Energy Capital Podcast

Watch the Conversation on YouTubeHeadlines warn that data centers are straining the Texas grid. The reality is more interesting: data centers — through their own flexibility and by supporting distributed flexibility markets — can strengthen the grid.I explored that topic and a lot more with Astrid Atkinson, CEO and co-founder of Camus Energy and former senior reliability engineer at Google. At Google, she led teams responsible for keeping the world’s search engine online, matching computing load to available capacity across continents. Her lessons from that experience translates well to the grid: reliability doesn’t come from scale alone. Reliability comes from flexibility and orchestration.Astrid calls it “grid orchestration” which means coordinating and optimizing both supply and demand in real time all the way down to homes and businesses, but starting with better data and better management of the distribution grid. We’re moving toward a more decentralized network of flexible resources: batteries, EVs, thermostats, and yes, data centers. We’re going to need a much smarter, much better orchestrated grid.Texas already has the raw material for this shift.Rooftop solar, batteries, and EVs are scaling faster than ever. We now have over 6 gigawatts of distributed resources in ERCOT, roughly the size of six large power plants.But they’re not well coordinated and that disorganized integration means we’re leaving cost savings and reliability benefits on the table. Part of the problem is that market signals aren’t flowing to distributed resources at a level near their actual value.That’s where data centers could potentially come in.If data center developers fund load flexibility, they could potentially put money into consumers’ pockets and increase their speed to interconnection. [D]ata centers fundamentally are not really budget constrained for getting these things built. They’re really time constrained. And so, I think in there is the opportunity to start thinking about off-market or kind of secondary market opportunities to get value for flexibility, both from the site itself, but also from you, me, batteries [and other DERs]… Astrid’s experience offers two key lessons for Texas:* Automation must be simple and local. The best systems don’t depend on constant central control. * The biggest savings aren’t in wholesale prices, they’re in avoided infrastructure. Flexible demand can defer costly upgrades to poles and wires, easing pressure on bills.We’re seeing movement in the right direction, ERCOT’s efforts to integrate distributed energy resources, electric cooperatives piloting new demand response tools, and increasing talk of creating distribution-level markets where buyers and sellers can trade flexibility directly.Texas has always led by embracing what’s next before anyone else believed it could work. This is the next frontier: flexibility, orchestration, and coordination of DERs.“There’s never been a more exciting time to work in this industry,” Astrid said. She’s right. We have the tools, the data, and the entrepreneurial spirit. What we need now is the will to connect them.The path forward isn’t about choosing between growth, affordability, and reliability. If we build smart, Texas can have it all.If this perspective resonates, share it with someone who cares about where Texas energy goes next and subscribe to stay part of that conversation.Watch the Interview Here:Timestamps:* 00:00 – Intro* 02:30 – Astrid’s background and Camus* 05:00 – Google reliability lessons* 06:30 – Texas load growth reality* 11:00 – Contracting flexibility, framing the problem* 12:30 – Internet-scale orchestration parallels* 14:30 – Major reliability event takeaways* 18:00 – What a flexible grid requires* 20:00 – Paying Texans for household flexibility* 27:30 – Visibility before control (DSO layer)* 31:30 – Intelligent automation, local control* 34:00 – Value is in avoided T&D spend* 38:00 – Co-ops and munis as testbeds* 46:30 – Edge markets and price signals* 56:30 – Bills down, capacity up, resilience* 58:30 – Closing thoughts Resources:Guest & Company* Astrid Atkinson (LinkedIn)* Camus Energy, (LinkedIn)Company & Industry News* “So What Does Camus Do Exactly?” (Camus Energy blog)* Camus wins Innovation Challenge Award at Data Center World (Camus Energy)* Access “Getting ahead of the EV tipping point” AES and Camus White Paper (Camus Energy)* Voltus “Bring Your Own Capacity” Announcement (Voltus)* ERCOT Selects GE Vernova to Help Drive Innovation in DERs Announcement (ERCOT)* ERCOT Grid Research, Innovation, and Transformation Announcement (ERCOT)* Community pressure mounts against CPS disconnection policy, rate structures (San Antonio Express News) * National Energy Assistance Directors Association. Energy Hardship Report.* Google’s new plan to keep its data centers from stressing the grid (Canary Media)* Texas law gives ERCOT authority to disconnect data centers in emergencies (Utility Dive)* Texas data center buildout, stranded-cost risks and planning challenges (Utility Dive)* MIT: Data center flexibility can cut costs, emissions vary by region (Utility Dive)Related Podcasts by Doug* How Load Flexibility Could Unlock Energy Abundance (with Tyler Norris)* Why the Old Utility Business Model Doesn’t Fit Anymore with Lynne Kiesling (Part 1)* AI, Outage Risks, and Market Opportunities with Lynne Kiesling (Part 2)* YouTube clip — Texas Grid Growth Depends on Data Center Flexibility: Related Substack Posts:* ERCOT and Texas Need a Different Kind of Growth * Demand-Side Resources Could Enable Load Growth* March 4, 2025: Data Centers, Nukes, VPPs, and MoreTranscript:Doug Lewin (00:05.356)Welcome to the Energy Capital Podcast. I’m your host, Doug Lewin. My guest this week is Astrid Atkinson. She is the CEO and co-founder of Camu Energy. The conversation was a really great one. We got into one of my favorite topics these days, which is how can data centers coming onto the grid actually increase the reliability of the grid and improve affordability for customers? So we talked a lot about data centers potentially actually creating funds to get demand reductions and demand flexibility in people’s homes and businesses that would put money back into their pockets while strengthening the grid, giving data centers speed to power. We talked about particularly the DSO model, distribution system operator model, and what that might mean in the United States. These are common in other parts of the world, but we really don’t have designated entities in the US that are DSOs. We talked about intelligent automation and how processes being automated can actually make it easier for human operators. The economics of DERs, distributed energy resources, so much of the value of DERs is the potential reduction in cost in the distribution system. Transmission distribution utilities have so many different investment opportunities, but how do you prioritize those to make sure that you are rate-basing the most important for reliability and expansion and all of the things that we need while also ensuring that where distributed energy resources might defer or even make unnecessary the need for additional investment that you are tapping those distributed resources. We even got into ERCOT’s demand response proposal, which is live right now at ERCOT, the ADER pilot in Texas. We covered a whole lot. Astrid is incredibly smart, brings a wealth of experience to this area and really enjoyed spending this hour with her. I hope you’ll enjoy it as well. Please like, rate, and review this wherever you listen to your podcast. Share it with friends, family, and colleagues. And thank you so much for listening.Astrid Atkinson, welcome to the Energy Capital Podcast. So excited to have you here. So excited to learn from you. You are a wealth of knowledge on so many of the issues I love to talk about and work on. Why don’t we just start, if you would, just tell the audience a little bit about yourself and Camu and also your background coming out of Google and how your work there kind of informed what you’re doing now.Astrid Atkinson (02:22.046)Hi, it’s great to be here. Yeah, absolutely. So I’m CEO and one of the co-founders for a company called Camu Energy. And we provide grid software primarily for grid operators, but also we work with folks that are developing assets that need to get connected to the grid as well. So thinking both about how we manage the grid, but also about how we plug people into it. My background prior to co-founding this company about six years ago was on the big tech side. I was at Google for a really formative period from about 2004 until I started the company in 2019. And that was a period of time during which Google and the tech industry went through a really massive period of growth and just a fundamental change in how we think about software, the role of software in the world, and also the physical infrastructure that we use to provide that. So I was really fortunate to be part of the original push towards data center scale computing and cloud scale computing when that was being invented. I was part of the team that helped build the internal cloud that powers all of Google’s public facing products today. And in particular, I spent the majority of my career there on a team called Site Reliability Engineering, which deals with basically the interface between physical and built infrastructure. So data centers, networks, et cetera, the computers and servers that actually do work for software systems, and then the software and data infrastructure that we use to operate and manage those. My team was responsible for about five years for Google’s public-facing web presence, Google’s homepage. If you went to google.com to see if your internet was working between about 2007 and 2012, I was running the pager-carrying team, carrying a pager myself, which was responsible for maintaining five nines of uptime for that service. And, you know, we’d get woken up at three

The federal 30% solar tax credit has driven demand for solar but it’s about to expire. And when it does, some worry the bottom will fall out of the market. But what’s actually emerging looks less like a collapse and more like a shift which could lead to bigger growth down the road.In this episode, Bret Biggart, CEO of Freedom Solar, offers a grounded look at how a major Texas-based installer is adapting in these uncertain times. Freedom Solar began in Austin and now operates across Texas, one of the fastest-growing residential markets in the country.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.Biggart notes that while the tax credit’s end will make sales more difficult, other forces like rising power prices and better financing tools are keeping solar within reach. New third-party ownership models are allowing companies to use commercial incentives to maintain homeowner savings, smoothing out the post-credit transition.That’s not the only shift underway. Consumer protection has become a growing focus for regulators after years of aggressive door-to-door sales and subcontracting issues. A recent Texas bill aims to bring more transparency to the process, ensuring buyers know who is selling, installing, and servicing their system. The Texas Legislature also made it easier to build with faster permitting. And storage is quickly moving from luxury to standard: 67% of Texans get storage with solar from Bret’s company now. The number is 90% in Houston. Freedom Solar is also expanding into efficient HVAC systems like heat pumps, which cut energy use and increase comfort.There are still challenges ahead. Equipment costs, tariffs, and permitting inconsistencies remain barriers and the ending of the tax credit is an undeniable headwind. But after Winter Storm Uri and Hurricane Beryl, Texans put a high value on resilience and the flexibility of distributed systems has massive value for the grid. Even as incentives fade, technology keeps improving, and Texans want reliable, resilient, and affordable power.That’s what this moment represents, not the end of the solar story, but its maturation.If you found this perspective useful, share it with a neighbor and subscribe for more grounded insights on Texas energy and policy each week.Timestamps* 00:00 – Introduction* 01:45 – Guest intro and background, origin of Freedom Solar* 05:00 – Importance of in-house salespeople and customer-first processes* 07:30 – Impacts of federal budget bill, end of tax credits* 11:00 – Long term implications for solar, rethinking the business * 13:30 – Third party ownership, pre-pay PPAs and other structures to lower costs* 17:30 – Transferring solar and solar payments when selling a house* 20:00 – Consumer protections and stopping bad sales practices* 25:00 – Some Texas bills that make it easier to build and install solar + storage, problems with implementation* 31:00 – Attachment rates of storage is up to 67% statewide and 90% in Houston * 33:30 – An integrated demand side: solar + storage + heat pumps* 39:30 – Difficulties for customers trying to get heat pumps* 43:30 – Heat pump cost differential from minimum performance HVAC* 46:30 – Supply chain, tariffs, domestic content* 51:00 – Two main variables for solar economics: cost to install and cost of electricity * 53:00 – The value of resilience* 56:00 – ClosingResourcesGuest & Company• Bret Biggart - LinkedIn• Freedom Solar Power + LinkedInReferenced During the Show• Solar legislation passed in Texas’s 89th Session (summary)• New law cuts red tape for rooftop solar and batteries (SB 1202) + Bill Text• TDLR: Residential Solar Retailers program (SB 1036) overview• Texas Legislature passes Residential Solar Retailer Regulatory Act (SB 1036)• Do Solar Panels Increase a Home’s Value? | The Wall Street Journal • Texas Energy Poverty Research Institute’s Community Voices survey• Sara DiNatale’s award-winning series on solar sales | San Antonio Express News• Heat pumps, heat pumps, heat pumps! NoahpinionRelated Podcasts by Doug• Resistance is Still Futile: Exploring Heat Pumps with Eric Wilson• How Load Flexibility Could Unlock Energy Abundance with Tyler Norris• Know Before You Go Solar with Sara DiNataleRelated Substack Posts by Doug• The End of Solar & Battery Manufacturing in America?• Rapid Demand Growth Outpaced by New Supply in Texas• Energy Scarcity• Helping the Grid by Helping CustomersDoug’s Platforms• LinkedIn• YouTube• X (Twitter)TranscriptDoug Lewin (00:05.87)Welcome to the Energy Capital Podcast. I’m your host, Doug Lewin. My guest this week is Brett Biggart. He is the chief executive officer of Freedom Solar Power. Freedom is one of the largest solar companies in the country, top 10 by size, around 500 employees, and probably the largest or among the largest within the state of Texas. I thought it was a good time to do an interview with a solar entrepreneur, given all the changes going on with the tax credits. But here’s somebody who’s employing a whole lot of people, is worried about the future of the industry, partially because of some of the changes made in DC, but is determined to innovate and is in fact doing that around financing where there are tax credits that can continue for leased systems for the next couple of years. Also innovating by starting up Freedom HVAC to complement Freedom Solar because HVAC is by far the largest use inside Texas homes. So linking that with the power generation for his business made a lot of sense. So we talked a lot about how companies can innovate. We also talked about some of the legislation that was passed during the session to remove permitting barriers, a bill that was passed to increase consumer protection, which Brett actually advocated for. We covered a whole lot of ground. I hope you enjoy the show. Please give us a five-star review wherever you listen, and please share the recording with anybody who you think might want to listen. That is one of the ways we grow fastest is through organic growth and sharing. So please like and share the podcast with anyone you know. With that, enjoy the show.Brett Biggart, welcome to the Energy Capital Podcast. Excited to have you here. Been reading your tweets and posts and seeing your name in news stories for quite a while. You guys are a pretty big deal in the solar space in Texas. You built quite a business over the last decade or so, a little longer than a decade. At this point, why don’t you just start by telling us a little about yourself, just briefly about Freedom Solar, origin story, size, scope, all that kind of stuff.Brett Biggart (01:47.704)Thank you for having me.Sure. I guess the short version of this is Adrian Buck and I started Freedom Solar probably around 15 years ago. And I had kind of come out of the sort of professional finance world after business school. I actually got sober—that was sort of the catalyst thing in full transparency. And I got sober and I was trying to figure out what to do with my life, as many of us come to those junctions. And I moved back to Austin where I’m from, where I grew up, and the idea of starting a solar company kind of came to me and I started to do some research and try to figure out sort of as a customer, what’s the value proposition for a customer trying to go solar. And I couldn’t figure out the answer to that question. You know, I couldn’t get people to call me back. I was sort of doing the math, you know, there were tax credits and there were local rebates and trying to think about kilowatt hours. It took me about two weeks to sort of get to the answer of like, what does this cost and what is the sort of payback, the economics of it.That was sort of a light bulb moment. Like, wow, there’s got to be other people out there that have a similar situation that are just trying to quickly understand the economics to make a decision. Does it work or not? And so Adrian and I—I met him and we sat at a Mexican food restaurant and I sort of said, look, I think I’m going to start a solar company and here’s why. Sort of fragmented. People don’t really explain it very well. Don’t know how to finance it, sell it. And I’ll never forget this. He sat across from me and he says, “Okay, I get that. Like I’ve been doing this for—I was the first NABCEP certified guy in Texas and I’ve been running installation crews and doing installs and designing systems for a while now, but I don’t even like people.” Okay. So this sort of behind the scenes, you know, profile of a guy who’s very technical and very detail oriented, doesn’t quite frankly like to deal with people. And so we sort of got together at that moment and started out of his garage.And so that was whatever it was 15 years ago.Doug Lewin (04:08.152)So him more on the technical side, you more on the people side, basically.Brett Biggart (04:11.852)Yeah, clearly. And so we were like, let me see if we can go put together a way to explain this to customers in a way that wasn’t explained to me, which is a clear kind of quick way to get to a yes or no, it either works or it doesn’t. And then his skill set to go install the solar and do a great job and sort of bend over backwards on the quality side. You know, we started building the business in the first year. We were like, okay, wait a minute. We just did a million dollars. Whoa. High five. Unbelievable. And then the next year we sort of did $8 million and we kind of high-fived and said, whoa, this is sort of growing.And Austin has always been sort of a leader, certainly in Texas, I would say, as it relates to renewable energy. And so they had a good program here. So it was a good place to start. And then we sort of expanded across Texas, San Antonio, Dallas, Houston, and then just grew the business and sort of realized what we did that was unique was everybody that works still at Freedom Solar is an employee. So we don’t subcontract the work. We manage the qu

Texas load is rising fast, supply chains are tight, and the cheapest near-term resource is demand we shape intentionally. But are the right economic signals there to bring this resource to scale?Texas has a highly competitive power supply market, but the demand side is severely underdeveloped. In my conversation with Travis Kavulla, former Montana PSC Chairman and current leader in retail innovation, we explored how Texas can unlock the cheapest near-term resource by shaping demand on purpose.Retailers now have both the data and tools to automate flexibility in homes and small businesses. That’s the fastest way to keep bills in check and the lights on during tight hours.“The incentives are there for sure… when spot prices rise above a flat retail rate, the incentive flips, and it’s valuable for both the retailer and the customer to reduce.”Smart Meter Texas enables interval settlement, and connected devices like thermostats, EVs, and batteries can now respond automatically. This is finally real.Retailers are competing not just on price, but on automation. NRG has moved its virtual power plant strategy to the center of its retail offering, pairing Vivint installations with demand response.“We announced a one-gigawatt goal… and hit 150 megawatts this year.”That flexibility hedges against the most expensive hours and brings value directly into customers’ homes. ERCOT has also proposed a program, capped at 500 MW, that pays households for reducing use in the tightest hours. It helps offset hardware costs and puts residential customers on more even footing with large industry.Our system should reward shifting, not just saving — using more when power is plentiful, less when it’s scarce. That avoids overbuilding while meeting growth from data centers, electrification, and hotter summers. Winter risk is just as much a demand issue as supply. Resistance heating drove massive spikes during Uri. Heat pump retrofits can improve reliability and affordability, but without targeted support, private markets may underinvest.Transmission costs are another sticking point. Large customers can avoid charges by guessing peaks, shifting costs onto everyone else. Residential customers use about a third of the energy but pay half of transmission, which rose more than 120% in a decade. Reforming 4CP so costs align with who drives grid build-out would be fairer.Texas can build a true two-sided market. Let competition automate flexibility in millions of homes, fix cost signals, and target winter risk directly. That’s how we keep bills manageable, stay reliable, and grow with confidence.If this breakdown was useful, share it with a friend or colleague, and subscribe so you don’t miss the next Texas-focused grid update.Timestamps* 00:00 – Introduction to Travis Kavulla* 02:00 – Introduction to NRG* 04:00 – ERCOT competition and demand side incentives* 06:30 – The importance of Smart Meter Texas* 09:00 – Innovation from competition, telecom and airlines analogies* 12:00 – Importance of demand flexibility both from AI and residential sectors* 15:00 – Rate design for shifting use* 17:00 – Increasing load factors, how using more energy can be energy efficient* 19:00 – NRG’s VPP with Google / Renew Home and their progress toward their 1 GW goal* 23:00 – Integration with smart home technologies* 25:00 – The potential for customers to lower prices* 28:00 – Sponsor: Aurora Energy Transition Forum* 28:45 – ERCOT’s residential DR proposal, why ERS doesn’t work for small customers* 32:00 – Why NRG has broken from other generators to support residential DR* 34:00 – REPs in Texas’ energy efficiency programs * 38:00 – Can we leverage markets to reduce wintertime outage risk through energy efficiency?* 41:00 – Part of the cause of Uri outages was extremely high demand, difficulty * 44:00 – Lack of focus from Utility Commissions on demand side* 46:00 — Sponsor: Intersolar and Energy Storage North America* 47:00 — Utilities are incentivized to spend on capital but not on operations* 52:00 – Why and how transmission cost allocation and 4CP should change* 57:00 – ClosingResourcesGuest & Company• Travis Kavulla: LinkedIn• NRG Energy: Website, LinkedInReferenced in the Conversation• Travis’ University of Chicago Syllabus: Utilities and Electricity Markets: Regulation in the United States • Book: Prophets of Regulation• Travis’ ESIG Whitepaper: Why is the Smart Grid So Dumb?An Audit Report on Critical Infrastructure Activities at the Railroad CommissionNRG’s filing post-Uri on wintertime demand with resistance heat 100% higher than summertime demand, referenced in my very first Substack article: 2022 Cold Snap Shows Resistance is FutileCompany & Industry News• NRG, Renew Home, and Google Cloud announce plan for a 1 GW Texas VPP • NRG to buy 18 gas plants from LS Power in $12B deal (Reuters)• NRG wins nearly $800M in Texas Energy Fund loans for gas plants (Houston Chronicle)Related Podcasts by Doug• The Name of the Game is Flexibility• Creating a Distributed Battery Network with Zach Dell📄 Related Substack Posts by Doug• Texas Load Growth, Challenges and Opportunities• ERCOT CEO says we need all resources• New Residential Demand Response Proposal in Texas (Grid Roundup #74)• Solar, Storage, Gas, and VPPs in Texas (Reading & Podcast Picks)🌐 Doug’s Platforms• LinkedIn• YouTube• X (Twitter)📅 Upcoming Events / Sponsor Information• October 21: Aurora Energy Transition Forum• November 18-19: Intersolar and Energy Storage North AmericaTranscriptDoug Lewin (00:05.656)Thanks everybody for being here and thanks Travis for doing this, really appreciative to SPEER for putting on this great event. As Liz said, I was director of the organization for—I was going to say several years. I think it was many years, five years. It’s great to see the organization growing and thriving and see all of you involved. For those that are listening to the podcast later, we are at the SPEER Industry and Policy Workshop in Austin, Texas. And I’m really thrilled today to have Travis Kavulla here. Travis, I’ve been meaning to interview you for the pod for a while anyway, and I think this is a great setting and crowd to have this conversation because I don’t think there’s anybody better to sort of talk about how retail electric providers, right? A really dynamic market here in Texas with how many different retailers are there?Travis Kavulla (00:51.534)80, 100? Many. Many. We love all of our competitors, we love competition, but there are a lot.Doug Lewin (00:56.682)Exactly. It’s a very thriving market. There’s a lot of different choice for customers, particularly in the Houston, Dallas, Fort Worth, Corpus Christi, Laredo, et cetera, parts of the state that are served by competition. And to really get into how energy efficiency and distributed energy resources can be advanced using competition and using retail electric providers, I think there’s nobody better than Travis for this. So Travis is vice president of regulatory affairs at NRG. He was commissioner and chair of the Montana—you guys call it the PSC there, ours obviously would be the PUC. He was also president, I believe was the title, of NARUC, National Association of Regulatory Utility Commissioners. So truly a thought leader in this space. Please join me in welcoming Travis Kavulla to the SPEER Workshop.Travis Kavulla (01:43.822)Thank you, Doug. Thank you, audience. We need those little things that say, “applaud” up here, I feel.Doug Lewin (01:50.318)I’ll just ask. We’ll just do that. It’ll be fine. All right. So first of all, anything before I get into some of the questions I’ve got for you, anything else you want to say by way of intro? As far as your background, maybe actually just like a brief word on NRG. I don’t want to assume folks know necessarily what NRG is. You guys are obviously a very big company, most probably do, but maybe give a little more background of yourself if you like and NRG.Travis Kavulla (02:11.342)Sure. So NRG is a retail electric provider in the state of Texas and all other states that allow customers of electricity and in some places gas, though not Texas, a choice in their provider. We’re also a power generator in the state. We sign a lot of power purchase agreements with third parties. And then we have a large natural gas marketing business. And relevant to this conversation, a smart home company that’s one of our most recent acquisitions called Vivint. So we operate basically across the United States, mostly in the competitive markets for power and gas. We have about 8 million customers across North America and a sizable chunk of generation as well. And then you got my bio down, Doug, but one of my passions is teaching. I teach, I’m a lecturer at University of Chicago as well, where I teach on—my syllabus is available for all of you to download for free. It’s a course on utility regulation and the design of electric power markets, which is sometimes not always intuitive. So that keeps me fresh with the youths, I’ll have to think.Doug Lewin (03:11.278)Clearly. You know, it’s funny you say that because I actually taught a semester at the LBJ School and I leaned pretty heavily on your syllabus, which is excellent. And anybody wanting to understand the history of regulation of the electric industry and how competition came about, like there’s probably no better place to look than your University of Chicago syllabus.Travis Kavulla (03:29.866)I’m pretty great, but I’m wearing the orange socks in your and the venue’s honor today rather than maroon.Doug Lewin (03:35.394)We much appreciate that. Thank you. All the Longhorns in the room want to clap for that? There’s only a couple of Longhorns. We’re at the University of Texas campus. Maybe they’re Aggies. So by the way, in the syllabus I used, your “Why is the Smart Grid So Dumb?” was in my syllabus. We’re going to talk about that paper you wrote, which is one of the best papers on this topic. But okay, but before we get into all that, and before we get into NRG’s

In Part 1 of my conversation with economist Lynne Kiesling, we traced how monopoly utilities and central planning helped electrify the country. That model worked. Economies of scale and guaranteed returns brought capital into the system, and within a few decades, nearly every home had electricity.But the world has changed. Technologies are smaller, decentralized, and more flexible. Risks are more complex. Consumers expect more than just “the light turns on.” In some areas, the old model now creates perverse incentives: rewarding capital spending over performance, insulating utilities from risk, and slowing innovation.So the question is: what comes next?In Part 2, we explore how markets can evolve beyond wholesale and retail competition to tackle the next frontier: risk allocation, demand-side flexibility, and performance-based regulation. And we look at how AI-driven data centers are testing the limits of the old model while creating new opportunities for Texas to lead.Markets as Error CorrectionMarkets don’t just allocate resources, they correct errors.As Lynne explained:“If someone has made an investment and… we’ve built too many gas power plants, and we’re not earning profits on that, that’s a signal to me that I need to take my money and put it somewhere else.”That’s how we avoid repeating mistakes. Yet in the utility model, many risks never reach shareholders. After Hurricane Beryl, for example, CenterPoint admitted its failures but still posted a billion dollars in profits. Consumers bore the outage costs, while investors stayed insulated.The missing piece: markets for risk. Today, outage risk, rate risk, and weather risk aren’t fully priced or traded. Post-Uri, some generators took huge hits while others profited. That’s markets working. But for regulated utilities, risk rarely lands where it should.Of course, markets don’t solve everything on their own. Consumers need protection against fraud and market manipulation, and regulators still have a vital role in setting guardrails. The goal isn’t to remove oversight, but to let markets do what they do best, deliver solutions faster than central planning.Demand FlexibilityFor decades, demand seemed inelastic. People flipped a switch, the light came on, and rates averaged out costs. But digital automation has changed the game. Devices from EV chargers to air conditioners to fridges can now respond to prices automatically.“We could find that there is a lot more latent flexibility on the demand side that would not inconvenience or discomfort consumers.” - Lynne KieslingImagine refrigerators with backup batteries. When the grid is stressed, those batteries could keep food cold without drawing power, creating resilience for the household and flexibility for the grid.Markets can unlock this value. Today, no one pays you for your fridge’s flexibility. But if performance-based regulation and transactive energy systems take hold, millions of small, automated actions could add up to major resilience.Performance Over SpendingRate-of-return regulation rewards utilities for spending capital, not necessarily for delivering better outcomes. Lynne contrasted that with price-cap or performance-based systems:* Rate-of-return: utilities get a guaranteed return, no matter the outcome.* Price-cap: utilities must meet quality requirements under a certain cost* Performance-based regulation: rewards improvements in reliability, efficiency, or customer service, usually removes incentives for capital spending and removes disincentives for operational expenses“If I were rewriting utility regulation, there would be a penalty structure on your ROE depending on your [reliability] scores.”- Lynne KieslingAligning incentives with performance instead of capital spending could drive innovation from transmission and distribution utilities.AI and Data Centers: The Demand TsunamiPerhaps the most urgent shift is the rise of AI and hyperscale data centers. The International Energy Agency projects global data center demand will double by 2030.In the U.S., McKinsey forecasts a 23% compound annual growth rate through 2030, adding 400 terawatt hours of new demand, the equivalent of adding another Texas in just a few years.Utilities, designed for less dramatic acceleration, can’t match that pace. Data centers are already seeking alternatives: onsite solar + storage, natural gas peakers, geothermal pilots, and even small modular reactors.Texas has a leg up. In many states, large customers are captive even for their generating resources to the monopoly utility. In ERCOT, they can contract directly with generators. That flexibility is why AI companies are flocking here and why Texas can continue to lead.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.From Capacity to CapabilitiesThe old system was built on capacity: how many megawatts you could generate or consume at peak. But AI and automation are shifting the paradigm.Most data centers won’t run at full tilt 24/7. Their true value — and the value of generation — lies in capabilities, how much load (or supply) they can flex, when, and where.“Capability and flexibility, with that intersection with time and location, that is kind of everything going forward.” - Doug LewinTexas must evolve its mindset. It’s not just about building more capacity. It’s about enabling capabilities: flexibility, automation, and responsiveness that can balance reliability and cost in real time.Final ThoughtsTexas built a world-class wholesale market by letting price signals communicate. The next step is to let that principle flow into risk markets, demand-side markets, and distribution markets.Markets, as Lynne Kiesling reminded us, are a discovery process. If we reward performance, enable innovation, and let capabilities speak louder than capacity, Texas can not only handle the AI and data center surge — we can do so while increasing reliability and lowering costs for residential and small commercial customers.That’s how we keep build out the grid and meet the challenges of the 21st century.If this resonated, share it with a colleague who cares about Texas energy. And if you haven’t yet, subscribe for more conversations and insights on the future of the grid.Sponsored by Aurora Energy ResearchAurora Energy Research provides leading analysis of global electricity markets. Explore their insights on the Energy Unplugged podcast and join their Energy Transition Forum in New York on October 21. Details at auroraer.comTimestamps* 00:00 – Welcome and Part 2 overview* 01:30 – Why central planning doesn’t work; next frontier: demand side* 04:30 – Markets as error correction, markets for risk including for fully regulated monopoly utilities* 08:30 – Demand flexibility via automation vs. customer actions* 12:00 – Transactive energy and user-friendly customer interfaces* 14:00 – Price cap regulation and performance-based regulation* 17:00 – Metrics for price cap and performance-based regulation* 20:30 – Sponsor: Aurora Energy Transition Forum* 22:30 – How AI data centers are reshaping demand* 25:30 – Make-or-buy decisions for AI infrastructure companies* 30:00 – Contracting for power in Texas* 32:00 – Crusoe, flare gas to power* 34:00 – Data center flexibility: reducing peak while overall energy use increases* 35:45 – Why we should talk about capabilities not capacity* 37:00 – Closing, where to find Lynne* 38:00 – Credits and thanksResourcesGuest• Lynne Kiesling - LinkedIn, Knowledge Problem (Substack)Company & Industry News• Google, Kairos Power, TVA collaborate on advanced nuclear• Reuters, Google to buy power from Kairos SMRs• Google, Fervo geothermal project operational• Crusoe secures 4.5 GW for AI data centersBooks & Articles Discussed• Alfred Kahn – The Economics of Regulation (two volumes)• IEA report on data center energy consumption • McKinsey report estimating 23% CAGR in U.S. data center electricity demandRelated Energy Capital PodcastsRelated Substack Posts by Doug• Why Are Utility Bills Rising So Fast?• Large Load Queue Has Tripled in Texas (Grid Roundup #76)• Solar and Storage Help Reliability (Grid Roundup #68)• Rapid Demand Growth Outpaced by New Supply in Texas (Grid Round #70)• Energy Pragmatism, A Path to Abundance🌐 Doug’s Platforms• Substack• LinkedIn• YouTube• X (Twitter)TranscriptDoug Lewin (00:06.05)Welcome to the Energy Capital Podcast. I’m your host, Doug Lewin. This is part two of my interview with Lynne Kiesling. She is a professor and historian of economics at Northwestern University and a non-resident fellow at the American Enterprise Institute. She is one of the smartest people on markets, particularly electric markets, anywhere. If you haven’t listened to part one, go back and listen to that first, because we get into some of the history, kind of bringing us up to the present. And then in this conversation, we talk a whole lot about the state of current electric markets, data centers and AI demand, risk allocation, and why that really matters for the grid of the future. You know, obviously this is a discussion going on all around the United States and around the world. And a lot of folks think that it doesn’t apply to Texas because we do have competitive generation and retail, but there is the potential for markets and price discovery on the distribution grid. And that is, as I talked about in the previous podcast with Charles Hua, the fastest rising part of the cost of the grid is on the distribution side. And even in a state as competitive as Texas is, there is no competition on that side. And there is a really important set of questions which we get into here as to whether or not that should remain the case. So with nothing further, enjoy part two of my discussion with Lynne Kiesling. And as always, please, please like and share the Texas Energy and Power Newsletter, the Energy Capital podcast. Please become a paid subscriber if you aren’t a

Over a hundred years ago, the monopoly business utility model emerged as the one that could attract sufficient capital to electrify everything.The monopoly utility business was championed by Thomas Edison’s protégé and early leader of ComEd in Chicago, Sam Insull.It worked. By mid-century, most Americans had power.But today, competition for generation and retail have shown that monopolies are not necessary. Texas is a poster child for for competition but even Texas has little competition on the distribution side — and the cost of distribution is skyrocketing with no ability for competitors to offer alternatives that could save consumers money.The monopoly model literally rewards utilities for spending more capital, even when smarter, cheaper options exist.In my conversation with economist Lynne Kiesling, we traced the arc from Insull’s vision to today, and talked about where the system is showing serious signs of distress. And we discussed how that could change…How We Got Here: Edison’s MachineEdison designed complete systems, from generators to the lamp in JP Morgan’s house. Insull scaled that model in Chicago, betting on economies of scale (bigger plants) and scope (serving factoreis, homes and electric trolleys together to increase system utilization and load factors).That became the vertically integrated monopoly: a single company, fully integrated, would keep costs low. Legislatures around the country formalized it, spreading the monopoly-utility model far and wide.It was the right model for the time. America needed electrification, and investors needed stable returns.“Economies of scale and scope… that’s your natural monopoly right there.” - Lynne KieslingWhy It Worked Then and Why It Doesn’t NowThe framework assumed three things:* Bigger plants are always cheaper.* Vertical integration and central planning are essential.* Utilities should earn guaranteed returns on new capital.That fit a world that wasn’t yet electrified and needed massive centralized power plants. But two revolutions were disruptive to the monopoly model:* Gas turbines: By the 1980s, combined-cycle plants made smaller, flexible generation competitive and lower cost than bigger centralized plants. The “dash to gas” in the 2000s proved it.* Digitalization: Sensors, controls, and standards cut transaction costs. Coordination no longer required vertical integration.Price Discovery: The LinchpinEconomist Friedrich Hayek described prices as a “system of telecommunications.” ERCOT proves it daily. When scarcity prices spike, batteries discharge, generators ramp up, demand response kicks in. Investors see those signals and commit capital for more resources.“Markets are a discovery procedure… trial and error with your own capital is how we get the most benefit.” - Lynne KieslingEvery bet on future conditions shapes tomorrow’s incentives. That’s why Texas leads in storage growth, retail innovation, and is attracting new gas peaker plants, too.But here’s the catch: we don’t allow price discovery work at the distribution level.The Last Monopoly MileTransmission and distribution remain monopoly domains. Under today’s rules, utilities earn more by spending more. Propose a $50 million substation, get it approved, earn a return. But what if a portfolio of distributed resources (e.g. batteries, EV charging, demand response) solved the same problem for half the cost?In most states, including Texas, that option isn’t tested. Regulators just green-light the $50 million.That’s why Lynne calls for “quarantining the monopoly”: keep exclusive rights to the poles and wires, but open competition for solutions at the grid edge.Final ThoughtsTexas already showed the world that wholesale competition works. Volatility spurs investment, spreads risk to investors, and drives down long-term costs.The next frontier is distribution. If we quarantine the monopoly to the wires while opening structured competition for everything else, we’ll see faster innovation, more reliability per dollar, and lower bills.That’s the Texas way: pragmatic, innovative, and willing to lead.This is just Part 1 of my conversation with Lynne Kiesling. Next week in Part 2, we’ll dive into data centers, AI demand, and why risk allocation will define the grid’s future.Timestamps* 00:00 – Introduction* 02:30 – Why history matters today* 05:00 – Edison’s vision for a fully integrated electric system* 07:30 – Insull’s bargain: regulate us but grant a monopoly & don’t municipalize* 10:30 – Was monopoly the right solution then?* 16:30 – Natural monopolies: economies of scale and scope* 20:00– Outdated assumptions, Texas competition* 22:00 – Rate-of-return regulation, capital bias, and technology innovation* 26:30 – The changes brought by combined-cycle gas plants and digitalization* 30:00 – Quarantine the monopoly, price signals* 31:30 – Do conservatives still support competitive markets?* 33:00 – How and why arbitrage lower prices* 34:30 – Distribution system efficiency and utility incentives* 37:00 – “Markets are a discovery procedure”* 40:00 – Let volatility speak, Texas choices* 42:00 – What’s the next frontier of competitionResourcesGuest & Company• Knowledge Problem (Lynne’s Substack) • Lynne Kiesling (Northwestern, Personal site, Santa Fe Institute, Books & Articles Discussed• The Merchant of Power: Sam Insull, Thomas Edison, and the Creation of the Modern Metropolis• Power Loss: The Origins of Deregulation and Restructuring in the American Electric Utility System by Richard F. Hirsh• Hayek: A Life, 1899-1950 by Caldwell and Klausinger• Competition as a Discovery Procedure, F. A. Hayek (QJAE translation)Related Substack Posts by Doug•Why Are Energy Bills Rising So Fast? A Conversation with Charles Hua • Creating a Distributed Battery Network with Zach Dell• The Energy Capital Podcast, Episode 1 with Will McAdams• Texas’ Load Growth Challenges and Opportunities, with Arushi Sharma FrankThe Texas Energy and Power Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber.Doug’s Platforms• LinkedIn• YouTube• X (Twitter)TranscriptDoug Lewin (00:05.356)Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week is Lynn Kiesling. There are few people in the electric industry I like reading and listening to more than Lynn. I'm kind of ashamed it took me this long to have her on the podcast, but better late than never. She is the director of the Institute for Regulatory Law and Economics at Northwestern University. She is a non-resident senior fellow at AEI, the American Enterprise Institute.The reason I wanted to have her on the podcast is I think she is sort of the academic expert par excellence on markets. She really understands markets inside and out. She has been as influential talking about transactive energy, talking about distributed energy resources and how they can participate in markets. She's been talking about these things more than just about anybody, talking about them eloquently.and really kind of pushing the envelope on what needs to happen in electric grids and electric markets for innovation. Obviously, with a focus on Texas and the electric market there, we split this into two parts. In the second part, which you'll hear next week, we got into all kinds of different stuff about data centers and their impact on electric grids, what they'll mean for competition. This was a ton of fun and a very wonky, deep conversation that I think you're going to enjoy. And more importantly,learn a lot from. Lynn is just a fantastic teacher and it was great to spend this 90 minutes with her. So you'll have 45 minutes today, another 45 next week as we go deep into the roots of electric competition and what it means for energy transition, affordability, reliability and all of that. So with nothing further, here's Dr. Kiesling.Doug Lewin (01:51.82)Lynn Kiesling, welcome to the Energy Capital Podcast.Thank you for having me, I'm glad to be here.I love reading your articles on Substack and knowledge problem. You obviously are an economist par excellence. are doing just great work on electricity systems and the evolution of electricity systems, competition, technology. You hit on all the things. Before we get into all that though, I think it helps to kind of ground people in like the, some of the history of all this and you're, you're an economist.but you're also a bit of a historian. So before we start talking about data centers and DRs and electric vehicles and all these cool technologies, you've written a lot, and I think just really eloquently and clearly, and I think you've done a great public service with that, about how the system of regulation we have, which is now well over 100 years old, is kind of showing some of the signs of its age. And is it quite keeping up with the technology and maybe needs to evolve?So can you talk a little bit about where we came from, sort of how we got that system, what defines that system, and where it's just kind of not fitting with where we're at right now?Lynne Kiesling (03:06.52)Well, thank you. I appreciate that. And I like the metaphor, you know, feeling like as I get older, my joints are creakier. And I think that's true about our institutional framework. Yeah. It's not just bodies. It's, know, the, kind of organic metaphor is relevant here. And for folks who, and especially maybe for students who are thinking about career paths, you know, I'm an academic by temperament and by career choice. So.You know, my fields in graduate school were industrial organization, because I went to graduate school to study electricity and with John Panzer at Northwestern. But then I got there and just got gripped by the love of economic history. And so I kept studying technology, but I actually worked in economic history. And then my other field is mechanism design, which is where the market design stuff comes in. So yeah, I have a love of history andand it's been part of my professional wor

Watch the Full Conversation with Graphs on YouTube (Updated)Utility bills are rising faster than ever. In the first half of 2025 alone, utilities requested $29 billion in rate increases, already a record for any full year, with months still to go. That’s more than double the pace of 2024.If you’re wondering why, you’re not alone. I hear this question constantly: “If renewables lower costs, why is my bill going up?”The answer: transmission and distribution. The costs of poles, wires, substations, and local infrastructure that move electricity from plants to homes is rising quickly, while the cost of generation is flat or declining in most places.To unpack why — and what can be done to help struggling consumers — I sat down with Charles Hua, Director of Powerlines, a new national consumer advocacy group focused on modernizing the regulatory system. The Real Reason Bills Are Rising“Generation is not what’s driving up bills. It’s really the transmission and distribution piece.” – Charles HuaUtilities are pouring capital into poles, wires, and substations. Much of it is necessary, but some isn’t. And because utilities earn profits on capital expenditures, they’re incentivized to build more; they are not incentivized to find cheaper alternatives.The data is striking: wholesale electricity prices have been flat, or even declined, over the past 15 years. Nationally, retail prices for households, meanwhile, have jumped from about 12¢ to 16–17¢ per kWh. And gas utility bills have been rising faster than electric bills. Those gaps are revealing.All Regulation Is Incentive RegulationUtilities make money by earning a rate of return on capital projects. But operational expenses, like vegetation management that could prevent outages, or cloud-based outage trackers, do not generate profits. The result is a bias toward big builds instead of low-cost, reliability-focused fixes.This is the system we have created and that needs reform. Consumers know something’s broken. Powerlines’ survey shows 4 in 5 Americans feel powerless over their utility bills, across Democrats, Republicans, and independents alike. Many don’t know what’s driving costs, and rate cases remain opaque and inaccessible.Short-Term Fixes: Squeezing More Juice from the GridWe don’t have to accept runaway bills as inevitable. There are proven tools available now:* Grid-enhancing technologies (GETs): Sensors and software that increase the capacity of existing lines. Charles calls them “ibuprofen for the grid.”* Distributed energy resources (DERs) and virtual power plants (VPPs): Solar, batteries, and smart devices coordinated to reduce peak demand and defer new builds.* Energy efficiency: Still the cheapest, fastest way to cut bills, though underutilized in Texas compared to other states.Each of these solutions stretches the grid we already have, reducing the need for constant billion-dollar expansions.Long-Term Reforms: Aligning Incentives with OutcomesFixing incentives is key. Options include:* Performance-based regulation (PBR): Tying utility profits to outcomes like affordability and reliability, not just capital spending.* Distribution system planning: Opening the “black box” of utility investment so alternatives like DERs can compete with substation expansions.* Return on equity reforms: Expanding utility profit opportunities to operational solutions, not just capital-intensive projects.None of this is simple, but without it, the trajectory is clear: higher bills and growing consumer backlash.Why Texas MattersTexas is ground zero for this debate. Utilities like Oncor have outlined multi-decade capital plans that could quadruple spending by the 2030s. If nothing changes, those costs land squarely on customers.At the same time, Texas leads the nation in renewables, is building out batteries faster than any other state, and has the independent streak to pioneer smarter utility models. As Charles put it, “Now is the time for consumers to get engaged.”Final ThoughtsUtility bills do not have to keep spiraling upward. We need investment in the grid, yes, but smart, efficient investment that maximizes resiliency while protecting affordability.This is where public utility commissions come in. Their decisions determine how much we pay, how reliable our grid is, and how fast we can adapt to rising demand.The challenge is real. So is the opportunity. If we get this right, Texas and the U.S. can build a grid that is stronger, smarter, and more affordable.Let’s make sure consumers have a voice in shaping it.Timestamps* 00:00 – Introduction * 02:00 – Meet Charles Hua, Powerlines* 05:00 – Why bills are rising* 09:30 – Different types of utilities* 12:00 – Profits and business model of T&D utilities* 13:30 – Alternatives to rate-based infrastructure* 15:00 – Why rates keep going up even as generation costs go down* 17:00 – Texas rates are low but our bills are high* 19:30 – Why 80% of consumers feel powerless over their electric bills* 22:30 – How ratemaking works, difference between OpEx and CapEx* 30:00 – All regulation is incentive regulation: moving toward paying for performance* 34:30 – The coming CapEx wave as evidenced by Sempra/Oncor* 39:30 – PUC engagement of the public; public interest in electricity and energy* 46:00 – Near term solutions, including Grid Enhancing Technologies (GETs) as “ibuprofen for the grid”; time-of-use rates, distribution system planning, etc.* 52:00 – Consumers aren’t represented at PUC’s now* 54:00 – How the public can engage in Texas* 57:00 – Different “win-win” business models that benefit utilities and consumersResourcesFeatured Guest & Organization* Charles Hua – Director of Powerlines, a national consumer advocacy group focused on modernizing utility regulation.* Charles Hua on LinkedIn* Powerlines.org – Reports, resources, and ways to get involved in utility regulationMentioned in this Episode:* Tyler Norris et al., Rethinking Load Growth (Duke University)* Powerlines Report: Utility Bills Are Rising – Q1 and Q2 2025 Data on Utility Rate Increase Requests* For help shopping for better rates, see Power to Choose* Excellent Volts Podcast with Charles Hua* Senate Bill 1664* PUC Office of Public Engagement* Office of Public Utility Counsel of TexasRelated Energy Capital Podcasts* Octopus Energy US with Nick Chaset – discussion of EV rates and flexible load* Zach Dell with Base Power Company* Tyler Norris (Duke University) – deep dive on ERCOT load factor and grid efficiency* More episodes on utility regulation, affordability, and grid planning are available in the Energy Capital archives.Find More on Social* Doug Lewin on LinkedIn* Doug Lewin on Twitter/X* Doug Lewin on YouTubeTranscriptDoug Lewin (00:04.78): Welcome to the Energy Capital podcast. I'm your host, Doug Lewin. My guest this week is Charles Hua, the director of Powerlines. Powerlines is a fairly new organization now, a little over a year old, that is focused on helping people understand the critical and important job that public utility commissions do day in, day out to increase reliability and hopefully keep electricity prices lower. I really enjoyed this conversation. Charles is incredibly smart and insightful. And we got into what I think is probably the most common question I get on Twitter and LinkedIn. Sometimes questions, sometimes arguments about why electricity prices are going higher. Spoiler alert, it is not because of renewable energy. It's because of the increased costs on the transmission distribution system, particularly on the distribution side. We did get into a lot of charts and figures and things like that. So if you're not already watching on YouTube, you might want to switch over there or if on Spotify you can see the video there, you should be able to see those charts, which I think really do tell a story and the graphs, which really do tell a story. If you want to watch it on YouTube, Doug Lewin Energy is the channel. You can find me there. This is a free episode of the Energy Capital Podcast. It is not free to produce. We really, really appreciate our paid subscribers. If you're already a paid subscriber, thank you. If you are not, please go to douglewin.com and become one today. You'll have access to the entire archives of articles of the Texas Energy and Power newsletter, all the paid episodes of the Energy Capital podcast, grid roundups, reading and podcast picks, special presentations, chats during ERCOT board meetings and most PUC open meetings. Public utility commissions, as Charles talks about, are incredibly important and I do follow them here at the newsletter and you can join and follow along. douglewin.com is where you do that. And last but not least, please do leave a five-star review wherever you listen. And with that, here is my interview with Charles Hua.Charles Hua, welcome to the Energy Capital Podcast. Let's start from the beginning. What is Power Lines? And tell us a little bit in that intro to Power Lines about this fantastic report you guys have out. Utility bills are rising, an analysis of utility bills and how they're affecting American energy consumers and who determines them. So what is Power Lines? And tell us a little about this fantastic report on utility bills.Charles Hua (02:35.95): Sure. Well, thanks again, Doug. So Powerlines, we're about a year old actually, a national organization, a national consumer advocacy group focused on modernizing the utility regulatory system, really with two key objectives in mind. One is to lower utility bills and second, hand in hand, is to advance economic development and growth. You and I actually met in August of 2024 in Houston during a very hot and humid summer. So that was a month before we had launched. And I think the topics that we had discussed then very much, if anything, have only intensified in the national discussion since, which is the confluence of load growth and affordability challenges and how that's playing out both in Texas, but also nationally. This issue clearly isn't

This is a free preview of a paid episode. To hear more, visit www.douglewin.comThis is my recent presentation on the latest trends in Texas energy and power for subscribers called the “Texas Power Rush,” followed by a Q&A.

This is a free preview of a paid episode. To hear more, visit www.douglewin.comSan Antonio is one of the fastest growing cities in the country and have requests to interconnect AI infrastructure and data centers that would triple their size. With that growth comes a simple but daunting challenge: how do you keep the air conditioning on while growing the economy and keeping bills affordable?CPS Energy, the nation’s fifth largest municipally owned utility, sits at the center of this challenge. Rudy Garza, CPS’s president and CEO, has spent the last two decades in Texas energy. In this episode, we talked through retiring old coal units, acquiring 1.7 gigawatts of gas plants, adding renewables and batteries, leveraging demand side resources, and preparing for a wave of new demand from AI data centers.As Rudy put it, Texas needs it all right now. The question is how to balance affordability, reliability, and growth in a rapidly changing landscape.A Utility in TransitionCPS Energy serves 1.4 million customers and maintains some of the lowest combined electric and gas rates in Texas. They return hundreds of millions of dollars each year to the city budget, while also managing 6,000 MW of peak demand and a portfolio of about 10,000 MW of generation.That portfolio is shifting fast. CPS retired its Deely coal units in 2018, is converting one of the Spruce coal units to gas by 2028 while closing the other, and has plans to retire the aging Braunig and Sommers units within five years. These changes create both opportunity and risk. As Rudy said, you cannot run 1960s-era plants forever and expect reliability.By the numbers* Customers: ~1.4 million total; ~1.0 million electric, ~0.4 million gas* Peak demand: roughly 6,000 MW, growing ~150 to 190 MW per year* Portfolio today: ~8,000 MW dispatchable plus ~2,500 MW renewables* Recent acquisition: 1,700 MW of gas at roughly $500 per kW versus $2,400 to $2,700 per kW to build new* Solar: 730 MW contracted or in construction, with another 500 to 600 MW in the pipeline* Storage: 520 MW secured, tracking toward more than 1,000 MW* Wind: 400 MW request for proposals in market* Demand response: about 250 MW per event, split roughly half residential and half commercial* Customer reality: about 60 percent low to moderate income; CPS targets modest, occasional asks near 5 percent when neededIf this was useful, share it with a colleague or neighbor. It helps more Texans find practical solutions.

Sometimes I get to bring you a conversation that really feels like a turning point.This week, I sat down with Bill McKibben, one of the most respected voices in climate and energy. His new book, Here Comes the Sun (out today! order it here), is different from his earlier work. Bill has long been known for sounding the alarm. But this time, he’s bringing something else: optimism.Why? Because solar and other clean technologies are no longer “someday.” They are scaling now — all around the world — faster than anyone predicted.Solar’s Exponential TakeoffIn 2009, The Economist predicted it would take 20 years for solar to scale up by an order of magnitude.It took six.Today, the world installs 230–240 gigawatts of solar every six months. That’s two massive coal plants’ worth of clean energy every single day.This isn’t fringe. This isn’t boutique. It’s mainstream power.Think Costco, not Whole Foods. Bulk, cheap, ready-to-go.Everywhere from Pakistan to Texas: A Global StoryThe shift is happening everywhere.* In Pakistan, rooftop solar grew so fast that in just 8 months, citizens built the equivalent of half their national grid. Farmers led the way, cutting diesel use by 35 percent in a single year.* In Texas, oil and gas operators in the Permian are connecting to the grid or tapping wind and solar because it is cheaper than running diesel generators.When energy is more affordable, more reliable, and easier to deploy, people adopt it. That is true from Karachi to the Concho Valley.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.No Longer “Alternative Energy”We’ve used the phrase “alternative energy” for wind and solar for decades. Now it means something different: natural gas and coal are the alternatives and renewables + storage are the most common, even dominant, resources.Last year, 90% of new power plants built worldwide were clean energy.Oil and gas remain vital and will continue to play an important role, but the growth is in clean energy.Leading With People’s Needs, Not Just ClimateHere’s the pivot that excites me most.If we lead with “climate crisis,” people shut down. Either they don’t agree it’s happening and check out, or they get it and feel depressed and stressed out.But if we lead with better lives and lower bills, people listen:* Half of Texans report they are choosing between food, medicine, and electricity. Renewables lower costs.* EVs aren’t sacrifices. They are smoother, faster, and cheaper to fuel.* Heat pumps aren’t compromises. They reduce stress on the grid, make homes more comfortable, and lower consumers’ energy bills.When we talk about clean energy in terms of savings and resilience, people connect. And those benefits also happen to reduce emissions.This is not about jerseys or tribes. It’s about abundance.Land, Liberty, and Local BenefitsOpponents often argue renewables take up too much land. But the math tells a different story:* 1 acre of corn for ethanol → fuels an F-150 for ~25,000 miles.* 1 acre of solar panels → powers an F-150 Lightning for 700,000 miles.That’s not even close.And the benefits are tangible:* Ranchers and farmers are keeping land in the family thanks to wind and solar leases.* Rural schools are funded by clean energy tax revenue.* Cattle graze happily under turbines, even using them for shade.This is energy independence at the community level — red state, blue state, doesn’t matter.A Race Between Challenge and OpportunityWe’re living two stories at once:* Bad News: By June 2023, Earth had entered the hottest 12-month stretch in 125,000 years.* Good News: That same month, humanity began installing over a gigawatt of solar per day.The race is on. The question is not if we transition. It’s how fast.The outcome depends on how quickly we build. We now have the tools to create cleaner, cheaper, and more reliable power. The question is whether we will use them fast enough.Bill put it bluntly: “We can’t stop global warming. But we can stop it short of breaking civilization.”Why Policy Still MattersThe economics are overwhelming, but politics can slow things down.* Texas became a leader in wind power because of transmission investments made two decades ago.* The oil and gas industry poured $500 million into lobbying and ads last year.* Rooftop solar in the U.S. still takes months to permit, compared to days in places like Australia.* And yet, local politics in Texas are shifting as communities fight for renewables that pay their bills.This is where action, at the state and local level, can accelerate the inevitable.The lesson is clear: smart policy can clear barriers so Texans can benefit sooner.The MomentAfter 700,000 years of burning things for fuel, humanity is finally learning to power itself directly from the sun.That’s not just about climate. It’s about freedom, prosperity, and better technology.Bill McKibben’s new book, Here Comes the Sun, captures this moment with story after story of how fast change is happening. It’s out now, and I can’t recommend it highly enough. He’s also helping organize a national day of action called Sunday on September 21st. Learn more at sunday.earth.If you got value from this, please share it with a friend, colleague, or family member and consider subscribing. The more people who see clean energy for what it is, the future, the faster we’ll build it.Transcript* 00:00 – Introduction * 02:30 – Why Bill is uncharacteristically optimistic* 04:30 – Very few people understand how much progress has been made: renewables are no longer “alternative”* 8:00 – The story of Pakistan’s solar surge* 11:00 – We’re in a different world because from steep learning curves for renewables and storage* 14:00 – Energy as a service instead of a commodity* 17:00 – Is the oil and gas industry getting what they wanted out of President Trump?* 20:00 – China is adopting clean energy and dominating those industries* 23:00 – Why leading with climate change is not a leading strategy* 26:00 – Leading with benefits of new technologies in this “epochal moment”* 29:00 – Not everyone can strike oil, but everyone can strike wind or sun (or both)* 30:00 – Agrivoltaics: “shade is a valuable commodity” * 34:00 – Sun Day: September 21* 37:30 – June 2023: hottest month on record to that point AND first month when world installed one gigawatt per day* 39:30 – Is it time for progressives to embrace permitting reform?* 43:00 – Is progress more likely at federal or state & local levels?* 48:30 – Closing Thoughts & Call to ActionResourcesBill McKibben’s Work* Book: Here Comes the Sun by Bill McKibben - (new release on the global solar revolution, packed with stories and stats).* Substack: The Crucial Years: Bill’s ongoing essays on climate, energy, and activism.* Sun Day! On the equinox: September 21Articles and Essays Referenced* The New Yorker (2025): Published an excerpt from Here Comes the Sun, surprising even seasoned climate experts with how fast solar is scaling.* Telegraph article on Texas, including John Davis, former Texas Republican legislator, who said he “struck wind” on his Menard ranch — wind leases now account for 40% of his income.* Mother Jones. Yes in Our Backyards — why it takes months in the U.S. but days in Australia.* Dallas Federal Reserve Quarterly Survey: Candid insights from Texas oil and gas executives on drilling economics and policy.Global and National Examples* Pakistan rooftop solar boom: Citizens added the equivalent of half the national grid in just 8 months (Google Earth images showed rooftops filling with panels). Diesel sales dropped 35% in one year.* California: Used 40% less natural gas for electricity than it did two years ago in summer 2023, evidence of rapid scaling of renewables.* China: 1/2+ of all cars sold last month came with plugs. EVs there now cost as little as $12,000, far below U.S. prices.* Australia: Rooftop solar installed as low as ~50 cents per watt vs. $1.50-3 or more in the U.S. due to faster, simpler permitting.* Vatican City: Building a solar farm outside Rome to become the first fully solar-powered nation.Concepts and Data Points* “Costco vs. Whole Foods” analogy: Solar has shifted from being a premium product to being the cheapest and most abundant option.* Agrivoltaics: Using solar arrays alongside farming. Examples include:* Cattle grazing under turbines and sheep around solar panels.* French vineyards report 60% higher grape yields with panels providing shade and moisture retention (pv magazine).* Corn ethanol vs. solar comparison:* 1 acre of corn for ethanol = ~25,000 miles of fuel for a Ford F-150.* 1 acre of solar panels = ~700,000 miles in an F-150 Lightning EV.* Balcony solar in Europe: Millions of apartment dwellers in Germany have adopted “plug-and-play” solar panels. Legal in Utah as of 2024 thanks to bipartisan legislation.Organizations and Initiatives* Texas Energy Poverty Research Institute (TEPRI) — Community Voices Survey found half of Texans are choosing between food, medicine, and power.* Sunday: National Day of Action — September 21, 2025 (Fall Equinox). Learn more at sunday.earth.* Conservatives for Clean Energy (Southeast U.S.): Helped persuade Florida Gov. Ron DeSantis not to block rooftop solar.Podcasts and Media Recommendations* Ezra Klein Show: Episode with Jesse Jenkins and Jane Flegal on energy transition and permitting reform (highly recommended).* Energy Capital Podcast: Previous episode with Octopus Energy CEO on new utility business models.TimestampsDoug Lewin (00:06.722): Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week, I'm very excited to tell you, is Bill McKibben. I've been reading things that Bill has written for literally decades. One of the smartest guys out there talking about issues related to energy, the environment, and climate literally for 40 years. And he has written a great book called Here Comes the Sun. By the time this comes out, the b

This is a free preview of a paid episode. To hear more, visit www.douglewin.com🎧 Listen to the first 15+ minutes for free, and if you’re a paid subscriber and want to listen in Apple Podcasts or Spotify, just connect your private Substack feed. Here is the a link with step-by-step instructions. You can also hear the full episode in Substack; just make sure you’re logged in with the email linked to your subscription.Texas’ retail electricity market was built to be a model for the world. When the state restructured its power sector in 1999, the idea was straightforward: unleash innovation, empower customers, and let competition drive costs down.More than two decades later, the reality is mixed. Texans enjoy more choice than anywhere else in the US — and some of those choices are great — but too often, customers are steered toward gimmicky plans with hidden fees instead of real value.On this episode of the Energy Capital Podcast, I talk with Nick Chaset, CEO of Octopus Energy US, about why the market isn’t reaching its full potential, how Octopus is trying to change that, and what policymakers can do to deliver a system that actually works for people. The Stakes for TexasElectricity consumption has gone from 400 terawatt-hours four years ago to nearly 500 TWh this year, a 25% jump. Peak demand hit 85 gigawatts in 2023 and 2024, up from 75 GW just a few years ago.We’ve built new generation to meet that growth, mostly solar and storage, but the way we price and sell electricity hasn’t kept pace. Most Texans are still on outdated plans that don’t reflect when power is abundant or scarce, driving up costs for everyone.

In this week’s Energy Capital Podcast, I revisit my recent article, None of the Above, with added commentary. Please give it a listen and let me know what you think in the comments.All of the Above vs. None of the AboveFor years, U.S. energy policy has been framed as “all of the above.” No red or blue electrons, just building what works.The new budget bill flips that script and is leaving closer to none of the above. The administration’s preferred resources aren’t available at scale:* Nuclear? Promising, but still 5-7 years, at least, from scaling* Gas? Facing massive supply chain bottlenecks, the world’s biggest turbine manufacturer only produces ~20 GW per year, globally.* Coal? No amount of weird nostalgia will changes its costs and health impacts.* Renewables and storage? The only sources growing fast enough to meet demand if they’re not strangled by new red tape.Blocking wind, solar, and batteries takes away most of what’s getting built. So where will the new power for AI come from if not from renewables and storage?AI’s Power Hunger Meets a Grid BottleneckThe White House’s own AI Action Plan says it plainly: “We must harness the full power of American innovation.” But there’s no details on how to harness enough electricity to make it happen.Meanwhile, AI developers are already building massive projects like Stargate in Abilene, a facility that will need 1.2 GW of power at launch and grow to 5 GW. For perspective: that’s more than the peak load of Austin, the 11th largest city in the U.S.How are they powering it? With a mix of wind, storage, and “incremental gas.” It’s pictured below.The market is showing us the path forward. Will policymakers follow?The Clock Is TickingEIA projects Texas demand will grow 14% in 2026 (see below). Nationally, data centers and electrification are set to drive historic load growth. Without new renewables and storage, we face higher prices, weaker reliability, and missed economic opportunities… just as China adds 400 GW of clean energy in a single year.We don’t have 5–7 years to wait for next-gen nuclear. We don’t have a supply chain ready to churn out additional gigawatts of gas turbines overnight. We have renewables and storage. Or we will not have enough to win the AI race.There’s Still a Way ForwardHere’s the good news: Developers can still add a lot of power in the next few years — if Treasury issues clear guidance and lets projects use existing credits before they expire. Congress already wrote this into law. The administration just needs to get out of the way.And yes, we should plan for what happens after credits expire. Permitting reform. Smarter integration of flexible loads. More diversified generation. But first, we have to stop kneecapping the solutions that are already working. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

This podcast is on YouTube with Graphs Congress’ new budget bill is an energy earthquake. It could wipe out tens of gigawatts of energy production, just as we’re experiencing load growth unlike anything since the 1960’s. It will drive power bills higher for families and factories, and give China the upper hand in the race for 21st century economic supremacy.To understand in more detail the impacts of the federal budget bill, this week on the Energy Capital Podcast, I talked with Dan O’Brien, senior modeling analyst at Energy Innovation. His team modeled what this bill really means for Texas and the numbers should stop us in our tracks.If you’ve been reading this newsletter, you know I’ve warned about this moment for months. Now, the data is here. It’s worse than we thought. We were on a path to energy abundance and we’re about to get energy scarcity including increased risk of blackouts and much higher electric bills.From Ramp to Cliff: What This Bill Actually DoesHere’s what Congress passed:* Ends clean energy tax credits abruptly. No glide path, no transition, just a cliff.* Imposes impossible project timelines that most developers can’t meet.I’ve written before about how this creates scarcity, not abundance (Energy Scarcity). We’re pulling the cheapest, fastest-growing resources off the table while demand is surging. That’s a recipe for higher prices and weaker reliability.And make no mistake: this isn’t happening in a vacuum. It’s happening right when Texas has proven that solar and storage are great for reliability and affordability.The Modeling: 77 GW GoneDan’s modeling tells the story:* 77 gigawatts of lost clean energy in Texas, including over 50 gigawatts of solar and over 20 gigawatts of wind)* Only 2 gigawatts of additional gas* Household power bills up $400–$500 a year* Industrial energy costs up 50%* Tens of billions in lost rural tax revenuePut that in perspective: ERCOT’s entire summer peak is about 85 gigawatts. This bill wipes out nearly that much future clean power before it’s even built.These numbers aren’t isolated. Princeton’s REPEAT Project and Columbia’s Climate Knowledge Initiative show the same trend: abruptly ending credits doesn’t save money. It costs money—because you’re replacing cheap renewables with expensive alternatives, or worse, with nothing at all.Demand Is Exploding, So Why Are We Pulling Back?At the same time, Texas demand is skyrocketing. From 2021 to 2025, Texas has experience 6% year-over-year growth, the fastest since the 1960s. AI data centers, crypto, and industrial electrification are all plugging in at once.And here’s the kicker: the resources meeting that demand surge aren’t gas or coal. They’re wind, solar, and batteries. They’re 92% of what’s been added since 2021. In the first half of 2025, wind and solar made up 40% of ERCOT’s generation mix. Batteries are breaking records almost monthly, keeping the grid balanced during extreme heat and sudden shifts.ERCOT calculated summer energy emergency risk dropped from 16% to under 1% in one year, because of solar and storage. We have the data. We have the results. So why are we sabotaging it?The Human Side: Jobs and Rural TexasThe energy sector is one of the largest drivers of job growth in Texas. These are real people—60,000 Texans working in wind, solar, and storage, including 6,000 veterans. It’s rural school districts balancing their budgets with wind and solar tax base and farmers and ranchers keeping their land in their families for another generation. It’s welders, electricians, and manufacturers in counties that haven’t seen this level of investment in decades.Global Stakes: China’s Electrostate MomentZoom out. While we’re cutting our legs out from under us, China is sprinting ahead. Last year, they added 400 GW of clean energy, several Texases worth of power. Last month, they put in 90 gigawatts of solar. The Financial Times calls them the first “electrostate.”The U.S.? We added 60 GW in 2024. And now we’re debating LNG power plants that don’t exist. As I wrote in Energy Submission: this isn’t energy dominance. It’s energy surrender.If we abandon clean energy leadership now, we’re not just risking higher bills—we’re giving away the 21st century.There’s Still Time: Ramp, Don’t CliffI’m not arguing for permanent subsidies. We should phase them out, but smartly, with predictability. A ramp-down avoids price shocks, keeps manufacturing momentum, and protects rural tax bases while we scale what’s next.We’ve already proven the formula: reliability up, prices down, emissions falling. It’s not theoretical. It’s working. And throwing it away overnight isn’t policy, it’s ideology.The Bottom LineThe Texas grid is stronger than it’s ever been, because of solar and storage. That’s not my opinion; that’s ERCOT’s own data. Reliability is improving, costs are falling, and we’re finally catching up to the energy future the rest of the world is racing toward.This bill reverses that progress. It’s a choice between abundance and scarcity, between leadership and surrender. And the clock is ticking.Timestamps* 00:00 – Introduction* 02:00 – What is the federal budget bill and why is it important?* 04:30 – Impact on Texas power* 07:00 – Why is there only a tiny increase in new gas capacity * 10:00 – Modeling Assumptions and Safe Harbor Provisions* 12:30 – Demand forecasts and modeling variables* 14:00 – Residential energy cost increases: $480/year* 16:00 – Why that could be worse if Treasury’s guidance is restrictive* 19:00 – Why are power prices high if renewables are lowering costs?* 21:00 – 54% increase in power costs for large commercial & industrial customers* 25:00 – Job losses from the federal bill* 29:00 – Rural community impacts and manufacturing losses* 30:00 – Policymakers could revisit this policy as the impacts take hold* 32:00 – Phasing out credits would protect consumers and end them permanentlyResourcesEnergy Innovation - Linkedin* Daniel (Dan) O’Brien - LinkedIn * Updated: Economic Impacts of the U.S. “One Big Beautiful Bill Act” Energy Provisions — Energy Innovation* Impacts of the One Big Beautiful Bill on Texas Energy Costs, Jobs & Emissions (PDF) — Energy Innovation* Texas Reliability Entity 2024 Reliability Performance & Regional Risk Assessment — Texas RERelated: Writing * TRE: Solar and Storage Help Reliability; Texas Grid Roundup #68 - Doug Lewin* Clean Energy Development Slows Without Tax Credits — Texas Tribune* Boom Fades for U.S. Clean Energy as Trump Guts Subsidies — Reuters* What the ‘Big Beautiful Bill’ Would Mean for Renewable Energy — Governing MagazineTranscriptDoug Lewin (00:05.922): Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week is Dan O'Brien, senior modeling analyst at Energy Innovation. Dan has spent a lot of time working on a model to show the impacts of the federal budget bill that passed the Senate on July 3rd, signed by the president on July 4th. This episode is a shorter one. Quick note to the listener, there were some charts and graphs. You can see all of that on the YouTube channel, Doug Lewin Energy.But if you are listening to the podcast version, we made sure to describe all the charts and graphs so you'd be able to follow along. The stuff that we got into in this particular podcast, the change in capacity that will be coming from the federal budget bill, which was a massive loss for Texas, 77 gigawatts of capacity. In the next 10 years, we talked about which sources that comes from and what might fill the gap and what doesn't fill the gap. We don't see a whole lot of gas. So we talked about all of that. We talked about the change in cost, both for households and businesses, a massive rise for both, but much bigger for businesses, about a 20% increase for residential consumers. That's $500 per year per family, but a 50% increase compared to had current policy stayed in place for businesses. We also talked about job losses, the loss of investment impacts on rural communities.Compare Texas to the impacts of other states. This is a short but very dense, very full episode. Hope you learned a lot from it. As always, please give a five-star review wherever you listen to your podcast. Please follow along, become a subscriber at YouTube, the channel's Doug Lewin Energy. And to subscribe to Texas Energy and Power Newsletter and the Energy Capital Podcast, go to douglewin.com. And with nothing further, let's jump in to this podcast on the impacts of the federal budget bill on Texas. Thanks for listening.Dan O'Brien, welcome to the Energy Capital Podcast.Dan O'Brien (02:07.694): Thank you for having me.Doug Lewin (02:09.389): So let's start with you've spent a lot of time obviously modeling the federal budget bill. Let's just start from the highest level. Why? Why spend time modeling this bill? What is the bill and why is it so important that you want to spend time modeling?Dan O'Brien (02:25.166): Well, energy is everything, Republicans got that right in campaigning last year. And one thing that this big, beautiful bill does is really changes how energy will be produced and transformed and consumed in the US in the next decade. And this happens a few different ways. So the biggest one being changing the tax credit structure around energy in the United States. So the big bill repeals a number of different tax credits that are offered to companies to incentivize development of new energy facilities like power plants in the US. It also increases the amount of oil and gas leasing in the US through running more auctions and lowering the royalty rates for these projects. It delays conservation funding that was passed in 2022. So it's kind of all consuming and touches a number of different areas. And my organization is one that tries to focus on producing quantitative analyses of bills like this. So we've definitely put a lot of time into it and happy to chat through it.Doug Lewin (03:34.612): Awesome. And you guys at Energy Innovation have done a great job and a

In May 2016, a wildfire ripped through Fort McMurray, the heart of Canada’s tar sands and bitumen mining region, with a speed and intensity unlike anything firefighters had seen before. It created its own weather. And it triggered the largest evacuation in Canadian history, which had to happen within mere hours.But this fire wasn’t just a freak event. It was a warning of more to come. Since then, Texas experienced its biggest wildfire ever — the Smokehouse Creek Fire — in 2024. On the latest episode of the Energy Capital Podcast, I talked with John Vaillant, author of Fire Weather: On the Front Lines of a Burning World, to unpack what happened in Fort McMurray and why it matters more than ever today.A City Built for Oil, Burning on OilFort McMurray exists to extract bitumen — a heavy, tar-like form of oil that’s mined, not drilled. The scale is staggering. It’s one of the largest fossil fuel reserves on Earth, and the city’s infrastructure, economy, and identity are built around it.John explains how the very thing that built Fort McMurray also made it vulnerable. Warming temperatures. Drier forests. Flammable building materials. More people living in high-risk zones. A city that was a tinderbox.Why This Story Hits Close to HomeTexas is no stranger to extreme heat and fast-moving fire.The Fort McMurray fire was one of the first modern wildfires to force a major oil-producing region to confront the new physics of our climate.But it wasn’t the last.In the episode, we talk about:* The almost unimaginable intensity of modern wildfires* the Lucretius Problem: the worst or biggest hurricane, flood, fire, etc. is not the worst or biggest possible* parallels between Fort McMurray and Texas suburbs near the WUI (wildland-urban interface)* Why we need to rethink infrastructure, building codes, and land use to have a chance at resilience in the face of extreme fire weatherThis is one of the most powerful stories we’ve featured — and one of the most important. Thanks for checking it outThis work would not be possible without your support. This episode of the Energy Capital Podcast is free, but paid subscribers get access to select episodes, including this one on the future of advanced nuclear reactors with Matt Loszak, as well as Grid Roundups, the full archives, special presentations, Reading and Podcast Picks, and more. If you’re not yet a paid subscriber, please become one today. The Texas Energy and Power Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber.Timestamps* 00:00 – Introduction* 02:00 – The Fort McMurray Fire* 04:00 – Fort McMurray’s economy is based solely on a fossil fuel: bitumen* 07:00 – The context of the Fort McMurray fire* 10:00 – The physics of modern fires: radiant heat of 900 degrees * 13:00 – The toll on firefighters* 14:30 – The megawatt equivalent of a wildfire: “this now is what fire is capable of”* 16:30 – Fires now create their own weather: pryocumulonimbus clouds* 19:00 – The Lucretius Problem and discontinuity* 22:30 – The connection between monster firestorms and floods and other extreme weather events * 26:00 – Similarities between Texas and Alberta* 27:30 – The Texas legislative session and flood response, adaptation* 29:00 – Examples of effective adaptation: “defensible space”* 32:00 – Texas wildlife risk and Wildland Urban Interface (WUI)* 37:00 – Greenhouse gas levels are higher by far than at any time in human history* 40:00 – The American Petroleum Institute’s policy reversal* 44:30 – Opportunities for business and industry from reducing emissions* 46:00 – Who’s leading the race for the future of energy? * 49:00 – Could Texas lead the way?* 51:00 – Final Thoughts & A Path ForwardResources* Fire Weather: A True Story from a Hotter World by John Vaillant* The Fires Sweeping Across Texas Offer a Terrifying Warning, New York Times Op-ed by John Vaillant* CBC documentary: Fort Mac Fire: Rogue Earth* The Fire Age by Stephen Pyne * Ladies and Gentlemen, the Northeast Is Burning, New York Times Op-ed by John Vaillant* The Fires Sweeping Across Texas Offer a Terrifying Warning, NYT Op-ed by John Vaillant * Mark Carney should understand better than anyone why Canada is burning. Here’s how he can change course, The Star Op-ed by John Vaillant* Steiner Ranch neighborhood gets second emergency evacuation route | FOX 7 Austin* Texas Wildfire Risk Assessment Portal* California Burning by Katherine BluntTranscriptDoug Lewin (00:04.984): Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week was John Vaillant. John wrote a book that really struck me, and as soon as I read it, I knew I was going to invite him to be a guest on the Energy Capital Podcast. It's called Fire Weather: On the Frontlines of a Burning World, and I cannot recommend this book highly enough. It was an absolutely fantastic read. It was the story of a fire that went through Fort McMurray, which is a town that exists for bitumen mining sort of a type of oil, but it's not really drilled. It's mined. We get into that in the conversation, but this fire was absolutely horrific. One of the worst that humankind has ever seen. We are dealing with fire weather in Texas in 2024. The Smokehouse Creek fire was the worst fire that ever happened there. And John brings a whole lot of insights. He was a Pulitzer Prize finalist, National Book Award finalist for this book.It took seven years to write it, to detail everything about it. Just incredible book. Again, highly recommended. But what really was the takeaway for me from this book was the Lucretius problem, which we talk about in the interview. So I won't talk about it now, but listen to the podcast. And I think you'll also find that that is a really useful construct to think about what's happening in our world in 2025 as we get the worst flood we've ever seen, the worst fire we've ever seen, the worst hurricane we've ever seen, so on and so forth.The Lucretius problem is a really valuable frame for this. I really enjoyed this discussion with John. Hope you do too. As always, please do spread the news of this podcast to friends, family, colleagues. Let people know about the Energy Capital Podcast, Texas Energy and Power newsletter. Word of mouth is very important and we really do appreciate those five-star reviews wherever you listen to your podcasts. And with that, here's the podcast recording with John Vaillant.John Vaillant, welcome to the Energy Capital Podcast.John Vaillant (01:57.4): Doug, so good to be with you. I'm glad we finally got it organized.Doug Lewin (02:01.838): Yes, sir. I've been trying to make it happen for a while. Because as soon as I read this book, I knew I needed to talk to you for the podcast. I'm talking about Fire Weather: On the Frontlines of a Burning World, a book you released last year, and John, just blown away by the book really truly, just a fantastic piece. I think, you know, wildfires are such a defining feature of this epoch, this era we're in. I think yours and Katherine Blunt's California Burning are probably, I need to have Katherine on for sure, just really the standouts. But why don't we just start with, can you just talk about the book, what it's about, how long it took you to write it? Let's talk about Fire Weather first, please.John Vaillant (02:42.926):So I was working on a novel back in 2016. My head was not in fire. I was not even in Canada. And while I was away, Fort McMurray, Alberta, which is the petroleum hub of Canada, almost the Houston of Canada the center of the industry, caught on fire. A wildfire swept into town on May 3rd, 2016. That's still early spring in the subarctic, which is where Fort McMurray is. So there was ice on the lakes. There were car-sized blocks of ice on the river that flows through the city called the Athabasca River. But the temperature record for that day was broken by about eight degrees Fahrenheit. It went up into the low nineties, relative humidity was around 11 percent like Southern California, and an unstoppable fire swept into the city of Fort McMurray, driving the largest, most rapid evacuation due to fire in modern times. People got out. No one was quite sure how many actually escaped, but about 80,000 people left.The fire, meanwhile, stayed burning in the city limits for nearly a week straight, and it shut down the multi-billion-dollar Canadian petroleum, I should say, bitumen, industry for weeks and hobbled it for months.Doug Lewin (03:57.59): And it really is this kind of amazing crystallization, because you mentioned bitumen there, right? And we should probably talk about what that is. This is what is often referred to as tar sands, right? This is really oil that has to be it's not really oil, but has to be heavily, heavily refined. So just to give a sense of the setting and the context of this fire, can you talk a little bit about bitumen and Fort McMurray?John Vaillant (04:23.374): Sure. I mean, if the oil you know, the sweet crude that you're getting out of the Gulf of Mexico or out of Texas is rum, what you're getting out of the tar sands is molasses-soaked sand. And in order to turn that molasses-soaked sand into a bottle of rum, you have to melt the bitumen out of the sand, which requires billions of cubic feet of natural gas every day just to melt this stuff into something that will fit and flow through a pipeline. Then you need to dilute it with condensate, which is super volatile, super toxic, and then pump it basically a thousand miles south, 700 miles south to the US border to specially designed American refineries that can process ultra-heavy crude. So this crude is so heavy, it sinks in water. And we all know oil doesn't sink, it floats around. This stuff sinks to the bottom.And so it makes oil spills, bitumen spills, almost impossible to clean up. And it's just a very, very energy intensive fuel. It almost doesn't make sense. And the business model is a very, very different one than you

Either the Texas grid is highly reliable, or the sky is falling.Spoiler alert: bet against the latter.A June report from the Texas Reliability Entity (which has federal statutory responsibility to report on Texas’ grid risks) shows that the ERCOT grid is increasingly reliable. That’s mostly because of solar and battery storage additions to the state’s energy portfolio.It also directly contradicts a report from President Trump’s Department of Energy, released about a week later, which said Texas faces a severe and shocking likelihood of outages every year — including this year.Meanwhile, in the real world, ERCOT expects to approach record peak demand next week. Again, thanks to the state’s booming solar and storage resources, ERCOT forecasts that we’ll have 35 more gigawatts than we need when demand peaks.What gives?Solar and Storage Is Powering the GridIn its report, the Texas Reliability Entity writes:The Region’s reliability performance remains strong while navigating [many] challenges. … The Region’s resources managed extended high summer peak periods in 2024 (as in recent years), helped by new solar generation and energy storage. Annual energy production increased (alongside renewable generation output and peak renewable penetration levels) to meet projected peak loads. As a result, the Region did not experience any Energy Emergency Alerts related to insufficient responsive reserves in 2024 [emphasis added].Yes, no matter what anti-energy politicians or activists say or believe, Texas’ abundant solar and battery storage resources are helping meet our booming demand. But don’t just take the word of the entity whose one job is to ensure Texas grid reliability …ERCOT CEO Pablo Vegas told the ERCOT Board just last month, “The risk of emergency events during [peak demand] periods is shrinking, dropping from over 10 percent a year ago to under 1 percent.”Vegas — again, the CEO of ERCOT — also said, “The peak in the summer, of course, is in the afternoon at the peak heat, when air conditioning load is at its highest. Solar energy is very well suited to help support that.”And the Chairman of the Public Utility Commission of Texas, Thomas Gleeson, said much the same late last year: “Solar and storage are key for reliability in this state,” Gleeson said. “We need them to be successful.”He added that solar and storage “saved us this summer.” He was speaking of 2024; it’s almost certain to be true this summer as well.Yet President Trump’s Department of Energy reached a very different conclusion – thanks to deeply flawed assumptions and methodology.What the DOE got wrongFirst and foremost, the DOE assumes that only “Tier 1” energy generation projects will be built over the next six years. These are projects that are so far along that they’re almost certain to be completed. Texas has about 29 gigawatts-worth of them (see graphic below).The thing is, Texas has added 50% more than that to the ERCOT grid in just the last four years.There are 112 gigawatts-worth of projects — nearly four times as much as is in Tier 1 — in Tiers 2 and 3, just waiting to graduate. The DOE assumes that none of that will get built.Unfortunately, the DOE report comes on the heels of the catastrophic new federal budget law (the apparently unironic “Big, Beautiful Bill”) that was designed, especially with subsequent executive actions, to hobble renewable energy projects in Texas and around the country.Maybe that’s the reason for the DOE’s pessimism about the Texas grid: it’s like a doctor mocking the health of a patient after cutting off the patient’s medicine.The DOE report seems to describe a state of energy scarcity that the administration and Congress have created. Given the regulatory uncertainty they’ve injected into the process, a shortage of Tier 2 and Tier 3 projects might become a self-fulfilling prophecy.The graphic below is from the North American Electric Reliability Corporation’s (NERC’s) Long-Term Reliability Assessment, published in December last year. It shows more than 100 gigawatts of generation in Tiers 2 and 3. It also shows steadily rising reserve margins — the amount of supply in excess of demand represented in the blue bars — as additional Tier 2 and 3 capacity is brought online.But because the President has directed the Treasury Department to make it as hard as possible to qualify for tax credits, many of these projects won’t get built to service rapidly rising load growth.They’re literally creating energy scarcity in place of energy abundance.What We Talk About When We Talk About CoalWhy would the administration make such a big bet on such dubious numbers?The clear implication is that officials are scrounging for excuses to force inefficient coal and gas plants to keep running, no matter how bad they are for consumers and grids. As Princeton energy modeler Wilson Ricks told Canary Media: “This report seems designed from the ground up to justify keeping coal plants open with emergency orders.”Of course, old coal plants are far from reliable. As TRE noted in their report, and as shown in the chart below, forced outages of conventional generation are up significantly in recent years. Forced — that is, unplanned — outages at gas and coal plants are up 50% compared to ten years ago.Indeed, old gas and coal plants are among the least reliable generation resources in existence.What’s the Plan?DOE’s shoddy analysis also doesn’t bother with a prescription. Clinging to aging, unreliable power plants is a Band-Aid at best.Worse, there’s a worldwide shortage of gas turbines right now. If you order a turbine today, you’ll get it a year or two after President Trump’s term ends. Gas plants aren’t coming to save us.Nuclear power also can’t deliver the amount of electricity we need, at least not until well into the 2030s. To be clear, I’m excited about new nuclear plants. There’s real hope there for clean, constant power … but not in the next few years. The technology simply can’t scale that fast.So, seriously, where does anyone — including the Trump administration — propose getting the new electricity that America is going to need to power rising demand from AI data centers, industrial electrification, and increasing extreme heat?Texas is a place to look for answers. ERCOT expects to integrate a mix of renewables, storage, gas peaker plants, and demand response programs in coming years to meet the state’s aggressive demand growth projections. Texas is also on the front lines of energy waste reduction: the PUC and ERCOT’s Energy Waste Advisory Committee will soon take that crucial issue up, per requirements that the legislature approved this year.Vegas, ERCOT’s CEO, has been a consistent defender of the state’s competitive energy market and its ability to meet the state’s energy needs. In a House Committee on State Affairs meeting this year, state Rep. Rafael Anchia asked Vegas whether “market forces exist today, absent heavy government involvement, for us to meet load forecast?” (That’s a load forecast showing a 75% increase in peak demand in five years, by the way.)Vegas’s reply: “The market, as structured today, is very well suited to support the growth trajectories that we're seeing increase in the state of Texas.”And it’s working. The U.S. Energy Information Administration says the wholesale cost of power in ERCOT is 15% below the national average — all while reliability in Texas has improved:The Trump administration should be looking for ways to support these market forces. Instead, with the budget bill, executive orders, and now a misleading DOE report, it’s undermining them.We Need More SupplyTexas Governor Greg Abbott rightly bragged in his State of the State speech this year that the ERCOT grid’s generating resources grew by 35% over the past four years.Of that growth, 92% came from wind, solar, and storage.Unfortunately, the President and Congress just passed a law that makes it much harder to add new supply. That reduces grid reliability.It’s kind of perfect that the DOE released its doom-and-gloom report just days after the bill was signed. It’s a self-fulfilling prophecy, foretelling a future of energy scarcity, higher prices, and lower reliability that the administration itself is creating by throttling the renewables that our state and nation increasingly need for economic growth..Their report is not a representation of current reality or trends; it’s a window into the world they’re creating.When we get there — when you’re spending more than you can afford on less reliable power — remember who to thank.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. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

In this episode of the Energy Capital Podcast, I sat down with Matt Loszak, co-founder and CEO of Aalo Atomics, a startup based in Austin, Texas, that’s reimagining how we build nuclear energy. 🎧 Listen to the first 15+ minutes for free, and if you’re a paid subscriber and want to listen in Apple Podcasts or Spotify, just connect your private Substack … This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

We’re on the verge of one of the biggest energy shifts in decades: the increasing use of demand side resources.They’re often referred to as Virtual Power Plants, or VPPs. Add together thousands of rooftop solar installations and home batteries and you reach levels of power equal to medium sized power plants. They add power capacity, can provide key grid support in ancillary services, and give consumers uninterrupted power during outages of any kind.Unfortunately, the budget bill passed yesterday by the Senate would make this much harder. (We talked about the bill and its implications but we recorded on June 23 before we knew how bad it would actually be.)VPPs are already working in Texas, and started to gain momentum. This week on the Energy Capital podcast, I spoke with Blake Richetta, CEO of Sonnen USA, and one of the most forward-thinking leaders in the clean energy world. We broke down what’s happening in Texas, why the rest of the country isn’t paying attention, and what’s at stake if we get this wrong.The Big Idea: Solar Alone Isn’t Enough. Batteries Make It Work.Blake lays it out clearly: The economics of rooftop solar by itself don’t work very well. You need a battery to make the math work.At midday, solar power is often so abundant it’s not worth much on wholesale markets. But during the evening — when people are getting home, turning on ACs, cooking, watching TV and the sun is setting — prices rise.A battery allows you to store cheap solar and sell it when it matters most. As Blake put it, that allows you to shape load perfectly and inject energy optimally. It’s not only a savings strategy; it’s also a boon to grid reliability.And if thousands of homes do this together? You’ve got a power plant, one that’s already connected, decentralized and closest to load, and can scale to solve some really difficult locational problems on the grid.What’s a VPP, and Why Are Texas Homeowners Getting One for No Upfront Cost?This isn’t theoretical. This is live in Texas.Sonnen and their Texas partner, SOLRITE, have already deployed over 3,000 residential batteries into a fully operational Virtual Power Plant. Here’s what makes it different:* A zero-upfront-cost offer for homeowners* 40 kWh, 9.6kW battery storage system: bigger than what most homes get* A locked-in energy rate (~12¢/kWh with a small escalator), generally lower than market prices* The ability to participate in grid services without even noticingTexans get resilience and savings. The grid gets flexibility and stability. The model works.Key Takeaways* Batteries unlock the real value of solar: economically and operationally.* Texans want energy independence and resilience to extreme weather events, and this model delivers it.* Competitive markets enable this kind of innovation in Texas in a way other states can’t match.* The grid gets stronger when consumers get stronger.* The President and Congress are poised to significantly slow down what Texans are doing.What Comes NextSonnen and SOLRITE are betting big on a Texas-led VPP revolution. But there’s still work to do:* Unlocking distribution-level grid value (like locational value and deferred infrastructure costs)* Expanding ADER pilot (aggregated distributed resource) programs* Supporting U.S.-based battery manufacturing to reduce foreign dependency* Ensuring that federal policy doesn’t kill the momentum just as it starts to scale.Texans remember what it feels like when the power goes out. VPPs offer a smarter, cleaner, more resilient future, without needing to sacrifice freedom or reliability.We finally have the technology.We finally have the market model.Now we need the political will to help Texans strengthen themselves and strengthen the grid, too.Timestamps00:00 – Introduction03:00 – How Sonnen helped develop Virtual Power Plants and paired solar w/ storage06:00 – Using Texas’ competitive market to make VPPs available for $0 upfront cost12:00 – Consumers’ cost to get a VPP through a retailer and a “VPA”17:00 – How VPP economics work for Sonnen and its partners (hint: it’s the batteries)19:30 – The market is sending signals for “firming” right now22:00 – The resiliency benefits of solar & storage, advantages over generators26:00 – Grid following vs. grid forming batteries for backup power32:00 – ADER pilot in Texas, grid services from VPPs33:30 – Fundamental goal: shape load perfectly and inject energy optimally37:00 – The potential to monetize the distribution value of VPPs and ADERs41:00 – How Distribution System Planning using DERs could lower costs45:00 – Tapping into locational and temporal value of distributed energy51:00 – Why some utilities make the leap to VPPs and tap the value of DERs55:00 – How vertically integrated utilities in Texas could benefit from VPPs57:30 – Implications of federal budget bill on residential DERs (as of June 23)1:02:00 – How market value can, in time, replace tax credits1:03:30 – sonnen’s manufacturing in America to realize the tax credit adder sonnen’s manufacturing in America to realize the tax credit adder1:05:00 – Final thoughts on being a “disruptor” in the marketResources* Sonnen USA (home battery & VPP solutions)* SOLRITE Texas Virtual Power Plant* SOLRITE + sonnen VPA launch (January 2025)* Utility Dive: Texas grid-optimizing VPP details* Abundance + SOLRITE + sonnen VPP collaboration* 25D Residential Clean Energy Tax Credit (IRS)* SEIA: 25D Solar Tax Credit explainer* Senate’s “One Big Beautiful Bill” tax credit updates* Reuters: U.S. Senate adjusting rooftop solar line in budget bill* AP News: Senate GOP solar & wind incentive cuts* Reuters: Rooftop solar firms warn House bill would set back sector* We’re Not Relying on the Texas Grid This Summer. Michael Hardy, Texas Monthly.TranscriptDoug Lewin (00:07.928)Virtual power plants have massive potential to make the grid more reliable and resilient and lower costs for consumers. But all that hangs in the balance. Welcome to the Energy Capital Podcast. I'm your host, Doug Lue, and my guest this week is Sonen CEO, Blake Richetta. Sonnen is a German manufacturer doing a large business in the United States, particularly in Utah, California, Texas. Doug Lewin (00:36.114)among their leading states. We recorded this on the 23rd. So just about a week ago and just at the very point that the Senate language was starting to come out, we were actually recording in the morning, so that language wasn't out yet. We were not able, obviously, to talk about the very latest of what is going in the Senate as this podcast is dropping. That said, it is highly relevant. Doug Lewin (01:04.299)because we did talk about the threat to the tax credits that help people get solar in storage at their homes. So when the next hurricane or ice storm or whatever it is hits or just a general power outage, which happened all the time, 95 % of them are on the distribution grid. And it's just because the wind blows really hard. A storm comes through, lightning hits a transformer, whatever it might be that knocks the grid out. People want to have solar and storage at their home. Doug Lewin (01:32.91)It's good for them to have that resilience. It's also good for the grid when those distributed assets can participate to support the grid. This is something Blake and I got into in great detail. I learned a ton, as you'll hear. A lot of times, asked questions about things I didn't understand. Learned a lot from Blake and really excited about the promise for virtual power plants, distributed energy resources, particularly in the Texas construct. But before we get into this, I think it's really important to say, given the moment that this Doug Lewin (02:02.488)podcast is gonna be dropping. All of that is in serious, serious doubt. And if you are somebody that was hoping to have solar and storage in your home or hoping that distributed solar and storage could make the grid stronger, all of that is very much in peril. I will be covering that at the newsletter and further on the podcast.gluon.com. But for now, enjoy this great conversation with Blake Riketa, CEO of Sonin US. Thank you. Doug Lewin (02:32.814)I'm Clay Kraketta. Welcome to the Energy Capital Podcast. Blake Richetta (02:35.746)Thank you, Doug. It's such a pleasure to be here. Doug Lewin (02:38.786)Great to have you. We've been obviously trying to get this together for a while. Really excited about the things you guys are doing at Sonnen, particularly in the Texas market, but let's just start at a high level. What is Sonnen for folks that don't know? Brief with this answer if you can, because I want to get into all kinds of different policy things, but it's important that people know what Sonnen is. So let's start there. Blake Richetta (02:57.39)Sure. Sonnen is a pretty special company. I joined Sonnen in 2016 when I left Tesla because of the incredible advancements that Sonnen had made in the European market and specifically in the German market, which is still really a world leading position in the virtual power plant based energy system. And we looked towards Sonnen even at Tesla with inspiration of how do they do what they do? How they achieve so much as such a Blake Richetta (03:26.892)at that point, small company that was really fast moving sort of startup. This was back in 2016. Sonnen started in 2008 with the innovation process of the first battery, 2010 launched the first product to the German market. And a very short summarized answer is that Sonnen, which in the German language is the Sonnen, which is the plural of sun, sort of like suns. There's no real English translation. Sunny battery, I don't know, was inspired by this idea that Blake Richetta (03:56.854)solar needed to have a greater purpose and that the intermittency of solar was a dead end for the German energy system, which was already being seen economically and scientifically. And then we needed to harness and harmonize solar, help it produce real value for the grid and serve real authentic grid services and also help balan

Anti-energy crusaders have a lot of facts wrong. I’ll break that down in this video. They’re also personally insulting the hard-working men and women in the renewable energy industry, calling solar jobs “fentanyl jobs.” They should apologize to the hard-working Americans helping to make our grid stronger every day.The ERCOT CEO told the Board earlier this week that solar and storage has strengthened our grid. Our risk of an energy emergency went from 16% one year to ago to 0.5% this year “because of the contributions of new resources on the grid.” Those resources are solar & storage. I show all of this in the video, which you can also watch on YouTube. I also covered a couple of the biggest problems haters of renewable energy and storage have: (1) They can’t credibly deny the benefits of renewables and storage, and (2) Where’s the alternative power going to come from if you limit renewables and storage?We have rising demand. If Congress lessens supply, what happens to prices?I wrote recently about how abruptly ending the clean energy tax credits will hurt our efforts to win the AI race and is actually Energy Submission to China. I also wrote about how short-sighted energy policy will raise costs, causing Energy Inflation for consumers of all kinds. The best way to handle the clean energy tax credits is a predictable ramp down of the tax credits — not a cliff.What You’ll Learn in This Episode:* How Texas slashed outage risk by 95% thanks to solar and battery storage* Why gas is not the fastest way to add power even though some people continue to falsely insist it is* How fossil fuel companies are using renewables to cut costs* The simple math of supply, demand, and rising prices without a credible backup plan📺 Watch on YouTube:Why It Matters:* Demand is up 25% since 2021: rapid growth not seen since the ’60s* Without tax credits, supply tightens, prices go up, and grid reliability suffers* Gas turbines aren’t coming fast enough, nuclear is years awaySeriously, over the next 4-5 years, where is the power going to come from if not from wind, solar, and storage? It’s not a rhetorical question and they can’t answer it. They’ve said LNG power plants, but those don’t exist. They’ve said nuclear but that’s 2030’s at best. They’ve said gas plants, but good luck getting a turbine.Final ThoughtIf policymakers want to kill clean energy incentives, they need a plan to replace the power. Because without one, consumers will pay more, grid reliability will suffer, and elected officials will face a backlash. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

This is the read-aloud version of my June 26 article, now on YouTube & the Energy Capital PodcastI don’t usually record readings of my articles, but I made an exception for this one.If Congress passes the budget bill as is, it would spike energy costs for families and businesses and cause serious economic harm.So I sat down and read the piece aloud with a few added thoughts and commentary as I went.Watch on YouTubeRead the original article hereWhat you’ll get in the episode:* Why “leveling the playing field” leaves out 100+ year old coal, oil, and gas subsidies (aren’t they mature industries at this point?)* How a $300 increase per household could be heading for your utility bills* What the real consequences of a 60-day cliff would be (I explain it in plain English)* Why this is really about consumers and voters, more than renewables, which will get built anyway, but they’ll cost more… which is probably why so many people oppose ending the clean energy tax credits.This is more than just a policy argument, it’s a warning. And a reminder that what Congress chooses in the next few days and weeks will show up on bills, ballots, and balance sheets.If you want to understand what’s at stake, and how we got here. Give it a listen.Thanks for being part of this. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.douglewin.com/subscribe

The U.S. was finally catching up.After decades of watching solar manufacturing develop overseas, mostly in China, the Inflation Reduction Act gave domestic producers a fighting chance. Texas responded in a big way. New factories broke ground. OCI and its sister company, Mission Solar, prepared to launch a full supply chain operation in San Antonio, including the rare addition of cell manufacturing, one of the most critical (and missing) links in our solar economy.Now? All of it hangs in the balance.I sat down with Sabah Bayatli, President of OCI Energy, for one of the most urgent and clarifying conversations we’ve had on this podcast. If Congress moves forward with budget as it passed the House, it could wipe out hard-won progress in U.S. energy independence and kill manufacturing momentum.This is not only an energy and economic issue, but also a national security issue. We covered:What the IRA Actually Did for Solar ManufacturingBefore the Inflation Reduction Act (IRA), manufacturers in the U.S. were forced to make short-term bets, never knowing if tax credits would last. That’s a terrible way to plan billion-dollar infrastructure investments. The IRA changed that. By giving developers and manufacturers a 10-year time horizon, it triggered a surge in U.S. supply chain planning.Sabah put it simply: You can’t invest in manufacturing without a longer time horizon.* The 45X tax credit provided per-unit production incentives.* Developers got extra credit for using U.S. made solar panels, creating demand.* Factories started popping up, especially in Texas, where low power prices make large-scale manufacturing viable.Now, that long-term signal is under threat.What’s in the “Big Beautiful Bill” That Could Undo It AllSabah broke it down for us: the current House version of the bill would eliminate developer tax credits by 2028, with an abrupt cliff 60 days after enactment. And while the latest Senate version is slightly better, it’s still a cliff:* Full credit in 2025* Drops to 60% in 2026* 20% in 2027* Zero by 2028The manufacturing credit technically stays, but if developers lose the adders for domestic content, American manufacturers lose their market. DC’s Math Doesn’t Add UpEveryone agrees: the deficit matters. But what’s often missing in DC is that you can’t shrink your way out of the deficit, you have to grow out of it.Growth means:* Domestic manufacturing jobs* Local tax bases* Energy independence* Lower-cost powerI covered that in much greater depth here:Timestamps* 00:00 – Introduction & opening context* 01:45 – What is OCI Energy?* 03:30 – OCI’s origin story in San Antonio* 5:00 – The elephant in the room: the impact of the not-so-beautiful bill* 10:00 – Investment signals leading to solar module and solar cell manufacturing* 13:00 – Manufacturing tax credits (45X)* 15:00 – The need for low cost power to spur economic growth to lower the debt* 20:00 – Lost cost power in ERCOT is attracting manufacturing of all kinds* 23:00 – Supply chain issues across the power sector* 25:30 – The need for moderate, durable policymaking, gradual ramp of incentives* 31:00 – The retention of the manufacturing tax credit won’t necessarily help* 34:00 – Where panels used in America are manufactured (hint: not China)* 38:00 – The need to communicate national security implications* 41:00 – To grow our economy, and reduce our debt, we need a lot more power (see chart discussed in this segment in Resources section below)* 44:45 – How to design Foreign Entities of Concern (FEOC) provisions well* 52:00 – Texas policy and the recently concluded legislative session* 54:45 – Is there a future for solar and battery manufacturing in America?* 58:30 – What could the Senate do to grow American manufacturing* 1:00:30 – Final thoughts, closing remarksResourcesInformation about Sabah and OCI* OCI Energy* Mission Solar* The chart Sabah sent me after he read Energy Submission:Discussed in the Episode:‘City of San Antonio Solar Development Plan. April 2012. H.R. 1, One Big Beautiful Bill Act (Dynamic Estimate). Congressional Budget Office (CBO).TranscriptDoug Lewin (00:05.426)The solar manufacturing renaissance in America, and particularly in Texas, is very much at risk as Congress considers a budget bill that would end solar incentives and clean energy manufacturing incentives. Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week was Sabah Bayatli. He's the president of OCI Energy. OCI Energy is both an IP and a project developer throughout the U.S. installing solar and storage, but also a manufacturer through their sister company, Mission Solar. And Sabah told me that that manufacturing plant, which currently produces modules and was getting ready to expand to cell production with 800 Texas jobs, is at risk and will not proceed if the bill in Washington passes in its current form.We talked about that and a whole lot of other things both related to the bill, but also talked about Texas policy, solar in general, what it means for the economy and growth. This was a great discussion and extremely timely. And I thank you for listening and we'll ask one more thing of you: if you can give us a review wherever you listen or particularly leave a five-star review, that is super helpful for our small but fast-growing podcast so that other people can find it. And I greatly appreciate it. You can find all the episodes of the Energy Capital podcast, become a subscriber to the podcast and to the Texas Energy and Power newsletter at douglewin.com. With that, please enjoy the show. Thanks for listening.Sabah, Bayatli, welcome to the Energy Capital Podcast. Great to have you.Sabah Bayatli (01:41.426)Thank you, Doug. It's wonderful to be here.Doug Lewin (01:43.896)So can we just start with a very brief little background? Folks may not have heard of OCI Energy. Tell us a little bit about OCI and Mission Solar.Sabah Bayatli (01:52.536) Quick background: OCI Energy is a developer and IPP for utility scale solar and battery energy storage systems in the U.S. We have been operating since 2012. We are headquartered in San Antonio, Texas. OCI Energy is a subsidiary of OCI Holding, a South Korean conglomerate based in Seoul. They have multiple businesses worldwide. I would say one of their core businesses is polysilicon manufacturing.For the audience, people who are not familiar with polysilicon, you can think about it as the raw material basically to the solar panel. It sits very, very upstream. In fact, I think they are the second largest polysilicon provider in the world if you take the Chinese manufacturers out of the list. That's a fact about OCI Holdings' operation on the polysilicon business.In the U.S., they have OCI Enterprises. You can think about it as a sub-holding company basically to the U.S. market. Under OCI Enterprises, there are multiple operating companies. One of them is OCI Energy, the developer and IPP for utility-scale solar and battery energy storage. We also have a sister company here in San Antonio as well called Mission Solar Energy. They are a manufacturer for solar panels. They also started business in 2012, 2013. In fact, when they started, they were producing cells in the early days as well. Today, they are producing solar panels. And we can talk more about them in the next few minutes.Doug Lewin (03:20.268) Yeah, it's interesting. A long, long time ago, I was involved in a lot of discussions in San Antonio in that kind of 2009, 10, 11 period when they were looking at how to develop a clean energy economy in San Antonio. I have not super sharp memories of that period, but some, and it's really gratifying and neat to see you guys there as such a big part of San Antonio and of that ecosystem.Sabah Bayatli (03:46.862) It brought us actually to town in 2012. What brought OCI Company to San Antonio and brought all these manufacturing jobs and basically development jobs to San Antonio. Today we are headquartered in San Antonio. We basically service all the U.S. on the development side as well as on the manufacturing side. But if you go to the story, actually the way OCI Energy, the OCI Company actually penetrated the energy market in the U.S., it was through an economic development agreement with the city of San Antonio. Yes, through CPS Energy, the utility.This is our public information. So in 2012, there was an economic development agreement entered into. With that, we had a commitment basically to develop up to 500 megawatts of solar projects. In 2012, it was a huge deal, right? So, and we did develop them, and in exchange, we got offtake agreements basically with CPS. And what we gave was we gave an overhead commitment to the city of San Antonio.So we had to bring manufacturing, we had to assemble the factories here. OCI Energy was assembled at that time. It was called OCI Solar Power. We actually brought inverter manufacturing to San Antonio as well. We brought a big EPC from Minnesota called Northern Central to open a branch in San Antonio too. That was a huge commitment actually by OCI Company to the city. It ended in 2020-22. But to your point, I think you can see the fruit today. The company's still operating in San Antonio. We are creating a lot of jobs basically for San Antonio and Texas, and this is a new technology and this is a new industry.Doug Lewin (05:17.868) Yeah. So I think we need to jump into kind of addressing the elephant in the room here, Sabah, which is right, you guys are a manufacturer in the United States, right there in San Antonio, here in Texas. And that had a first mover from some city initiatives, but over the last couple years at the federal level, congressional bills, particularly the Inflation Reduction Act, but also the Bipartisan Infrastructure Law put in place a lot of incentives for manufacturers.Can you talk a little bit about what is going on right now with the officially named "big, beautiful bill" that would reduce some of those and how those impact you as a solar manufa

Texas is adding solar at a faster pace than any other state. Solar and storage are powering Texas’ manufacturing renaissance, creating jobs, and lowering customers’ bills; even the state’s oil and gas sector is an eager consumer of solar power.And renewables are also pumping tens of billions of dollars into local — mostly rural — economies in the form of landowner payments and tax payments. We’re on track to add another 8-10 gigawatts in 2025, after adding about that much in 2024.In this week’s episode, I sat down with Sean Gallagher, Senior Vice President of Policy at the Solar Energy Industries Association (SEIA), and Daniel Giese, SEIA’s Director of State Affairs for Texas. We unpack the forces behind this record-breaking growth and what could help keep it going — as well as what could stop it in its tracks.The federal budget bill would cripple the boom. Texas is seeing historic levels of investment, in large part because of the 10-year certainty provided by the IRA. These tax credits are bringing down capital costs, reducing risk, enabling longer-term project planning, and driving investments in solar manufacturing.As Sean points out, this policy clarity has helped drive a wave of new solar and battery projects. And Texas is leading the pack, thanks to our land availability, pro-development bent, and robust demand growth.But the same projects that are thriving today could be lost tomorrow if federal tax policy changes too abruptly.Policy risk is rising. And it’s already hurting deployment.Federal tariffs. Delays in domestic manufacturing. A growing push in some counties to ban solar outright. It’s all adding up. SEIA recently reported that more than 5 GW of solar capacity in Texas was delayed or canceled just this spring due to trade policy and market uncertainty.Add in the threat of repealing or rolling back the IRA, and the fragility of this moment becomes clear. Developers aren’t panicking, but they are cautious. And that’s enough to slow the pace of deployment at exactly the wrong time.Storage is the backbone of reliability and we’re just getting started.Storage is no longer a “nice-to-have.” It’s essential. It’s one of the main reasons ERCOT’s summer grid outlook improved from a 12% chance of outages in 2023 to less than 1% this year.Daniel and Sean both emphasized how solar + storage is becoming the new standard and how distributed storage, especially, can help strengthen resilience while reducing strain on transmission.If Texas wants to keep growing solar and maintain reliability, batteries aren’t optional. They’re the glue that binds the new grid together.Final thoughtsThe clean energy transition is already underway, but the friction between policy and politics on the one hand and markets and technology on the other, is starting to slow it down.Texas has the fundamentals to lead the next chapter of America’s energy story: land, load, labor, and sun. But the national and state-level decisions we make in the next two years about policy, infrastructure, and transparency will determine whether we keep that lead or fall behind.This conversation with SEIA was timely given all the activity in Austin and Washington DC. Timestamps and relevent links are below.This was a free episode but your contributions support this podcast and the newsletter. If you’re already a subscriber, thank you! If you’re not yet a subscriber, please become one today and please recommend the pod to friends, family, and colleagues. The Texas Energy and Power Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a paid subscriber.Timestamps* 00:00 – Introduction* 02:00 – Breaking down the recent Texas legislative session* 03:30 – Rural benefits of renewables, why some legislators vote against their districts* 07:00 – How Texas rates nationally on solar & storage* 8:30 – Solar’s meteoric rise in Texas* 11:00 – Good bills that passed in the recent legislative session* 13:30 – How industry supported bills addressing recycling, consumer protection* 15:45 – The federal budget bill and its potential impact on manufacturing* 18:00 – Data center and AI companies’ support for renewable energy* 20:00 – Without solar & storage, the economy will slow* 23:00 – Winning the competition w/ China for electricity supply chain dominance* 27:30 – The three incentives that support domestic manufacturing* 29:30 – The impacts of the budget bill on Texas* 34:00 – Grid operators and regulators say we need continued solar development* 37:00 – Where will tax credits go from here* 39:00 – Problems with the budget bill: abrupt end of tax credits instead of ramp and Foreign Entities of Concern (FEOC)* 44:00 – Prospects for residential solar / distributed generation in Texas* 46:00 – Initiatives SEIA will be engaged with at the PUC* 48:00 – Support for solar power and SEIA’s call to action & how to get involved ResourcesGet Involved: Solar Powers AmericaSEIA Resources* Solar and Storage Industry Statement on Proposed U.S. Senate Finance Committee Reconciliation Text* Hundreds of American Solar Workers and Advocates Rally on Capitol Hill With a Message to Congress: “Don’t Kill Our Jobs”* REPORT: U.S. Adds 8.6 GW of New Solar Module Manufacturing Capacity, One of its Strongest Quarters of Growth in U.S. History* Solar Market Insight Report Q2 2025Other Podcasts, Articles, Websites Mentioned* Pakistan’s Solar Boom. Volts.* Energy Submission. Texas Energy & Power Newsletter* Impact of Limiting Solar and Wind Development in the ERCOT Market. Aurora Energy Research* CPS boss says taking away renewable tax breaks will just shift the costs. San Antonio Express News.* Gridstatus.ioTranscriptDoug Lewin (00:05.816)Solar was under attack in the Texas legislative session that recently ended. Now it's under attack in Congress. Why is this happening for resource that has delivered so much benefit? We dive into that in this episode of the Energy Capital Podcast. I'm your host, Doug Lewin, and this week I was joined by not one but two guests, Sean Gallagher, Senior Vice President of Policy for the Solar Energy Industries Association, and Daniel Giese, Texas State Director for SIA. A quick note, we recorded this pod last Doug Lewin (00:35.436)week before the Senate version of the reconciliation bill, the budget bill was released. So we got into what happened in the House bill. We talked a whole lot about what happened during the Texas legislative session. We talked about the meteoric rise of solar and what that has meant for the state of Texas. We got into all kinds of things, but not the Senate version of the bill. We will put in the show notes. You will be able to find there, a statement on the Senate bill, but we will not discuss it in this episode. Doug Lewin (01:04.728)This was a great episode. Really enjoyed talking with Sean and Daniel. think you're going to learn a lot from this. As always, please become a subscriber to the Energy Capital podcast and the Texas Energy and Power newsletter at douglouen.com. Please leave a five star review wherever you listen and please enjoy the show. Thanks for listening. Doug Lewin (01:27.608)Sean Gallagher and Daniel Giese. Welcome to the Energy Capital Podcast. Daniel Giese (01:31.256)Thank you Doug. Good to be here. Sean Gallagher (01:32.76)here. Sean Gallagher (01:33.175)Thanks for having us. Doug Lewin (01:34.872)You guys are doing great work at SIA on behalf of the solar industry. And obviously it is a fascinating time, too fascinating in my view, what's going on in the solar industry. Let us start with Texas. We are definitely going to jump to talking about federal and what's going on in Washington, DC, but it's energy capital podcast and I cover Texas. So Daniel, we'll probably start with you and maybe just kind of introduce yourself very briefly, but talk to us. You're obviously, Doug Lewin (02:04.62)leading things in Texas. Why in a state where solar is delivering so much value in the state are we still seeing these legislative attacks? I get asked this all the time and I feel like I'm really struggling to explain it. So maybe you could help me, Daniel. Daniel Giese (02:19.032)Sure. Daniel Giese (02:19.352)Yeah. So we had a, you know, session just ended this month. And, know, like you said, there's obviously going to be challenges in a legislative session. There's no limit on, you know, what types of bills, how many bills legislators can file. You know, this year we saw over 8,000 filed. At end of the day, only about 1,200 of those actually passed, but you have to keep them all serious. And so there was probably over 200 bills that, you know, I was personally tracking people in the industry tracking that dealt with, touched on our issue. Daniel Giese (02:47.252)Unfortunately, a lot of those were negative, but we made it out okay. It was actually a pretty good session for clean energy, for energy in general. Nothing bad happened to us. Other like past legislative sessions, there's been some more challenging legislation passed. This time around though, think cooler heads prevailed and legislators just looked at, they just did simple mathematics that you cannot meet the demand that this state is seeing. That's through population growth of people, growth of businesses moving in, the types of businesses moving in that are using incredible amounts of energy. Daniel Giese (03:17.038)They're going to need energy when they get here. They can't sit around and wait. So the simple supply and demand won out at the end of the day. And legislators, the cooler head prevailed and they just saw that the only way to meet the demand that's coming is through clean energy growth, energy growth in general, and all of the above. Doug Lewin (03:32.226)think that's right. And I just continue to wonder because, you know, and I put together a podcast and video that's on YouTube with some of the testimony during Senate Bill 819, right? You just see so many folks, particularly from rural, deep red districts,