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Thad Hill, President & CEO, joined Calpine in 2008 which helps business transform energy & carbon management programs to data-driven, sustainable business process.
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EarthX is a media company dedicated to inspiring people to care about the planet. We take an omni channel approach to reach audiences of every age through its robust 24/7 linear channel distributed across cable and FAST outlets, along with dynamic, solution oriented short form content on social and digital platforms. EarthX is home to original series, documentaries and snackable content that offer sustainable solutions to environmental challenges. EarthX is the only network that delivers entertaining and inspiring topics that impact and inspire our lives on climate and sustainability.
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Thad Hill, President & CEO, joined Calpine in 2008 which helps business transform energy & carbon management programs to data-driven, sustainable business process.
About EarthxCEO:
Compelling stories from top business leaders across a variety of different industries. They share the belief that financial success is only one side of the equation and work to achieve a triple bottom line, People, Profit and Planet.
EarthX
Love Our Planet.
The Official Network of Earth Day.
About Us:
At EarthX, we believe our planet is a pretty special place. The people, landscapes, and critters are likely unique to the entire universe, so we consider ourselves lucky to be here. We are committed to protecting the environment by inspiring conservation and sustainability, and our programming along with our range of expert hosts support this mission. We’re glad you’re with us.
EarthX is a media company dedicated to inspiring people to care about the planet. We take an omni channel approach to reach audiences of every age through its robust 24/7 linear channel distributed across cable and FAST outlets, along with dynamic, solution oriented short form content on social and digital platforms. EarthX is home to original series, documentaries and snackable content that offer sustainable solutions to environmental challenges. EarthX is the only network that delivers entertaining and inspiring topics that impact and inspire our lives on climate and sustainability.
EarthX Website: https://earthxmedia.com/
Follow Us:
Instagram: https://www.instagram.com/earthxmedia/
LinkedIn: https://www.linkedin.com/company/earthxmedia
Facebook: https://www.facebook.com/EarthXMedia/
TikTok: https://www.tiktok.com/@earthxmedia
YouTube: https://www.youtube.com/@EarthXMedia
How to watch:
United States:
- Spectrum
- AT&T U-verse (1267)
- DIRECTV (267)
- Philo
- FuboTV
- Plex
- Fire TV
#EarthDay #Environment #Sustainability #EcoFriendly #Conservation #EarthX
Category
📺
TVTranscript
00:00Hello, everybody, and welcome to EarthX CEO, a weekly series on EarthX TV.
00:08And each week we speak to business presidents and CEOs about their leadership on sustainability
00:14and climate issues.
00:16I'm your host, Bob Perciasepe, president of the Center for Climate and Energy Solutions.
00:20And with me today is Thad Hill, CEO of Calpine, one of the largest power producers in the
00:27United States and one with some of the lowest emissions.
00:32Over 26 gigawatts of power, 20 plus states, Canada and Mexico are part of their customer
00:39base.
00:40So welcome, Thad.
00:41Thanks, Bob.
00:42I'm happy to be here.
00:44Well, we're really happy to have you.
00:46And I think the best thing to do to get started on the expanse of all the different states
00:51and types of generation you have to ask you to say a little bit about about the company
00:59and where you see the company sitting in the in the business world here.
01:04No, thanks, Bob.
01:05So, you know, our company, Calpine, I'd really say there are four fundamental things that
01:11we do.
01:12First off, and record our history, is our late model efficient gas generation point.
01:19We have almost 26,000 megawatts, almost all combined cycles.
01:24These are late model efficient and flexible units and flexibility matters a lot in today's
01:29world.
01:30And first and foremost, we take pride in being really good operators.
01:35The second part of our business would be our geothermal fleet.
01:39We have together 13 different power plants that compromise our geysers geothermal asset,
01:45which is the largest geothermal power facility in the world.
01:48And it's actually the largest renewable asset in the state of California to make six million
01:54megawatt hours of reliable energy every year.
01:57And it's really cool as well.
01:59Thirdly, we have a trading business, as you can imagine.
02:02We procure a lot of gas, we sell a lot of power.
02:05We have a lot of information because we do that.
02:08And we have a trading and marketing wholesale business.
02:12And finally, we've got a retail arm.
02:14We have residential customers and kind of Mid-Atlantic through the Northeast, as well
02:18as a bunch here in Texas.
02:20We also have what I believe to be about the one of the most sophisticated commercial industrial
02:24where we sell direct to large companies as well.
02:27You know, the thing about our business, we reflect on is a regional scale for us really
02:32matters.
02:33So we really try and be one of the top generators in each of the markets we serve.
02:37The West, Texas, New England, and then again, the Mid-Atlantic through the Midwest.
02:44And we're very focused on our advocacy.
02:47We believe in two fundamental things, the competitive markets work better than governments
02:53determine outcomes.
02:55And secondly, for environmental advocacy, which I'm sure we'll come back and talk about
02:59in a minute.
03:00And then finally, just to give you kind of an idea, we've got two public peers.
03:06We are now a private company and our two public peers are NRG and Vistra.
03:11And we are about in between them, about the size of the company, just to give you a rough
03:14order of magnitude.
03:16Well, that's pretty expansive.
03:19And thanks for that very high level overview.
03:22You know, as a major producer, you're obviously in the middle of how things are evolving in
03:30the power sector in the United States and to a certain extent globally, but certainly
03:34in the United States and North America.
03:37And I think all of us are seeing big changes happening, emissions going down, even different
03:44ways of dealing with customers.
03:46So what are you seeing in the major trends in the industry from your vantage point?
03:52Well, I'll start high level and just name a couple.
03:56And I would say, you mentioned the term trends.
03:59Part of my job as a capital allocator is to differentiate between secular and cyclical
04:05trends.
04:06And the two trends I'm going to mention are both secular, which is they're going one way
04:11and I don't think are reversible.
04:13The first of them is much more heavy renewables.
04:18Renewables not only because of policy support, but now even more so because of the economics
04:22of renewables themselves are going to continue to play a large and larger role in our energy
04:27mix.
04:29And there will be storage mixed in there as well, energy storage, which will be further
04:32changes.
04:33And we can come back and talk more about that later.
04:35That's clearly a secular trend.
04:38There's change in the way we operate and the way we think about these markets.
04:41The second trend is actually even a little more macro, which is that of decarbonization.
04:47And as we decarbonize our economy, electric use is going to grow.
04:52And that has big implications, big implications for the way we run our business.
04:58And let me just give you a little more of an example of why that's going to be the case.
05:03And I'm going to pick California here as an example, but I could do it.
05:06We could do this about most markets.
05:07California is a little more of an advanced case.
05:11But in the state of California has goals of reducing its CO2 by 40% by 2030 from today
05:19and 80% by 2050.
05:20It's actually a little tighter than that now.
05:22But let me just stick with the 40% by 2030.
05:26Today in California, only 10% of the greenhouse gases produced actually come from the interstate
05:32power generation sector.
05:33Over 40% come from transportation, 20% from agriculture, with the balance from home heating,
05:40industrial use, et cetera.
05:41But if you actually take 10 percentage points, you're trying to reduce 40% over the next
05:4510 years, you're going to have to shift a lot of other items to electrification.
05:51And this equals load growth and load changes.
05:53So both of these are just massive trends.
05:56So I think over the next 10 years, we're just going to continue to roll forward.
06:01I think electrification, as it's generally called, is a big trend that is moving forward.
06:10I mean, when you talk about electricity and you try to electrify a significant amount
06:15of the light duty vehicles, for instance, that's going to be a big demand.
06:23How much do you think the demand might grow?
06:25Do you guys estimate some amount that you might have to grow to accommodate this?
06:31Well, we have worked with a lot of consultants, and it's actually different by the different
06:37economies around the country.
06:39Just speaking at the United States, each regional economy has its different mix of current sources
06:45of carbon, and it's got its different mix of renewable potentials and other things.
06:49But I think it's fair to say all of the forecasts I've seen differ a little bit by part of the
06:53country over the next 20 years or so, somewhere between 50% to 100% of load growth versus today.
07:01Yeah.
07:01I mean, I think that's an estimate I've heard to 50%, maybe even a doubling, but
07:09depends on how quickly it goes.
07:11You know, you mentioned geothermal and you mentioned geysers.
07:15I think most people tuning in may not know what that is or where it is.
07:19It sounds like something in Yellowstone Park.
07:23But it's a unique location.
07:26Tell us a little bit about it.
07:28And also, as you're looking around the country, that's a very unique location.
07:32Are there opportunities for geothermal in other parts of the country?
07:36Well, excuse me if you hear the enthusiasm come out.
07:39It is a – I've worked in and around many different ways to generate electricity, and
07:43it's by far, in my view, the coolest way to generate electricity on the planet.
07:47It also is, Bob, as you mentioned, a very unique resource that is going to be hard
07:53to replicate in other parts of the country.
07:54So essentially, the geysers is a giant tea kettle in a simpler sense.
08:00You have impermeable caprock with a bunch of porous rock underneath where if water is
08:05hot, it turns to steam that can transport, and then superheated bedrock at the bottom.
08:11So what happens is water that gets in, turns to steam because of the heated bedrock.
08:17It can move around like steam would in a tea kettle, and you can poke a hole in the
08:21impermeable bedrock and you actually – sorry, caprock, and you get steam out and enough
08:26pressure and enough heat to actually spin big turbines and generate electricity.
08:30Like all tea kettles, the magic of this particular resource is that over time, you deplete the
08:35water or the steam in the kettle.
08:38We actually at the geysers, which is one of the reasons why it's so special, take all
08:42of the twice-period wastewater from Santa Rosa and Sonoma County – and this is in
08:47Sonoma and Lake County, California – and Lake County, California, and they chip us
08:51their greywater and we put it back in the ground.
08:54And so you can actually think of it, we take greywater that instead of having to be treated
08:58a third time and get put back in rivers, we actually put 10,000 feet under the ground
09:03and it comes back out as steam and we keep refilling the tea kettle.
09:07So it's very unique geology, both the geology I just described as well as the source of
09:12the water.
09:13But it is a very reliable source.
09:15It's very important to Northern California as well and to the liability.
09:20Yeah, it's a pretty large source of emission-free electricity in California.
09:27So you're putting a little bit more – I asked you to put a little bit of a crystal
09:31ball on for – or hold onto it on how much demand may change, but how do you see this
09:37overall transition taking place over the next couple of decades?
09:42And everybody sort of points to the middle of the century where we really have to be
09:46significantly decarbonized.
09:49How do you see that continuing to unfold in the trends that you've already identified?
09:55Well, so on the supply side, something that I think people are just beginning to realize
10:02– and we can talk more about this in a minute – is that natural gas is going to play a
10:09very important role.
10:10And let me back it up.
10:11I should say the natural gas fleet.
10:13What you find when you game this out and you actually do the serious work around the physics
10:18and the economics, the academic work, is that you can – as load grows and you electrify,
10:24you move a lot of extra load on the electric system.
10:27Wind and solar can cover a lot of it, and storage can help a lot too, but you actually
10:31end up with events.
10:33And these can be a dry hydrant in the west where you can have 5,000 less megawatts available
10:39to the grid for a year.
10:40It can be a nor'easter in New England where you end up with two feet of snow on top of
10:45solar panels, and four-hour batteries aren't going to help you when that's the case.
10:51And so we're actually – I believe fleets like ours over time will ultimately run less,
10:57maybe not immediately, but that's not a bad thing because renewables will produce more
11:02of the power of the lower carbon.
11:03There are going to be times when that resource is absolutely required for reliability.
11:08And so I do think a lot more renewables, a lot more load, and I actually honestly do
11:14believe that these units are going to be around for decades when we spike them in order to
11:19balance it when these tail events occur, which do occur, and we've seen perfect instances,
11:24many instances of that.
11:26There's another thing on this, which is I actually do believe that things – I mentioned
11:32it's secular, but may move a little more slowly than a lot of people think.
11:36I mean, I – and take this as a personal opinion, but I – for better or for worse,
11:43I chose a career which is very subject to command and control.
11:47It is very easy, relatively speaking, for regulators to say shut your coal plant and
11:52build a wind farm, or whatever it might be.
11:54We don't operate coal, but as an example, to shut something down and build something
11:57else when you're talking big macro power plants.
12:01It is a lot harder, Bob, to say to you, you have to sell your F-150 and buy a leaf.
12:07And we're at the point now where a lot of the easy, low-hanging fruit on the grid has
12:13been taken, and we're at the point where people are going to have to start changing
12:17their lives and making personal economic decisions versus having those made for them.
12:22It doesn't mean we're not going to get there, but I – so let me not be a naysayer
12:27because we are definitely behind, and it's in our interest for electrification, too.
12:30I just think it's going to be a fascinating experience as we actually start to see people
12:34have to change their lives.
12:35So we'll get there.
12:36I've got no doubt about it.
12:38I just think it's going to be very interesting to see how fast that rolls out.
12:41Yeah.
12:42Well, there's certainly – the demand side is a really important part of this.
12:48And we see this in many other industries, people slowly but surely starting to demand
12:52more sustainable products and more lower-emitting electricity.
13:00And so that is evolving along with the way we're dealing with the transition in energy.
13:08So you started to talk a little bit about some of your views.
13:11As a leader – and I think, if I'm not mistaken, Pat, you've been doing this job.
13:16You've been at Calpine for a while, but you've been doing this job since 2014
13:20and pushing the company toward these goals.
13:26What are some of the motivators for you in this?
13:30There could be business ones.
13:31There could be personal ones.
13:32There could be financial ones for the company.
13:37What's that mix of motivators?
13:39Well, I think there is business.
13:41There is personal.
13:42I also think there's – and maybe this is personal and business – kind of analytical.
13:47I mean, look, I want us, and I want us as Calpine, to be on the right side of history.
13:55And I want us to be here.
13:56As I mentioned, this transition is going to occur,
13:59and I want us to play our role and be supportive in the transition.
14:02We are backers of climate change.
14:06We're supportive of President Obama's Clean Power Plan.
14:10We have been supporters of AB32 in the West,
14:14which is effectively the carbon price in the West Coast,
14:16and REGI, which is the East Coast carbon pricing.
14:20And I believe the right way to get this done – and we may or may not come back and talk policy later,
14:26but it isn't through a bunch of government mandates,
14:28but it's through a price of carbon and let markets work.
14:32And so we're very supportive of that.
14:34And I do think this trend is going to happen.
14:36I want to be on the right side of history.
14:37I also happen to believe that there's really no real debate about climate change,
14:45but we have at one side – we have actually one side
14:49really talking about the science behind climate change and others who may deny it.
14:54But the science behind climate change, people fall back to science,
14:57but it's amazing how much many of the solutions or the paths forward
15:02actually aren't ground analytically or in the science,
15:05where people rely on the science to diagnose the problem,
15:08but not to prescribe the right solution.
15:10And I happen to believe that by the rigorous focus on analytics
15:15and paying attention to the physics and the economics,
15:17we can get to a much better place.
15:19And for me, that's both a – hopefully we can find a way as Calpine to make money
15:23through that transition, but it's also personally satisfying
15:26if we come up with a much better solution for society to get there.
15:31So all of those are kind of rolled together.
15:33I hope that makes sense.
15:34Yeah, well, it does.
15:35I mean, look, electricity and the availability of electricity
15:41is intimately intertwined with the quality of life going forward for people.
15:48And that – we just talked about how the demand for electricity is going to grow
15:55because we're going to need more of it.
15:57And so the opportunities are obviously pretty high,
16:00as well as the challenges are very strong.
16:03But you've got to have that commitment,
16:05and I appreciate you talking about how you look at this.
16:09Now, you touched on policy.
16:12And I'll just say something very quick.
16:13You know, when I started in the business of dealing with air pollution
16:17and water pollution back in the late 70s and early 80s,
16:23whenever Congress would pass a law,
16:25or my General Assembly in the state I was working in passed a law,
16:28it usually included a to-do list for me to tell businesses what to do.
16:35I know that you're familiar with this.
16:39But now we have businesses like yourself and many others saying,
16:43look, we know we've got to do this and we want to get there.
16:47And so instead of having to say this is what you need to do,
16:51now it seems like there's an opportunity for policy to say,
16:53here's what we can do as a government in partnership to help you get there.
16:58And so in that context, what kind of policies can there be
17:03at the federal level or at the state level?
17:05You've mentioned California several times.
17:08But at the national level,
17:10that can really help put some wind in the sails to move things forward.
17:15Well, I'm going to answer your question directly,
17:19but I want to set the stage a little maybe for a minute.
17:23There are almost half the states in this country
17:27actually have some form of climate change policy,
17:31whether it's a RPS target or a more,
17:36if you include more than half, if you include RPS targets,
17:38but local Green New Deal or net carbon neutrality by a date.
17:43And I would say that it's pretty clear in many of these states that the policies,
17:48as I mentioned before, has actually outstripped the academic work.
17:52We actually have people have actually put targets out there
17:55and haven't necessarily thought about the way they're going to achieve them.
17:59I think it's really instructive.
18:01In the last year, the academic work has begun to catch up with the policy.
18:06And there was a great report that Secretary Moniz,
18:09who was President Obama's Secretary of Energy,
18:11did about how do you decarbonize California.
18:15There's been work by a consulting firm called E3 and others too.
18:20They're focused on what it takes to decarbonize different parts of the country.
18:23And I talked a little bit earlier about the role of natural gas as an enabler.
18:28And I think that kind of thing comes out very clearly
18:31when you actually work your way through this report.
18:32So I'm glad that the work and the serious thinking
18:35and the analytical approach was catching up.
18:37But when it comes down to this, Bob, I really think at one level,
18:42there's two choices.
18:44One is you actually have politicians try and pick how much of what you need.
18:51Where are you going to set CAFE standards
18:52or how much solar or wind or what should those tax credits be?
18:57Or what are you going to do about energy efficiency?
18:59And it's a very complicated set of things that intersect to make all this happen.
19:05And some people that are either elected officials
19:08or people that are in part of the bureaucracy,
19:11making all these huge calls is a much less efficient way to do it
19:15than to rely on a market.
19:17And the academic work on that is extensive.
19:19And so in our view, the number one thing that can be done
19:23is to actually put a economy-wide cost on carbon.
19:29And by economy-wide, and I hinted at this earlier,
19:33but the goal here, I'm in the electricity sector,
19:36is not to decarbonize the electricity sector.
19:38The goal is to decarbonize the entire economy
19:41and a economy-wide cost of carbon by all means.
19:44And we're active in a couple of groups in Washington.
19:47One is called the CEO Climate Dialogue.
19:49The other is the Climate Leadership Council.
19:51One's going to center left, one's going to center right
19:54with some NGOs and other large companies mixed in.
19:57And we're actively and publicly advocating
20:00to put an economy-wide cost of carbon.
20:02There's a far better way than having government
20:05kind of deepen all the piece bars.
20:09Yes, but government will be involved with how to run the price.
20:14You can't escape it.
20:16You're right.
20:16I mean, look, and government's going to have to set the targets.
20:19I mean, government's government for a reason.
20:21And our view is, so I'm not trying to be like
20:26complete libertarian-ish here.
20:29I mean, there needs to be a goal to get set
20:33and the mechanisms that are there.
20:35But I think that the beautiful thing about this
20:37is that if we can set the targets,
20:39it can set up the market structure,
20:41the government can take a step back.
20:43And I promise you a lot of smart people that are competing
20:46and will compete to deploy their own capital
20:48and we'll get what we need to get.
20:51Well, my own group C2ES is involved with the CEO Climate Dialogue.
20:56And we've done an analysis of decarbonizing the economy,
21:02as you point out.
21:03And it includes many of the attributes that you're talking about.
21:07But you decarbonize electricity plays a very key role
21:11as you electrify the other parts of the economy
21:14where that can happen.
21:16You know, there's...
21:19You've joined recently, I think, this summer,
21:24I think, the Carbon Capture Coalition,
21:27which we are also...
21:28We were actually one of the co-conveners of it
21:30or the co-founders of it back almost 10 years ago now.
21:33But now we're just a participant
21:35working with the Great Plains Institute.
21:37But this is a group of 80 different institutions
21:41from labor to industry to other NGOs,
21:44all looking at policies that could help
21:47move along this one particular type of technology
21:50because it applies to so many different places,
21:52whether it's cement manufacturing or power generation
21:56or even, you know, chemical plants.
21:59So what motivated you guys to join up
22:03with the Carbon Capture Coalition?
22:06Do you see this utility of this type of technology
22:11in the near term or in the long term?
22:14I think it's probably the medium term.
22:16I think we'll hopefully have some projects
22:18in the near term,
22:19but it's gonna have to be a part of the solutions.
22:22I mentioned earlier,
22:24there is no way to get to these deep
22:27economy-wide decarbonization
22:29without having existing fossil assets,
22:31gas plants like ours, play a role.
22:34You know, the idea of having enough biogas
22:39from landfills or from agricultural uses
22:42to make that work is a long shot.
22:44Hydrogen can play some role,
22:46but it's very expensive
22:48and that's probably a lot further out,
22:50true green hydrogen to actually be competitive.
22:53And so I actually think, you know,
22:55carbon capture and sequestration has a role to play.
23:00I mentioned earlier,
23:02and again, Secretary Moniz's work in California,
23:06as a part of that work,
23:09and it's in the report, it's buried,
23:11but it is there.
23:12They actually came out and suggested
23:14that California achieve this 2030 goal,
23:16not as long-term goal, but it's 2030 goal.
23:18The shadow price of carbon needs to be $400 a ton.
23:23That's staggering.
23:24For people who may not be familiar,
23:26the carbon price right now on the West Coast
23:28and the AB32 is about $17 a ton.
23:31On the East Coast and RGGI,
23:33which is the Regional Greenhouse Gas Initiative,
23:35it's about $6 a ton.
23:37Most economists, and Bob, you can keep me honest here,
23:39but we usually say the societal cost to carbon,
23:42if you're trying to, you know,
23:43kind of cost to society is about $40 a ton.
23:47So the Energy Futures Initiative,
23:49BFI, Secretary Moniz,
23:50looks at $400 a ton by 2030.
23:53I will tell you that at $40 a ton,
23:56CCUS for gas plants does not work,
23:59but it works at a number that's far closer to $40
24:02and at $400 a ton.
24:04And so as we move forward,
24:07you know, I actually do believe
24:09that it will be economic in all of our best interests
24:11to actually learn to burn fossil fuels
24:14in centralized locations
24:15and pull the carbon streams out.
24:17Again, so yes, Bob, we're part of that.
24:21We're working on our own efforts here at Calpine.
24:24And again, I don't think it'll be part
24:25of the near-term solution.
24:26There are a lot of things that are a lot cheaper
24:28than the price of CCUS,
24:29but as you continue to decarbonize
24:32and get further down that curve,
24:33I actually do believe it will become in the money,
24:36so to speak, and will make a lot of sense.
24:38Yeah.
24:40You know, the issue you have with the gas turbines
24:43is the concentration of carbon dioxide,
24:45which is one of the reasons we like using them
24:48is a lot lower,
24:50and so it takes a lot more capturing to take place there.
24:55You mentioned hydrogen.
24:58You know, making hydrogen from natural gas
25:01is another technology that people have been talking about,
25:06and it also emits carbon dioxide when you do that,
25:11so carbon capture would be needed there as well.
25:14So I'm glad you guys are part of that coalition.
25:18I think having that broad group together
25:22working on this is really important
25:24because as you get further toward the middle of the century,
25:30we can't afford to not have some more eggs in the basket,
25:33as I say, you know, in terms of technology inclusiveness.
25:39So on the overall view of how this works for Calpine,
25:45how do you see this working with your broader brand?
25:51You know, we talked about your views.
25:53We talked about some of the companies and the technology,
25:57but now, you know, when you're out there
25:58talking to customers, to investors,
26:01how do you see this as your brand?
26:06Yeah, well, you know, the way we brand ourselves
26:09in our large commercial and industrial customer sales,
26:13this is from our Calpine Energy Solutions Group.
26:15We call it sensible sustainability,
26:18and that is our retail group,
26:20so it's not an overall corporate,
26:22but I actually think that has a, you know, nice ring in it
26:24and it generally sums it up.
26:27You know, we are all dictated
26:29by the law of physics and economics.
26:30We all know where we need to go,
26:32and, you know, as I mentioned up front,
26:35you know, we believe in competition
26:37and we believe in environmental advocacy,
26:39and I hope between those two, and by the way,
26:42you know, the deep power of being analytically,
26:45you know, rigorous about the approaches we take,
26:47so I hope, you know, that is more or less our brand.
26:49We try and call them like we see it,
26:52and, you know, we're, you know,
26:53going to be aggressive in our advocacy
26:56and, you know, hopefully we'll make
26:59some of the right calls along the way.
27:01Yeah, well, I mean, being involved
27:04with some of these groups that you've mentioned,
27:06the Climate Leadership Council
27:08and the CEO Climate Dialogue
27:10certainly puts you front and center
27:13in places where the conversations are going on now
27:16about how to move forward on both policy
27:20and also on research and development.
27:22Do you see a role for the federal government
27:26in its sort of center of mass kind of approach
27:30on research and development,
27:32let's say at the national labs
27:34in the Department of Energy on any of these things,
27:37you know, whether it's batteries or even CCUS?
27:42You know, and this is a personal view,
27:46Bob, I'm sure it will not be as informed as your view,
27:49but, you know, I actually think
27:52the federal government with early stage
27:55research is an appropriate place to be.
27:59I think as we actually move down the curve
28:03and resources get to the point
28:04where they're actually commercially deployable,
28:07you know, I actually think
28:09they need to stand on their own.
28:10And, you know, this is, you know,
28:12a great example for this,
28:14although no longer cutting edge,
28:16but would be wind and solar.
28:17I will tell you that I believe
28:19wind and solar are economic.
28:20Solar may be more than wind today,
28:22depending on what part of the country you're in,
28:24and that continued federal support,
28:26in this case, in tax credits, not research.
28:28So I'm going a little further afield than your question,
28:31but it's probably no longer required.
28:34And, you know, these resources
28:36can definitely compete on their own,
28:37and there's no reason for taxpayers
28:38to continue to support it.
28:39There are other technologies.
28:41Lithium ion batteries are getting
28:42a long way down the curve too.
28:43They're getting deployed,
28:45but there may be some other items which need it.
28:47So I just think, you know,
28:48there's an early development role,
28:50but ultimately, you know,
28:52it needs to move to a market-based system.
28:55So one more question here,
28:57and then I'll let you do whatever summary you want,
29:00but you talked about the wind resources and solar now,
29:04and you talked about,
29:05and you guys are in a number of different states.
29:08Obviously, I may have this wrong with that,
29:11but you might, you as a single company,
29:13might be in more states than any other power company.
29:16I think that might be true,
29:17but, you know, how important is transmission,
29:22and even distribution at a more local level,
29:25and the role of the interstate issues
29:28with moving power around?
29:31I mean, there's a lot of talk about this.
29:33I mean, if you want to do offshore wind,
29:35you've got to have some kind of, you know,
29:37transmission system into the shore,
29:40wind resources in the Midwest
29:41and in the West to the coast.
29:45How are you guys looking at that issue?
29:48Given your spread?
29:50Yeah, so, and I don't know that we're in the most states,
29:52but we'll certainly be a handful that is.
29:54I actually, I wish I knew that statistic.
29:56I actually don't.
29:58We may be, but, you know,
30:01obviously the source of the power
30:04needs to be connected to the load,
30:06and it is our view that though a real economic test
30:12should be employed when that happens.
30:15I will, and we haven't talked a lot today, Bob,
30:17about competition in these markets.
30:19I've kind of mentioned my market philosophy,
30:22but if you actually go to these organized markets
30:24around the country and, you know, pick a place,
30:29you'll actually have seen,
30:30and I know the statistics in Pennsylvania,
30:33because I just looked at them recently,
30:35but if you go back a number of years,
30:37the regulated part of the electric bill
30:39in the state of Pennsylvania,
30:41the transmission distribution charge
30:43used to be something like 25 to 30% of the bill,
30:47now it's 65 to 70% of the bill in less than a decade,
30:52and part of this is because competition
30:54has actually worked so well on the generation side,
30:57the prices have come down,
30:59which is a really positive thing.
31:00Part of it is a lot of the companies
31:02that operate transmission distribution
31:05have been incredibly successful
31:07at actually getting their rate bases
31:09more and more inflated,
31:11which has actually provided, you know,
31:12the shareholders obviously returns,
31:15but not all of it has been justified
31:17in the way that these folks have,
31:18you know, kind of managed to work.
31:19So I actually, you know, again,
31:21they're very good companies out there,
31:22and I'm not, you know,
31:23I'm not trying to call, you know, anybody in shame,
31:26but the fact of the matter is,
31:29a lot of times in this country,
31:30the first thing we say is,
31:31you know, build more transmission,
31:33and people's bills go up a lot,
31:36and I actually think that a real economic test
31:40before we start building is important.
31:42And by the way, I would say
31:43a lot of commercial industrial customers
31:45have fallen under this,
31:46and are now a lot more concerned
31:48about what happens
31:48to the regulated side of the bill
31:50than their unregulated side of the bill,
31:51and I think that's a very appropriate place to look.
31:53A little bit of a rabbit trail,
31:55but I want to be clear, you know,
31:56competition works,
31:57and sometimes the other side doesn't work so well.
31:59Well, I think that's a good segue to the end here,
32:05and I want to really thank you, Thad,
32:07for taking time out of all of our schedules,
32:10or actually I seem to be more aggressive,
32:14in the time of socially distancing work,
32:18and if we weren't,
32:19we may be together somewhere
32:20doing this nice little chat,
32:22but I really appreciate you taking the time
32:24to talk with us today, you know, on EarthX TV,
32:27and I'll leave it to you
32:29to have any last particular word
32:31you may want to add to your points already.
32:35No, Bob, I appreciate it.
32:37I wish I was in the same room as you.
32:39I look forward to when that can happen again.
32:41I've certainly enjoyed the conversation,
32:43and, you know, I just think that,
32:46you know, keeping our eye on the ultimate prize,
32:49which is decarbonizing the economy
32:51and leveraging markets would be our,
32:54you know, two key points,
32:55but I certainly appreciate having a chance
32:57to discuss it with you.
33:00All right.
33:00Well, that says it all.