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Open Circuit is brought to you by Energy Hub, the flexibility platform for the modern grid. More than 230 utilities trust Energy Hub to build and operate virtual power plants, delivering 3.6 gigawatts of flexible capacity. As the resources grow, okay, this is really great. This is an amazing resource. I can use it. It's really valuable. But here's what I really need to do to make it as good as or better than my existing conventional capacity. Paul Hines is the chief scientist at Energy Hub, where his team develops algorithms that turn millions of DERs into flexible capacity utilities can stake their grid planning on. My team is working on the algorithms that allow us to meet the utility's goals for shaping these virtual power plants. Machine learning keeps raising the ceiling on what VPPs can deliver. Energy Hub's platform is trained on years of data from millions of devices, optimized for utility needs across every season and every grid condition. We're working with utilities not to just enable that capacity, but also make it more flexible so that utilities can use it, you know, more times per year for longer events in ways that are valuable to both customer and utility. Later in the show, Paul explains how Energy Hub's platform helps utilities scale VPPs for their unique needs as grid demands evolve. Learn more at energyhub.com. OpenCircuit is supported by Everyday Electric. You might know them by their former name, Renew Home. We are at a pivotal moment. Energy demand is growing faster than the grid was designed for. Everyday Electric believes we need to start at home, with savings, before jumping to new expensive infrastructure. They already run the country's largest residential VPP, coordinating over 6 gigawatts of capacity. And now they're expanding partnerships with energy providers and OEMs so that products like thermostats, EVs, and batteries can help households save money and support the grid. That's home energy as it should be. Learn more at everydayelectric.com. What if you gave your climate donations the same due diligence you gave your investments? That's what Giving Green does. Giving Green researches the strategies and non-profits best positioned to unlock the next big climate breakthrough and sends 100% of every dollar donated to the Giving Green fund directly to them. Maximize your impact per dollar, no cuts or guesswork. Make your first gift before the new year and it will be matched up to $500. Go to givinggreen.earth.circuit. Latitude Media, covering the new frontiers of the energy transition. Austin, Texas, how we doing? From Latitude Media, this is Open Circuit. For a long time, there was a huge gap between what utilities needed and what DER and flexibility champions wanted. If you've been in the power industry for a while, you've read your fair share of reports on making the grid more distributed and flexible. And as the joke goes, if we had as much action as we had white papers, we'd be able to be in a much different place. But the last few months have arguably brought more momentum than the last decade. From Texas to Virginia, from Washington to California, low growth is pushing policymakers to do something that they've talked about for years. Leverage DERs and other flexibility tech to get more out of the grid that we've already built. So this week, we're going to dive into how that's playing out in pockets of the country. Can we finally get out of the white paper era? And then it's one thing to champion flexible resources. It's another thing to count on them. And in the second half of the show, we're going to be joined by a seasoned utility executive managing one of the biggest distribution networks in the country. And he'll tell us how he thinks about flexibility and we'll make him stick around to play a game of would you rather. That's right here at Flex Summit in Austin, Texas. I'm Stephen Lacey, the executive editor of Latitude Media. Thanks everyone for being here. Here with me is the Yang to my yin, the hot to my cold, Jigar Shah, the co-managing partner of Multiplier. How are you? I'm awesome. Keep it weird, Austin. How many white papers have you been responsible for? Zero. I've got Jen for that. I think she's probably written like 40. I'm guilty. No, no, no. Not 40. Just a couple at the Department of Energy. So Jen Downing is in the co-host chair this week. She's an operating partner at Era Partners. She is a former senior advisor at the DOE's loan programs office. And as she said, she's no stranger to writing reports. She led the agency's VPP liftoff reports, which I'm sure a lot of people in the room read. Jen, welcome. How are you doing? I'm doing fantastic. Thank you. So you worked with Jigar at DOE. Do you want to spill the tea on anything about his management style inside the agency? You have a good sense of it just by listening to the podcast and hanging out with him. It's a lot of fun. I learn a lot. He wasn't hawking his crypto coin, or asking someone to pay his $100,000 credit card, though. Thank goodness, no. No. I mean, nobody had to, like, what is it, feed my iguana? No, was that a Kimberly Guilfoyle thing? Who was the feed my iguana? No, that's the Mary Pelota from Alaska. Oh, I can't keep track of her. And then Matt Iglesias put out a slow, boring thing, like, feed the iguana, if that's what it takes for her to win. So Jen, you're at Era Partners after you left DOE. You went to Era. It's a firm that does take a pretty unique approach, a private equity firm that takes a unique approach to investing, largely in industrial decarbonization. What brought you there? What's the model? Yeah, so it's a very similar mission to the Loan Programs Office, or to EDF, as it's now called, which is bringing companies across the chasm of what's known as the valley of death for energy transition technologies, where they have a technology that has been proven at a small scale, and the company has been funded by VC dollars. But they need to, to scale up that technology, build the first of a kind, second of a kind, third of a kind plant to get ready for infrastructure capital, or maybe an IPO. And so Era takes a private equity style approach to investing in those companies. We make majority investments, and then we have a team of in-house engineers to make sure that those large capital projects are delivered on time and on budget. And we design once, build many times. So whereas at LPO, we were providing loans to those projects, at Aura, we're actually investing in the top co. Yeah, I was going to say, it sounds a little bit like the Loan Programs Office, just with different capital. That's what brought me there. It's like peanut butter and chocolate. And what's Multiplier? The jelly? We're the bread. We're the bread. No. No, I mean, Multiplier's trying really hard to just get people paid. Like, it's extraordinary to me how many people around here have raised a lot of money, have never sold secondary. It's time to, like, you know, like, get off the sidelines and pay off that mortgage. All right, let's dive into the news. We've got a bunch to talk about. First up, we'll start in Virginia. The governor unveiled a new energy plan, and it models multiple pathways, one around flexibility. 10 gigawatts of distributed resources by 2045, flexible data centers cutting the equivalent of 10% of peak demand. It recommends requiring data centers to be flexible and letting them meet that flexibility requirement through investing in off-site resources like VPPs and distributed batteries. Virginia is still way behind on distributed resources, though, so it has a lot to do to catch up. And the question becomes, is this going to be another report that sits on a shelf, or is Virginia going to be able to execute? And I know, Jigar, you just interviewed Governor Spanberger. What did she tell you, and what do you, what's behind this report? Well, I think we need to set the scene in a couple ways. One is, is that that report very distinctly focused on healthcare costs, too. And I think it's important to note that, like, as a governor, what you really care about is not just solving the speed-to-power problem, but also making sure it resonates with voters. And, you know, for those of us who've been working with the environmental communities for a long time, you know, reducing asthma, you know, making sure that people don't have health impacts is a big deal. So that was a big thing. But I think the other piece of it is to recognize that whether it's data centers, which, you know, obviously are prominent in Virginia, or it's EV charging, or new manufacturing load, or other things, we are going to double the size of the grid in the United States, right, and double the size of the grid in Virginia. And so part of this is we're no longer trying to split up a pie that, like, is fixed in size. We're now saying that there's enough pie for everybody, that it's going to double. So now do we do it the smart way, or do we do it the dumb way, right? And the dumb way is the N-1 approach that we've been doing forever, which is like, hey, let's use our grid even less, but make sure that we meet peak for five hours. And the smart way is to say to everybody, look, we're changing the entire way in which we provide you approvals. The large load tariff now says that you will be interruptible. It just will be, right? And that is the default condition. And that will trickle down to everybody, from EV chargers to everything else, just like PG&E has done for DC Flex. And then you then have a series of technologies that you can deploy to make sure you never turn off your compute, right? You can have behind-the-meter gas, you can have batteries, you can have all these things that you can do, right? But in the end, if none of it works, you're going to turn down your compute, right? And I just think that for a long time, people thought, no, no, demand can do whatever. at once, supply has to accomplish And I think what the governor is doing, throwing it on the gauntlet and saying, every single model shows that that approach leads to above inflation rate increases forever. All right, so I want to dig into the pathway for this plan. But first, Jen, let's get your thoughts on what's in this plan. So the flexibility pathway itself features less local pollution, but is ultimately more carbon intensive. And there's also like less clean, firm resources in that plan. There's less nuclear, there's more fuel cells and flexible generators. What are the trade-offs that Virginia needs to make to meet this maximum flexibility plan? Well, first, I think it's important just to take a look at the load growth that Virginia is projecting, because Jigar mentioned, you know, we need to double the grid. If you look at this plan, Virginia has about 30 gigawatts of nuclear. That's the same plate capacity installed today. And their forecasts that they're using for these scenarios show adding 60 to 120 gigawatts. So they are at least tripling, if not quadrupling or quintupling the size of their grid. And then they're looking at these different scenarios saying, okay, if we have different ingredients in the mix with the cost, both in terms of the financial cost of the system and health and social costs. And so the comparison and the trade-off they are referring to is. You know, in the distributed flexibility scenario, they are allowed, allowing the model to build up to five gigawatts of distributed gas. So non-combustion gas, things like fuel cells, and they're comparing that to kind of current policies that would exclude that because Virginia is part of the regional greenhouse gas initiative. And in the latter scenario, you're ending up with more nuclear and offshore wind in the mix. But it's more expensive. And I think we should just call a spade a spade. Like nuclear and offshore wind are costly. Right? One megawatt of nuclear, more expensive than one megawatt of distributed gas. That doesn't mean that we shouldn't build nuclear. Right? The timescales are different. When the megawatt hours show up are really different. But it is important to acknowledge that trade-off. One of the things, though, in terms of the governor is I think many of us have read that viral story about how Energy Arkansas, you know, basically screwed their rate payers, you know, with Google's prepayment and some of that stuff. Right? That same thing occurred in Virginia. Right? But the governor's staff, Josephus and Louise, intervened in the rate case and convinced the SEC to reallocate that transmission cost that the data center companies were paying for to the data centers. Right? Away from residential. And so they saved everybody $3 a month by doing that. That required an intervention by the governor's staff on a tiny issue. Which they're going to have to do every week or else they're going to, like, you know, have something that happens without their knowledge. Right? Like, this is like hand-to-hand combat. And so when you look at the way in which that's occurring, and to be clear, Google and AWS said, fine, we lost that battle. Like, we're going to move on. Microsoft is suing the SEC and saying, no, we actually don't want to meet the rate payer protection pledge. We want all that stuff to be shared with residential rate payers. Right? And so that is what governors are. It's not just writing the energy plan. It's going toe-to-toe in all of these detailed rate cases with their regulator. And in Virginia, those people don't even report a tiny bit to the governor. Right? Because the regulator is nominated and approved by the legislature. So they are not nominated by the governor. Well, this brings me to maybe my cynical question, which is, this report was released to a lot of fanfare. Right? A lot of people were excited about it. You interviewed Governor Spanberger, and she said, like, look, this is our -- we were fulfilling our required energy plan, and now it's over to the legislature and over to the Corporation Commission or whoever. And I don't know a lot about the makeup of the Virginia legislature, but I have to assume that both, you know, in the Corporation Commission and the legislature, we're talking about slow progress. Who knows how this is going to play out? And then you're talking about getting involved in rate cases. And then you're talking about getting involved in rate cases as well. Like, how much of this plan is going to, again, sit on the shelf, and how much of it do you think can get executed? Yeah, I can comment there. I think what you would expect to see play out in Virginia is similar across other states, where there's this chain reaction of someone's got to do the math, run the study, model the grid to see what's possible. Then that informs smart legislation. Then that trickles down to -- Or I shouldn't say trickles down. It forces the hand of the regulators, who then create requirements or financial incentives to the utilities, who then build out the system in a different way. So there are all of those steps that need to happen in order for something like this to actually be implemented. And so, you know, it's a step in the right direction, but you're right. I mean, even after the utilities, you know, decide to deploy something, they might run into permitting issues trying to deploy a DEV. Now you've got the governor who is faced with being the chief economic development officer of the state, right? And Dominion is saying it's a seven-year interconnection queue, not just for data centers, but if you have a warehouse and you suddenly decided that robots were cool and you wanted to put in robots and automation and you need to double your interconnection with Dominion, seven-year wait, right? And so now she's faced with all these people. You want to build in Virginia, and the monopoly utility can't meet economic development requirements of the state, right? Separately, right, you've got all of these lobbyists who are going into the state legislators and saying, my natural gas solution will succeed, my this solution will succeed, this will succeed. None of them have any expertise by which to evaluate what they're being told. So when the governor says, here is the plan, we have our own modeling people. Remember, Virginia hired. They hired their own modeling people. This is not NREL or other things. They hired their own best of the best modelers to do all this stuff. She is now definitively saying that of these five cases, don't listen to what the lobbyists are telling you who are self-interested. We've done the math, and it's all published in this document, right? And I think it's just, look, I mean, there's always going to be confusion, and there's a lot of people whose job it is to sow confusion, right? But the governor can only do what she can do, and in this case, she's saying. We brought the best experts we could find. This is the best way to balance health care costs and the cost of providing electricity, while at the same time shrinking the speed to power from seven years down to one year. All right, that's Virginia. We want to move to the federal permitting bill now. So this permitting bill released this month has a section on what it calls dispatchable energy systems. We call them virtual power plants. It would require grid operators to. Open their markets to aggregations of DERs within 18 months, basically facilitating FERC order 222. It bars requirements for utility-owned metering equipment. It sets strict rules against double compensation, requires aggregations to publicly report what they deliver. It also offers data centers a discount on transmission service if they accept non-firm service. And it requires utilities to deploy advanced transmission technologies when the benefits exceed. So there's a lot in here. Jen, what do you think the most consequential pieces of flexibility are in this bill? Yeah, I think the measures that are taken to basically knock down the hurdles that distribution utilities can throw up to block DERs from participating in wholesale markets are the most significant. So you named some of them, meaning, you know, a distribution utility can't require, you know, a VPP company to add a physical meter onto a device. I think the most consequential pieces of flexibility are in the fact that the distribution utility can't do that. In order to generate data that goes into the wholesale market. That never made sense, and now they're not allowed to do it anymore, or they wouldn't be under this bill, right? The distribution utilities need to interconnect the DERs. They can't prevent them from exporting back into the grid, which means the DERs can be compensated for actually providing energy. And those, I think, they go a long way towards allowing better participation. But I'm very hesitant, given the track record of order 2222, that this is going to be a big deal. I think it's going to be a big deal. I think it's going to, you know, allow us to declare victory on that. There are still all kinds of hurdles that could be thrown up, such as, you know, not giving these distributed, these DER aggregations sufficient, you know, accredited capacity to compensate them sufficiently. There are other things you can do to kind of erode the margin on a business model of VPP participation in wholesale markets. So I do think that these are a lot of very productive measures, but I'm cautiously optimistic after order 2222. Because this is our moment, right? When you think about, like, this whole thing started with Arnold Schwarzenegger in 2007 with the California Solar Initiative, where we were required to provide real-time data to the utility, which they have never read or integrated into their system, right? Then FERC ruled in 2008. Then John Wellinghoff ruled with A41. Then Neil Chatterjee ruled with 222. Then Rich Glick did 222A. Like, we are now in a place where everything is so messed up, right, that the DOE, who are filled with molecules people, right, and the National Energy Defense Council, a bunch of molecules people are like, crap, this whole natural gas thing isn't going to work, is it? Right? Like, we're going to have to do this damn flexibility thing, right? That's why it's in there. It's not there because they like me. They clearly don't. They tried to put me in jail in 2025. Right? But they're like, we love AI. We want it to be online. We want to win. And the only way to do it is to get more out of the system we've already paid for. What are you talking about? The gas people are licking their chops. The gas people will make a lot of money on the actual sale of equipment. But the pipelines are going to take five to seven years to upgrade, right? All of this stuff just isn't getting deployed as fast as it could be. But you know what is getting deployed fast? Batteries. All day. Right? Batteries is what saved the Texas grid. And it's now, like, going to be reluctantly going to have to save the PJM. Right? That's where we are. And, like, that's why it's in the bill. It's not there because, you know, everyone's like, well, it's such a good idea, whatever else. It's there because nothing else will work. And the White House actually approved it being there. Fully agree. And, you know, we're taking two different approaches to our common call to action, I would say. But I think my point is we just can't let our guard down. Like, the way that DERs are getting greater access to wholesale markets is, you know, organizations like, you know, Voltus and C-Power doing the hard, extremely technical work of picking apart the wholesale market participation rules. And making sure that these, you know, here's a good example. You know, I was talking to a VPP company that said we have to rely on distribution data to measure the impact of our DERs to get paid. And that data exists. And we can, but 65 out of 365 days of the year, the data feed coming from the utility just goes down. And so it's the very tactical measures like that, that, you know, that stand in the way. Not the kind of theoretical, hey, you know, under this permitting bill, you have 18 months to comply with Fork Order 2222. Like, the devil's in the details. And we need people kind of fighting at every step of the way on exactly how it gets implemented. Let's just finish up with a look at California. Governor Newsom signed two VPP bills recently after rejecting others. One directs regulators and the grid operator to better measure and reward the value of these resources. The other requires utilities to start measuring and reporting how efficiently they use their grids. California has really struggled with getting this market off the ground. We saw the governor. You know, sort of reject other pieces of VPP legislation. Is this a good moment for California? You know, obviously, they're working on their market rules, but they also have a VPP program that's falling off the cliff in terms of funding. So on balance, what's going on in California? Jen? Yeah, I'm going to express potentially an unpopular opinion on the program that you just mentioned fell off a cliff. So that's the DSGS program, the Demand Side Grid Services Program. Which, personally. Actually, I always thought it was weird. And the reason why is because California basically said, you know, we know that distributed energy resources can be used to, you know, keep the lights on during periods of grid stress. And we think it's a good, cost-effective resource. But instead of directing our utilities to change how they plan, build out, and operate the grid to incorporate more DERs, we're just going to let them continue on, you know, charge rates. And then we're going to use taxpayer dollars to create this pool of money to pay DERs to keep the lights on when the grid is too stressed. And I understand that that was a good way to prove out that hundreds of megawatts of DERs can show up when the grid needs it to keep the lights on. And that was a good proof point. 1.2 gigawatts, just Tesla alone. Amazing. Yeah, exactly. Right? So we know that this can be deployed at scale. And now the measures that California. is taking is to say, hey, we ran out of money with DSGS. Let's actually go change the utility business model. Let's allow them in Senate Bill 913 to count DERs towards the resource adequacy requirement. And then with Senate Bill 905, you know, the California regulator, the CPUC, is instructed to require utilities to publish data on the grid utilization. And I think, you know. Don't underestimate the power of measuring and reporting this data. A good kind of proof point on the value there is, look at Massachusetts. That requires their utilities to publicize the 10% most constrained nodes on the distribution system. And if you can drop peak on those constrained nodes during peak hours through the Clean Peaks program that Massachusetts has, you'll get paid double. So. So now, if you're a DER company or VPP company looking, hey, where will I get paid the most, you are now enabled to zero in on the most valuable point in the grid to sign up a customer to participate in these programs. And so that's, you know, California is taking a step in that direction with Senate Bill 905. Is this step enough, Jigar, for California to get its act together? I mean, you know I've been slaving at getting this done in California, right? We passed these bills last year and got vetoed by Gavin Newsom. Then we wrote the bills with PG&E earlier this year, and PG&E undermined the bill through the process. And Gavin only signed them because under duress, he was like, I can't be president unless I have a better reputation. And so, like, I don't think Gavin wanted to sign them, but he was like, well, crap. Like, you know, this is going to look bad if I don't, right? So that's happening. But then. Separately, like, PG&E has shown extraordinary leadership with, you know, DC Flex and then T-Flex, right? And when you think about how that works, what they're saying is we'll connect you, but then, you know, for the hours that we can't give you the full allocation of power, we will deny you access to that power, right? Now you have to figure out what to do if you don't want to be turned down during those hours, right? And these. Uh, batteries are already there. They're already registered into the DSGS program, right? But when you look at, like, the CPUC has eviscerated the value of these programs. When you talk to Elliot Mainzer at California ISO, he's like, I don't set that, that rule. All I do is implement for a quarter of 2222. I don't set what they're worth. And the CPUC has deliberately made it worth zero so that, like, nobody wants to participate in my program, right? This was a calculated thing that was done on purpose. Even if you wanted to bungle this, this badly, you couldn't figure out how to bungle it this badly, right? And so it had to be something that they deliberately did because they hated distributed generation so much, right? And so now we're on track to fixing it. And I think that's amazing. We have three gigawatts of already paid-for behind-the-meter batteries alone, let alone, right, Nest thermostats and Ecobees and all that stuff, plus smart water heaters and all these other things. Carrier is part of the share pilot, right, with their battery. And so I just. Like, what shocks me in California is that there's a hundred companies in California that do awesome stuff here. All of them are here at Flex Summit. Thank you for being here. And none of them can do business in the state of California, right? This is now going to change. Yeah. And I want to just add one thing, which is I mentioned, you know, it's a step in the right direction to change how PG&E, SoCal Edison, they are planning, managing all of the utilities in California, how they're managing their grids. Um, it does. It does make it more challenging if you are a VPP company where before you're raising money for, from investors, you're making a business case, you could point to that, you know, pocket of state budget and say, that's my addressable market here. That's what I'm going after. Now you have to, you know, your fate is in the hands of the, of the distribution utilities, and it's unclear how much they're going to spend on your grid services. Earlier, we met Paul Hines, Energy Hub's chief scientist. His team develops the machine learning that orchestrates 3.6 gigawatts of virtual power plants. When you see a utility using algorithms that we wrote on the whiteboard running 250 megawatt events, I think that's pretty amazing. Utilities need capacity they can deploy now, and they're finding it in virtual power plants, which are precise and configurable. I've got customers that have time of use rates. We need to make sure we. respect that I need to pre-cool during these hours, maybe there's some hours that have a lot of solar power, so let's make sure that we soak up as much of that solar as we can, but I need to really manage my peak during this other period of time. And so figuring out how do we take all those goals and then come up with schedules for all the resources, whether it's batteries, thermostats, electric vehicles. Energy Hub maps that evolution through a four-level maturity curve. Level one looks like traditional demand response. At levels three and four, a VPP is a real-time resource that can meet many different needs on the system. It's actually better than a power plant because you're able to solve problems in the distribution network, which is where a lot of the cost is right now. You're able to solve problems in an automated way, whereas power plants actually are fairly slow to respond to issues. It's the future of how the grid operates, and we just need to connect them in the right ways, give them the right algorithms, and make that happen. Energy Hub's GridAware DERMS is the flexibility platform trusted by 230 utilities across North America. OpenCircuit is brought to you by Everyday Electric. After years proving the market was ready, they're delivering a new kind of VPP. So how does it work? Starting with features built into the products people already own and use. Things like smart thermostats, electric vehicles, and home batteries adjust automatically based on everyday routines, helping lower bills and add capacity. People can get meaningful savings and earn rewards for their work. Energy Hub's GridAware DERMS is a great way to connect with people across the grid, and this contributes to a reliable, resilient system that lowers costs for everyone across the grid. That is Everyday Electric's vision. It's the next great addition to your program portfolio. You can learn more at everydayelectric.com. What if you gave your climate donations the same due diligence you give your investments? Giving Green researches the strategies and nonprofits best positioned to unlock the next climate breakthrough. Climate impact is difficult to quantify, but Giving Green's research is the best position to unlock the next climate breakthrough. Climate impact is difficult to quantify, but Giving Green's research suggests a donation to one of their top climate nonprofits is roughly 10 times more effective than a high-quality carbon offset, and the Giving Green Fund sends 100% of every dollar straight to them. Maximized impact per dollar, no cuts or guesswork. Make a first gift before the new year, and it will be matched up to $500. Go to givinggreen.earth slash circuit to claim it. All right, we're halfway through the show. That was our quick tour through the news. We just talked a lot about ways that people are trying to shape the power grid. Let's actually bring in someone who runs one. Let's welcome to the stage Todd Conner. He's the Senior VP of Electric Distribution at Accel Energy. Todd, welcome. Thank you. I think I got better cop than you did, so. Were you itching in the seat there, wanting to respond to Jigar on any points? It was a little squirmy. All right, so you run a team of 4,400 people, roughly, at Accel. You oversee enterprise distribution grids. That includes operations, planning, compliance, safety. You've been in this business for like 35 years. What is different about today's pressure, today's load growth pressure, from the point of view of the company? From the past, and how are they forcing you to get creative around flexibility? There have been a lot of load waves come through the industry, I think, and historically. This one's different in that a lot of the past ones didn't actually show up, or they showed up real gradual. This one, we knew it was coming, and then the AI boom just, like, turned on, and so it's real. And we have these. These customers that come with an infinite checkbook, but on the flip side, these same customers that are the hyperscalers are consuming the resources that we also need to be able to deliver, so it's created this tug of war all the way around to just be able to serve. But it's also. It's a great time to be in the electric industry. I mean, we're at this inflection point of how the grid operates, how we. How we design the grid. You know, we've run this system for 125 years a given way. It was designed by Edison and Tesla and Westinghouse. And we're at this place where, in 30 or 40 years, the textbooks, they'll talk about those folks, but they're going to talk about the Dukes, the Nexteras, the Dominions, the Excels, the PG&Es, about how this generation transformed and built the next future of the grid. So it's a. However many generations, 125 years is, it's a once-in-many life. It's a lifetime opportunity in this industry. Yeah, when we chatted, you said something that really struck me. You said, flexibility is a commodity to be harvested. What do you mean by that from a distribution operations perspective? So I don't really look at flexibility or utilization as a scorecard. It's not a result. It's a tool. We've built this grid. We've always worked to connect load. When one load would come and ask, can we connect? Can we connect here, here, here? And we might be peak constrained, like you all were talking about. We have always looked for ways to fit it in. How do we push down the peak? How do we add more utilization? It may not have been that language, but we've used the tools available to drive up utilization of the grid. It's not our desire to, you know, contrary to popular belief, to just go spend capital. It's our desire to connect load and meet our compact. And if we can do. If we can do that directly, that's better for everybody. It's a win for us, and it drives customer value. So utilization is a lens through which we can look at the grid at a segment-by-segment, element-by-element level. It's not a score of the whole grid. And we can use that lens to find places where we can encourage load to go to because we can connect them better, faster. We can invest less capital, create less revenue demand. And as a result. As a result of doing that, we create customer value. Just connecting things doesn't always create customer value, but we can find ways to create customer value. But it's got to be optimized. It's not, you know, there's an analog out there, an analogy out there going, you know, view the grid as a highway, and there's only two cars on this four-lane highway. That's underutilized. Well, take that same highway at rush hour, and you're moving at five miles an hour. And that's when the grid doesn't work as well. So it is an optimization problem, and it's a tool. It's not the answer. Well, I mean, you know, I've been working with Excel since 2004, and I would suggest that they are one of the utilities that I think has consistently done it right every single time, right? You had to push them. We had to, you know, pass Amendment 4 in Colorado with Matt Baker. We had to do this, but then they did it, right? They were like. They were like. They were like. They were like. They were like, all right, this is the new rule set. We're going to do it the best way we can. Look, I think when you think about what both Excel and Elite are doing in Minnesota, I mean, it's nothing short of breathtaking. And it's tough, right? Like, I mean, there were a lot of criticisms of, you know, why is Excel rate-basing this stuff? Why aren't, you know, the private sector folks, like, able to buy the batteries and get a contract? You're talking about the Capacity Connect program? Like, I, as far as I'm concerned, like, my North Star has been that flexibility has never been an equal tool in the toolbox, even though FERC has asked for it to be since 2008, right? And I think what Todd and his team are doing is figuring out how to operationalize making flex an equal tool in the toolbox. And whether that's rate-based or whether that's a demand signal or whether that's it or that or whatever, I'm fine with all of it, right? Each group is going to. Each group is going to do something different. But what I'm not fine with is, you know, rates going up, a double the rate of inflation, a huge percentage of the population being on fixed incomes. Those, like, utility bills are actually eating into their, you know, fixed incomes. And people are like, well, what would you have me do? Change my way of doing things? Yes, I would like for you to change your way of doing things. And I think Todd's, like, leading the way. You know, there's elements in there that I completely agree with. I mean, if you look at our total territory, we have the lowest share of household wallet of electric bills in the United States. We have, you know, if I just look at our distribution system, we are the third lowest O&M expense per customer utility anywhere. So we've really focused on that. We literally spend agonize over our capital plans to try to push our rate growth at or below the rate of inflation. And I can tell you that there's a lot of other people who are. We're not the third lowest, that they are the third highest. And those are the people I'm criticizing. Yeah. So, you know, I can't speak to them. And, you know. You can speak for them. Go ahead. Teach them exactly how you're getting it right. Because you are getting it right. It's fantastic. Yeah. I don't sit in their offices. But what I would tell you is our focus is on customer value. And even DER, just putting DER on the grid is not an objective for us. It's not an anti-objective either. It's what option creates the best value for our customer along the way. And. Sometimes it's non-wires and sometimes it is wires. Well, the other thing, though, that I think you guys have taken very seriously, particularly under Tim Walls, but even before that, is that as this load growth approached you, first it was the IRA and a bunch of manufacturing, onshoring and reshoring, which Minnesota, obviously, is a very business-friendly state. But then with AI data centers, you also had the same issue where people were starting to see two-year interconnection timelines and four-year interconnection timelines. And the governor was like, what the hell, man? You have one job. Help me get economic development done. And I think what you guys did differently was when Google came to you and said, hey, I think we can get this thing done faster if you guys agree to these three changes, you were open-minded to it in a way that a lot of other utilities weren't open-minded to it and have resisted heavily. And so I think it's important to note that what we're talking about here is central, in my opinion. To speed to power, right? And there's a lot of other utilities that are just not taking speed to power seriously. They talk about it, but then a year goes by and nothing has actually improved in terms of doing business and connecting faster. I'm really proud of what we did with Pine Island and Google and put forth that large load tariff. One, in the way it protects our customers, but also it protects the environment and the communities in the area from a lot of the. The complaints and issues that exist with data centers. I would also say that when you look at the solutions, many, many utilities, if you just look at the IOUs, every one of us has a set of solutions that solves this problem or this problem or this problem. Few of us have, we've solved all the problems together. So we each have the wonky spot that doesn't work. And it's not a lack of desire in most cases. And it's how do we sew all these things together and working together to create, you know, I've solved this and you solve this and you solve this. The benchmarking between us and coming with common solutions, that I think is the path forward. I think it is unfair, though, to go point at them or them or them and say they're bad, they're evil. They're solving a lot of problems, just not this problem. And so there's a balance. You mean the number one GDP growth driver of our country, that's the problem they're not solving? Say that again? The number one GDP growth problem or growth driver of our country, that's the one problem they're not solving? DER and interconnect studies is not the number one growth problem. Right. It is a problem? No, no, it is the number one solution. We're here because it's the number one solution that people have not taken seriously. I just want to be crystal clear about this because I feel like people like want to hedge just because they want to protect. And I don't call anybody evil, but I do call people stupid. I mean, there's a lot of people out there who basically are. There's a lot of people out there who are deliberately hurting their governors and hurting their states. Right. And the reason why people hate data centers so much is because their utilities have not used this tool to maximum effect, even though they've been told by FERC to get ready for this moment for over 20 years. Right. And so, like, the fact that they haven't met this moment is their fault, and they absolutely should own that. Well, there's a lot of players, but, I mean, look at what we've been doing. That's what I'm talking about. You're talking about it, and I think you're oppressive. I think we're trying to lead by example. And there's other utilities that have done really great things in the space as well. And I think we've evolved and had a lot of learnings in the domain of data centers as they've worked their way from the East Coast and the West Coast towards the central U.S. And I think we're getting on a much better pathway here. Can you just address what Jigar said head on, though? Like, he's saying that this is the best pathway forward for accommodating data centers. And opening up new capacity. I think a lot of people in this room make that claim. Like, this is the best affordability solution. So, when you're evaluating, like, different types of flexibility on the system, like, how do you evaluate the right tools? And do you have any pushback on the idea that this is the ultimate solution? So, I'm a big believer that we need to look at each of the individual options. And we need to look and then score those. I'm also a believer that as we go to this launch. Large load demand space that we're in. These large loads have to pay their own way. We should not be putting the costs on the back of our customers and socializing it across the whole grid. These folks are coming in and they want to consume portions of the socialized grid. And if they don't pay their way, then those that paid in the past are just creating space for them. And the people that are coming in the future don't have room. And what we've done. I think is exactly the right thing that we've done in Minnesota. And it's more than just capacity management and paying your own way. It's also, you have to meet certain criteria if you want to get in. If you're a data center, you know, are you air cooled? Are you, you know, we have a big list of hurdles you have to get across to earn the tariff. And I think that's the right thing. I think that's the right thing for the company. I think we're modeling what it's. What it's supposed to look like. Can I come at that question from a little bit of a different angle? What, coming back to the theme of kind of treating flexibility as a resource to be harvested. I think my question is how much and where I'm, where I'm coming from with that is, you know, when Jigar and I were working together at DOE, we looked at, you know, how big could VPPs be on the grid and VPPs, obviously that's a combination of flexibility and a capacity from, from DERs. But if you look at the kind of nameplate. Capacity of devices and a reasonable enrollment rate and load growth trends, it was pretty obvious that 10, maybe even 15, 20% of peak could be flexed. And, you know, for, for a utility, that means either it's savings because you don't have to build out the grid quite so, so large, or it's your interconnecting more load in that headroom that you have just created. Do you think about kind of the flexibility resource as a percentage of peak? And what do you think is? What do you think is possible for Excel? Because we look around at other IOUs across the country and best in class is like 1%, 2% of peak. But you look at some of these smaller, you know, co-ops, for example, who are managing 10% of their, of their peak demand down through flexibility. Or what do you talk about in those terms internally? And what would your goals be? We do, but, but I hate to measure in terms of how much, how much flex could we add in terms of peak? Or harvest. Right, or harvest, right? Yeah. My, my peak is 19 to 20 gigawatts is, is what our total system north to south runs. If I look at the distribution system in, you know, in certain areas, I may have a gigawatt, a gigawatt and a half of, of headroom if, if I just use the total area that's available, ignoring, you know, the peaks where they consume. If I could eliminate that peak, that's what I would have in head, as headroom in the grid. But that's not all reachable or it's not reachable in an economic way. Right. Probably 30 to 40% of that, you know, in that jurisdiction is potentially achievable in a, a meaningful harvestable way. That's, that's pretty big. Yeah. 30 to 40% of it. But now I'm looking at what, 300, 300 megawatts versus, versus. Sounds big to me. Well, yeah, but think about it. You just said percent of peak. Yeah. So 300 megawatts compared to 20. 20 gigawatts is what? Well, we're going to. One and a quarter percent. So it's, it's, that's why I said I don't like that measure. Yeah. It's, it's, I can avoid wires construction and major capital investment to expand the grid if I can break my way into that. If I'm able to, to break my way into that and there's load that gets married to me that, that is flexible enough to land where I need it to land, I can go deliver that 300 megawatts. And I don't have a new revenue requirement, but the revenue that does come in now creates downward rate pressure for our customers. That cost of the next incremental megawatt of load actually serves real value to my customers. And that's the real measure I like to look at is what did we serve to our customers at the end? What's the result in terms of value and measure the incremental dollar per next megawatt serve. Did we serve it now? I know I'm doing something. Yeah. I just, I'm hearing you say too is it's all. Very location dependent. Incredibly, yes. Yes, which is incredibly important to, to recognize. Yeah. And I PG, the slides that were up in the previous session, there was a slide up that says, how can we use batteries to unload substations? I loved that problem statement. I think DER is one of those biggest roles is to push the peaks down and start to make the distribution grid or at least the variations in the distribution grid, less demanding on substations. And take it to a hyperbolic limit. How do you make distribution invisible to transmission or to substations? You know, that's not, you know, a real end state, but how do you make the noise go away and have a very clean state of stable method that we're going to operate the grid and not constantly driving all the ups and downs? Um, you know, it's, it's a idealized outcome to say that, but I think we have tools to, to move and smooth it as opposed to, it's not going to go away, but we can smooth it. and smooth it with these tools and it's, makes a real difference yeah i mean look i think that the thing that i think people are having a hard time communicating here is that whatever that number is right and i've obviously worked with excel for 20 plus years right um it's real dollars right i mean unlocking 300 megawatts worth of headroom for you guys is a billion dollars in contracts for everybody here right it's a lot and i think that you know like when i first started working with excel they were like jigger if we ever have renewables above five percent the grid's gonna go down whatever i was like fine give me five percent right and i did it and then you know now it's like regularly 90 but whatever you know spp was the same they were like if we go above five percent jigger the grid's gonna go down okay now it's regularly 90 but i don't care where we get started but i do care that we get started and i think the fact that you guys have i think been a real leader around getting started and obviously our friend arushi's in the audience and she's gotten texas started right with the edr work and we've gotten other people started i think matters but it's got to be a billion dollar scale if it's a 20 million dollar scales you're out like i don't i don't want to hear about the bs around 20 million dollar scale right it's got to be a billion dollar scale and i think that's the people who are serious and the folks who aren't serious are giving me 20 million dollar stuff i agree in large large extent what you're saying but you know it's not how much do i spend on de our dr is a tool right i have a toolbox der is one of my tools to help harvest capacity to drive customer value and the measure has to be up at the top and you know it might not be popular here in the room but i don't care if we buy der we don't buy der that's not the objective the objective is to both serve our compact and drive customer value it's we have new der tools today that we didn't have before it lets us look through that lens of utilization and harvest that value in ways we couldn't the other cool thing that we have is we have compute capabilities that we never had so i have the data from ami meters so i can see real load flow data i can see better rtu data and then i take that data and i push it through some of these these ai tools that can consolidate and consume this data quickly so it's not months of study to say hey what's the what was the utilization on this day it could take weeks to calculate the utilization on you know a subset of feeders for one day i can do it in minutes now and so my ability to see it is greatly enhanced so my my toolkit and the lens that i have uh we're we're in a time where i get to act more efficiently and find things and take better action than we could in the past and and so it's not about buying der it's not about how do we put a vpp on those are just tools it's customer value at the end that we have to get to and i know that sounds like a broken record but but that's my mission um it's not i don't care if i buy transformers from ge or howard or or hitachi or anybody else i care about the result of the grid but then that you have to though understand here and i get what your mission is but the mission of the governor is to get re-elected and what the governor wants is to actually make sure that we're empowered which is what everybody in this room does for a living right and so the thing is is that yes maybe you can just jam a bunch of like you know low heat rate um or high heat rate like natural gas units somewhere which a lot of your brethren and other utilities are doing but like it's causing an enormous political backlash right and i get it they're saying the same thing you're saying they're saying i got a lot of tools in the toolbox and i'm using this tool that pisses everybody off but i like using it right but what i'm saying is is that then the governor is saying i used to like the utility but now my poll numbers are saying i'm supposed to hate the utility because otherwise i can't get re-elected and so part of what i'm using though i'm i'm using all the tools in my toolbox and and i also had the luxury of being in a place in the united states where the wind blows and the sun shines my renewable resource base is is one of the best in the u.s and and we're able to leverage that day in and day out and we do so we're using all the tools that we can and and so i i think the scorecard needs to be not the utility industry or utilities i think it needs to be the individual company and how are they doing and how are they working and and don't necessarily lump everybody together and step back and look at the the you know somebody has to sit in that chair and make a decision and what what do they have to deal with day in and day out that's i think that's a fairness we have to give everybody well we just have a few minutes left so i want to round this out with a game of would you rather this is one of my favorite games although typically it's played late night at a bar and things can get somewhat raunchy but we'll keep it very professional here um it's very easy i'll give you two options you'll explain which option you'll pick and why and uh let's try to get through as many as possible so um would you rather have batteries at half of today's cost or interconnection in half the time jigger or gen gen half the cost i think if you look at households who are interested in backup power and you know they've heard of distributed batteries but maybe a generator is cheaper if we can have the cost of batteries and add more batteries to the grid behind the meter faster even in states where they may not have uh you know utility programs for those customers to enroll in yet if we add that capacity there's more incentive for utilities to start uh incorporating them into how they're managing the grid i i think all things being equal in terms of of customer value i'd like to see the interconnect process go faster um i i'd like to see us be able to bring on more load bring on more resources and and move through the the permitting and the third-party review processes that we have with with both permitting interconnect way faster than we do today it's probably our biggest headache jigger i think by this time next year jigger i think by this time next year we're gonna and we're gonna eliminate the interconnection process all together right i mean as long as you're not back feeding into the grid we're gonna say it's it's an appliance right you know no back feed i don't need to talk to anybody about it all right clean firmer flexibility would you rather have one gigawatt of new nuclear in 2035 i want what he's drinking or one gigawatt of flexibility one gigawatt of nuclear 2035 or one gigawatt of flexibility in 2028 you todd i think right now i'd want the the flexibility i i think there's a lot to be seen and in terms of our ability to deliver nuclear and deliver it on costs and on schedule um i think it's a very important part of the grid that's going to come but but i think we need to solve some near-term problems today i mean imagine posing that question to a hyperscaler would you rather generate revenue seven years from now or today with a one gigawatt data center i think the answer is obvious yeah i think that's a good answer um okay jigger would you rather run the grid like uber with real-time surge pricing for every kilowatt hour or like netflix with uh one flat monthly subscription for unlimited power well i mean i think we are moving to netflix right i mean that is what the grid 2.0 task force is right and it's not what you just suggested what it is is we're gonna throttle folks right it's net neutrality so like if we're going to run a grid like you know at the time at which the grids at peak everything on your in your house is digital it'll ask for permission to use power and if there isn't power right now it won't get power it won't get permission to use it right that's where we're headed anybody else have strong opinions netflix or uber i i hate that view um i kind of thought learn to love it learn to love it yeah i i i still subscribe to the view that that i would like it if you can only have water for your house um you know during these hours or if the whole community is like cooking sunday dinner you can't do the dishes um water and electricity start to become it's it's not just a commodity it's an essential thing that we serve with and i think we need to find ways to serve fully what the demand is along the way and i don't think you've seen traders on peacock i mean i need traders like i need it i need it that is an essential part of my evening i have no idea what you're talking about i think it's a great new show on peacock my tv's on like one day a week it is productive though as just a thought experiment right if if i were paying a capacity payment rather than an energy payment on my utility bill right paying for you know the kilowatt max rather than the kilowatt hours that i'm using what are the different business models that will take to help me get as much as i need from my appliances and my ev etc um and not think about it because you have all of these uh sophisticated software programs in the background or these smart devices that that people have uh invented to make my life easier and manage the grid uh and you know it's companies that are all represented today here uh thinking about hey how do how do we make this a reality from a software and hardware standpoint mm-hmm All right, we're going to have to close it there. We've come to the end of our time. Todd Conner is the SVP of Electric Grid Distribution at Accel. Thank you so much, Todd. Jen Downing is an operating partner at ARA Partners. Jen, great to see you. Good to see you, too. And Jigar Shah is the co-managing partner of Multiplier and my regular co-host. Thanks, Jigar. Good to see you. Always. Open Circuit is produced by Latitude Media. The show is produced by me, Anne Bailey, and Sean Marquand. Fine Grain Pictures produced a video for this episode. If you want to see all of our episodes, subscribe to Latitude Media on YouTube, or you can get all our audio episodes on Apple, Spotify, or anywhere you get your podcasts. Thank you so much, Flex Summit. We'll catch you next time. Bye.