Energy Capital Podcast

Josh Rhodes & Matt Boms
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The Texas power grid is being rebuilt in real time. Energy Capital covers the policy fights, market mechanics, and technical decisions shaping what comes next. Hosted by Josh Rhodes (UT Austin) and Matt Boms (TAEBA), with the policymakers, regulators, and researchers at the center of it. Produced by ClarityForge Studios. Topics include ERCOT market operations, grid reliability, renewable integration, distributed energy resources, interconnection and transmission planning, regulatory economics, energy storage, demand response, and the Texas electricity market. New episodes weekly. on Texas energy and power grid issues, featuring interviews with energy professionals, academics, policymakers, and advocates. Produced by ClarityForge Studios. www.texasenergyandpower.com

  1. Why PJM is looking at the Texas grid

    1d ago

    Why PJM is looking at the Texas grid

    ERCOT made a choice years ago that most of the country is now reconsidering. Texas runs an energy-only market with no capacity payments, connects generation through connect-and-manage, sorts out delivery in dispatch, and pushes interconnection risk onto developers. That design is a big part of why Texas has added generation faster than any other U.S. grid. PJM, the operator for much of the eastern U.S., is now weighing whether to move in that direction. A white paper from the operator describes a shift from managing surplus to managing scarcity as data center demand outruns new supply. The paper lays out three pathways: long-term bilateral contracts, differential reliability standards for new loads, or an ERCOT-style tilt toward an energy and ancillary services market with a smaller role for capacity. The scale is large in both regions. ERCOT is now considering roughly 445 gigawatts of large-load interconnection requests against an 85-gigawatt system, while in PJM, one Dominion territory alone projects 70 gigawatts of new demand against a 24-gigawatt peak. On this episode of the Energy Capital Podcast, Joshua Rhodes talks with Josephus Allmond, Virginia’s chief energy officer, about what separates the two grids and what PJM can take from the Texas model. Allmond points to ERCOT’s interconnection speed as the clearest lesson, given PJM’s projected 700 days from queue to agreement before construction even starts. He also points to the state line, where borrowed fixes hit a wall. Virginia’s State Corporation Commission requires large customers to pay a generation charge for 14 years, even when a data center builds its own power. A load that sources its own generation, Allmond says, ends up “paying their own way and then turning around and paying Dominion.” The conversation works through: * ERCOT versus PJM structure, energy-only and connect-and-manage against PJM’s capacity market and consensus-driven stakeholder process, and why one moves faster. * PJM’s three pathways, and how the energy-market tilt is the one Allmond reads as closest to ERCOT. * The large-load tools, controllable load resources, and behind-the-meter generation in Texas, and the Virginia charge that makes the same moves uneconomic. * Interconnection speed, ERCOT’s developer-risk model against PJM’s roughly 700-day queue. What PJM borrows from ERCOT, and what it refuses to give up, will shape how fast the East Coast grid can serve the load now lining up. Timestamps * 00:00 - Introduction and Guest Background * 01:52 - Virginia’s Chief Energy Officer Role * 04:15 - Data Center Alley and Virginia’s Hub Status * 06:29 - ERCOT vs. PJM: Governance and Transmission * 10:53 - PJM’s Shift from Surplus to Scarcity * 19:29 - PJM’s Three Reform Paths * 24:19 - Virginia’s Minimum Demand Charge Problem * 29:36 - The Data Center Tax Exemption Fight * 31:50 - Path C and the ERCOT Parallel * 35:17 - What Has to Give: Allmond’s Closing Answer Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Micalah Spenrath (LinkedIn) * Matt Boms (LinkedIn) * Texas Advanced Energy Business Alliance (Website) * Energy Capital (Website - LinkedIn - YouTube) * Texas Energy & Power (Substack) * Josephus Allmond (LinkedIn) * Office of the Virginia Chief Energy Officer (Website) * Southern Environmental Law Center (Website) * PJM (Website) * Monitoring Analytics — PJM Independent Market Monitor (Website) * ERCOT (Website) * FERC (Website) * Dominion Energy (Website) * Virginia State Corporation Commission (Website) * Virginia Department of Energy (Website) Books & Articles Discussed * Powering Reliability Through Market Design — PJM White Paper (PDF) * How Will Data Centers Pay for Power? — Travis Kavulla, American Affairs (Website) Company & Industry News * PJM floats options for capacity market overhaul (Utility Dive) * Spanberger creates new cabinet position, appoints Allmond chief energy officer (Virginia Mercury) Related Podcasts by Energy Capital * How Texas Plans to Serve Infinite Demand, with Eric Goff (Texas Energy & Power) * NRG’s Gigawatt VPP in Texas, with Travis Kavulla (Texas Energy & Power) * Who Pays for Texas Grid Growth? — Roundtable Discussion (Texas Energy & Power) * Who Pays for the New Grid, with Pablo Vegas (Texas Energy & Power) Transcript Joshua Rhodes: Hey everyone and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Josephus Almonds on today to get us out of our comfort zone a little bit here in Texas and ERCOT and talk a little bit about PJM, kind of some of the things that are happening in other grids. PJM is one of the other grids that is experiencing large amounts of load growth, particularly from things like data centers. Texas is no stranger to that. And so it might be useful to figure out kind of how other regions are doing it, approaching it, and maybe we can Cross-collaborate on some of those. So Josephus got his JD from Duke, where he did a couple of stints at BakerBots and Kirkland and Ellis. And then he was an attorney with the Southern Environmental Law Center, where I should say that we worked together on Dominion’s IRP a couple years ago, intervening in that. But recently was named CEO, should say Chief Energy Officer, although this may be one of the few podcasts where Chief Energy Officer might get you more kudos than Chief Executive Officer for sub. But Josephus was recently named Chief Energy Officer from Governor Spanberger. Josephus Alman. Welcome to the Energy Capital Podcast. Josephus Allmond: Yeah. Thank you so much for having me, Josh. It’s good to see you. Joshua Rhodes: Yeah, it’s good to see you too. So first I gotta ask, how’s dad life treating ya? Josephus Allmond: It’s great. We actually just had his first birthday party this past Saturday. So awesome. We went all out with a clues theme, had paw prints all over the house, a bunch of decorations. We had my in laws were in town from California and some of her aunts from Texas. So full house, lots of friends and family over and a blue smash cake that Josephus really loved. Joshua Rhodes: Nice. That’s awesome. You know, Aiden’s only just about a month ahead there. I remember when I when we were working together when you were at SELC and I was like, hey, I’m not gonna be able to make this like super important meeting that I said I’d be at because it’s literally on the day of my son’s birth. I think you told me that y’all were also expecting. So that’s awesome. We’re right in there together. Neither of us are probably getting any sleep at all. So we’ll see where this goes. Let’s start out with the job title. So Virginia now has a chief energy officer. So what was the problem that the Commonwealth was trying to solve with creating that role? And what does success look like for you there? Josephus Allmond: Yeah. So historically we’ve got a Virginia Department of Energy, used to be known as the Department of Mines Minerals and Energy. And so they do all of the permitting for mines for oil and gas, mostly out in Southwest Virginia, and recently started to do more of the state energy office stuff as Virginia created the RPS and started its clean energy journey six years ago with the Clean Economy Act. So that’s sort of one agency within the Secretary of Commerce and Trade, but We all know that energy sort of touches everything. And so the governor really wanted to create a more nimble cabinet level position that could work with the different secretariats on energy issues as they pop up and as they’re impacting the different secretariats. And so the Virginia Department of Energy is still under the Secretariat of Commerce and Trade and we’re working really closely together. They’re doing some modeling to inform an energy plan that we gotta put out later this year. But I’ve really got sort of the ability to work not only with them, but with the Secretary of Labor when it comes to apprenticeship requirements or the Secretary of Education when it comes to apprenticeship programs in K twelve or energy savings performance contracting, as we’re looking at trying to get more efficient government buildings to even working with our Secretary of Public Safety and thinking about Can we develop some distributed solar facilities at our jails and prisons and incorporate some training there? So really trying to bring energy to the forefront in sort of everything that we’re doing. And in today’s world where affordability is sort of dominating the conversation, having that position at a cabinet level, I think really just elevates the importance of it and puts more of a high profile on it, just given how much it sort of seeps into everything that we’re doing. Joshua Rhodes: Yeah, totally. I mean, particularly on the affordability front with all the load growth and with electricity and data centers. I mean, Virginia’s no no stranger to data centers. You’re kind of the original area. Can you talk about data center alley? Where is that located and what’s the importance of that region and the energy that it consumes? Josephus Allmond: Yeah, so we are sort of the data center capital of the world. Loudoun County is home to Data Center Alley up in Northern Virginia. And there are a number of reasons why I think that emerged as a hub. We’ve got a great fiber network already built out, the proximity to DC for the three letter agencies and their needs. And then our tax exemption is something that we’ve had on the books for a really long time and gives an exemption for Basically all of the equipment that you purchase for your data center facility, that’s going back, you know, fifteen years at this point. And the way that that exemption has played out over time is that once a data center sort of obtains that exemption in a specific county, everything else that they do in that county is r

    38 min
  2. Inside the PUC's Cost-Allocation Overhaul with PUC Chairman Gleeson

    Jun 10

    Inside the PUC's Cost-Allocation Overhaul with PUC Chairman Gleeson

    Texas spent five years rebuilding its electrical grid based on the lessons of Winter Storm Uri. Now regulators face a harder question: who pays for the surge of large new customers trying to connect? The projections for electricity demand run far above what will actually get built, and hyperscalers want to power their data centers within 18 months, a pace much faster than the three-to-five years large industrial loads once took. ERCOT has run out of spare capacity, and the cost of building more lands squarely on residential and small-business customers if the projected load never arrives. The state’s answer is to make new load prove its intention and viability to build and pay for the grid it requires. On this episode of the Energy Capital Podcast, Matt Boms talks with Thomas Gleeson, chairman of the Public Utility Commission of Texas, the regulator who must write the rules to make that principle work. Gleeson’s North Star is SB6, the 2025 law that rewrote how large loads connect. He explains the trade-offs behind the decisions commissioners are weighing, from financial gates that screen speculative projects to a December deadline to overhaul who pays for transmission. Gleeson returns over and over again to the demand side, arguing that “the megawatt we don’t use is just as important as the megawatt that we generate.” The conversation works through: * Batch zero, ERCOT’s first round of committing firm capacity and the financial security and fee requirements, recently set at $50,000 per megawatt and meant to screen out projects that are purely speculative. * 4CP to 12CP, the proposed overhaul of transmission cost allocation, with a minimum demand charge so that large customers cannot zero-out their shares by curtailing at a few predicted peaks. * The reliability standard, a new three-part measure of how often, how long, and how large an outage Texas will tolerate. * Demand-side resources, the aggregated distributed energy resource pilot, virtual power plants and a $1.8 billion backup-power program funded through the Texas Energy Fund. How Gleeson and the commission write these rules will set how much cost current ratepayers must shoulder and which projects ever get built. Timestamps * 00:00 - Introduction and Chairman Gleeson’s PUC background * 00:48 - A new chapter for the Texas grid: from Uri reform to implementation * 04:19 - The core problem: interconnection capacity and speculative vs. real load * 08:28 - SB6 and ERCOT’s Batch Zero process * 15:10 - Large-load ride-through and performance standards * 19:18 - The reliability standard and load modeling assumptions * 23:39 - The ADER pilot: lessons and whether to scale it * 25:01 - Virtual power plants and the NRG proof of concept * 27:29 - Standardizing DER interconnection across the state * 29:20 - The backup power package: resilience for critical facilities * 32:33 - From 4CP to 12CP: reallocating transmission costs * 39:30 - Closing: taking a breath, and what the era will be remembered for Resources People & Organizations * Matt Boms (LinkedIn) * Texas Advanced Energy Business Alliance (Website - LinkedIn) * Thomas Gleeson (PUCT Biography) * Public Utility Commission of Texas (Website) * Other Orgs * ERCOT (Website) * ADER Pilot Project (Overview) * Batch Study Process for Large Loads (Overview) * Texas Energy Fund (PUCT Program Page) Company & Industry News * Texas PUC Approves TEF Backup Power Program (RTO Insider) * ERCOT’s Batch Zero Proposal and What It Means for Large-Load Projects in Texas (Seyfarth) * ERCOT’s Proposed Batch Zero Process: What Developers Need to Know (Foley & Lardner) Related Podcasts by Energy Capital * How Texas Decides Which Data Centers Connect (Tiffany Wu) (Listen) * How Will Data Centers Pay for Power? (Travis Kavulla) (Listen) Related Posts by Texas Energy & Power * How Texas Decides Which Data Centers Connect (Read) * Price the Grid or Keep Rationing (Read) Transcript Matt Boms: Today, we’re very pleased to welcome back Chairman Thomas Gleeson of the Public Utility Commission of Texas. Chairman Gleeson was appointed to the commission and named Chairman by Governor Abbott in January 2024, but his service to the state of Texas goes back much further than that. Over more than 15 years at the PUC, he has served in a number of important leadership roles, including Executive Director, Chief Operating Officer, Director of Finance Administration, and Fiscal Project Manager. That gives him an unusually deep understanding of the agency, the Texas electric market, and the work required to turn major policy decisions into real world implementation. Chairman Gleeson, thank you for your years of service to Texas and welcome back to the Energy Capital Podcast. Chairman Gleeson: Absolutely. Thank you for that introduction. Looking forward to the discussion. Matt Boms: Awesome. Well, thank you for your time. We know that you’re really busy. This interview happens in the middle of a million conversations that are happening right now around energy in Texas. We’re gonna try to hit on as many as we can. And you know, just to kind of set this up, Texas is growing fast. The commission is trying to separate real projects from speculative ones, protect existing customers, use flexibility and customer side resources more efficiently. And build a grid that can support economic development without sacrificing reliability or affordability. So I want to start with, you know, since you last came on the podcast and Doug had you on, it feels like the Texas grid conversation has shifted a little bit from post-Uri reforms and market design and broad policy ideas into a very serious implementation phase. So, from your perspective, do you see this as a new chapter for the Texas grid? Chairman Gleeson: Yeah, I absolutely do. I think you’re right. I think the reforms coming out of Winter Storm Uri, for the most part, have all been implemented. And I think the legislature, the governor, citizens are all happy with the reforms that we’ve put in place. You know, the grid has been tested a few times since Winter Storm Uri and has performed really well. So I think, yeah, the conversation has definitely now shifted to large loads, data centers, hyperscalers, how we’re going to incorporate those reliably and safely onto the grid. And then really, who’s going to pay for it? And I think as we move forward from today onward, who’s gonna pay for all of this is gonna take f you know, primary focus for everybody. Matt Boms: Yeah, absolutely. And I think Texas has always been a growth state if we look back to our our history. But does this load growth moment feel different to you? Chairman Gleeson: It feels a lot different. And the main reason for that is the speed at which it’s changing. You know, historically when large loads have come onto the system, it’s taken three, four, five years for those facilities to need their power. When you’re talking about hyperscalers, these companies want power sometimes within eighteen months to be fully operational. So the speed at which we’re being asked to make decisions that impact the economy is going quicker and having a much, you know, more difficult effect on us coming up with the right decisions in a short amount of time. Matt Boms: And, you know, given all those decisions that need to be made and looking down, you know, over the next few years, what are two or three things that you think Texas absolutely has to get right here moving forward? Chairman Gleeson: Yeah. So the first part again is who’s going to pay for this? We want economic development in Texas. You know, as the governor says, Texas is open for business, but we want to make sure that residential rate payers and small businesses are not bearing the brunt of all the costs that are going to come along with hyperscalers moving to the state. So I think figuring out how to effectively and efficiently allocate costs to those that are actually putting those costs on the system is going to be the number one thing that we do. Number two, and this will always be an issue coming out of Winter Storm Uri, I think, for for the rest of time for Texas and the ERCOT market. How do we ensure that we’re getting the right resource mix on the grid for generation resources? You know, we continue to see a proliferation of batteries and renewables on the grid, particularly solar. And that’s great for the state. You know, those resources keep prices down. When it comes to batteries and solar, you know, they help us a lot in the winter during our two peaks and the summer during our afternoon peak. But I think there’s a growing concern that we need more what we would consider baseload twenty four by seven generation, mostly thinking about gas generation. And so continuing to have discussions about how we incent that type of generation to come onto the grid, I think will continue to be really important for the state. Matt Boms: Absolutely. And for listeners who are not living inside of ERCOT stakeholder meetings, that we certainly have listeners that do live inside of those meetings, but plenty of listeners that are new to the energy space. What is the actual problem that Texas is trying to solve here with large loads and data centers? Just for a beginner who is, you know, hearing this for the first time. Chairman Gleeson: Yeah. So historically the grid has always had a lot of excess capacity. So the transmission system has capacity. A new customer can come and interconnect and not have a problem getting the service that they need. But because of the size of these facilities and the speed at which they are looking to interconnect into the grid, we’ve run out of existing capacity on the system. And so what was happening over the last say six to eight months was large loads were looking to interconnect and not being able to, because as soon as they would have a study validating. Their ability to interconnect, another load would

    43 min
  3. How will data centers pay for power?

    Jun 3

    How will data centers pay for power?

    Right now, connecting a data center to the grid works like Texas hog season: no defined season, no bag limits, first-come-first-served, file as many interconnection requests as you want. Travis Kavulla’s recent essay in American Affairs argues the power industry needs something closer to deer season, with defined rounds, allocation rules, and prices that reflect what grid access actually costs. The mechanism he favors is an open season, borrowed from interstate gas pipeline regulation. Rather than processing interconnection requests on a rolling basis, a grid operator would design an engineering plan reflecting realistic demand and tender it to the market in a structured bidding process. Winning bidders receive transferable property rights to grid access, comparable to water rights or spectrum licenses, rather than vague regulatory permission that reverts to the grid operator if a project fails. That difference matters for financing: a transferable property right holds residual value even if a data center company does not survive the artificial intelligence boom. Kavulla has worked as a utility regulator at the Montana Public Service Commission, on market design at California ISO, in policy at R Street, and in regulatory affairs at NRG. He now leads policy at Base Power and teaches at the University of Chicago. The conversation also covers three other mechanisms: * Data center prepayments for discrete capital costs are, in Kavulla’s framing, the most direct fix for protecting existing ratepayers. Utilities resist them because prepayments erode the rate base growth that regulated utilities depend on for earnings. * Transmission service agreements (contracts requiring upfront financial commitment before interconnecting), widely adopted across the eastern United States, rank a distant third. They base the commitment on average embedded rates rather than actual incremental cost, which overcharges some projects and undercharges others. * Bring your own generation addresses a separate problem: demand growing faster than supply pulls the clearing price higher for all customers. Data centers that source their own capacity or pay for flexibility elsewhere ease that pressure. Utah and West Virginia are among the first states opening pathways for large loads to do this. On ERCOT, host Joshua Rhodes frames the gap: the batch zero process rations grid access but does not price it. Kavulla affirms the distinction and argues cost-of-service regulation has been stretched past its breaking point. How Texas resolves these issues will shape its next interconnection rules and what current ratepayers carry as load climbs. Timestamps * 00:00 - Introduction & Travis Kavulla * 01:59 - The Essay’s Core Premise * 03:45 - Open Season: From Hog Season to Deer Season * 08:07 - What Actually Gets Auctioned * 09:45 - Data Centers Fronting Capital, and Why Utilities Resist * 13:37 - Transmission Service Agreements and Their Flaw * 17:41 - Do Data Centers Raise or Lower Rates? * 22:55 - The ComEd and Dominion Problem * 25:14 - Bring Your Own Generation * 26:53 - Reforming Monopoly States: Utah and West Virginia * 30:51 - Batch Zero vs. Open Season in ERCOT * 35:43 - ERCOT’s Flexibility Tools and Speed to Power * 42:08 - Which Idea Has the Best Shot Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Travis Kavulla (LinkedIn) * Base Power Company (Website) * American Affairs (Author page) * Energy Capital (Website - LinkedIn - YouTube) * Texas Energy & Power (Substack) The Essay at the Center of This Episode * How Will Data Centers Pay for Power? — Travis Kavulla, American Affairs (the essay this conversation is built around) Studies, Cases & References Discussed * Factors Influencing Recent Trends in Retail Electricity Prices — the Lawrence Berkeley National Lab / Brattle study on load growth and rates, explained by a Brattle researcher (the North Dakota “headroom” finding Kavulla references) * FERC Rejects the Amazon–Talen Co-location Agreement at Susquehanna — the co-location dispute Kavulla cites * FERC Upholds the Amazon–Talen Rejection on Rehearing — the March 2026 follow-up * Kavulla Outlines His Data Center Interconnection Proposals — RTO Insider coverage summarizing the open season, prepayment, TSA, and BYOG ideas Related Energy Capital Episodes * How Texas Decides Which Data Centers to Connect — Tiffany Wu on ERCOT’s Batch Zero process * Who Pays for the New Grid with Pablo Vegas — ERCOT’s CEO on load growth and who pays * Texas Growth Is Running Into Power Grid Limits with Katie Coleman — large load interconnection and cost allocation Transcript Joshua Rhodes: Hey everyone and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Travis Kavulla here to talk about an essay that he recently wrote in American Affairs, where he’s the energy editor about how data centers will pay for power. It’s a really hot topic right now, and I’m excited to dig into that and how it kind of ties in to what ERCOT is doing for data centers. Before that, if you’re in the energy nerd space like you would be if you were listening to this podcast, you probably know Travis already, but He’s got a pretty impressive background that I’m going to go ahead and go through now. So Travis went straight from Harvard to the University of Cambridge, which I found funny that you went from one Cambridge to another, I guess. I guess that was easy for the well, I guess postcard you’re going from Massachusetts to the UK, but still. Travis Kavulla: The imitator to the original. Joshua Rhodes: Yeah, fair enough. Should I call this New Cambridge? But that’s not a thing. That’s not what we call those. Anyways. After that, you spent some time in the media with National Review and some freelance work in the UK, East Africa, and the US. But then I did not go back and look to see what you wrote for National Review. But at this point it looks like you kind of pivoted into energy and in particular the regulatory space around energy, which is what we’re gonna talk about today. But you started out as a board member for the Western Electricity Coordinating Council before becoming a commissioner at the Montana Public Service Commission, then jumping over to California to work on the energy and balance market with CAISO, the California independent system operator. Then going to R Street, where you’re the director of energy and environmental policy. And then I think your longest period of time, and probably most people know you as the VP of regulatory affairs at NRG. NRG is big in Texas, and so that brought you into Texas quite a bit. And so we were very happy to have you here. Currently a lecturer at the University of Chicago and the head of policy at Base Power, also based in Texas and Austin actually, Travis Kavulla. Welcome to the Energy Capital Podcast. Travis Kavulla: Thank you for having me, Josh. Great to be here. Joshua Rhodes: Yeah, so we wanted to bring in and talk about this essay where you’re talking about of how data centers should pay for power. And really this essay, we’ll link to it in the show notes. It’s brilliant. And I think it’s getting read pretty widely, including I saw on LinkedIn from FERC Commissioner David Rosner. So that’s great. One thing I was gonna say when I was going through your list of things is that I’ve already put my money in Polymarket that one day you’ll be a FERC commissioner. So I don’t know. It’s a pretty good bet right now. Just kidding. Not not the case. But at least your work’s getting read by them, so that’s great. So and I’ll go ahead and try to lay out the premise of your essay, and you can tell me where I get this wrong. But essentially, it’s like that the US should stop treating hyperscale data centers demand as just another low class to be included inside traditional utility rate making, with a core idea that scarce grid access should be explicitly allocated and priced, and new data center loads should pay its incremental cost, and that new generation, the bring your own generation, should be essentially required. Other than, you know, socialize through the utility rates. Did I get that roughly right? Travis Kavulla: You got it down and you didn’t even need ten thousand words, Josh. Yeah. I mean the basic premise here is that the typical utility business model, which involves estimating what load is going to be on the system in the future and beginning to make capital outlays in advance of that load showing up in a lack of knowledge about whether it will appear, is not a good fit, given the amount of uncertainty over which loads are going to show up, or in terms of cost allocation when you have obviously an inflationary price environment. Where serving the next unit of demand is so costly. So it’s compounding risk and costs that need to be better tied back to the future users of the system. That’s the fundamental insight. Joshua Rhodes: That totally makes sense. I mean, you know, I’ve been steeped in ERCOT for a long time and I haven’t believed these large load numbers for years, right? And they just keep getting bigger and bigger and bigger and bigger. And I know in other regions that we’ll get to like PJM are also, you know, experiencing these large increases. And so one of the things you do is you kind of argue for a few different ways around if we’re going to try to connect as many of these large loads as possible, you argue around a few different concepts. One of them is like an open season for access. And I just wanted to translate this into Texas Speak just for the audience. So open season. So right now it feels like that connecting large loads is kind of like hog season, where there is no season. And it’s just anyone all the time, as much as you can, please, like first come, first serve, whatever. But kind of m

    44 min
  4. How Texas decides which data centers to connect

    May 27

    How Texas decides which data centers to connect

    ERCOT now has roughly 445 gigawatts of large loads asking to connect to the Texas grid, a figure so large that Joshua Rhodes says it might as well be infinite, because the system cannot physically build for all of it. To sort real projects from speculative ones, ERCOT is launching a new screening process called batch zero, and stakeholders voted to advance it at last week’s Technical Advisory Committee meeting. On this episode, Rhodes walks through the mechanics with Tiffany Wu, an energy markets and regulatory consultant at McAdams Energy Group and a former adviser to Public Utility Commissioner Will McAdams. The mechanism traces back to SB6, the 2025 law that standardized how large loads connect to the grid and set a 75-megawatt threshold for what counts as a large load. Wu describes a sequence built to thin the field at each step. ERCOT screens which projects qualify and studies what transmission they would require, then puts the survivors through a financial gate that filters out developers unwilling to commit real capital before final studies on whatever clears. The first batch is not expected to finish until late 2027. Running alongside the batch process is a fight over who pays for the transmission. PUC staff want to charge large loads based on their contracted peak capacity rather than the four coincident peaks that currently let flexible customers shave their bills. Wu says this shift would make much of the demand-response incentive evaporate. The episode explores: * How ERCOT separates base load projects already in the queue from those still being studied and allocated. * Why the shift from 4CP to a contracted-capacity charge changes who pays for transmission. * How loads can use ERCOT pathways to pull more power than their allocation while transmission gets built. ERCOT is moving to approve the framework now and tweak it as the first batch works through. (It’s the same build-it-in-motion approach ERCOT CEO Pablo Vegas described on an earlier episode.) The vote sets the rules. The studies will decide who actually connects. Timestamps * 00:00 - Introduction & Tiffany Wu * 01:47 - Why SB6 Exists * 07:42 - Batch Zero Status * 10:03 - Who Gets Into Batch Zero * 16:49 - Financial Obligations and Commitment Gate * 22:44 - Batch Zero Study and Timeline * 27:49 - Load Estimates and Flexible Load Options * 31:37 - Transmission Build-Out and 765 kV Lines * 35:46 - Batch One and Future Batches * 37:43 - Transmission Cost Allocation and 4CP Reform * 46:43 - Reliability Standard Study Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Tiffany Wu * McAdams Energy Group (Website - LinkedIn) Company & Industry News * ERCOT’s TAC Sends Batch Zero Guidelines to Board Books & Articles Discussed * Texas Senate Bill 6, 89th Legislature * PGRR145 - Batch Zero Process for Large Load Interconnections * NPRR1325 - Related to PGRR145, Batch Zero Process for Large Load Interconnections * PUC Project No. 58481 - Large Load Interconnection Standards Rulemaking Related Podcasts by Energy Capital * How Texas Plans to Serve ‘Infinite Demand’ with Eric Goff * Who Pays for the New Grid with Pablo Vegas * Is Texas Ready for Winter Now? with Will McAdams Related Posts by Texas Energy & Power * Energy Policymakers Grapple with Reliability, Fairness, and Flexibility Transcript Joshua Rhodes: Hey everyone, and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Tiffany Wu here to talk more about what all is happening in ERCOT, particularly around SB6, large loads, transmission cost allocation, all of the hot topics right now. Tiffany Wu is an energy markets and regulatory consultant with McAdams Energy Group. And for more background with McAdams Energy Group, you can go back and listen to Matt Boms’s interview with Will McAdams just a couple months ago. So before working at McAdams Energy Group, Tiffany was a DOE Solar Energy Innovation Fellow and also an advisor to Will McAdams while he was a commissioner at the Public Utility Commission of Texas. But between that, also was a senior project manager at TEPRI, the Texas Energy Poverty Research Institute, which is, I think we actually met. We had our first conversation when you were at TEPRI, and I was asking you questions about how these 9.9 megawatt batteries, what they were paying for electricity and how much they got paid for electricity, because that was a big deal for a while. Tiffany Wu: That’s right. Yeah, I remember that there are a lot of questions around whether or not those batteries which support the grid, whether or not we should be paying for some of those distribution level costs as transmission level costs. Yes. Joshua Rhodes: Yeah. Anyways, we probably won’t get into that, but we can leave that as a thing. But that was super helpful back then. Thanks. And I know you you also spent 10 years with Mitsubishi Heavy Industries as a process engineer, commissioning engineer. I’m really excited to have another engineer on this podcast. That’s kind of rare, to be honest. Well, thank you. You got your BS and chemical engineering at UT Austin before getting your masters at the LBJ School of Public Affairs. So Tiffany Wu, welcome to the Energy Capital Podcast. Tiffany Wu: Thank you. Thanks for having me. Joshua Rhodes: Yeah. So the day we’re recording this podcast, we we just released a podcast with Eric Goff where we talked we hit on some broad topics around how ERCOT policy is made. And we talked a lot about the large load process. I’d encourage folks to kind of maybe listen to that podcast first in terms of like kind of setting the broader goal. But with this one, I think I’d like to get a little bit deeper in this conversation around some of the intricacies of the process, kind of where it’s at. And to be fair, this kind of fits in my teaching philosophy of any time I give a lecture, I try to say the same thing three times in three different ways as a way of like some people learn one way versus the other way. So there will be some overlap between this and and the podcast with Eric, but I still think there’s so much there that I think this is gonna be, I think we need to be having a lot of conversations around this. But we’re gonna get deeper into some of these things. But let’s start bigger picture, maybe for folks who haven’t had the one with Eric. So The whole reason we’re having this conversation about large loads and batch zero and transmission cost allocations based on SB6 or Senate Bill 6. Can you lay out what problems Senate Bill 6 was looking to solve and kind of how the batch zero process, you know, fits into that effort? Tiffany Wu: Yeah, sure. So Senate Bill 6 is trying to balance a few different things. So previously in ERCOT, most of the large loads were coming from the cryptocurrency industry. It wasn’t until recently that more of the data centers have been looking for interconnection into ERCOT. So historically, the way that you would connect into the system is you would go and talk to your transmission provider or your distribution provider and ask them, hey, I want to set up a business. Can I connect to the electricity system? And they would figure it out. But because there are so many loads coming in now, there was some concern that with the size. Historically they were working on one project at a time and TSPs were conducting the studies, but ERCOT started to see that there may be a reliability issue with how many loads are coming onto the system and how big each of these loads are. The other issue is that with the cryptocurrency miners, you may remember that a lot of people were worried that they were not paying transmission costs because the way that we paid transmission costs historically is based off of the four coincident peaks during the summertime. And so if you’re able to avoid that, then you don’t have to pay transmission costs. So, so in SB6, what they’re trying to do is provide more guidance and more standardization around how you interconnect into the system. So that would support business development. And on the other side, they’re also trying to make sure that whoever does come into the system will pay their fair share of the interconnection costs. Joshua Rhodes: Yeah, no, totally. So there is that distinction in SB6 and I know there’s this distinction of like seventy five megawatts and above that defines kind of the large load. And I know the public utility commission can change that number in the future, I think if they want. Where did that number come from? Do we have a feel for kind of where that seventy five megawatts came from? I Tiffany Wu: Honestly not sure where seventy-five megawatts specifically came from. But I think that what they’re trying to do is make sure that this is capturing the data center loads, which we know are potentially like hundreds of megawatts to gigawatts to even multi-gigawatts now. Yeah. Versus some of the traditional loads that are like the oil and gas industry, petrochemicals manufacturing. So not making it more burdensome for those traditional loads to interconnect into the system still. But PUC did try to reduce that threshold to twenty-five megawatts. They’re allowed to reduce the threshold that they think that it’s necessary. They originally wanted twenty-five megawatts for the load forecasting rulemaking, but that was gonna capture so many things and that was going to be so burdensome that multiple people push back against that. Joshua Rhodes: Got it. When the seventy five megawatts like threshold kinda came out, a lot of people said, Well, we’re just gonna see a bunch of seventy four point nine megawatt, you know, data centers show up. Are there any of those? Are we seeing a bunch of those pop up under the radar now? Or I guess maybe we’re not seeing them. Do you know if they’re there? Tiffany Wu: I think they are there a

    50 min
  5. How Texas plans to serve ‘infinite demand’

    May 20

    How Texas plans to serve ‘infinite demand’

    Texas has spent decades building transmission to serve load growth. The pattern worked when growth rose steadily with new homes, oil and gas operations, and the gradual expansion of the state’s industrial base. It is being tested by a different kind of customer: data centers requesting interconnection at a scale that exceeds what the grid can physically deliver. Eric Goff, founder of Goff Policy and a long-time participant in the ERCOT stakeholder process, walks through how the system is adapting. The current large load queue sits above 400 gigawatts, a number Goff describes as effectively infinite because the constraint is infrastructure, not demand. In an interview with host Joshua Rhodes, Eric covers a lot of ground, including: * How the batch zero policy, now working its way through ERCOT governance, would replace one-off utility studies with a single, system-wide study and a constructable transmission plan. * How the decision to build 765 kV transmission compares to the 138 and 345 kV shifts of past generations. * How Senate Bill 6 gave ERCOT and utilities multiple tools to disconnect large loads before emergencies. * Why artificial intelligence hyperscalers behave differently than the crypto miners that came before them, with a value-of-lost-load above the wholesale price cap. * Whether a minimum transmission charge can protect existing rate payers as new load arrives. Goff argues the infrastructure decisions Texas makes now will determine whether the data center build-out lowers per-unit costs for everyone or shifts them onto residential consumers. Energy Capital Podcast is produced by ClarityForge Studios. Timestamps * 00:00 - Introduction & Eric Goff * 02:36 - How Policy Gets Made in ERCOT * 06:35 - What’s Actually Driving Load Growth * 09:18 - Is the 435 GW Queue Real? * 10:41 - Inside the Batch Zero Process * 14:21 - Building Transmission for Load, Not Generation * 16:56 - Large Load Flexibility and Controllable Load * 18:18 - SB6 and the Power to Curtail * 22:38 - The Dispatchable Campus Idea * 27:27 - Does Transmission Planning Need to Change? * 32:32 - Paying for Transmission: 4CP, 12CP, and a Minimum Charge * 39:39 - Five Years Out: Betting on Infrastructure Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Eric Goff (LinkedIn) * Goff Policy (Website - LinkedIn) Company & Industry News * ERCOT files Planning Guide Revision Request 145 for Batch Zero * ERCOT Board approves $9.4B 765-kV Eastern Backbone project (RTO Insider) * PUCT approves first 765-kV transmission lines in ERCOT region * Texas lawmakers push back on 765-kV transmission plan (KXAN) Books & Articles Discussed * Texas Senate Bill 6, 89th Legislature * ERCOT Planning Guide Revision Request 145, Batch Zero Process for Large Load Interconnections * ERCOT Permian Basin Reliability Plan Study * PJM proposal to transition away from capacity market Related Podcasts by Energy Capital * The New Rules Behind ERCOT Prices, with Andrew Reimers * Texas Growth Running Into Grid Limits, with Katie Coleman * The Data Behind Texas Reliability, with Max Kanter Transcript THE ENERGY CAPITAL PODCAST Eric Goff, Founder of Goff Policy Host: Joshua Rhodes Joshua Rhodes: Hey everyone, and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Eric Goff, the founder of Goff Policy here, to basically tell us how ERCOT works. Eric is one of the smartest people out there when it comes to kind of the current comings and goings in and around ERCOT. Deeply involved in a lot of the policy and a lot of the procedures and a lot of other things happening. Eric founded Goff Policy in 2019. Before that, he had seven years at Citigroup in energy trading, market operations, earlier roles at NRG Energy and Reliant and Constellation. He’s been a longtime participant in the ERCOT stakeholder governance system. He serves as past chair of multiple ERCOT subcommittees and working groups and up until just recently served as a sole representative for Texas residential consumers at the ERCOT Technical Advisory Committee appointed by the Office of Public Utility Counsel. The firm has grown significantly in the past couple of years. You’ve been spreading into Western markets. You’ve been hosting symposiums and all kinds of things. Eric, welcome to the Energy Capital Podcast. Eric Goff: Thank you so much. It’s great to be here. I appreciate the invitation. Joshua Rhodes: Yeah, no, absolutely. So as I do with most people when I’m going through their LinkedIn before talking, I actually came across something I did not know about you is that did you really co-found compost peddlers? Eric Goff: I did with my friend Dustin Fedakko. Joshua Rhodes: Okay, so I don’t know if we’ve talked about this. Maybe we have. I was in East Austin at around that time and I saw your guys, maybe you, I don’t know, like riding these modified cargo bikes with basically blue barrels carrying compost around. Was that you? Eric Goff: That’s right. That was us. We had, we called everyone the peddler. And I did some of the compost shifts, but we had part-time and full-time peddlers and launched it before we had municipal composting in Austin. And I think that maybe the best thing to say is that we accelerated the city’s own plans to municipal composting. Joshua Rhodes: Right, right, right. It was just funny. Just, remember one time thinking, and this was also with like PediCab folks around that time before like e-bikes really kind of made it into where they’re the most fit people in the world riding tens of miles a day carrying heavy loads. It was insane. Eric Goff: Yeah. Some of the hard part too is because it’s just pure literally inertia with another maybe grid thing, but you have to stop the bike and start the bike and stop the bike and start the bike with many, many pounds of compost in that barrel. Joshua Rhodes: It was insane. All right. So I’ve already burned enough of our precious time talking about, but inertia is a good tie in. We’re going to get to the grid. So Eric, you do a lot of policy, a lot of policy consulting, a lot of policy work in ERCOT. For folks that either don’t live inside the ERCOT stakeholder world, which is the vast majority of people on this planet, how does policy actually get made in ERCOT? Where does it start and where does it continue? Eric Goff: Sure. It’s a unique system that doesn’t exist in many other locations. And it’s changed some. I’m sure we’ll get into that since Winter Storm Uri happened. Historically, the energy companies in Texas, going back to the 90s at least, I wasn’t in the business then, so I’ve been told, were active in working together to establish what ERCOT would be and do. And they established this stakeholder process. At the time, it had a stakeholder board and it operated by having like a balance and continues to have a balanced group of buyers and sellers that many recommendations at the time of decisions. And if anyone doesn’t like something, you can appeal that to the public utility commission. But the process drives consensus because you have to get along long-term with your peers. Right. And so many things don’t end up being appealed to the utility commission. They just kind of get worked out. Everyone leaves a little bit dissatisfied, but it’s an effective process. Since Winter Storm Uri, for good reason, people were upset about how the process was working and, you know, there’s a lot of finger pointing. And so there was significant change to the process. So now everything goes to the utility commission ultimately. And the stakeholder process is more of like an advisory role to the commission. Joshua Rhodes: Okay. And so are these the groups, the technical advisory committees, correct me if I’m saying these wrongs, and these working groups like the large load working groups, is this kind of where all of this is the negotiations happen and things are made? Eric Goff: So ERCOT has offices in Austin and those meetings are technically open to the public, but they’re also broadcast online. State law has required that TAC, which is the senior stakeholder group, as well as the ERCOT board, have been accessible on the internet so anyone can follow along. During COVID, some people just kind of dialed in for fun. But the process has dozens of people in some cases, for many of these large load questions, hundreds and hundreds and hundreds of people that dial in to listen. But it’s many of the same people that speak that are kind of established figures in the stakeholder process have been around for a while. Joshua Rhodes: In general, like, is the policy that comes out of these things, I mean, there’s negotiations, there’s consensus or some form of consensus or some things like that. How quickly are these groups able to move? I know there’s a lot of pressure right now on figuring a lot of things out that I want to get to, but how quickly are these groups able to move to make new policy? Eric Goff: It depends on the issue. Historically, when I say historically, I’m going to typically mean like before Winter Storm Uri and after Winter Storm Uri. But before Uri, a lot of it was stakeholder driven and led. Then when the new commission and new board and new CEO came in to kind of right the ship with ERCOT and the grid, a lot more became. Joshua Rhodes: Three years ago. Okay. Yeah Eric Goff: led by ERCOT staff. Today it’s largely similar to how other independent system operators work, where the staff will recommend something, bring it to the stakeholders and ERCOT board and to the commission. And there’s back and forth dialogue among all three groups. I don’t think it’s more efficient than it used to be, but it is more public process. Joshua Rhodes: Okay, well there’s some trade-offs there, I guess. I want to jump into probably one of the biggest, the hottest butto

    43 min
  6. Austin Energy Enters the Next Phase of Decarbonization

    May 13

    Austin Energy Enters the Next Phase of Decarbonization

    Austin Energy’s power generation hit the 65 percent carbon-free level in 2024, and the municipal utility is targeting 100 percent carbon-free load by 2035, one of the most aggressive clean energy targets of any utility in Texas. Austin Energy is one of the largest municipally owned utilities in the country and one of the few vertically integrated utilities operating inside ERCOT’s deregulated market. As the utility plans for load growth and rising ERCOT market exposure, it is also preparing the community to weigh the trade-offs that entails. In this episode, Joshua Rhodes speaks with Stuart Reilly, general manager of Austin Energy, and Lisa Martin, the utility’s chief operating officer. Reilly and Martin walk through how the muni model shapes new load evaluation, renewable contract structure, and community engagement. They describe a resource plan that combines local generation with utility-scale batteries, distributed energy deals, transmission upgrades, and demand response. Joshua, Stuart, and Lisa discuss topics including: * What it means to operate as a vertically integrated muni inside ERCOT’s competitive market. * The 500 megawatts of plausible new load Austin Energy is planning for, and why most of it is not data centers. * How load zone price separation has changed the hedging value of distant renewable power purchase agreements. * Why the resource plan calls for new local generation alongside more clean energy procurement. * A new 100 MW battery deal with Jupiter Power and a 40 MW distributed deal with Base Power. * How the utility returned over $100 million to customers from Winter Storm Uri. * How Austin Energy communicates reliability, affordability, and clean energy trade-offs with its community. Energy Capital Podcast is produced by ClarityForge Studios. Timestamps * 00:00 - Intro, Stuart Reilly and Lisa Martin * 01:11 - Austin Energy as a Non-Opt-In Utility * 05:47 - Planning for Load Growth, Why Gas Peakers * 09:25 - Sizing Real Load vs the ERCOT Forecast * 10:49 - New Loads, New Costs, Who Pays * 12:13 - Load Zone Separation, Explained * 14:02 - Decker Retirements and Local Generation * 16:51 - PPAs, Hedges, and the $850 Problem * 18:26 - How a Gas Peaker Fits a Carbon-Free Goal * 23:53 - Why Local Power Enables More Renewables * 26:43 - Communicating Complexity to Customers * 31:19 - Jupiter Power, Base Power, and Local Storage * 36:08 - Distributed Batteries and Distribution Costs * 40:25 - Closing Thanks and Outro Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Stuart Reilly (LinkedIn) * Lisa Martin (LinkedIn) * Austin Energy (Website - Executive Leadership Team) * Other Oganizations Mentioned * ERCOT (Website) * Jupiter Power (Website) * Base Power (Website) Company & Industry News * Austin Energy signs Battery Storage Deal, Advancing Climate and Reliability Goals * Austin expands renewable energy push with major solar generation investments - Community Impact * Texas grid operator’s demand forecast likely an overestimate - Texas Tribune * Austin Energy 2035 plan sees challenges and successes one year after adoption - KXAN Books, Articles & Reports Discussed * Austin Energy Resource, Generation and Climate Protection Plan to 2035 * ERCOT Preliminary Long-Term Load Forecast 2026–2032 * Aggregate Distributed Energy Resource (ADER) Pilot Project Related Podcasts by Energy Capital * All Energy Capital Podcasts * Texas Growth Is Running Into Power Grid Limits with Katie Coleman * Who Pays for the New Grid with Pablo Vegas * Creating a Distributed Battery Network with Zach Dell Related Posts by Texas Energy & Power * Process is Killing Texas Data Center Projects * Transmission Takes a Decade, Load Doesn’t — with Raina Hornaday Transcript Joshua Rhodes: Hey everyone, welcome to another edition of the Energy Capital Podcast. I’ve got not one but two guests for you today, both from the C-suite of Austin Energy, one of the largest municipal utilities in the country. It actually ranks as the eighth largest publicly owned electric utility in the U.S. And it serves about a million folks in the greater city of Austin. So today we’re going to be talking to Stuart Reilly, who’s a current general manager of Austin Energy. Stuart has spent about 20 years in service of the city of Austin, starting as assistant city attorney, before moving up to various roles at Austin Energy. Lisa Martin is currently the Chief Operating Officer at Austin Energy, but she’s also spent times before at SoCal Edison, going through energy supplies and contracts and other types of things. And also from her LinkedIn, found out that she had something to do with subsea surveillance at Shell, which I actually want to just throw out all of the questions I have for you guys and focus just in on that. So sorry, Stuart, if we don’t talk about anything that we were going to talk about, but having found this out today. I’m really excited to have both of you all here to talk about Austin Energy. So Stuart and Lisa, welcome to Energy Capital Podcast. Stuart Reilly: Thanks Josh. Lisa Martin: Thank you, glad to be here. Joshua Rhodes: So in this podcast, we talk a lot about energy. We talk a lot about Texas energy. And a lot of times when we’re talking about ERCOT, we’re talking about the competitive regions of the system. And most electricity meters in the state of Texas are in kind of the power to choose region. But there are some parts of the states that are different, one being Austin Energy, the other being the City Public Service of San Antonio. And a lot of the co-ops are actually these things called non-optin entities. Stuart, can you explain kind of what those are and kind of how Austin Energy fits in the energy mix in ERCOT and in Texas. Stuart Reilly: Yeah, absolutely. And Austin Energy has been around since 1895. Like you mentioned, we serve about a million residents, 580,000 customer accounts, homes and businesses. Not just in the city of Austin, but kind of in the Travis County region, we serve 11 other cities in our area and unincorporated areas of Travis County. Currently the third largest municipally owned utility, but operating in the ERCOT market as a non-optin entity. So because our history kind of goes back to this 1895 period when investor owned utilities didn’t want to come to Austin, our city decided to start this journey on its own, build a dam, build a powerhouse that served as the first street lighting system, the moonlight towers that we still have here in Austin. Even as the market evolved and even after the competitive market in Texas and ERCOT came to be, we still operate as vertically integrated utilities. So we still have generation, transmission, distribution, and retail customers. And we do all of the customer service functions for the city of Austin. And so while we’re a vertically integrated utility in Texas, we still have to compete in the ERCOT market. Our generation, we still sell all of our generation into the ERCOT market and we buy all the load to serve our customers out of the ERCOT market at the Austin Energy Load Zone. So even though our generation used to directly serve our customers, now it’s operating and bid into the market just like anybody else is operating in that ERCOT market. So really when you look at us as a vertically integrated utility in Texas operating everything from end to end, I think we have the ability to do more of what’s in our community’s best interest. Because if you’re just operating in the ERCOT market as a generator, your interest is in generating more and that’s where your income is going to come from. For us, it’s really looking at the whole picture of what is the best outcome for the customer leading with our values. We’ve been trying to sell less of the thing that we sell. So if we’re a generator, we’d be generating more. If we were a rep, we’d be trying to sell more. So that’s really enabled us to be ahead of the game when it comes to energy efficiency programs, rebate programs, solar programs, getting our customers to do things on the customer side that get to better environmental outcomes. Because we’ve been talking for years of decades, even in Austin, about how a kilowatt reduced is cheaper than a kilowatt produced. So if you’re looking at getting to cost effective environmentally friendly outcomes, we think we have that kind of advantage by looking at the whole picture by serving customers and operating as a generator in the market. Lisa Martin: And I’ll just add in that I think being municipally owned has really helped us get where we are in terms of being a leader in the energy transition because our public and our city council are so engaged. And so, you know, for right now we’re implementing our resource generation and climate protection plan to 2035. And a lot of it involves going out into the community and talking to them and saying, Hey, what is being a good utility partner look like to you? What do you expect out of your utility? And so we get lots of feedback from the community and our city council, and that all ties into what we’re working on. Joshua Rhodes: That makes sense and I want to dig into quite a bit of that, but Stuart, you actually brought up a really good point about some of the first uses of electricity in Austin being our famous moon towers. I just want to verify these are the same moon towers where the dazed and confused party at the moon tower be there comes from, right? Stuart Reilly: Yeah, and we have a little history center here in Austin Energy that shows some of that. And I think Matthew McConaughey is playing there around the clock telling people that there’s a party at the Moon Tower. I think that that really sparked a new level of understanding and appreciation for our iconic Moonlight Towers, which we still operate after all these years and they’re designated as Tex

    41 min
  7. Process is Killing Texas Data Center Projects

    May 6

    Process is Killing Texas Data Center Projects

    As the data center buildout in Texas accelerates, the public conversation has fixated on generation, interconnection queues, and gigawatts. But the firms actually structuring these deals see a different problem entirely: process. In this episode, Joshua Rhodes speaks with Maura Yates, chief executive of Mothership Energy. Mothership is one of the most active retail electricity providers in ERCOT’s large-load market, managing more than three gigawatts of large load and writing more than 39 distinct data center contract templates to handle the variation across deals. Yates says the technology to power data centers exists. The bottleneck for data center completion is the time it takes to sign contracts for electricity service and the time it takes to connect them to the grid. As Texas debates SB6 implementation, co-location rules, and demand-side management, that distinction is shaping which projects get built and when. Joshua and Maura discuss topics including: * Why Mothership has written more than 39 distinct data center contract templates. * The difference between behind-the-meter, front-of-meter, and co-location deals. * What the Crusoe Goodnight data center PUC ruling means for future co-location projects. * Why most data centers are data center companies, not power companies. * HowYates expects ERCOT to integrate large load without pushing costs onto residential customers. Energy Capital Podcast is produced by ClarityForge Studios. Timestamps * 00:00 - Introduction & Maura Yates * 01:26 - Building Mothership from Both Sides of the Market * 03:27 - The Problem Mothership Was Created to Solve * 05:51 - White Label REP Model and Getting DERs into ERCOT * 08:37 - Option One vs. Option Two Retail Licenses * 10:42 - Selling the Residential Book and Pivoting to Large Loads * 13:27 - Entering the Data Center and Bitcoin Mining Space * 16:24 - How Mothership Structures Data Center Deals * 19:13 - What the Market Needs: Process Over Technology * 21:24 - Co-location, Net Metering, and BYOG in ERCOT * 26:13 - Do Data Centers Actually Want to Be Power Companies * 28:12 - Eclipse: Mothership’s Market Access Platform * 32:01 - Forward Curves and Empowering Price Takers * 38:07 - The Grid’s Future: Distributed Supply and Data Center Growth * 41:03 - Closing Resources People & Organizations * Maura Yates (LinkedIn) * Mothership Energy (Website - LinkedIn) * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) Company & Industry News * Mothership Energy and Atlantic Energy Complete Texas Customer Transfer Related Podcasts by Energy Capital * “The Name of the Game is Flexibility,” a Conversation with ERCOT’s Pablo Vegas Transcript Joshua Rhodes: Hi, everyone, and welcome to the Energy Capital podcast. I’m really excited to have Maura Yates here to talk about Mothership Energy in ERCOT. Maura Yates has over 20 years of experience in the power industry, starting in distributed energy resources at Arizona Public Service before moving to governmental affairs at Sun Edison and then becoming VP of sustainability at MP2 Energy, which was bought by Shell in 2017. In 2021, Maura co-founded and is the CEO of Mothership Energy Innovations with her business partner, Caitlin Brammer. Mothership is the 18th largest retail electricity provider in the nation and is contracted and manages over three gigawatts of large loads in ERCOT. In addition to being a rep, Mothership provides risk management, technology and consulting services to electric cooperatives in Texas and specializes in data center and wholesale procurement. Yates, welcome to the Energy Capital Podcast. Maura Yates: Thanks for having me. Super excited to be here chatting with you all. Joshua Rhodes: Yeah, and we’re again, super excited to have you. Before we dig into mothership and your current role, like looking back kind of where you’ve come from, your LinkedIn started in a regulated electricity space at Arizona Public Service before kind of going into more corporate with Sun Edison and MP2 and Shell. And now you’re CEO of like a company in the really competitive space. How were those different, those roles that you have in the different spaces where they Maura Yates: That’s a really good question and it’s one I enjoy answering because ultimately it’s that background that has allowed us to create incubator Mothership Innovations to be the shop that it is. So when you look at the places, I’ve spent time at the utilities, I spent time at the development side, both a DER and large scale solar development shop, all the way then to a deregulated pseudo rep slash utility in ERCOT. And really just bounce back and forth from utility side. To developer or industry side, back to a version of the utility, back to the industry side. And now I’m back on quote unquote the utility side or the delivery side and supply side. And where we’ve landed with Mothership is really taking the learnings of participating and being a part of a company on both sides of the transactions, right? So you typically have the utility on one side and the developer on the other side. And so by jockeying back and forth between these spaces, between our regulated utility all the way into the deregulated market, it’s given us a really well-rounded understanding of how these different parties participate in the market, but also really what they find important and what they find valuable and like, what is it that the utility is trying to get out of transactions? What is it the developer is trying to get out of transaction? And when you better understand both sides of a transaction, you’re able to come up with a better solution for the transaction. Which is why, again, we’ve developed mothership in its latest stage to really be this deal shop and this service provider for both developers and other load serving entities and utility providers. And I should clarify, I’m using utility and like not the traditional ERCOT sense of TND, but really the one providing and servicing power to the end user. Joshua Rhodes: Yeah, no, that makes sense. Like, can you kind of tease out a little bit like of that? I seeing both sides of kind of how things operate is super valuable. So as you were seeing both sides, can you kind of tease out what was the problem that mothership was originally created to solve? Talked about both sides, but what was that problem there? Maura Yates: Yep. So the more time that we spent on both sides of these deals. So for example, I go back all the way to Arizona Public Service when we structured some of the first utility incentive programs and we were very aggressive, like in a very solar friendly way in terms of the incentives we were offering. So we worked really closely with the industry and the solar and battery developers. And our goal there was to better understand what is it that gets you to transact, right? Like if our goal as the utility was to get solar adopted by homeowners, what is it that the solar homeowners need to adopt? And what is it we as the utility then need to provide to enable this transaction? And we did a good job. Typically the utility or the load serving entities role is to provide some form of incentives and compensation. And we did that and we had success. We deployed a lot of projects, but incentives aren’t the most sustainable mechanism for growing an industry. So you have to continue to find value and way to extract value as you move away from incentives as the technologies become more competitive. When you start moving down the advancement and the maturity continuum, you start to realize that the challenge in getting these technologies deployed from both sides is really the customer experience. Something has to change in the customer experience. Everybody talks about it, both utility talked about the customer experience and the developer talked about the customer experience. But they talked about it differently and it’s the same customer. So our point was this customer is facing a very bifurcated customer experience. They would get a bill from their solar developer. They’d get a bill from their retailer. They said that solar developers sold them on one thing, but then when they got this bill, they can’t make sense of it. They’re speaking two different languages. And then all of sudden you have a bad customer experience and the customer’s not happy with their solar. Their expectations weren’t met because they were set the incorrect way. And so when Winter Storm Uri happened in 2021, this thesis really became a more apparent need. We observed that if more distributed energy resources had been in the market, they would have had a massive impact on what happened during Uri. And when you take that step back and say, why weren’t more DERs in the market? For us, the answer was the value proposition is too complicated. It’s still too much of a bifurcated experience for the customer. So our original thesis at Mothership was and is to be a white label retail electricity provider. However, in the beginning, we were focusing on these DERs. Since then, we’ve now migrated to the other end of the spectrum and do very large load. Yeah, kind of getting further from the beginning. But the idea with the original launch of Mothership and our first clients that we launched with were, hey, we need to get more customer-cited, residential-cited assets in the market. Joshua Rhodes: We’ll get that. Maura Yates: because that’s where we’re going to see reliability. In a market, we’re going to continue to grow to have challenges because that residential load shape is the one that creates that fall. And so as such, how do you do that? How do you get customers more comfortable with adopting? And our thought was we got to turn it into one. The solar company, it all has to be the same customer, the same economics that are all being balanced between one transacting party rather than a solar co

    42 min
  8. Texas Bets on Speed, with Gin Kinney

    Apr 29

    Texas Bets on Speed, with Gin Kinney

    Texas generators and grid operators used to spend a decade or two planning for new power plants. But as Gin Kinney, chief administrative officer at NRG Energy, told Energy Capital Podcast hosts Matt Boms and Josh Rhodes at CERAweek in Houston this year, the company’s planning horizon has collapsed to 12-18 months. The company’s activity reflects the dynamic growth of the ERCOT grid. Kinney said NRG has sourced 5.4 gigawatts of natural gas turbines, secured a labor arrangement with the construction company Kiewit, and begun construction on three gas plants funded in part through the Texas Energy Fund. ERCOT’s demand forecasts, which should inform the plans of developers such as NRG, have been hard to pin down at best. Yet while no one can say for sure how much of the new load is actually coming to Texas, it’s clear that demand is going to rise substantially and very quickly. That’s why, as Gin explained, NRG is focused on the assets, not the timeline of the load they’ll serve. This rapid growth means grid connection — speed to power — has never been more important. In this episode, Josh describes a 350-megawatt data center going up near El Paso, outside of ERCOT, that’s being powered by roughly 800 small generators — because larger generation units weren’t available on the data center’s construction timeline. Such behind-the-meter, bring-your-own-power projects are what happens when speed-to-power is a grid’s binding constraint. They also show the vital importance of load flexibility. Every megawatt of flexible load is a megawatt of generation that does not have to be built, financed, or fought over. In this episode, Gin discusses NRG’s work on virtual power plants and new hyperscaler contracts as steps toward a more flexible grid. The question is how to scale such efforts. This episode points to ways that grid participants are working to answer it. Energy Capital Podcast is produced by ClarityForge Studios. Timestamps * 00:00 - Introduction & Gin Kinney * 04:42 - NRG’s One-Gigawatt Virtual Power Plant * 06:07 - Affordability, T&D Costs, and the Smart Home Strategy * 09:09 - How NRG Uses AI in Operations and the Home * 12:49 - Texas Market Outlook and Speed of Development * 20:07 - Texas Energy Fund and NRG’s Construction Progress * 21:06 - Hyperscalers, Bring Your Own Power, and Community Investment * 27:41 - Post-Conversation: VPP Mechanics and the Gentailer Difference * 34:13 - Load Growth Numbers and What Is Actually Real * 38:57 - Data Centers, Bridge Power, and Speed to Grid * 42:39 - SB6, Legislative Hearings, and Who Should Set the Rules Resources Guest, Host, and Organizations * Gin Kinney (NRG Profile) * NRG Energy (Website) * Reliant (Website) * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Matt Boms (LinkedIn) * Texas Advanced Energy Business Alliance (Website) Organizations & Individuals Mentioned * Pablo Vegas (LinkedIn) * ERCOT (Website) * ERCOT ADER Pilot Program (Website) * ERCOT Long-Term Load Forecast (Website) * Public Utility Commission of Texas (Website) * Texas Energy Fund (Website) * SB6 Implementation Rulemaking, Project No. 58317 (Website) * Columbia University Center on Global Energy Policy (Website) * CERAWeek by S&P Global (Website) Company & Industry News * NRG Energy Completes Acquisition of 13 GW of Power Generation and C&I VPP Portfolio from LS Power * Sunrun and NRG Energy Announce Partnership to Harness the Power of Distributed Energy in Texas * ERCOT’s Large Load Queue Jumped Almost 300% Last Year * NRG Completes Acquisition of Vivint Smart Home Related Podcasts by Energy Capital * NRG’s Gigawatt VPP in Texas with Travis Kavulla * Who Pays for the New Grid with Pablo Vegas * Who Pays for Texas Grid Growth — Roundtable Discussion Related Posts by Texas Energy & Power * More Power that’s Faster and Fairer — Roundtable Discussion * Connecting the Regulatory Dots Shaping Texas Energy Transcript Matt Boms: So we are here live at CERAweek in Houston, Texas, and we have a very special guest with us today. Gin Kinney is Executive Vice President and Chief Administrative Officer at NRG Energy, where she leads marketing, communications, and customer experience. She brings more than 20 years of experience, including over a decade in the energy sector, and has played a key role in building NRG’s brand and shaping a more customer-focused digitally driven organization. She’s also active in industry and community leadership with a focus on sustainability and advancing women and energy. Gin, thanks so much for joining us today. Gin Kinney: Hey, thank you. It’s great to be here. Joshua Rhodes: Yeah, so one of the things from your background is you really came from renewable energy development before joining NRG. How is that path shaped like your role or what you see your role is at NRG? Gin Kinney: Coming from a startup environment to a comparative behemoth, right? You definitely learn a lot on the fly in the entrepreneurial world. You definitely learn how to be scrappy, have a lot of grit, say yes a lot to challenges. You also learn how to manage things at a different scale, be really close to the customer. And I think also coming from that entrepreneurial world where you’re working on project finance or you’re working on project development, well, this is how we’ve always done it before. And so I try to bring that mindset to NRG where we’re much larger, but the excuse of we’re not going to change or we’re going to, instead of innovate or sort of take chances, we’re going to protect the status quo. I think the other piece of that too is this competitive nature. When you’re a startup or you’re entrepreneurial, you’re competing every day for dollars. You’re competing for space, you’re competing for customers. And when you have this highly competitive spirit, you’re always playing to win. And that’s what we try to bring to NRG too, is that play to win, not protect the status quo. Joshua Rhodes: You think that fits better in Texas with other places given like the competitive nature of like the generation market in the retail space you operate in? Gin Kinney: Texas certainly provides us the opportunity to move fast. Policy and regulators clear the pathway to get things done, get things built. And in Texas, in the competitive markets we serve, every day we have to earn the trust. We have to fight for those customers and we have to show up for them. We’re not just about rate basing a solution. We have to figure out how to put that on our balance sheet and also satisfy the demands and the expectations of our shareholders. Matt Boms: They’re also very savvy customers in Texas. Find that compared to either parts of the country, Texans really know more about their energy bills than the average American. Can you speak to that? And where do you think that comes from? Is that like a Winter Storm Uri consequence, or is that just the fact that we have this really competitive retail market? Gin Kinney: It is, and you have to choose. When I first moved to Texas a few years ago, I had to choose my energy provider. So I had to get smart on what I was looking for, the type of services, the type of value I wanted. And certainly after Winter Storm Uri, there’s a heightened sense of ERCOT. My 80 something year old mother who lives in Georgia knows what ERCOT is. I mean, I don’t think we ever would have thought about that five years ago or 10 years ago. Right. And so. That heightened sense and heightened awareness just by having to elect your energy provider. And again, in Texas, I think things are just different. Like we demand more, we expect more. Back to that competitive nature, sitting here with a UT grad, know, football is big, bright lights, you know, I think that competitive nature comes through in kind of everything and how we operate in Texas. Joshua Rhodes: Yeah, absolutely. In that space, mean, energy just doubled its generation fleet with a 12 billion LS Power acquisition. You know, at the same time, you’re managing a CEO transition and navigating a global energy crisis. Given all of these things happening in a hyper competitive space, like how do you prioritize, you know, what gets your attention? Gin Kinney: Well, first and foremost, we do everything in service of our customers. And if we keep that in mind, all of these other issues that we see around, we always think about it from, how is a CEO transition going to shape how we serve our customers? How are the changing dynamics in economic environments going to change how we provide services to our customers? If you look at it through that lens, it’s easier to focus and drive towards those business outcomes. Then let all of the myriad of issues kind of dilute the value that we can drive across all of our stakeholders. Matt Boms: And I also wonder, keeping on this topic of the savvy Texas customer, we talk about things like virtual power plants and flexible demand and people’s eyes gloss over because they don’t quite know what we’re talking about. But NRG actually is building a one gigawatt virtual power plant here in Texas. Can you talk more about that and give us the details? Gin Kinney: Well, that’s enabled through the trust we built with our customers and even customers in general. So it’s kind of taken a step back. I think customers today are still accustomed to automation. They’re accustomed to letting machines decide. This is just a natural segue because we’ve done the hard work to build the relationships with the customers. We’ve talked about the value we can deliver to them. And then when we talk about savings, particularly in a time where affordability is top of mind, customers are willing to trust us with their energy usage. They’re willing to enroll in VPP. We set a pretty high bar, I think, in Texas for the amount of VPP we wanted to achieve. And we more than what, 5x that l

    48 min
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4.9
out of 5
35 Ratings

About

The Texas power grid is being rebuilt in real time. Energy Capital covers the policy fights, market mechanics, and technical decisions shaping what comes next. Hosted by Josh Rhodes (UT Austin) and Matt Boms (TAEBA), with the policymakers, regulators, and researchers at the center of it. Produced by ClarityForge Studios. Topics include ERCOT market operations, grid reliability, renewable integration, distributed energy resources, interconnection and transmission planning, regulatory economics, energy storage, demand response, and the Texas electricity market. New episodes weekly. on Texas energy and power grid issues, featuring interviews with energy professionals, academics, policymakers, and advocates. Produced by ClarityForge Studios. www.texasenergyandpower.com

Information

  • Creator
    Josh Rhodes & Matt Boms
  • Years Active
    2024 - 2026
  • Episodes
    106
  • Rating
    Clean
  • Copyright
    © Texas Energy and Power Newsletter
  • Show Website
    Energy Capital Podcast

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