacity that they have available. So I definitely think the PUC does deserve some kudos, but ERCOT as well, because even before we had Micalah Spenrath (13:46.048)a finalized Senate Bill 6. They were already looking at the interconnection process for large loads. I forget the number of the MPRR, but yeah, so they were all really considering this and then getting the legislative direction just added fuel to that fire. And I think we are moving in a very positive way. There are things that we still need to hash out, right? So making sure that data center... Micalah Spenrath (14:10.25)load is met with sustainable outcomes, right? So we don’t necessarily want all data centers to just have their own natural gas plant. That would not necessarily be the best thing for air quality and community well-being for the communities that are located near these data centers. We do want them to be good neighbors. I think that there’s a lot of work to be done in terms of making sure the policies at the state and local level align to make sure that that can happen. Micalah Spenrath (14:38.9)And yeah, if we can encourage like using solar and storage to meet that load, I think that that would be a real significant movement in the right direction. You’ve seen other states like Oregon, they’ve passed a bill that does actually aim to have sustainable or renewable fuels, I should say, renewable technologies provide the energy for these data centers. And that’s something that Texas can certainly replicate if we wanted to. Matt Boms (15:09.25)Yeah. Then they’re the cheapest megawatts out there. And it feels like a lot of these data center companies are because of their own internal corporate goals. They’re going out there and trying to procure renewables and storage as the market is currently structured. Right. I wanted to ask you both. sorry, Josh, go ahead. Joshua Rhodes (15:27.374)You know, heard something mentioned the other day, a comment that like, you know, right now with data centers, it’s kind of speed to power. And so it’s kind of like whatever we can do to get the megawatts the fastest, but eventually they’re going to have to compete with each other once they get it. Right. And so like, they’re going to want that, you know, unit costs of energy to go down. Like such that they’re, you know, dollar per token, know, dollar per my students cheating on their homework goes down. Right. So, I mean, I think we’ll get there. is a weird time right now with like how fast things are moving and how, how much they’re willing to throw at it, but. Joshua Rhodes (15:57.196)I think long-term equilibrium, yeah, I think we do end up kind of with that lowest cost energy, which yeah, like you said, when solar in storage right now. Micalah Spenrath (16:05.87)But to your point, Josh, you mentioned something that was really interesting, which is what’s unique about this particular load is that they do move so fast and they are of such a great magnitude, right? We typically have not seen that before and it creates a lot of challenges when it comes to energy planning to a previous point. So I think that if there’s an opportunity to align how these loads actually materialize on the grid with our planning processes, we’ll be in a much better place. And I think that Micalah Spenrath (16:35.33)the acknowledgement that that’s needed is already there. Joshua Rhodes (16:39.342)I mean, that’s like where the, crux of like the affordability argument hits. We’re trying to build so much infrastructure so fast right now, but it’s also the fact that that infrastructure is really expensive right now, right? It’s like the top of the market for transformers and for poles and for power plants. Like with my commissioner had on like, know that, you know, natural gas power plants are two and a half times what they cost a few years ago. Transformers are, you know, double what they cost a few years ago. Lines, the wires cost way more than they did. And it’s just like, you buy your house at the top of the market. Joshua Rhodes (17:07.48)when the market corrects, like you don’t get to readjust that principle, right? If we buy a bunch of expensive stuff right now, we’re gonna pay for it for a long time. So we’ve got to look into like, how do we cost share this thing or how do we do this differently than we have in the past? It’s a big deal. Matt Boms (17:23.0)Yeah, it feels like unprecedented times. I wonder listening to you both, like, I agree with you, Josh, that we’re, building out the sandbox for everyone. However, this stuff has to get built somewhere and communities are already starting to push back against some of the 765 transmission build out. We’ve seen legislation the last three sessions in Texas against renewable siting. So. Matt Boms (17:50.082)My question would be for both of you, how much do you worry about that? And I think what can be done to make communities feel like this is the right thing to do for economic development in Texas? Joshua Rhodes (18:01.646)That’s a good question. So, I mean, I’ve done quite a bit of work on like the impact of renewables, renewables and storage. Someone, know, a wind farm is built in a certain community. What does that mean for like landowner payments and taxes? And generally it can be, you know, quite large. In fact, if you look at like the sum total of landowner payments and taxes that the existing and soon to be built fleet are looking to pay, it’s like $50 billion. It’s not a small amount of money. It’s a lot of money. A lot of that flows to rural parts of the state, right? And so it’s areas that don’t... Joshua Rhodes (18:30.934)normally get economic development and it can be helpful in terms of having longer term sources of energy. But transmission is harder, I will say. Transmission is harder, it’s more diffuse, it’s spread over more areas, it can be more visible. Yeah, I know there were fights during CREZ and I’m not surprised that there are gonna be fights during this one as well. It’s just compensating people for bearing the burden, right? It’s like we do that via the tax. Joshua Rhodes (18:57.602)benefits that communities get for like hosting this infrastructure and the landowner payments. and just making sure that those are commiserate. Micalah Spenrath (19:05.582)So when it comes to siting, the main thing that I think about is balance. So, and compensation, of course. So it’s very Texan to say, you know, let’s go ahead and do something, but compensate me fairly for it. And I think that that is very fair. Also risk management. So if we’re asking them to host this infrastructure and these projects, we want to make sure that they’re safe and secure. I think that’s absolutely valid as well. For me, it’s also a conversation about Micalah Spenrath (19:32.692)sustainable outcomes. So we do need to build a lot of things. And that’s no surprise to many people. But we need to do it in a way that preserves our natural resources to the extent possible. And I actually think a lot of rural stakeholders would agree. I mean, if you’re raised in the country, you know it’s a beautiful place to be. And there’s a relationship to the land that you may want to preserve. And I think that that should be honored and respected as well when we’re having these conversations. Micalah Spenrath (20:00.268)So I think that it’s all about balance, it’s all about trade-offs, and it’s all about optimizing emissions reductions with natural resource stewardship and community fairness and compensation. Matt Boms (20:12.064)I agree and it’s highlighting the positive stories because I think for every negative story out there, there’s a hundred positive ones that maybe aren’t spoken about as much. So some of this really has to do with communications and I think how some of these projects are interacting with communities, maybe highlighting the good actors as much as those bad actors get highlighted in the news. You know, we can always find out your positive examples for every bad one, but Josh, you were going to say something? Joshua Rhodes (20:36.642)Well, Matt, what do you think has been the biggest energy story this year? Matt Boms (20:40.366)I mean, this year’s got to be data centers. Like it’s unavoidable. And I think it’s not just a Texas issue. It’s all over the country, right? Like there’s no energy conversation now without talking about data centers. And I think it’s interrelated with everything else we talk about in energy. Like the whole conversation around the 765 lines, it did come from the Permian originally as far as oil and gas and electrifying those operations. But at the same time, you can’t really accommodate all this new load if you don’t have a Matt Boms (21:09.196)know, sufficient transmission infrastructure. And Micalah and I have worked on this in the past at the Capitol, at the PUC, at ERCOT, trying to push for transmission build out, but it didn’t quite happen until the load was really clear that this, this is this huge tsunami that’s going to hit us very quickly in Texas. And if we don’t build out transmission quickly enough, then we’re not going to be able to meet that demand. So for me, that was definitely the number one story in 2025. And then all the flexibility around like DERs, demand response, reducing energy waste. Matt Boms (21:39.116)All of that is now very much on the table in a way that it wasn’t this time last year. And I think that’s because of the AI data center growth. Joshua Rhodes (21:48.232)I’ve got a joke going around that like, can’t talk about energy for more than five minutes in this state without talking about data centers and all my energy newsletters have become AI newsletters. Yeah. I’m sure it’s vice versa on the other side. All the AI newsletters have become energy newsletters, et cetera, et cetera. Micalah Spenrath (22:03.154)Yeah. Matt, I have a follow-up question for you. So you work with a lot of advanced energy companies, some of which are solar and storage organizations. So what gives you the most optimism when it comes to renewable growth in the next year? Matt Boms (22:18.69)think it’s those private power purchase agreements that are happening. A lot of this stuff is happening in the private sector and doesn’t need the government to interfere. And I think that’s why a lot of these data centers are coming to Texas because they have deep pockets. And like you said, Micalah, the number one issue for them is not how much the energy is going to cost. It’s how quickly they can get their energy, right? So that flips the whole thing on its head. We actually do have cheap, abundant energy in Texas, but the key Matt Boms (22:47.596)factor here is the speed. I think they’re seeing that, you know, Google can come in and partner with any number of renewable companies that can get them up and running relatively quickly by building that co-located array of solar and batteries, right? In a way that you can’t really build it as quickly in other states. So that’s what I’m excited about. Like, I feel like we’re best positioned to meet the load quicker than any other state is, but I want to bounce that back to you and Josh and see what you both think about that. Micalah Spenrath (23:13.086)just look at our interconnection queue. You’ll get happy real fast. Well, that’s simplifying it, but I certainly find reasons for optimism when looking at our interconnection queue and also just how readily deployable solar and storage and some of these renewable technologies can be to meet load. Because speed is going to matter. Scalability is going to matter. And so I think that those are great assets of these resources and we should really lean into that. Micalah Spenrath (23:42.158)That’s my perspective, but you also mentioned DERs and circling back to my comment about balance, not every renewable project has to occur on a greenfield site on undeveloped land. It can actually be a parking garage roof. It can be commercial building roofs. And so I really am excited to see like how much we can do in that landscape when it comes to distributed energy, because I think there’s so much potential there if we could just tap into it. Josh? Joshua Rhodes (24:12.418)I think the thing that I’ve been really kind of excited about is like the distributed battery space with, you know, announcements from the ADER program with like the base and Tesla and Bandera that are finally kind of getting these, you know, more dispatchable assets at the grid edge. Like it’s been, there’s been a lot of movement really quickly. I feel like in the past year, year and a half or so, I’m really excited about that too. Cause like, you know, as we run into constraints on getting Joshua Rhodes (24:40.494)know, large loads and generation and all this stuff, you know, in greenfield sites, like we do have a lot of points of interconnection that could take small stuff. And finally, it seems like people are starting to get that business case to work out. And that’s really exciting for me. Matt Boms (24:55.498)Awesome. Maybe to close this episode, we can give one area of like one item that we’re looking forward to in 2026, whether it’s a policy, just an issue that you’re interested in, but like one thing you’re looking forward to next year. Joshua Rhodes (25:08.866)Yeah, so real quick, this year has also been a big year for Texas and critical minerals in the East, the lithium in the smack over to uranium in the panhandle, critical minerals, Brewster County, all these other places like all around the state. I just think that bodes well, bodes good for like Texas and our country as a whole. And so I’m excited to see where that goes kind of in the future. Micalah Spenrath (25:29.048)Clean, firm power. I want to see that grow and scale, and there’s a lot of positive indicators for it. So I’m really excited where it’s going to go in 2026. Matt Boms (25:39.19)Awesome. And I think I’ll go with backup power because I hope that that program will get off the ground next year. And I’m looking forward to that because that should be really fun to see how these technologies can play a role in backing up our critical facilities. So that’s something I’m looking forward to, but thank you both so much. This has been a really great conversation and I’m really looking forward to seeing the guests that you bring on the podcast next year and listening to those amazing conversations. And we’re definitely going to get together more frequently and do these roundtables next year. Matt Boms (26:08.558)And this has been the Energy Capital Podcast. I’m Matt. Micalah Spenrath (26:12.386)I’m Mikayla. Joshua Rhodes (26:13.921)I’m Josh. Matt Boms (26:15.246)See you time. Matt Boms (26:44.77)We’re also on LinkedIn, X, and YouTube, where we post clips, insights, and ongoing commentary. Big thanks to Nate Peavey, our producer. I’m Matt Bombs, and I’ll see you next time. Stay curious, stay engaged, and let’s keep building a stronger, smarter, energy future. This is a public episode. 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Matt Boms, Executive Director of the Texas Advanced Energy Business Alliance, shares his insights on energy innovation in Texas. He highlights the challenges of rising transmission costs despite affordable generation. The conversation emphasizes the need for grid flexibility, revealing how distributed energy resources (DERs) can save ratepayers significantly. Matt proposes leveraging data centers for energy solutions and discusses the $1.8B Backup Power Package aimed at enhancing resilience. Together with Doug, they advocate for a pragmatic approach to energy policy.

Everyone’s talking about the cost of power lately. But the Texas Energy Poverty Research Institute has been studying, talking, writing, and working to do something about it, for over a decade. In recent research, TEPRI found that 65 percent of low and moderate income Texans are cutting back on essential energy use, often turning off AC in extreme heat. But their demand reductions aren’t necessarily saving them much money or supporting the grid. Affordability is now a very high salience issue and there’s no one better to help us understand than TEPRI Executive Director, Margo Weisz. She talked about energy burden and affordability in Texas and the clearest paths to ratepayer relief.TEPRI’s latest research shows bills increasing sharply over the last five years and again in the next five years: TEPRI Releases ERCOT Electricity Affordability Outlook: Forecasting Residential Electricity Prices and Burdens (2025-2030)Energy burden is rising sharplyEnergy burden is the share of income spent on electricity. In Texas:* ~4.5 million households are low or moderate income.* Their average electricity burden for a low income Texan is nearing 7% — that is, they pay 7% of their income for their power costs alone — and expected to be 9% by 2030.* TEPRI’s modeling shows about a 29 percent increase in the cost of power over the last five years, with another 29 percent projected for the next 5 years.* The biggest increases are coming from transmission and distribution utilities.Wages are not keeping pace, leaving an average affordability gap of roughly $850 per year.Because of this, households are taking risky steps — or getting shut offAs TEPRI’s survey shows, they are turning off or limiting AC in dangerous heat, skipping essentials to pay the bill, and accumulating arrears until shutoff notices arrive. And 12% were actually shut off. But Texas does not track disconnects so we don’t know if this survey matches actual shut-offs.These actions point to system-level strain. They increase health risks and make reconnection more expensive for everyone.Efficiency and distributed energy are long term solutionsEfficiency is the fastest, cheapest way to cut bills and peak demand. Weatherization and efficient HVAC could reduce load and permanently lower costs for the households who feel the most pain.Distributed energy goes one step further. Community solar, batteries, and virtual power plants at homes and apartments can lower bills, reduce peak load and improve resilience. Final ThoughtsEnergy burden is the lived reality of the Texas grid. Millions of Texans are paying nearly 9 percent of their income for electricity, and many are already taking unsafe steps to stay connected.But we have real options. Smarter enrollment for bill help. Scalable efficiency. Community solar and virtual power plants that lower costs and support ERCOT.If this work matters to you, share it with someone who cares about Texas energy, and consider subscribing so we can keep tracking what works and where Texas can lead.Timestamps* 00:00 – Intro and why energy burden matters* 02:00 – Margo’s background and TEPRI’s mission* 04:00 – “energy limiting behaviors” often aren’t saving much money* 05:00 – Community Voices Energy Survey and behaviors* 06:30 – How Bandera Electric Co-op is helping their customers* 08:30 – Texas does not track disconnect data* 10:00 – “Sexy energy efficiency” and heat pumps; the split incentive problem* 12:00 – TEPRI’s approach to applied research* 13:30 – Defining and measuring energy burden* 17:00 – the potential for energy abundance and what that means for low-income Texans * 19:00 – Texas rates are lower but rising faster than the national average. Why?* 22:00 – How do we allocate costs for socialized grid upgrades and storm recovery? (SB 6 implementation)* 27:00 – What’s going to happen to bills in the next 5 years?* 30:00 – Where some downward pressure for prices could come from* 32:00 – What do we do about all this?* 35:00 – Bill assistance and the future of LIHEAP* 36:00 – Scaling efficiency and demand response in Texas* 39:00 – Virtual power plants in low-income communities* 41:00 – Enlightened self interest: helping those in need helps everyone* 43:00 – Margo’s closing thoughtsResourcesGuest & Company* Margo Weisz – LinkedIn* Texas Energy Poverty Research Institute (TEPRI) - LinkedIn Company & Industry News* TEPRI New Report: “ERCOT Electricity Forecast Outlook”* TEPRI Receives Outstanding Non-Profit Award at Texas Energy Summit* TEPRI 10-Year Anniversary Celebration and Future of Energy in Texas * Community Voices Energy Survey* E4-TX Geo-Eligibility Tool* Low Income Energy Assistance Program on TX System Benefits ChargeRelated Podcasts by Doug* Why Your Utility Bill Keeps Rising YouTube* Creating a Distributed Battery Network with Zach Dell YouTube* How Data Centers Can Strengthen the Texas Grid with Astrid Atkinson YouTubeRelated Substack Posts by Doug* The Affordability Crisis Deepens: Reading & Podcast Picks, August 31, 2025 * An Expensive and Unnecessary Capacity Market* Energy Inflation* Texas Has Never Had a Summer Blackout — Here’s Why That May ChangeTranscriptDoug Lewin (00:05.548)Welcome to the Energy Capital Podcast. I’m your host, Doug Lewin. And my guest this week is Margo Weisz. She is the executive director of the Texas Energy Poverty Research Institute or TEPRI. Everybody these days is talking about affordability, and rightfully so. Affordability played a very important role in the recent elections in New Jersey, Virginia, and Georgia. And we are seeing increasing numbers of Americans and of Texans that are struggling to pay their bills, that are making that terrible choice between food, medicine, and their power bills. As high as 30 and sometimes 40% of Texans making those choices. TEPRI has done incredible work with their Community Energy Voices survey, where they surveyed 6,500 low-income Texans and found that more than 60% of them were engaged in energy-limiting behaviors. Translation of energy-limiting behaviors is, in some cases, particularly with medically vulnerable populations, extremely medically risky. This is a problem we’ve got to solve together. And as I talked about with Margo, who’s just a fantastic leader in this space in Texas, the solutions actually can help across the grid. One of the things TEPRI is working on is distributed energy resources at multifamily facilities. And one of the things we talked about there is how all of us benefit from implementing those kinds of solutions. It’s what I’ve referred to—I didn’t come up with this term; I’ve heard it in a lot of different places—but enlightened self-interest. If we are getting solar and storage and energy efficiency out widely, particularly to low-income Texans, that strengthens the grid for all of us while it lowers their energy bills. So looking for those win-win-wins is what Margo and TEPRI are all about. I hope you enjoyed this episode and, as always, if you did, please share it with a friend, family member, or colleague and please leave us a five-star review wherever you listen. And with that, here’s my conversation with Margo Weisz.Margo Weisz, welcome to the Energy Capital Podcast.Margo Weisz (02:11.64)Thank you, Doug. It is awesome to be here with you. Yeah.Doug Lewin (02:15.662)We’ve been talking about this for a while, but this is timely because you guys have a really important paper coming out that we’re going to talk through a little bit. But before we get into all that, can you just share with the audience a little bit about the Texas Energy Poverty Research Institute? What do you guys do? What’s it all about?Margo Weisz (02:29.486)Right, we’re a statewide nonprofit and we address the acute energy needs of people with low incomes. And we do it in a variety of different ways. As our name says, we do some research and we’re going to talk a little bit about that today. And the cornerstone of our research is a survey of low-income households throughout the state. And I know we’re going to get to that. We also do some pilot projects. So we take what we learn in that research and then we try to figure out some strategies to solve some of the challenges that low-income households face by doing a variety of different pilot projects on the ground. We also have some web-based tools that we use, that we’ve created, and we do a little bit of education as well.Doug Lewin (03:09.134)Great. Thanks for that. We’ll have information on the organization in the show notes. So folks that want to learn more about TEPRI, I encourage you to go check out their website. You just mentioned the Community Voices Energy Survey. You all surveyed 6,500 Texans who are low or moderate income. Can you talk a little bit about what are some of the key takeaways from that for you? What a fantastic exercise. Yeah. So what did you guys learn?Margo Weisz (03:32.626)Right. I mean, it’s so important for us to really have our work guided very much by the experience and the priorities of the people that we serve. So we focus on affordability, reliability, and clean energy. What are their behaviors around it? What are their priorities? What are their concerns? So that’s kind of—we just ask a whole variety of questions about their experience in a day-to-day environment with energy. It’s very illuminating for us.Doug Lewin (03:59.756)Yeah, and one of the things that really stuck out to me out of that was 65% of the low and moderate income Texans you surveyed said they engage in, quote unquote, energy-limiting behaviors. I mean, that to me was sort of an eye-popping figure. Can you talk about why that’s so important?Margo Weisz (04:16.649)Yes. So I think these are the ways that people try to lower their bills. So they think to themselves, “How can I lower my bills? I can turn off my air conditioning when it’s, you know, a hundred degrees outside, because it’s probably really expensive if it’s a hundred degrees outside,” or “I can turn off my heat or turn down my heat.” You know, those are the variety of things—unhooking their appliances. I think what’s most interesting, though, about that, probably not so surprising that low and moderate income people are doing that, but they may not be doing it in a way that really optimizes savings for them. And so I think the takeaway from that is that there’s a lot of opportunity with demand response for them to be using these behaviors in ways that not only more positively impact their bills, but also support the grid. So knowing that 65% of them are already engaging in these behaviors, well, if they had more information about... Don’t turn off your air conditioner in the middle of the afternoon.Doug Lewin (05:16.62)We have a lot of solar power. Power is actually really cheap.Margo Weisz (05:19.106)Zero-cost energy in the middle of the afternoon. You know, so you can have your air conditioner on, but maybe, you know, at five o’clock, especially if you could get a little text that your retail electric provider let you know, you could save $5 if you, you know, right now turn your air conditioner up by three degrees. So I think that is the piece of the Community Voices Survey that is most helpful: what are people doing now and what are they trying to do and is it achieving that or are there ways to help them do that better to meet their goals?Doug Lewin (05:56.654)Yeah, I can’t tell you how many times over the last 20 years working in this space, people said, “Oh, demand response isn’t for low-income people. You know, too many of them or they don’t have the right technology or they’re like older and they can’t really understand it.” And it’s like, look at the data. Like 65% of them are doing it right now. But to your point, they may not be actually getting paid for that. They may be saving some, but to your point, like three and four in the afternoon in Texas with 36 gigawatts of solar power, like that’s not the time to be turning down. You should actually, if you had the right rate structure and incentives in place, you could actually be using more at three or four, as long as you’re set up to use less.Margo Weisz (06:39.714)Right, cool down your house. And one of the really interesting kind of case studies that we’re looking at right now is Bandera Electric Co-op because they have fairly large, low and moderate income household membership. And they created some software that allowed them to have really efficient and effective communication with their members about their energy use. And what they found, and we’ll be digging much deeper into this in 2026, is that they were able to make tremendous impact on their members’ bills by feeding them the information about when they should be using those behaviors. And so they’re also doing a lot of other really interesting things that we’re excited to dig into at Bandera. But I think this software that allows them to communicate in real time with their customers has had a huge impact on customer bills. So we’d like to see that and figure out, is that something that could be replicated by other providers?Doug Lewin (07:35.886)I mean, yeah, it obviously can be replicated. It may not be the exact same in every place, but that communication is just so absolutely critical.Margo Weisz (07:43.582)Right, and it really speaks—like people are already doing this, they want to do it. They want to do it well, and they’re really concerned about their bills. We know that we keep hearing about that. So, you know, and I know we’ll talk a little bit about what can people do.Doug Lewin (07:56.876)Yeah, we are gonna get there towards the end, but I will say, because I think it’s appropriate to say at this point, one of the things we could be doing is more energy efficiency, because what is actually—when people are taking those energy-limited behaviors, depending on how they’re doing it and when they’re doing it, it can actually be unsafe. And then you’ve actually got, I think the number you guys had—we’ll quickly, I’m gonna have a link to this in the show notes so people can find the exact facts and figures—but something along the order of 30% of the low and moderate income folks you interviewed had received a bill of disconnect notice of some kind.Margo Weisz (08:27.886)Right, and 12% of them had actually been disconnected. And I think it’s really important to note that because other states actually track their disconnection data, but we don’t do that in Texas.Doug Lewin (08:37.336)Which I find just wild. Like, I mean, you can’t manage what you don’t measure. And we’re like literally—like it’s being measured, but it’s not being reported. So like, great, you’re measuring it, but nobody knows.Margo Weisz (08:47.468)Right, it’s not only costs for the households. There’s ripple effects throughout the whole industry. I mean, there’s bad debt expense.Doug Lewin (08:53.681)This is good for nobody. This is good for nobody. Nobody benefits.Margo Weisz (08:56.514)This is good for nobody. So to understand, like, well, what is the extent of the problem? So our survey shows that 12% of low and moderate income households reported—this is what they report—that they were disconnected in the last 12 months from the survey. So we’ll go out again and see, because we also know since we did the survey in 2023, that rates continued to go up. So it will be really interesting in 2026 to see, well, in the last 12 months, what percentage of low and moderate income households report that they were disconnected or received a disconnection notice.Doug Lewin (09:28.11)Yeah, and one of the things I would love to see happen is, not the reporting—you’re absolutely right. Like that should come first. Like we just need to have a better sense of the data in Texas. Policymakers, particularly legislators need to like demand that of the PUC and hopefully the PUC can like figure out how to just get that out there. ERCOT has that information. There’s a number of ways to get that information, but then starting to connect the energy efficiency programs to those that are being like—that is a way, like yes, you can do bill assistance and that’s really important, like a one-time bill assistance, but if you do energy efficiency, it’s actually lowering your bill every single month and making those energy-limiting behaviors, which we know 65% are doing, less risky for them. Because if you have better insulation and better equipment and things like that, that’s gonna make it more safe when you’re engaged.Margo Weisz (10:15.202)The least sexy thing to talk about is energy efficiency.Doug Lewin (10:18.134)The most sexy, damn it! If a listener, if you haven’t realized yet how sexy heat pumps are, please look into them. They’re incredibly sexy. They’re sexy. Go ahead. At least as sexy as solar panels and batteries. At least, if not more.Margo Weisz (10:38.946)Right. Way more sexy than virtual power plant technology. Let’s just say. I think the challenge with energy efficiency, which we also are huge proponents of, is that you really have the split incentive for landlords and for low and moderate income households. Just a very large percentage of them are living in rental housing and in urban areas in multifamily. So we need to be more creative. And when we think about it, it’s just not a straight-out incentive, but what are sort of the targeted incentives for multifamily and for landlords to really invest in energy efficiency? Because it’s gonna be a huge impact on people’s bills and keep them a lot safer when it’s really hot or really cold outside and they’re exhibiting these energy-limiting behaviors. Well, it won’t be so bad if their home is already cool enough, you know, and then they do that and then retaining that air conditioning. So we think it’s really important as well and would like to see those programs expanded. We have created a web interface tool that four of the utilities currently subscribe to because one of the challenges that they have with their energy efficiency programs for low-income people is that historically contractors go out, they knock on doors and they collect income information. Well, in this day and age in Texas, who’s going to pass over their income information to some rando that knocks on their door? So the customer acquisition cost for utilities was very, very high and people were very uncomfortable with the process. So TEPRI created a geo-eligibility tool where households are automatically qualified based on where they live. The four largest utilities currently subscribe to that program through TEPRI and their contractors use it. And so those customer acquisition costs should be significantly lower. And hopefully, as our colleagues go and advocate for more energy efficiency dollars, the issue of customer acquisition for low income should not any longer be an issue.Doug Lewin (12:30.562)That’s amazing. It’s one of the things I really love about TEPRI is you guys have these great research reports. You’re kind of that, you know, it’s a little cliché, but like the think and do tank, right now. Right. You guys are actually building these tools to make the experience—well, to increase the likelihood that you can actually deliver energy efficiency.Margo Weisz (12:47.414)Right, like the think part is really important because you can’t know if what you’re doing is right if you’re not doing the research, but the doing part is equally as important because then you have to say, “Well, let’s try these things out and get to that next level of learning of what are the obstacles.”Doug Lewin (13:05.66)It’s really like a virtuous cycle, right? Because you’re thinking, you’re doing, you’re thinking, you’re using. Like as you’re doing, you’re getting that feedback from the market, from actually what’s going on in the world that then informs the next research. I’ve always loved that about TEPRI. You guys are awesome. So I want to make sure we talk about energy burden. This is a phrase that I think is getting used more and the sort of literacy around what that means is going up, but I still think it’s actually fairly low. Can you describe what energy burden is and what you found from your survey about what energy burden in Texas is like?Margo Weisz (13:36.63)Yeah, sure. So energy burden is a term used nationally to describe the percentage of a household’s income that goes to their total energy costs. And in the industry, anything over 6% of your income going to your energy costs is considered energy burdened. And so we do find that low and moderate income people are disproportionately, as you would expect, energy burdened. I think most concerning is that we’re seeing that those energy burdens have gone up and are continuing to go up. In Texas specifically, and I know we’re going to get to this, 80% of somebody’s energy costs are derived from electricity. And so what’s going on with electricity prices is most consequential to their energy burden. So I know we’re going to talk a little bit about it. We are about to put out a paper on affordability, and we distinguish electricity burden, which is a TEPRI term, but just in Texas, sort of perhaps most meaningful. And we say anything above 5%, the way that we calculated it, is electricity burdened. And we’re seeing those burdens really going up over the next five years. And they have gone up over the last five years as well.Doug Lewin (14:50.478)So for the average low to moderate income Texan from your survey, the energy burden was just about 8% and electricity burden was 7%. And again, just to put a finer point on that, that means all the income a person is taking in—like I want people just to stop and let that sink in a minute. If you imagine, dear listener, whatever you make in income, if 7 or 8% of what you made was going to pay your energy bills, this is what the reality is like for, what is it, 40% of Texans that are low to moderate income? I mean, this is not a small number of people.Margo Weisz (15:27.21)I mean, about 4.5 million households in Texas are struggling, you know, or low and moderate income. So it’s a big percentage of that. And so what do people do to be able to afford their bills? I want to step back a second because I think when people talk about poverty and they talk about challenges, we often think a lot about homelessness, as we should. We think about people having food on their table. And I think this idea that energy is consequential to the way that they live is just not something that hits people’s radar screen. Yet, it’s really foundational to how we live in the modern world. You know, not only is it a health issue in that, you know, we have very, very hot summers, we can have incredibly cold spells in the winter. So, especially for people who are medically vulnerable, which again tend to be disproportionately low and moderate income. But it’s like if you work these days, there’s so much—you know, you got to take a virtual call at home. Schools for the students, this thing’s everything. When my son was in school, in high school, everything was posted that he had to find. So if you don’t—what do you have to do if you’re not hooked up? You know, you really actually need energy in your lives. And when you think about your refrigerator, I mean, food costs are really high, but if you can’t keep your food cold, it goes bad really quickly. These are huge costs for people. So I think a lot of times people don’t think about how foundational energy is in our lives. I mean, our communication systems. In the case of an outage, the thing that people were most concerned with was communication systems. I need to know what’s going on and I don’t have access. So I think when people sort of think through all the different ways that they’re using energy, it becomes clearer to them, “Wow, this is really important. If people can’t afford their bills, what are they going to do? They don’t want to be cut off.”Doug Lewin (17:16.205)Yeah, and this is where, I mean, there’s obviously a whole discussion and dialogue going on in this country right now—right, left, center, everything—about sort of abundance, right? This is like a word everybody’s talking about. Some of it because of, you know, the Ezra Klein and Derek Thompson book. But just in general, you’re hearing this again, like a lot of the—I mean, in Texas, there’s a group active called Abundance Institute, and they’re like, there is this potential, I think, in the moment we’re at right now with particularly this scale-up of renewables and storage going on, particularly if we can get the demand side right, which is a huge if, if we could do the energy efficiency and DERs, that we could get to a point where we actually are driving costs—at maybe overall bills, if not rates, and we’re going to talk about that—downward. And I think that it’s important just to really—what we’re doing right now, right, is like diving deeper into what does that actually mean? If you could, somebody who’s making $30,000 a year, I’m going to do math on the fly, that’s, yeah, so 7% is roughly like two grand a year. If you can drive that down even a percent or two, and you’re giving somebody with $30,000 a year an extra few hundred dollars in their life, that makes a big, big difference. So that’s why this is so important. Anything else you want to say about that before I start asking you about rates?Margo Weisz (18:35.124)No, I mean, I think that’s, yeah.Doug Lewin (18:35.124)So in the report, while we’re recording is not out yet, but hopefully we’ll get this all lined up right. And when this comes out, the report will be out. It’s called ERCOT Electricity Forecast Outlook. And you guys have done some fantastic research again here, just like in addition to the Community Energy Voices Survey, this is a real contribution to really—I get asked this a lot, like what’s going on with Texas rates and you kind of point to EIA data and all that, but you guys have really put this together in a great way. I appreciate you sharing it before this so I could dive into it. So what you found was Texas rates are lower than the national average, but are rising faster than the national average. And one of the stats you had in there was rates were basically flat from 2010 to 2020. It was a little bit of up and down, but like basically flat for that decade. And then up 29% from 2020 to 2025. That seems like a pretty extraordinary finding. Can you talk a little bit about what is driving that 29% increase in the last five years?Margo Weisz (19:36.31)It was several different drivers. I think it was gas prices going up. I think it was investments in transmission and distribution. So it’s been weather and having to really figure out how to pay for all of the damage and the upgrades from weather. So yeah, we saw starting in 2020, just this big kind of movement upwards. I think we’re also seeing that a larger percentage of bills, when you look at them, the composition of your bill is becoming transmission and distribution costs. So as we continue to make more investments in transmission and distribution, that’s having an increasingly bigger impact on the bill. So not only are our investments going up for a whole variety of reasons in transmission and distribution, but transmission and distribution has increasingly become a larger percentage of the bills. And I think people don’t understand that. They’re like, “But you know, we can get the costs of energy in the afternoon,” you know, the generation piece of it towards zero. But if 40% of your bill is transmission and distribution, and that’s going up at a quick clip, then you’re going to see some increases in your bill. So yeah, I mean, to your point, like we did see that electricity rates are generally lower than the U.S., but when we compared them to states with similar climates, they weren’t really any lower. In fact, they were a little bit higher than those states with similar climates. And then additionally, while we did see rates going up across the board, Texas was going up at a much higher rate and higher than the U.S. average. So that’s what’s concerning.Doug Lewin (21:12.172)Yeah, and it’s really, it’s a little bit of a catch-22 kind of a problem too, because what you’re talking about is like all the extreme weather—that is one of the factors, right? Natural gas was clearly a factor 2022, the Russian invasion of Ukraine. By the way, to be clear, when we’re talking about rates, we’re talking about the all-in rate, right? Because you said T&D is making up, and I think you had a number in there, again, dangerous to this from memory, but it’s something on the order of magnitude of like 10, 15 years ago, like 28% of the bill was T&D, and that’s all the way up to 39, almost 40%. But this is the all-in bill you’re talking about, and a lot of that driven by gas, but a lot of it driven by the extreme weather, which then leads you as a, naturally, as a policymaker or a regulator or stakeholder advocate, you know, nonprofit think tank, like whatever, it probably leads you to say, “Well, we’re gonna need some more investment in the transmission distribution grid, we need to be more resilient to these storms.” But now you’re...Margo Weisz (22:08.974)You don’t want people to have these outages. And they’re very concerned about these outages. And for good reason, because the outages usually happen when there’s inclement weather. And so bad time to have an outage. So it is, it’s a little bit of a catch-22, but these investments are very expensive. And I’m sure you might ask me about this, but like how we allocate those costs—of who pays for it.Doug Lewin (22:30.35)Let’s talk about that now. How do we allocate those costs? Who pays for it?Margo Weisz (22:34.71)So historically, there’s been a different way to allocate those costs to the residential and commercial sector compared to the industrial sector. And so I think that we’re looking at that. The good news is we’re going to look at that allocation. Currently, the residential sector carries a disproportionate amount of those costs. So it hasn’t been particularly fair. And the good news is that we’re finally taking a look at it. And by the end of 2026, there will be some sort of a draft plan that should hopefully address those sort of inconsistencies in how those costs are allocated and who’s responsible for those costs.Doug Lewin (23:10.816)Yeah. And that’ll all happen through the Senate Bill 6 implementation that’s happening at the Public Utility Commission. So that draft plan, there’ll be some sort of... We don’t know what form this is going to take. It could just be a report with options. It could be a recommendation. I don’t think...Margo Weisz (23:26.178)It could be nothing at all.Doug Lewin (23:27.699)Well, there’s going to be something because the legislature did say in SB 6 that they needed something from the PUC. They needed them to look at it and give them a report. So there will be something on paper go into the legislature, whether or not that includes recommendations or merely options we don’t know, but there will be something. And to put a little finer point—go a little deeper into that with the transmission cost allocation—we’re really talking about that four coincident peak pricing. So I’ll put some links in the show notes. I’ve covered this in other podcasts, but the basic point for this conversation is if you are a really large user, if your load is over 700 kilowatts, it’s like a really large big box store and up, and far up, right? Including big manufacturing facilities, big data centers, all of that. You have the ability by reducing your peak usage on four days, June, July, August, September, to get your transmission bill way down. So that 40% you’re talking about, there’s the ability of a large user to reduce that, right? As a residential or small commercial customer, you cannot. All you could do is just reduce during that hour, but it’s just the reduction for that one hour, whereas the large users can reduce their bill for the entire year just by turning down during these four increments. So to bring this back full circle to where we started, those 65% of low to moderate income Texans that are taking energy-limited behaviors, if they were large users, that would save them money all year. But for these folks, like it’s only saving them money on that day.Margo Weisz (24:56.268)Right, right, right. So probably not even saving them money because they’re not really optimizing their behavior to actually when they would optimize their bill savings. And as we know, the market really isn’t set up to currently make sure that they are getting compensated for their behaviors at the right times. That’s the future. That’s the hopeful.Doug Lewin (25:16.198)That is the future. And I think what I’m hopeful—one of the things that will come out of that 4CP, you know, whether they go to some kind of 12 CP and make it 12 months or 6 CP, there’s all kinds of different sort of proposals floating out there. And there was a workshop held on this. I talked a little bit about this, actually quite a bit in the podcast with Travis Kavulla of NRG. And one of the things NRG has been advocating for is make whatever it is, 4CP, 12CP, whatever it ends up being, make that something that the load serving entity is exposed to. You don’t want to expose the individual customer to that. They don’t have the sophistication of a big manufacturing firm or something like that with energy managers on staff. But if they want to participate in something and save on their bills all year round, they could do that through their load serving entity, through their co-op or retail electric provider. Right. You think that one maybe holds some promise? Have you thought that one through?Margo Weisz (26:10.69)I think it does hold promise and I think there’s a lot of innovation. I feel like one of the things that’s so fun about my job and probably your job is just like all this innovation and all this possibility that you see. I think innovation has happened pretty quickly and I think a lot of people are seeing this. I think there’s a lot of reasons across the board for us to start looking at this in terms of grid support and our ability to use sort of all customer markets to support the grid. So yes, I feel fairly optimistic that we will see more services coming out that will impact customers. So there’s also some things that could be positive and there’s things that could negatively impact customers too in the future. So, I mean, one of the things that our paper looks at, and we think it’s pretty conservative, is what’s going to happen to bills over the next five years. So you sort of talked about like we looked first at what actually happened over the last five years. We can see that. Well, you know, an almost 30 percent increase in bills has been, you know, an incredible burden for all people, but especially for low and moderate income people. So going forward, we’re seeing that bills are going to rise almost another 30 percent. And we think that that projection is fairly conservative because it’s based on things that we feel that we can build into a projection model. And yet we do acknowledge that there’s all sorts of things that could be impacting bills that we will have to come back in three or four years and take a more granular look at and re-project out because we’ll know more. I think that people were very fearful that as we lost a lot of support for renewables, that that would really impact bills. But the truth is in Texas, we have so much solar in our interconnection queue and the batteries are playing such a huge role that the generation over the next three years probably is not going to go up that much. We’ve got a lot. We’ve got a lot of supply.Doug Lewin (28:09.814)And a market that still has price signals for the lower cost resources. So I think it’s important to note that with that in place, that counteracts some of that rising cost on the T and D side. Maybe, maybe not a lot, but some—puts a little down.Margo Weisz (28:25.166)Yeah, it’s close to $90 billion of investment that’s been approved for transmission and distribution upgrades. That’s a lot of money. So that’s going to impact bills. And if it’s 40% of your bill or 39% of your bill, maybe becoming a bigger percentage of your bill, we’ll have to go back and look. Then somebody’s got to pay for that. Now, that doesn’t include, what if we have another weather event in the next five years?Doug Lewin (28:53.09)I mean, again, that’s a big part of what’s caused the rising bills over the last five years, right? All the Winter Storm Uri surcharges, the Hurricane Beryl surcharges, the Derecho surcharges, they all stack up.Margo Weisz (29:02.862)It’s looking like we’re probably going to have some unexpected weather that’s going to require us to make investments that we can’t see right now. That didn’t go into our projection model because we don’t know. We could have said, “We don’t want to be conservative. Chances are, let’s add some more in there.” But we didn’t. So this is going up almost 30% and we feel like it’s fairly conservative. We looked at what we thought we could predict. We didn’t think that over the next three years, generation was going to be constrained in a way that would cause upward pressure, but it could. It could. We did show some increases in those costs starting in 2028. So we did see upward pressure and that is built into our model.Doug Lewin (29:45.558)And some of that, right, is I would assume the tax credits going away. Because there’s a lot of safe harboring going on where folks are still doing the projects with the tax credits, but that only has a runway out till... Well, I think even in ‘28, you can have some safe harbor, but it starts to go away somewhere right around ‘29.Margo Weisz (30:04.31)2027. Right, so we sort of show that that pressure is gonna start around 2028, a little bit, and then kind of goes up 28, 29, 30. But again, we’ll have to come back in a few years and see what’s going on. It could look worse than we think, it could look better than we think. Sure, of course. You know, those are things we didn’t know. So that was not a huge driver in our projection model, but we acknowledge it could be. We might have some benefits from co-optimization. We might have some benefits because DER integration and technology really becomes commercialized and there’s an uptake in the market faster than what we think. And so we know that could be a positive, but we didn’t put it in our projection model because it’s hard to know. We call it out in the paper, we describe it, we know that these are drivers that might affect the model, but not things that were easy for us to understand how to predict.Doug Lewin (30:54.766) Yeah, and if you’re wondering what co-optimization is, we’ll put in the show notes a link to a podcast I did with Beth Garza a year or so ago where we talked about it, but this is the sort of co-optimizing ancillary services in the real-time energy market, and it will go live right around the time this episode comes out. December 5th is the go-live date, and ERCOT projects that will save a couple billion dollars. So it’s nice to have all these low-cost generation resources coming onto the grid. It’s nice to see batteries getting in there and competing in major ways and some of the really spiky days that normally we would have seen thousands of dollars a megawatt hour. Now we’re seeing a few hundreds of dollars because all these batteries are competing against each other. So we are seeing some downward pressure there, but not to lose the point, 29% increase the last five years, projected 29% increase the next five years with, you know, 65% of over 4 million Texans already engaging in energy-limited behaviors.Margo Weisz (31:51.982) And already 12% already reporting that they’re getting a shut-off in that they’re actually being shut off and a much larger percentage of those reporting that they at least received a warning for shut-off. So they’re not paying their bills on time.Doug Lewin (32:03.982) So we’re likely to see those numbers go up, which brings us, I think, to what is one of the most important questions I could possibly ask. What do we do about this? So as part of your research is what are the things that can be done to help folks that are struggling and maybe even potentially some of these things like strengthen the grid at the same time? You guys had a few ideas in your report. You want to talk through some of those?Margo Weisz (32:26.668) I do, but before we do, just really want to quickly point out that the other thing we look at in the report is how do these changes specifically impact low and moderate income households? And so what we see is you talked at the beginning of our conversation about what those percentages of energy burden look like. And so if we’re seeing in 2025 that the average low and moderate income household has an electricity burden—because we’re just projecting out, we’re just looking at electricity for this paper, which is again 80% of the average household’s bills—if their electricity burden is 6.7%, 5% is considered energy burden. So they already have an energy burden starting in 2025. What’s it going to look like in 2030? And we’re looking at that going up to almost 9%. So that’s like almost 9% of their income. And we do put into that model an income increase of about 1 to 2% a year, depending on the geography. So we took a look. OK, we’re already showing, well, there’s going to be some income increases that we’re projecting in there. Even with that, this is what’s going to happen to the bills. We’re going to see almost a 9% electricity burden. Huge. This is not even their energy bill.Doug Lewin (33:35.772) So for low and moderate income folks, imagine—again, if you are low and moderate income, you don’t have to imagine this. If you’re not low and moderate income, imagine whatever your number is, take a minute, picture it in your head. Now take roughly 10% of that and imagine paying that on your power bill.Margo Weisz (33:51.63) Just your electricity alone. Yeah, just your power alone. That’s crazy. The interesting thing about that is, so I’m just gonna—I can’t remember the exact number, but it’s about $850, a delta of what we consider affordable and what—there’s about $850 that you just can’t afford.Doug Lewin (34:06.962) So annually, if we lower the number by $850, it would move back into like an affordable, not quite energy-burdened kind of a...Margo Weisz (34:14.156) But it gets a little bit harder because when you say a low and moderate income household, well, that includes everybody who’s at 80% or below of area-wide median income. Well, some of those people are at 30% or below. So those people are seeing, you know, $1,500 deltas in what they can afford each year. So it can be much higher depending on what your income is. So we’re just giving you an average. It’s an average of about $850-ish, the delta. But for some people, it’s much higher than that. So as we go into what can you do about it, we’re really looking at kind of a tidal wave of a problem in terms of affordability for low and moderate income people.Doug Lewin (34:57.334) And so some of the things you outlined, we talked about some of them, but energy efficiency, distributed energy resources, these things can help. We probably need some form of just straight bill assistance. We used to have this in the state in the form of the system benefit fund, but it went away 10 years ago or so. So we haven’t had any statewide—there’s federal bill assistance.Margo Weisz (35:16.17) There is federal bill assistance. We still have the LIHEAP dollars, but currently most of the staff for LIHEAP have been laid off. So it’s sort of unclear what the future of LIHEAP is, but the money’s still there. The money comes down to the states. I mean, again, this is just my thinking. This is not coming from anything I’ve read, but because the LIHEAP dollars come down to the state, we might not need that many staff at the federal level. That’s sort of our hope. Maybe it doesn’t need that staff.Doug Lewin (35:41.833) Administered here through Texas Department of Housing and Community Affairs.Margo Weisz (35:44.468) Right, right, and then out to these community service organizations throughout the state. So that money is still there and we’re, again, hopeful that it will continue, but it’s hitting such a small percentage of people who qualify. Again, I think we may quote it in the paper, but I believe it’s something like 5% of the people who qualify for that money actually receive it.Doug Lewin (36:05.98) Literally only a couple. Yeah, we’ll look it up and we’ll put the citation.Margo Weisz (36:09.672) Yes, it’s a small percentage. Yeah. So yes, but we need more. We need that state-level support. I think some of the munis have some support, depending on where you are. There’s probably some local support. But yeah, there’s just a huge challenge. Outright bill assistance is needed. But what are market-based strategies that we can be looking at? I think we should just be from here on out calling it sexy energy efficiency. It’s just, you know, it’s sexy energy efficiency. It’s what it is. We need to rebrand it. Absolutely. I do think it’s the lowest hanging fruit. I think again, Doug, you will know the numbers better than me because I do not have them in my head. But years ago, Texas used to be, I believe, number one in requiring energy efficiency.Doug Lewin (36:57.08) We were the first state to have what was called an energy efficiency resource standard. There were other states that like California had been doing it before that, but we innovated that model. We were the first to do it. Now of all the states, I think there’s like 27 that have a resource standard, we’re dead last in the size.Margo Weisz (37:11.564) Yeah. I mean, you know, it’s time. Yeah. It’s time for us to put money into sexy energy efficiency. And so I’d say that’s the easiest and probably the most impactful strategy. However, as we’ve talked about, we really need to think about that split incentive and what are those incentives for multifamily housing developers at the front end? How can we support those kinds of—whether it’s building codes or some kind of credits, tax credits they get for putting heat pumps in to multifamily and to be doing energy efficiency? So I would say that’s always number one. I think demand response has, as we’ve talked about, I think there is a lot of potential for that because we’re already seeing those behaviors being demonstrated. So now how can we really hone in on those to make sure that those behaviors are optimizing their bill savings? I think there’s a huge opportunity. Again, I’m super excited this year to be doing that case study on Bandera Electric Co-op and just understanding—I always sort of joke, you know, that when I sit in meetings, especially when I started this job, you know, I didn’t come from the energy world. I came from the finance world. So when I started this job and, you know, the acronyms and the complexity, and we’re talking about five different markets, and I was just like, okay, I just got to listen really carefully here to get caught up. I always would say this industry more than any I’ve ever been in needs like communications people. We need a lot of communications people, and how are we going to take demand response technology and demonstrate the value proposition to customers? And I think it requires kind of a different or a bolstered skill set than we have today. So, and I think if I had to say what are the biggest challenges, I think that’s one of the biggest challenges, but I also think it is one of the biggest opportunities. We are super interested, whether you call it distributed power plants, virtual power plants, in this technology because it’s potentially revenue-producing. I think it has a lot of potential for low income. It’s a little bit harder. I think it has a lot of potential for resilience. And we’re looking right now, we’ve just recently put some solar and storage on two multifamily sites and we’re talking to the REP about connecting these batteries, these commercial-sized batteries, to virtual power plant technology. And so again, I think when we got into this, it was much more nascent than we realized. We thought the technology just wasn’t being utilized for low and moderate income households. And we thought, you know, well, this is generating revenue and it supports the grid and there’s all these great opportunities for it. It can reduce transmission and, you know, it has all these layered benefits. This is the new best thing. And so as we’ve gotten deeper into it, which honestly is just a ton of fun, it’s like endlessly interesting, but it’s also got just a lot of kinks that need to be worked out and I often use the analogy as we’re just trying to like build a little trail of like how could this work, just like bang a trail out and then hopefully like that’ll be a pathway and that’ll become a road and then in the future there’ll be this like freeway where we have these distributed generation and it’s all just much more efficient and it lowers bills and provides support to the grid and that’s the future I think, you know, several people in the industry are hoping for.Doug Lewin (40:30.156) Love it. Love it. And I really do think that that’s a great sort of metaphor to use there because we do need to blaze some trails here. Like you said, it is early days with virtual power plants. And I would encourage everybody listening in whatever kind of role you’re in, whether you’re in energy or not, like to be thinking about these things because we’re going to need innovation from all different places. That comes from the nonprofits and NGOs and think tanks. It comes from the companies in the space. It comes from regulators, policymakers, and the general public. Like everybody uses energy. Like how would you like to see these products get rolled out to you? What kind of price points do you need? Like there’s so much thinking to be done here, so much innovation that is needed from all the sectors. And I’m thrilled you guys are playing a role. I want to say one more thing before I ask you if there’s anything else I should have asked you that I didn’t and give you a chance to say anything in closing. I want to also just frame this up that like there’s a phrase I kind of like here, which is enlightened self-interest, right? There’s a reason to help folks that are struggling that is just right and moral and just in and of itself. And we should do these things for those reasons. It’s in all of our religious traditions. We’ve all been taught this from a young age. It should be in all of our core, but we all know we live in the world and that is usually not enough. The enlightened self-interest comes in when you think of all those apartments with all those split incentives, right? And to be clear, the split incentive is the landlord owns the building and doesn’t pay the energy bill. The tenant pays the energy bill, but they don’t own the assets. So when they leave, they leave that stuff behind. So we’ve got to solve that problem. If we can solve that problem, we’re not only helping people. Winter Storm Uri was a lot about resistance heat in apartments driving demand sky high. To replace resistance heat with a mini-split heat pump, the sort of one that goes, attaches to the wall, you’re talking about like a few hundred dollars per kilowatt reduction. A gas plant is a few thousand dollars per kilowatt reduction. We could have a more reliable grid. All of us save money. So it’s like, yes, you’re helping people that really need help and you’re helping yourself at the same time, right? And I think if we could, if policymakers could see it that way, like nobody, nobody wants to see another Winter Storm Uri. And I do think the state’s better off than it was five years ago, but we still have problems on the demand side. And we’ve got these multiple drivers, reliability and affordability. Like we would all benefit from taking these actions. So you can respond to that, add to that, and then whatever else you want to say in closing, you want to leave the audience.Margo Weisz (43:05.718) Right. I think it’s lucky. It’s not always the case that the strategies that will help low and moderate income people will help us all, you know? And so when we do a project, we really try to look at what are those layered benefits? What are the layered benefits for the household? But what are the layered benefits for the energy landscape at large? And I think maybe we haven’t talked about being in an enviable place, but in some ways we are in an enviable place because the solutions will benefit the energy landscape at large and for us all.Doug Lewin (43:39.958) Is there anything else you wanted to say? I really appreciate you doing this. I’m so excited about all the work TEPRI’s doing. Anything I should have asked you that I didn’t?Margo Weisz (43:46.958) I don’t know, I can’t think of anything. Thank you, Doug. I appreciate you.Doug Lewin (43:49.183) We covered a lot of ground. Margo, thanks for tuning in to the Energy Capital Podcast. If you got something out of this conversation, please share the podcast with a friend, family member or colleague and subscribe to the newsletter at douglewin.com. That’s where you’ll find all the stories where I break down the biggest things happening in Texas energy, national energy policy, markets, technology, policy, it’s all there. You can also follow along at LinkedIn. You can find me there and at Twitter, Doug Lewin Energy, as well as YouTube, Doug Lewin Energy. Please follow me in all the places. Big thanks to Nathan Peevey, our producer, for making these episodes sound so crystal clear and good, and to Ari Lewin for writing the music. Until next time, please stay curious and stay engaged. Let’s keep building a better energy future. Thanks for listening. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Cully Cavness, Co-founder and COO of Crusoe Energy, specializes in transforming wasted energy into computing power. He shares insights on how Crusoe repurposes flared gas and curtailing renewables to fuel modular data centers. With the rise of AI, their facilities now support tech giants like OpenAI and Google. Cavness discusses emissions reduction achievements, the challenges of thermal management in data centers, and innovative grid reliability solutions. He also emphasizes the importance of location-based carbon accounting in energy optimization.

Varun Sivaram, co-founder and CEO of Emerald AI, shares his expertise on AI-enabled data centers and their role in the energy grid. He discusses how these centers can shift from villains, raising costs and causing outages, to heroes that enhance grid reliability and affordability. Varun highlights the innovative Phoenix trial that cut power use while aiding the grid and emphasizes the importance of regulatory innovation in Texas. He also explores transformative AI applications and the potential for flexible load systems to reduce emissions while integrating clean energy.

Nat Bullard, energy analyst and co-founder of Halcyon, dives into the evolution of energy systems in Texas. He discusses how batteries are outpacing gas peakers due to their rapid response times and resilience during extreme weather events. Bullard emphasizes the growth of distributed energy storage, such as residential and school batteries, which could replace traditional power plants. He also highlights the importance of planning for cheap solar and flexible demand to optimize energy systems, urging a focus on real-world deployments over political debates.

Nat Bullard, an energy researcher and co-founder of Halcyon, dives into transforming dense regulatory filings into actionable insights through AI technology. He discusses the rising costs of gas turbines and shares a striking analysis of combined-cycle plants costing $2,500 per kilowatt. Nat also highlights China's booming EV manufacturing and its impact on the global market, alongside exploring Tesla's recent model updates. This engaging conversation sheds light on the convergence of transportation and power sectors, illustrating the rapid changes shaping the energy landscape.

This is a free preview of a paid episode. To hear more, visit www.texasenergyandpower.comMost solar panels are imported from China which now has the ability to manufacture over a terawatt (1,000 gigawatts) of solar modules every year — roughly equal to the entire installed base of generation in the US inclusive from every energy source.America makes less than 1/20 of that amount and even less when it comes to the more difficult task of manufacturing cells. But Texas is known for manufacturing and T1 — short for Type 1 civilization — is building solar manufacturing in Texas that could change the game. This is about energy abundance that is reliable, local, and affordable. As T1 CEO Daniel Barcelo told me:“I’ve been working in oil and gas and I am an old oil and gas guy who has run oil and gas companies globally. At the end of the day, it’s really about providing the lowest cost energy in whatever form it is and delivering that energy at a cost-competitive basis to the customer. That drives the philosophy at T1.”T1’s plan is straightforward and ambitious: a multi-site Texas footprint that connects a domestic solar manufacturing chain from materials to finished modules. The company has a module assembly plant in Wilmer in the Dallas area, and is developing cell manufacturing in Rockdale in Central Texas. Upstream, they’ve lined up domestic polysilicon supply from Corning to feed those lines.While T1 scales up supply, demand for power is surging. Texas electricity use is rising rapidly, driven mostly by oil and gas demand, cryptocurrency mining, industrial electrification, and data centers. Texas demand is up 23% in the last four years; most of that new demand is being met by solar power. When more of the equipment is made here, projects move faster and carry less supply-chain risk. And solar can be scaled very quickly to meet near-term needs.“AI needs energy. Data centers need energy. They need it now. It’s great to build nuclear plants in 2030. That’s awesome. But the world’s not waiting. And the big tech companies are not waiting. And right now, solar and storage can deliver it.”This is not either-or. Texas has long succeeded by adding the next tool that works. Solar plus storage are tools for growth and we should use them. Domestic manufacturing creates jobs and strengthens our energy security and global competitiveness.Texas has never waited for someone else to build our future. If companies like T1 can stand up the full stack here, we get more than panels. We get speed, security, control, and the ability to match ERCOT’s needs with Texas-made solutions.If you found this episode useful, share it with a colleague. If you want more Texas-first, reality-based energy coverage, subscribe and join the conversation.The Texas Energy and Power Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.Timestamps* 00:00 – Introduction * 02:00 – T1’s Texas footprint overview* 04:00 – U.S. solar chain, Corning partnership* 05:30 – Jobs and polysilicon-to-module flow* 07:00 – Building U.S. cell capacity* 09:00 – Timelines and receptivity of Texas political leaders* 11:00 – Demand growth requires gigawatts per month* 13:00 – Competitive advantages of building in Texas* 15:30 – Oil and gas demand growth met by solar and wind, saving $1/barrel* 20:30 – When King Coal tried to kill natural gas and why gas won* 23:00 – Political economy of varying energy sources* 25:30 – Can the US build enough solar to meet domestic need and export?* 31:00 – Solar trade investigations, tariffs, anti-dumping rules, FEOC* 35:00 – Solar and manufacturing tax credits under OBBBA, “stackability”* 38:00 – How and why tax policy benefits all energy, including oil and gas* 42:00 – Will Texas continue to blaze trails and attract new energy companies?* 45:00 – Distributed power is “sovereign energy”ResourcesGuest & Company• Daniel Barcelo — LinkedIn • T1 Energy — Company Website + LinkedInCompany & Industry News• Reuters: T1 Energy and Corning agree to fully U.S.-made solar supply chain• PV Tech: T1 Energy–Corning “landmark” U.S.-made poly/wafer/cell deal• Manufacturing Dive: T1 to establish $850M solar cell facility in Texas• T1 Energy IR: Corning deal accelerates ‘Made in America’ solar • T1 Energy IR: Strategic investment in Talon PV Related Articles & Podcasts• How Batteries Are Reshaping the Texas Grid (with Suzanne Leta) • Beyond the Tax Credit Cliff (with Freedom Solar CEO Bret Biggart) • Creating a Distributed Battery Network (with Zach Dell)• The End of Solar & Battery Manufacturing in America? Studies & Policy Documents • S&P Platts 2022 Study On Electrification of the Permian Basin • Rystad Study on $/barrel savings • FERC Order 636 • Section 232 Investigations • Foreign Entity of Concern Guidance | Dept. of EnergyDoug’s Platforms• LinkedIn • YouTube• X (Twitter)TranscriptDoug Lewin (00:05.25)Welcome to the Energy Capital Podcast. I’m your host, Doug Lewin. My guest this week was Daniel Barcelo, the CEO and chairman of the board of T1 Energy. We talked about how they got their name in this episode. I think you’ll enjoy that. This is a fascinating company, headquartered in Texas. They are building out a full end-to-end manufacturing of solar in Texas. They started with the acquisition of a manufacturing plant, five gigawatts of solar module assembly in Wilmer, Texas, just south of Dallas. They are currently building in Rockdale, Texas, about 60 miles north of Austin, a cell manufacturing facility. So obviously cells are much more complicated to manufacture, much more complex than the module manufacturing. They are also in partnership with Owens Corning to get the raw materials actually sourced here in America. So that when they are done with that process in a year or two, they will have end-to-end American solar manufacturing. So we talked a lot about the potential for American manufacturing of solar, how big it is now, what its potential is to maybe counterbalance China, which is really dominating electricity supply chains throughout a whole number of different components, including all parts of the solar supply chain. They’re dominating that globally. Can America be a counterbalance? One of the things I really enjoyed about this conversation is Daniel has a great perspective, having worked in oil and gas for much of his career, really at the broad spectrum of energy. So I think that really comes through in the interview. I think you’re going to enjoy that. This is a paid episode. If you’re not already a paid subscriber, please become one today. You’ll get access to all sorts of things, roundups, reading your podcast picks, other paid episodes of the Energy Capital Podcast. Most importantly, you will be supporting the work of this podcast, the Texas Energy and Power Newsletter. They are not cheap to produce, and your six bucks a month or five bucks a month if you do an annual subscription is incredibly important, deeply appreciated. With that, let’s jump into the episode with Daniel Barcelo of T1.Daniel Barcelo, welcome to the Energy Capital Podcast. I am very excited to talk to you. T1 is making a whole lot of waves, people in Texas talking about the company a lot. Why don’t we just start from the beginning. What is T1 and tell us about the Texas operations you guys are standing up.Dan Barcelo (02:31.8)Great. First of all, Doug, thank you very much for having us. We’re always excited to talk about the T1 story, something we’re really passionate about as energy operators, managers, investors, historically. T1 Energy is building a domestic solar and battery supply chain that we want to invigorate America with clean, scalable, reliable, and low-cost energy. This is all about advanced manufacturing. This is about how do we bring advanced manufacturing capacity to unlock the most scalable resources we have. That’s what we’re doing. We’re doing this with our core foundational assets. We own and operate our five-gigawatt solar module plant just south of Dallas. That’s called G1 Dallas. And we are also building our five-gigawatt solar cell plant north of Austin called G2 Austin. Those two assets are foundational. The other part of the investments we’ve made is we also own a supply chain of polysilicon from Hemlock. Coupling that polysilicon supply chain coupled with the cell plant, coupled with the module side, we have a tremendous capacity to unlock what we think is a very scalable, renewable power asset we have available right now.Doug Lewin (03:42.39)Yeah, it’s pretty exciting because I see the vision of what you’re trying to do here, right? Because what we have in the United States right now, if I’m not mistaken, and you correct me on any of this I get wrong. This is your world. But my understanding is we’ve got something like 50 to 60 gigawatts of capacity of solar module manufacturing. So that’s sort of the last phase where you’re bringing the assembly, kind of bringing it all together. But you guys are going way upstream to raw materials. And you mentioned something just there. I’m not sure I heard what you said, but I do want to get more into this. I think you guys announced a deal with Corning, right? For some of the raw materials. Not sure if that goes through to the wafers, but I do kind of want to break that down a little bit, Dan, because I think the audience will really appreciate it. It’s very important. I think it’s very important that the United States have the full end-to-end capability for manufacturing. And it looks to me like you guys are doing that with the partnership of Corning upstream, then actually making the cells, correct, in Rockdale, which is what you’re calling the G2 Austin plant, close enough, like 50 miles or so from Austin. I believe near the old Alcoa site, we could talk some about that. And then putting it together in Wilmer, south of Dallas. So you’re really kind of doing that like soup to nuts end-to-end, full supply chain, no?Dan Barcelo (05:04.034)Yeah, look, when we acquired these assets at the end of last year, what we acquired was, at that point in time, the world’s most modern solar module manufacturing facility. And that’s operational, that’s up and running.Doug Lewin (05:17.954)That’s Dallas, right?Dan Barcelo (05:20.162)Dallas. That is this five-gigawatt solar module manufacturing G1 Dallas. It is one of the world’s most modern facilities up and running ready for business. Highly automated yet also employs a good number of people, over a thousand people workforce and a very large payroll as well in the South Dallas community.Doug Lewin (05:39.378)Dan, that thousand jobs is current or that’s projected?Dan Barcelo (05:43.064)That is current. Currently, a thousand Texans employed in South Dallas. That’s correct. We’re currently over 1,200. And with the acquisition, we also acquired a polysilicon supply agreement to supply gigawatts of polysilicon to be the initial part of the chain. Now we did announce earlier that we have the arrangement and the contracts with Hemlock to convert that polysilicon contract in part to wafers. So in order to complete the chain, you’re basically taking the polysilicon, which is ingots and then wafers. Then you’re taking the cells and then you’re taking the modules to the module of the solar panel. So when you think about the solar chain, you’re going from the polysilicon, ingots and wafers, cells, and modules. What this acquisition did was we purchased the module plant, which just gets us to the end customer use. You mentioned the market size of 50 to 60 gigawatts. This plant is about 10% of the U.S. On the polysilicon side, we wanted to secure American polysilicon in order to supply an American module plant. Until we have our solar cell plant up and running, we currently are sending our polysilicon to Southeast Asia in order to make wafers and cells and then bring those cells back to the United States. By the fourth quarter of 2026, we anticipate to have our G2 Austin site up and running. And at that point, what we’ll be doing is taking wafers from Corning, bringing those wafers to G2 Austin, and then making the cells and then taking those cells to G1 Dallas to make the modules.Doug Lewin (07:17.838)Amazing. And my understanding, and this may be a couple months old, but I don’t think it’s terribly out of date, there’s really only like a gigawatt or maybe two of solar cell manufacturing in the United States. When you say you’re 10% of the module assembly in the Dallas plant, that Austin plant, when it comes online, will represent... Maybe by that time there’ll be others and maybe I’m missing some or I’m just getting it wrong, but that’s a huge percent of the entire capacity of the United States, right?Dan Barcelo (07:46.376)The cell capacity is higher. It’s above 10 gigawatts. There are differences in that capacity. There is capacity from different technologies which are non-silicon based. There’s also technologies of cells that are older PERC style. This will be TOPCon technology based and is one of the most modern and most energy efficient technologies.Doug Lewin (08:08.302)So that’s First Solar is like the other 10 gigawatts basically, right?Dan Barcelo (08:12.33)That’s correct. First Solar and then there’s others on the PERC side and that technology. But on the silicon-based TOPCon, this will be one of the first. So with that TOPCon technology, that provides better efficiency, it provides better in terms of what customers want, in terms of energy density, in terms of deployment. So that’s our focus.Doug Lewin (08:32.716)Okay, incredible. And I will put some links in the show notes, stuff like this. The capacity of China is orders of magnitude more. Like I said before, I think this is really important that this start to happen in the United States. It’s going to take a while for this to all scale up, but this is obviously a huge step in the right direction. What is the reception in Texas? You’re obviously, I’ve seen you post on social media various visits to the plants by various elected officials. You know, obviously there’s a notion out there that at least, well, and it’s true, that some in Texas political leadership are hostile to renewables. But I think by and large, there’s an awareness out there that oil and gas and renewables actually can have kind of a symbiotic relationship. Curious, you’ve written about that on LinkedIn, so I would love for you to talk about that. So there’s really two questions there. Sorry I do this, I do these multi-part questions. But really, what is the reception from political leadership been and what do you see as sort of the future of Texas energy with sort of the coexistence of oil and gas versus renewables? Where do they compete? Where are they symbiotic?Dan Barcelo (09:39.64)Sure. Well, first of all, the reception has been phenomenal. Whenever anyone’s bringing in a large payroll, a large labor force, and also bringing in newer, advanced manufacturing jobs, that is something I think everyone across the political aisles can agree on and see as a good thing for the United States. Bringing supply chains back to the United States are also very important, and I think all of that is resonating. There’s the obvious tensions and competitive tensions we all see and read about with China versus the USA. So having more of the energy manufacturing and having more of the energy security based in the U.S., that’s all positive. So it’s resonating from Washington to the state, to the local levels. So that has been very, very clear and very consistent. Now, I kind of grew up in the oil and gas sector. Since the early ‘90s, I’ve been working in oil and gas and I am an old oil and gas guy who’s done capital markets on that and run oil and gas companies globally. At the end of the day, it’s really about providing the lowest cost energy in whatever form it is and delivering that energy at a cost-competitive basis to the customer. That drives the philosophy at T1. I almost shrug or shudder when I hear the word renewable sometimes. I think it’s done a disservice to the solar industry. It’s done a disservice to the wind industry. This is just conversion of materials to electrons to enable power, to enable electricity. And I think that solar and solar plus storage can be an incredible competitive advantage versus other sources of fuels. I spent years drilling natural gas wells in order to get gas to create power, the power from the generators, right? This is very similar to me. Now we’re spending years and capital to create machines that from the silicon sources of polysilicon create the machines and the panels to make electricity. So it’s either drilling or finding the gas to feed the turbines to make the power, or it’s putting up the machines and finding the silicon, the polysilicon to make the electrons. So in my mind, this is all about delivery of energy to the market and the market needs it. The demand growth right now that we’re seeing in the U.S. is unprecedented. It is driven by small amounts of residential growth, but it’s driven by industrialization and it’s obviously driven by the rise of AI and data center loads. The only source of power that can match the ramp that AI wants is solar and batteries, at least for the next four years. If we’re going to be very competitive over the next four years, as hopefully people a lot smarter than me try to go for the AGI and try to get to that level of where we can be as a society, the gigawatts per week, gigawatts per month is what everyone’s talking about. The plant we have at G1 can produce five gigawatts a year. If I had the demand signals, I could create another plant like this within a matter of another year. We are able to deliver gigawatts and gigawatts of solar. Some will say, well, it’s interruptible power. Well, you know, when you look at where demand is, demand is kind of interruptible too. As we know in Texas from three o’clock to seven o’clock, it’s a very different load profile than three o’clock to seven o’clock at night. So the matching of demand is something I think that does a disservice. And once you put batteries and grid level batteries on, we see it in ERCOT all the time. We see it in CAISO in California all the time. The grid is more robust when batteries and solar are part of the grid, full stop. So we think that batteries, and to be clear, we used to do batteries, we have paused on the batteries now, we aim and strive and have ambitions to batteries in the future. Right now it’s all about the solar and it’s all about supplying that supply chain. The last part of this is all of that’s great, but I believe that we can build this in the United States. And I don’t believe this is anything we’ll say less competitive or that we don’t have versus other places. Let me just expand on that in a moment. When we look at the automation of the machines we’re buying and the ability for these machines to run, fundamentally we’re turning silicon to polysilicon to wafer to a cell to a module. This is just the transformation of materials into something that collects photons to create electricity. The largest conversion costs of all of that has to do with water, has to do with electricity. There’s some specialty gases. There’s in the case of the modules, there’s frames and there’s glass. But fundamentally, these are all very commoditized products. Texas is very lucky to have extremely competitive electricity prices, extremely competitive water prices, extremely competitive specialty gas prices, and extremely competitive natural gas prices. So what this is getting distilled down to is a labor cost differential. Given the high automation, both the module plants, the cell plants, the wafer plants, that labor component is less and less and less. So I believe that we’re actually seeing a competitive advantage now where these machines can be here. There’s still a higher labor cost structure than in other parts of the world. That goes to the wages America pays its employees and the good wages and the living wages. It probably also ties into a bit on how wastewater is treated, which is probably much more important when we talk about what the impact the solar industry or data center or other people can have is the immediate impact right now on wastewater. So those two parts are probably the highest differential in cost relative to the rest of the world. When I build, for example, in G2 and Rockdale, those machines that come in and that are building there, those machines don’t know if they’re in Egypt or Turkey or Nigeria. They have no concept of where they are. Those machines just know they need power, water, and they need wafers. So that’s where we get to how we can be more competitive.Doug Lewin (15:23.8)You mentioned load growth from AI. In preparing for this, I missed it at the time, but I’m going to follow your LinkedIn more closely now. You had a post a couple months ago that I thought was really extraordinary. It was specifically about oil and gas. So yes, we have a lot of load growth from AI that is already hitting the system and more to come. The far west zone in Texas has tripled its energy consumption over the last eight years, a tripling in eight years. And some of that is Bitcoin, cryptocurrency, there’s probably some initial AI, but there’s a whole lot of oil and gas load as well that is connecting to the grid. And a few years ago, six of the biggest oil companies operating in Texas went in together on a study from S&P Platts and showed their kind of demand growth curves that there’s already, I think, four gigs or so of grid-tied oil and gas sort of fracking operations, but also compressors and all the rest, that that could go as high as 10 to 12. And this was just in the Permian, I believe just in the Texas. You were writing about this. And again, you referenced that you and other executives at T1 have spent much of your careers working in oil and gas. And you put in there that last year more than 88% of the electricity produced there, meaning I believe you meant in Permian, you may have meant far west zone, was from solar and wind farms, according to an analysis of the actual electricity production last year. That is extraordinary. I’ve never seen that number before, but it kind of makes sense when I sometimes will post on social media or in my articles, like the overlay of where the Permian is geographically, obviously in far west Texas, sort of where the right angle of Texas and New Mexico meets, kind of just to the east of that and to the south of that. And then if you look at that right next to maps of where the sunniest parts of America and the windiest parts of America are, it’s all right there. Can you talk a little bit more about what you’re seeing in the oil and gas? Are you having conversations with people in that industry that are like, we’re trying to purchase more renewables. Can you get some of your solar panels out here? Are you hearing that kind of chatter from folks you know that are still in that?Dan Barcelo (17:33.11)Look, part of it is geography. Southern and Western Texas, all the way to California is blessed with a lot of great solar in terms of radiation levels. And in terms of wind, you have straight down the center and through West Texas, you have wind. So you have a lot of overlapping wind and solar power and it makes West Texas extremely, extremely valuable in terms of that resource. So again, I almost would drop the word renewable. This is as simple as according to, I think we use Rystad in that study. There’s about a dollar per barrel in terms of BOE equivalent of savings that companies could make by removing their power from the grid and using electricity rather than running gas turbines or diesel generation, which is expensive. So the idea is how do you produce and sell more of the product you’re making rather than use it to run your turbines with your diesel. So by using power from the grid there, there was a savings about a dollar per barrel. When you look there, I think the numbers there were growing to around eight gigawatts today. And according to Rystad, there was an increase of a further three gigawatts on the Texas grid just from the Permian. So it’s just making an example that in order to produce even the oil and gas, in order to lower operating and lifting costs, the switch is to go to grid power, which is primarily renewables, which is primarily wind and solar. And again, this goes to just the cost nature of it. So even oil and gas, which in that area, a third to half of production of the U.S., it’s phenomenal levels of production. Those resources can be produced. Those resources can be used for better energy and chemicals and plastics in the United States, or they can be exported, so to speak, to export American exceptionalism in that form in terms of energy exports. So I think there’s a lot of combined ability for it. The benefit the ERCOT grid gets from solar and even from wind is it’s driving energy costs lower. And you mentioned this before that maybe there’s some biases in terms of left and right, in terms of wind and solar versus oil and gas. But if you look at Texas, it’s just making an example of what can be built now, what’s economic, how do we build it fast? So I think those are the key drivers. So we flag that as, it’s a great example of how it’s just energy and the cheapest forms of energy and the most efficient forms of energy are there supporting the largest forms of exports of American oil.Doug Lewin (19:48.622)Yeah, I actually love that framing or reframing that we often get so much into the label that goes in front of the word energy, the adjective, the modifier, instead of focusing on the energy itself. And this is what is great about Texas is you do have this system of economic dispatch and it’s going to be the lowest cost energy. And that typically happens to be wind and solar, but it’s not because it’s wind and solar. It’s not because it’s renewable. It’s not because of some attribute other than it’s cheaper. That is really what kind of is driving its adoption. So that’s fascinating. A dollar per barrel is not insignificant. That could be even a couple of percent when we’re down in the $50 to $60 range.Dan Barcelo (20:31.982)So when I started my career in the early ‘90s, it was the era of FERC 636 with open access for natural gas. That was when coal dominated all electricity production and King Coal tried to kill natural gas.

The full video is on YoutubeTexas isn’t just projecting future load growth; it’s happening now. Maura Yates of Mothership Innovations set the stage for our discussion at GCPA’s Fall conference earlier this month in Austin. “We are looking at meters that are 800 megawatts on a single meter… that’s crazy. We used to think 10 megawatts was a big deal…” She also cut through the headline noise: “The next three years are really critical… This is the them we are hearing at this conference: it’s a near term discussion… We have a big, urgent discussion ahead of us.”How much of the 200 gigawatt large load queue is real and how much will actually come in the next few years?Hayden Stanley of Good Peak brought the developer’s eye to the near term. He sees a “whole new layer of infrastructure” coming as the grid gets smarter and more coordinated, but warned that SB6 complexity and behind-the-meter buildouts can slow timelines.Tom McGinn with EnergyWell focused on “lifting the system load factor” with tools people don’t have to think about, built on “optimizing interval-level usage to respond to price signals.” He added a sober note: in the next few years, mass-market customers could get squeezed by rising load in the short term, though he thinks in the longer term, Texas will have continued investment in the grid and new technologies and abundance for consumers.Zach Dell of Base Power Company reframed things taking a much longer view:You’ve got to make large investments with a long-term time horizon. And I think there are really strong precedents for this kind of orientation in other parts of technology. You saw Uber do it in transportation, Amazon in commerce, SpaceX in aerospace. We’re taking a similar approach to energy where we’re making 10, 20 year investments, both in terms of the technology that we’re developing, but also in terms of how we think about policy. Base has added 100 megawatt-hours in the short time it’s been in business and is now adding 20 megawatt-hours per month. Large loads are coming but so is innovation across the grid.Timestamps* 00:00 – Opening* 01:00 – Guest introductions* 03:30 – Load growth happening now much faster than expected* 04:30 – Critical discussions are about the next 2-3 years* 07:00 – Smarter grid, higher load factors, new infrastructure layers* 09:00 – Potential bearish load growth over the next few years* 10:30 – Thinking long term about resiliency and costs * 12:00 – Is ERCOT still working to remove roadblocks? Are process changes needed?* 17:00 – Smart meters enable design innovation and response to price signals* 19:30 – Demand-side flexibility from batteries: “price down, reliability up”* 22:00 – Base Power’s scale, the new factory in Austin* 24:00 – Gigawatt scale virtual power plants (VPPs)* 25:00 – Inflation Reduction Act repeal* 26:30 – The advantage of distributed, smaller scale (<10MW) battery projects* 28:00 – Senate Bill 6 and the case for a more bearish demand growth case* 30:00 – What could slow down load growth* 33:00 – Data problems with large load demand response* 34:00 – Audience question: Data center water use, closed loop design* 36:30 – Audience question: Doug’s one top policy change, would it be a carbon tax?* 37:30 – Audience question: Zach- when will you expand to California?* 38:30 – Audience question: Will grid tech still advance if there’s not load growth?* 40:30 – Closing ResourcesPanelists & Company* Maura Yates LinkedIn, Company Page & LinkedIn* Hayden Stanley - Bio, Company Page & LinkedIn* Zach Dell - LinkedIn, Company Page & LinkedIn* Tom McGinn - Linkedin, Company Page & LinkedIn* Doug Lewin - LinkedIn, YouTube, Twitter, Bluesky, and ThreadsBooks, Articles & Podcasts Discussed* Load Growth: What States Are Doing to Accommodate Increasing Electric Demand (EPRI) PDF (Clean Energy States Alliance)* NRG’s Gigawatt VPP in Texas with Travis Kavulla (Energy Capital Podcast) * Shape Load Perfectly, Inject Energy Optimally with Sonnen’s Blake Richetta (Energy Capital Podcast)* The Year the Texas Legislature Changed the Energy Game Forever by Russell Gold (Texas Monthly)* ERCOT CEO Pablo Vegas Board Presentation:TranscriptDoug Lewin (00:06.464)It’s great to be here this morning. Hope everybody’s doing great. It’s been a great couple of days. Really want to thank Gulf Coast Power for again putting together such a great event. I think my first Gulf Coast Power was like 15, 16 years ago. This is the 40th anniversary. It’s amazing to see you guys still going so strong. This has been a great conference. I’ve learned a ton, caught up with a lot of people. I am Doug Lewin. I do a couple of different things, but one of the things I do is I host the Energy Capital podcast. We are recording this today and we’ll release it as an episode. For those that are listening later, we are in Austin at the AT&T Conference Center at the Gulf Coast Power Conference. So I have four amazing panelists here. I can’t wait to get into this discussion. We’ve got a lot to talk about, but would each of you just briefly introduce yourselves and your companies so folks kind of know who you are. You want to start at the end? Go ahead, Zach.Zach Dell (00:58.366)Hey everybody, I’m Zach Dell. I’m co-founder and CEO of BASE Power. BASE is a retail energy provider and battery developer based here in Austin. Started the company about three years ago. Our mission is to lower the cost of electricity for all. And we do that by developing technology solutions, hardware, software, and the like to help rebuild the infrastructure here on the power grid in Texas and beyond.Doug Lewin (01:20.458)And I’ll just say I did record a podcast with Zach. It was like a year ago, more than a year ago now. Two years ago. Was it really that long ago? Wild. So for those that want to know more about BASE, you can go back, whether you’re in the room or listening later, you can go back and listen to that one. Go ahead.Tom McGinn (01:35.16)Hi, I’m Tom McGinn. I’m Senior Vice President of Energy Trading at EnergyWell. EnergyWell operates a few different load-serving entities in competitive markets in the US, along with offering software and consulting services to other market participants. I’ve been working in competitive markets for almost 20 years now across all the competitive ISOs in the US, kind of at the intersection of the wholesale and retail functions in those companies. So yeah, happy to be here with everyone.Doug Lewin (02:03.694)Thanks Tom. Hayden.Hayden Stanley (02:05.486)How’s it going? My name is Hayden Stanley. I’m the co-founder and COO of GoodPeak. We’re involved with building out distributed generation assets in ERCOT. We’re vertically integrated. And we’ve recently also entered the digital realm with data centers. So excited to be here today.Maura Yates (02:22.466)Maura Yates, the co-founder and CEO at Mothership Energy and Mothership Innovations. We are a retail electricity provider and ERCOT market service provider to large loads and load-serving entities across ERCOT. So everything from billing and operating services to QSE services, but again, really focusing on large complex loads across ERCOT.Doug Lewin (02:44.61)Such a great panel, so much knowledge and experience and lots of different experiences and different businesses represented here. So let’s just start at a very high level with a question I like to ask on the podcast. Zach, I don’t remember if I asked you this one two years ago. I probably did, but it’d be interesting to compare and contrast your answers if I did. It’s one of my favorite questions, which is just to kind of look ahead four or five years. You know, sometimes I think 10 and 20 years is like too far. Who knows? It’s anybody’s guess, but four or five years far enough away that we’re not talking about tomorrow or next week or even next year. You’re looking like a 2030 kind of view. What do you think is really going to change in this Texas market? What are the technologies you’re kind of most excited about? And I think even let’s talk a little bit about what are some of the roadblocks and obstacles to getting to that vision. You want to start?Maura Yates (03:32.526)Sure. So for those who know me in the room, they know that I’ve participated in the market for a while and done everything from resi in the kilowatts all the way up to now megawatts and gigawatts. So we’ve seen this really crazy, interesting evolution, especially the integration of renewables into ERCOT. And I was reflecting with somebody last night about where we saw the market in 2013. 2025 was so far out. And did we see where we were, you know, 12 years ago? And I think in general, we kind of had a sense, yeah, this is where we were going to see a lot of renewables come online. We had a good idea of where generation was going, but I don’t think we had a good idea of where load was going. Obviously the latest incentives to move business to the state have really helped drive that. And not only did we not see where load was going, we didn’t see the scale at which load was going there. Like we are looking at meters that are 800 megawatts on a single meter. That’s crazy. That’s insane. We used to think 10 megawatts was a big deal. Now 10 megawatts is like, I don’t know if we have time for 10 megs. That feels really small. So I mean, we’ve seen this really, really rapid shift and this change in trajectory in terms of where we’re seeing this market go. And so when we talk about the next five years, it’s really interesting. It’s going to be, I think, much faster the rate of change than what we’ve seen perhaps the last five years. We saw the last five years coming. I don’t know if we saw the next five years coming. So when I think about what’s going to happen, I think the next three years are super critical. The next three years will dictate what happens in five years. So when I really think about what I’m focusing on or where Mothership is focusing, we are focusing on the next two to three years and say, what is going to happen in the next two to three years? Because that will absolutely determine what we see in ‘28, ‘29, ‘30. And again, I think this is the theme that we’re hearing at this conference, largely a conversation about the queue and what’s going to happen with large loads, what’s happening as a result of SB 6. This is the conversation. It’s a very near-term discussion. It doesn’t mean that all the other discussions don’t need to keep happening. We need to keep having the conversations around how do we manage our really elastic peaks with residential volatility. We still need to have those conversations, but we have this really big urgent conversation in front of us of, what do the next two to three years look like? Because that will then dictate the tale after that. I mean, 190 gigs in the queue, we know that’s not real. Like, that’s not what our future looks like in the next five years. What part of that is real? Maybe 5, 10%, maybe 10%, maybe 15%, maybe 20%. What do we actually think generation can keep up with? What is practical? What is feasible? And so I don’t know what’s going to happen in the next five years. Every month we get closer to that five-year benchmark, I’ll be a little bit more willing to wager. But right now, I see the conversation of, we have a jam. We can’t get to the numbers that we’re talking about by 2030. We’re too jammed up. If I think maybe another 10, 15 gigs by 2030, maybe in the next two to three years, three, four or five gigs, I don’t know. It depends on again, how we handle and how we manage through the stuff that’s jamming up right now. I think this gets to the innovation conversation that we can talk through more later, but yeah, two to three years.Doug Lewin (06:42.956)Yeah, before we go to Hayden, just kind of a thread to pull on there a little bit is, you know, there’s 190 gigs in the queue. I think part of the problem we’re having is everybody is talking about the gigawatts and not necessarily the gigawatt hours or terawatt hours, right? And we started to see that shift at the ERCOT board meeting last week, Pablo Vegas, CEO. And yesterday here, ERCOT Chair Bill Flores talked about the very same thing, showed the same slide that we are seeing increased use and consumption while demand has actually not increased the last couple of years. Part of that’s weather, but I think part of that is changing use patterns, which is something I think we’ll talk about a lot here, is like freeing up some headroom for some of those AI data centers. Hayden, what are you looking at for 2030?Hayden Stanley (07:28.686)Well, I mean, I think over the next five years, we’re certainly in a race to win the AI race. You know, that’s ultimately going to be enabled by power. You know, power is maybe one of the largest waves created by AI. Interestingly enough, it does enable it. So I think that that’s paramount that we achieve some of these goals. You know, when I think five years from now, I think that there’s going to be a lot of innovation that’s going to play a really big role. I think that there’s going to be a lot more, the grid’s become smarter, there’s going to be more communication, more alignment. You’re mentioning, like demand not increasing, but a lot more consumption that just seems like efficiency to me. And, you know, I think things like that are amazing. I think that we’re in a situation where I look at infrastructure maps a lot and I think there’s going to be a whole new layer added on. I don’t know if you guys play with those, but you turn on one layer, another, another. I think there’s a whole new layer of infrastructure that’s about to be added to the map. And it’s really exciting how all of that gets to be thought about and created and developed. So happy to be a part of it and try to help.Doug Lewin (08:30.382)It’s a fun time to be part of it. I love the way you said that, that just sounds like efficiency to me. Because I think part of what is happening with discussions on energy efficiency is that actually using more electricity can be energy efficient, right? Particularly if you’re using it for industrial purposes or transportation electrification. Like it’s a good thing to use more as long as you’re using it at the right times and as long as we can move it around. Tom.Tom McGinn (08:53.686)Yeah, I mean, I think we’re talking about just kind of lifting the system load factor as a whole, which, you know, hopefully has benefits downstream for recovery of system-wide costs. You know, I think maybe to take a slightly more pessimistic view of what the next five years might look like. You know, we heard previously the backlog around getting new thermal generation online, system loads going up. We’re likely to see kind of increased just base load heat rates at least just through the higher system load factor. Resiliency seems like it’s going to be a continued household concern. Part of me is concerned about what happens to the mass market in this kind of wave of new load. Are they going to get run over for lack of a better term? Are they not going to have adequate representation at some of these policy settings where they don’t have the sophistication to manage load like some of our other large load customers that we talked about today? Yeah, I guess I’m short term a little concerned about what that looks like. I think long term with the continued innovation and the investment in the grid and other technologies kind of coming down the pike here that we would expect to see kind of a return to the abundance that Texas consumers have enjoyed thus far.Doug Lewin (10:12.224)Yeah. And I appreciate that little dose of, I wouldn’t even call it pessimism, just like realism, right? That there are concerns for residential consumers. I don’t know. And it’s actually, I think it’s very smart. I wrote down something Chairman Gleason spoke here at this conference on Monday. And he said, we need to make sure consumers are empowered, not just protected. Right? So like consumer protection is in the DNA of every PUC, but how do you actually think about consumer empowerment? Consumers want to save on their bills. They want to be more resilient, as you said, which is probably a great tee up for Zach. Your customers want to be more resilient. Zach, no, just kidding. Start with the 2030 question. Yeah.Zach Dell (10:52.462)I’ll be honest, I and the team at BASE, we think a lot more about 2040 than we do about 2030. And there’s plenty of good reason to think about ‘26 and ‘27 and ‘28 and the near term, but our mission as a company is to drive price down and reliability up. And we’re not talking 5% improvements, we’re talking 50% improvements, right? I’m using round numbers here, but we want to make a really big impact on those two metrics. And so to do that, you’ve got to make large investments with a long-term time horizon. And I think there are really strong precedents for this kind of orientation in other parts of technology, right? You saw Uber do it in transportation, Amazon in commerce, SpaceX in aerospace. We’re taking a similar approach to energy where we’re making 10, 20 year investments, both in terms of the technology that we’re developing, but also in terms of how we think about policy. And I think that this long-term orientation, this long-term planning, whether it’s building factories and building engineering teams and working on new technology that’s never been done in this industry, or it’s kind of mapping the policy roadmap to what is the grid of 2040, 2050 look like. That’s where we spend our time less about the 18 months, 24 months, 36 month timeframe. So that’s kind of how we think about the problem.Doug Lewin (12:04.014)All right. So let’s come back to this side, Maura. I want to ask you something. I saw a quote you gave in Texas Monthly. It was an article about restructuring that Russell Gold did. He quoted you as saying, ERCOT doesn’t put up roadblocks, it removes them. Do you remember saying this?Maura Yates (12:20.642)When was this article? I might have a different response.Doug Lewin (12:23)‘23. That’s what I want to ask you. Is that still the case? And I’m curious, like what are the emerging technologies you’re working on? Where are there roadblocks that are actively being removed and you’re excited and where are there roadblocks that actually we need? There’s been a lot of talk here last couple of days about stakeholder process, collaboration, and I think ERCOT is a great place for that. So what are some of those roadblocks that need to be removed to get these next emerging technologies to market?Maura Yates (12:47.628)Sure, and I certainly don’t want to point fingers at ERCOT. ERCOT has a lot on their plate. I am not one of the projects that’s in the queue directly impacted by some of the stuff going on. It’s a broader issue outside of ERCOT. I think ERCOT is also sometimes maybe doesn’t get the right direction or other things. So certainly don’t want to take a controversial position on that. In terms of where these roadblocks are, I think the roadblock largely right now is in my eyes a process-driven roadblock, right? We again work on a lot of large load projects. Some of these large loads are located behind the meter, private use networks. Some are just large loads trying to get interconnected that might have been further along in the interconnect process and now are going through a restudy. And when I think about the challenges to getting our portfolio done, it’s really just clarity on what do we need to do? Like, what are the steps to get there and what is the process to get there? And it sounds like a very simple resolution, but I think everybody here who’s stuck in that would probably say, yeah. That’s what I don’t understand is what’s the process to get there. So it feels as if there needs to be some effort to really look at, again, I know I’m pointing out the obvious, people work on this every day, an overhaul to the process and how we approach this problem. You know, we’re going through standard or normal means, whether it’s the standard rulemaking process or other, I understand that there are regulatory requirements, but perhaps we approach this challenge differently. Everybody’s confused on how to move forward. Nobody’s quite sure on where projects stand. That seems to be the challenge right now, a large challenge. Maybe we look at that differently because it doesn’t seem like we have resolution in sight. And to us, that’s the biggest question. That’s the question of how many of those gigawatts get built, right? Like, that’s the question we’re all asking is what’s going to get built? And the question of what’s getting built is, I don’t quite know what’s getting studied or how I have to get this studied to understand what capacity I have so that I can actually go get lending and actually get it built by 2027 or by the timeline that I need. So to us, this is a process conversation. Like the innovation needs to happen from how we are deploying and how we are understanding what that process is to get a large project built.Doug Lewin (14:56.674)Yeah. And obviously when you said that a couple of years ago, right? Like these new data centers were kind of a gleam in everybody’s eye. It was starting to be talked about a little bit, but only barely.Maura Yates (15:05.006)Yeah, the technologies I was worried back in 2023, we were working a lot with everybody on the stage and having conversations about residential-sized technologies and how do we get an integrated home into the market, right? Something that wraps in the electricity bill, very similar to the value proposition Energy Well and BASE are offering. Like, how do we get those types of technologies into the market? To me, ERCOT still is the great playground to have those conversations. I think ERCOT and the DG, the DER space and the work that we’ve done over the past decade has been a really great welcoming space to bring these technologies.Tom McGinn (15:40.344)Smart meters are leaders to that, usually enabling technology that a lot of other markets don’t have.Maura Yates (15:45.922)We’ve done a great job at that and ERCOT’s done a great job at that and they have allowed a lot of innovation in that space and I love working on those technologies with these people for that reason. The challenge that we have again is back on large load right now and large load is shifting this market so dramatically because one data center is the equivalent of a huge aggregation.Doug Lewin (16:05.646)Yeah. And Tom, let’s actually go to you next sort of picking up on that. You were saying, did you say smart meters and Smart Meter Texas? So this is something I’ve been kind of obsessing about lately. I did a podcast with Sonnen and Blake Richetta, he had this great phrase where he said, shape load perfectly, inject energy optimally. I’ve been thinking about that a lot because that’s really what is going to happen on the resi side. There’s so much, I think in the common understanding and even in industry circles, they’re like, customers aren’t going to do this stuff because you’re asking them to do something when you’re talking about shaping load. A lot of that is going to be done by the very AI we’re talking about trying to accommodate. Can you talk a little bit about the innovation in mass market retail? You have a lot of experience in that area.Tom McGinn (16:53.496)Yeah, just to pick up on the thread that Maura started earlier, the smart meter ubiquity throughout the market, the way that ERCOT transparently settles load to those meters enables a lot of product design innovation, at least in our market. I think what we’ve moved to now, I think early product design that leveraged Smart Meter Texas was really build design-driven or, you know, things like TOU products, index products. We’ve moved past that. I think there’s some interesting learnings there, but you know, the future of leveraging this type of technology is I think going to be done by physical products that make the market participation of mass market customers effectively effortless or invisible to them. You know, Blake’s point about perfectly shaping load and optimally dispatching is I think kind of echoing the earlier point about lifting the system load factor. I think just more efficiently using the grid that we have. You know, Zach’s going to be able to go into much more detail about the specific battery operations behind a company like that. But I think they’re all related and whether it’s whole home batteries or whole circuit batteries that are starting to come to the market or smart thermostats or smart EV charging or any of the things like that. They’re all kind of sitting on the same baseline technology of optimizing interval-level usage to respond to price signals.Doug Lewin (18:28.462)And these are resources that we’ve barely tapped at all. Like even on cars, I’m kind of amazed at, this thing gets talked about a lot, but there’s more than, that’s a rough back of the envelope, but there’s probably about 20 to 25 gigawatt hours of batteries rolling around on four wheels in the state of Texas right now. And we’re just like charging them whenever.Tom McGinn (18:46.19)This is an opinion, but I think part of the reason we haven’t seen more done with that data is just that for the most part, people don’t want to think about this stuff. They get home from work and they turn on their stove or have to do their laundry. They don’t want to check the app for price signals. And so we’ve been lucky to have this kind of multi-year environment with a couple of hiccups of very low pricing, especially relative to the rest of the country. And so it hasn’t spurred the type of innovation that you may expect. I think recent challenges around resiliency and some concern about what future volatility looks like is leading to kind of a different approach now where we’ll see more physical products come to the market.Doug Lewin (19:26.99)So Zach, I think that’s like a perfect tee up to ask you about, you know, again, the last couple of days, there has been a very consistent theme through all the different sessions. It was in Hollub Blues’ keynote yesterday, flexibility, flexibility, flexibility, right? And so the demand side has this enormous potential. You guys are focused on that residential mass market. Can you talk a little bit about the flexibility that you’re bringing to market? Pick up on those themes of what are you seeing consumers actually want out of this? And also, I’m just interested also from you in kind of how the go-to-market is working as far as competitive versus vertically integrated, because I know you guys are doing some in both. So if you have a mind addressing that too.Zach Dell (20:06.2)Couple of questions there, I’ll try to touch on all of them. I think the panel kind of touched on this, what do customers want? This is a pretty simple question to answer. They want their bills to go down and their lights to stay on, right? So, price down, reliability up. And that’s really our North Star as a business. How do you achieve this kind of flexible, reliable outcome at the max? You have the biggest possible battery on the home. Right? So we make the biggest battery in the market. Our next generation battery will be an even larger battery. Right? So why? Well, because we want to add as much capacity to the grid as possible. That capacity can be used to take the home off the grid in times of high prices. That capacity can be used to serve the grid in the same times, but more capacity is better. Right? So that’s really how we think about it. I think it’s pretty straightforward in terms of go to market. The way we think about this is we have one technology stack, hardware, software, firmware, we can talk about that. It’s vertically integrated and we’re building a factory and all that fun stuff, but the whole technology stack is aimed at these North Stars of price down, reliability up. That’s true in our deregulated gen-tailer business, and that’s true in our utility partnership business, where we go provide that same technology stack, the hardware, the software, the firmware, to regulated utilities, and then they get to go deploy that technology in their service territory to do what? To drive prices down and to drive reliability up, right? So it’s the same value proposition, same technology stack, different business model. We think that the long-term future of the company actually is more so focused on being a technology vendor to the utilities than just a deregulated gen-tailer in Texas. And we’ll grow the gen-tailer business in Texas. We’ll do it in other markets. We might do it in other countries. But the vast majority of the grid in the United States and the world is regulated and for good reason, right? And we can talk about why. And so we want to be the preferred partner to those utilities and really their outsourced R&D function. So the technology is the same, the value proposition is the same, the business model is just a little bit different.Doug Lewin (22:09.582)And you just, I don’t know if you can’t answer this, can’t answer it, but the size of the batteries, you said they’re getting bigger. Like, what are we talking about?Zach Dell (22:15.394)Yep. So our current product is a 25 kilowatt hour system that we primarily, if there’s room and the customer wants it, which they typically do, we install in parallel. So it gets you to 50 kilowatt hours.Doug Lewin (22:24.908)You get a couple days even in fair weather.Zach Dell (22:27.634)Our next generation product is a 40 kilowatt hour battery that we again install in parallel often to get you to 80 kilowatt hours. So that’s massive amounts of capacity on a per home basis. And then we’ve recently announced our generator integrated product. So we actually have a portable generator integration for our current product where you can take a $500 portable generator that you can buy on Amazon and you can plug it into your BASE battery. Obviously that portable generator isn’t able to power the whole home, right? But the BASE battery is and you can use that generator to charge your battery to keep you powered through a long duration outage. So we’ll continue to develop new technology like this to extend duration, add more capacity on a per home basis, which we think really is the way to solve kind of both of these problems that you’re highlighting.Doug Lewin (23:09.324)Before we go to Hayden, just also just want to give folks a sense of the scale of this, because I sort of hear this a lot is like, well, we’re doing so many batteries on the bulk side. What is the demand side? Can you talk about the scale you’ve reached so far and kind of the pace you’re going at as far as adding this? Yeah.Zach Dell (23:23.15)We’re growing fast. We’ve got over 100 megawatt hours on the grid here in Texas, rapidly approaching 200 megawatt hours. We’re adding over 20 a month. We think around this time next year, we’ll be on the order of 100 a month. So we’re building a factory here in Austin, capable of four gigawatt hours a year. That’ll be our first factory, which is really kind of not a prototype factory, a way for us to, we think about things in terms of crawl, walk, run, right? So develop the technology, test it, then make sure it works, then scale it up. Factory one will be sizable, four gigawatt hours is not small. Factory two will be much larger. And we’re already thinking about that and making some investments in that direction that we’ll be able to talk more publicly about soon. Yeah, I mean, I think we’re the fastest growing battery developer in the state, certainly, and probably the country. And we’ll continue to grow at that deployment rate over the next couple of months.Doug Lewin (24:11.022)And part of my reason asking that question is just, I’m hoping to the audience in the room and to those that are listening to the podcast, the scale of this is really starting to, I’m hoping it’s starting to take hold with folks. Like the podcast I have coming out tomorrow, Travis Kavulla from NRG, they’ve got a one gigawatt VPP they’re working on. He said on that podcast, they were at, I think at 150 or something like that, 100, 150 somewhere in their megawatts already. You’ve obviously got Tesla out there, Swell and Octopus. We are starting to see gigawatt scale. There’s already six gigawatts of distributed assets already out there that ERCOT has measured. So when we’re talking about these large numbers of growth on the bulk system, we also need to be thinking about the distributed system as scaling. All right, Hayden, I want to ask you something sort of obviously related, but a little bit different and actually hasn’t been talked about a ton at the conference here, but you know, it’s a big deal in Texas and nationally is the repeal of the IRA. What does that mean for you guys and your changing business and sort of the pace and economics of building new gen in ERCOT?Hayden Stanley (25:17.652)Sure. Well, that’s a really easy one. I’ll take that one head on. Sure. So, you know, there’s probably folks that are on both sides of it, you know, on one side, you know, we want large degrees of security, on the other side, there’s a lot of people who just don’t want the rules to change. Yeah, you know, I understand both sides of people who want it and don’t want it. I’m really glad that I get to be in the position of someone who gets to respond rather than having to make the decision on the legislation. So I get to, you know, Monday morning quarterback over here, but you know, I think that ultimately what happens is it levels the playing field and in doing so it creates more competition and it allows there to just be a lot of innovation and the best business model wins and you get to figure out what that is. And that’s happening in real time and it allows, you know, smart and agile teams to be really creative and push innovation into the space. I think ultimately customers win whenever there’s a lot more competition. So that’s great. I think that, you know, in doing so we like to be highly competitive ourselves. The best way you can do that, serving power is you can either figure out ways to make more money or you can figure out ways to save money. And so figuring out ways that we can synergize our operations, we are vertical, we do our own EPC. We try to have the lowest net build cost out there. And so that’s really something that we really focus on. It’s easier to save a dollar than it is to earn one because earning one’s risky and other things.Doug Lewin (26:41.432)So you see one of the main things about the repeal of the IRA being sort of driving efficiency.Hayden Stanley (26:44.85)Driving efficiency, you know, that’s on one side. Efficiency is on one side of it. Cost savings is on one side of it. You know, another thing is, you know, we really focus on the DG level. So we’re deploying 9.9 megawatt assets and you know, would I rather have a 100 megawatt or 200 megawatt asset or 10, 10 megawatts or 20, 10 megawatts? I think I would take seven 10 megawatt sites over one 100 just because you get diversification of risk and the portfolio effect. But with that being said, we’re more so looking at this 9.9 megawatts of interconnection capacity as a resource. And, you know, the prior business models of the past are not set up for the future. And we are pairing resources. We are stacking advantages to be prepared for these non-scarcity years, such as 2024, 2025. We’re really focusing on the intrinsic value of the assets that we’re building. And if they’re not underwritable from an intrinsic view, it’s not something that we’re interested in. So we’re really trying to create more value and being more innovative in our own deployments in order to survive those years. You know, we somehow entered the data center space. We really couldn’t help ourselves. We came by, came across a site that has literally everything you need. 138, 345 kV lines, plus three natural gas pipelines, 20 minutes from a major metro area with a lot of acreage, right? It’s something that we’re like, hey, we’ve got to get involved with this. And even with everything on site, the data center world, it’s complex. It’s a very complex animal. And having to bring all the power behind the meter and the complexities of SB 6 and how the TSPs are viewing load versus co-located generation, it’s creating a scenario where you have to paint this power story and these systems are complex, especially getting them online. And so I think that I may have a view of ERCOT where, you know, maybe the demand story isn’t so bullish and maybe it’s a bit more bearish because there’s potential for delays for regulatory compliance and things of that nature. And what happens with all of these things, you know, it’s a lot of demand, but they’re all bringing really big plants behind them. What does that really look like? So we’re having the view into kind of that demand side with still building generation assets. We’re really preparing for non-scarcity years and really focusing on intrinsic value. And that’s kind of how, you know, a repeal of a certain regulation just kind of forces you to think differently across your entire business portfolio.Doug Lewin (29:20.302)All right. So in just a couple of minutes, we’ll go to questions from the audience. Before we do that, though, I want to also ask you, Maura, related to that, right? Hayden’s talking about a lot of the complexity that could really slow that down. I know that’s a lot of what you guys are dealing with. So you guys are putting together a dashboard to kind of look at all the different things that are going on. So what do you see as you’re talking to people out there as far as, what are those roadblocks? If you take more of a bearish case, you look ahead to 2030, like we haven’t built out as much data centers as we all maybe hoped or thought, what’s kind of got in the way. And that way we can sort of anticipate it and hopefully not let it happen.Maura Yates (29:57.816)Sure. So if we get to 2030 and we’re kind of cruising along still seeing the same steady load growth, I think one of the things we need to clearly continue to evolve is our data use and our data around some of these more remote sites. So one of the challenges we have is we’re seeing a lot of load growth in remote areas. And as a result, we don’t have the same quality of data that we were talking about earlier. We have wonderful quality of data on our residential loads, which is great because they drive a lot of the volatility in the market. We want to see how those behave. And again, the real-time behavior is really important on those. But at the same time, we also have a lot of these large loads and—sorry for being the large load voice on this panel—but we have a lot of these large loads where we don’t have data visibility and granular visibility into what’s happening. Not all these loads have an EPS meter or the right metering infrastructure for us to see that data even, you know, five days in arrears if they don’t have the telemetry or a QSE on site.And so I think as we continue to move forward, we have to understand how we use data better and we get good data off really important assets. Again, that sounds like a really obvious point, but it’s not working well enough right now. So we need to continue to work on how we get data off some of these larger assets in the market. I think one of the other things that we want to be thinking through is also just—we spend a lot of time in legal and in contracting and how you create contracts that are nimble and grow and evolve with the market as there are uncertain times. I think, again, through all these large loads and working through contracts that perhaps have tenor that extends beyond this five years that we’re talking about. So how do you create a contract that is de-risked for all parties, able to go get lending, that also recognizes and acknowledges the market’s going to change in the next five years and we don’t know, and the market’s specifically going to change around things that impact your load? And so I think the other thing that we’re trying to focus on is the perfection of contracting and how you create the right contract and document set for a very, very boutique product. Every site has different needs. Every site has different lenders. Every site has different operations. So how do you evolve that contracting structure so that five years from now, you’ve got all these participants in the market who have been trying to get in for five years, but in a structure that supports reliability, supports performance, and doesn’t drive bankruptcies and a whole other kind of next generation of problems to solve.Doug Lewin (32:22.04)That’s really interesting. I think most people think about the data problems as being more on the residential side. Maybe it’s just me, maybe I’m just totally off base on this. I think of the big customers—data is something everybody’s got. But it’s a brave new world, right? These are developments, like you said, 800 megawatts. We haven’t seen anything like this.Maura Yates (32:41.902)We just launched a platform that we built off of our own internal operations because it’s how we look at data and we really care about how these large loads behave. And we really care about it at an interval basis. And when you don’t have that data at an interval basis, what’s the other data you need to look at? So it’s something that we think is super important and we’re trying to lend our learnings to the market to also have access to the best data available today.Doug Lewin (33:06.584)So before we go to the questions, anything y’all want to say in response to each other?Tom McGinn (33:09.558)I have a question about what you just brought up, if you don’t mind. So are you saying that, let’s say you have a very large load that is committed to be price responsive or something like that, let’s say you have a price spike, the large load curtails, but your initial data is going to show what?Maura Yates (33:27.918)Sometimes it shows in our large loads that that load never curtailed in our initial settles. And again, I’m not trying to put ERCOT in a hot spot, so please don’t take it that way. But sometimes based on the load profile, based on, again, the meter and the communication available at that site that’s available to the TDSP—it might not be the TDSP’s fault—that load, we won’t get actual meter data until that meter is read 30 days on the 30-day mark. And that’s when we actually see how it behaves. So our initial settles might not reflect the price-responsive load actually curtailing. It might actually be settled off of a profile settlement, which is, when you think about it, these are really large loads, a big piece of...Tom McGinn (34:04.716)Huge dollars on the initial settle, but you’re working capital flow to support that.Doug Lewin (34:10.446)All right. Okay. So let’s go to some of the questions here. Let’s see. So I’ll go with the one that’s upvoted the most in the room. No one seems to talk about the water issue. There seems to be a lack of water, which will prevent generation from coming online. It’s also—there’s water associated with data centers, obviously. So that’s a really good point. Water is often sort of overlooked. Does anybody want to take that one?Maura Yates (34:30.893)There’s a reason we haven’t talked about it, I guess. None of us want to—I’m not a developer. I’m going to absolutely punt to the developers of those assets. But I do know through the permitting process and through a lot of the AHJs, they’re looking at the water requirements. And I think there’s a lot of technical evolution in terms of cooling technologies out there to require less water.Zach Dell (34:51.534)Yeah, I’m certainly not an expert on this topic. There are some very smart people working on water problems in Texas. In fact, my sister is working on this and spending a lot of time thinking about it. Our generation technology requires 0.0 gallons of water. So there certainly are—I think the cooling point, Maura, is a good one. And that was a challenge that data centers face. If you’re looking—I mean, why is Northern Virginia a place where all these data centers go? There’s a bunch of things, there’s permitting things and real estate implications, but a lot of it is the climate. Texas is very hot, as we all know. You do have to cool down these GPUs and that does take a lot of water. But not all generation technologies do require water. Obviously data centers are not necessarily generation, they’re load obviously. So, but yeah, it’s a complicated problem and I certainly don’t have any...Doug Lewin (35:32.12)I do think it’s a really important point. It’s not actually talked about a lot with renewables and storage—that there really is minimal water there. Obviously water use is mostly agricultural and the power sector is a slice, but it’s—other than washing some panels and stuff like that, you do get major water savings from renewables. Do you want to say something on this one?Hayden Stanley (35:53.006)Sure. Yeah. A lot of the data centers are moving to closed-loop designs to alleviate that. They’re building these things in the desert, but on the power gen side, a lot of the behind-the-meter thermal—I mean there’s certainly a requirement where you need water to operate those.Doug Lewin (36:09.056)And I think the trade-off there, right? If you’re reusing the water, you’re going to use more power because you’ve got to keep that water cooled, right? So there are these trade-offs.Hayden Stanley (36:17.964)Right. And some assets use more than others do. So if you’re using different types of thermal, they require different levels of steam.Doug Lewin (36:28.962)All right, somebody’s asking a question of me that got upvoted. Is this a tough question? Should I ask myself? What would be your one policy you’d implement in Texas if you could? A carbon tax? No. Incentive for clean dispatchable resources? There has to be some ambitious policy post-IRA. What is it? So I would think probably half this group can probably guess what I’ll say, which would be a real focus on getting rid of resistance heat and putting in high-efficiency heat pumps. And I’d like to see that done with market-based solutions where we actually have some price discovery, where it’s not just like pick a price and pay this incentive. We don’t know, are we paying too much? Are we paying too little? Introduce some competition into the demand side. I’m supposed to be the moderator. Any—y’all want to say anything about that?Tom McGinn (37:13.422)I’ll echo your point. I agree with you. I think the resistance heating or just inefficient heating in general in the mass market space is a serious issue that we see in risk management and load forecasting and stuff like that. So I agree completely.Doug Lewin (37:26.528)And it very much relates to what we were talking about earlier with shaping load, perfectly adjusting energy optimally. You’re not shaping load perfectly if in the wintertime a house is using 10 kilowatts and an apartment’s using five kilowatts all through the night. We’re not shaping that load. And it’s those peaks that we’ve got to be able to manage to be able to bring data centers and all kinds of other stuff on. Okay. There’s one for Zach. Zach, when are you expanding to California?Zach Dell (37:51.468)We’re working on it. We will share more about our expansion plans outside of Texas in the coming months, but we’re talking to regulated utilities in a number of states that have expressed interest in our technology, California being near the top of the list. So I don’t have a firm date for you. My hope is 2026. I’m pretty confident that we’ll be able to—I’m quite confident that we’ll be moving outside of Texas in 2026. I’m hopeful that California will be one of those states because California is a place that obviously has a massive need for batteries given the penetration of solar.Doug Lewin (38:19.662)This is a question from the audience. The panel’s outlook is pretty bearish about demand growth in ERCOT, but bullish on the technological innovations on the supply side. Will the technology be deployed without the demand?Maura Yates (38:29.39)I think so. That’s what ERCOT is known for. Back to that earlier comment that I still stand by from 2023. ERCOT is the right place for experimenting with products and technology and testing how a market responds. I think as we introduce new price signals, we’ll start testing other ways new technologies behave with the RTC plus B. What does that do? Does that introduce new technical innovation? But I think we continue to be really right for that.Tom McGinn (38:54.38)Yeah, I don’t think anyone’s bearish on load growth. Load growth is already here, right? And so, I mean, the existing infrastructure is aging, load growth has happened. There’s questions about how much future load growth there will be, which I think are valid given the state of the interconnection queue. But yeah, I just wanted to push back on bearish load growth.Hayden Stanley (39:15.33)Yeah, I think that the projections are what? A hundred percent increase by five years or something crazy. So, I mean, I think that it’s the relative nature of it—maybe where we should backtrack the pace of this—but the growth is still going to be very, very, very high relatively. So I wouldn’t say the outlook is bearish.Zach Dell (39:35.758)Yeah, I would add, I would go back to the first point I made, which is we think more about 2040 than 2030. So yeah, we are going to continue building technology to drive price down and reliability up. And what happens next year and the following year matters, but is not really where we’re focused. We’re making long-term bets. And I think my hope is that other technology companies take the same approach because that has worked out really well in other industries.Doug Lewin (39:55.982)Yeah, I think the only bearishness you’re probably hearing is just like, how are all these rules around SB 6 going to get worked out? There’s a lot of uncertainty. Is that going to kind of slow things down? But to your point, a 25% increase—we were like 400 terawatt hours four years ago. We’re probably going to be just short of 500 terawatt hours in 2025. Again, I think we need to think big, like, you know, maybe even doubling that number in a six to ten year kind of a horizon, but really managing that peak. If we get to where we’re double the peak, but not triple the consumption, then we’ve done something very wrong. All right. Maura, Hayden, Tom, Zach, thanks for being here. Please join me in thanking the panel for a great discussion.Thanks for tuning in to the Energy Capital Podcast. If you got something out of this conversation, please share the podcast with a friend, family member or colleague and subscribe to the newsletter at douglewin.com. That’s where you’ll find all the stories where I break down the biggest things happening in Texas energy, national energy policy, markets, technology, policy. It’s all there. You could also follow along on LinkedIn. You can find me there and on Twitter, Doug Lewin Energy, as well as YouTube, Doug Lewin Energy. Please follow me in all the places. Big thanks to Nathan Peavey, our producer, for making these episodes sound so crystal clear and good, and to Ari Lewin for writing the music. Until next time, please stay curious and stay engaged. Let’s keep building a better energy future. Thanks for listening. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe