In this episode, Minnesota State Representative Larry Kraft shares about the state’s ambitious, progressive transportation policy, which includes climate accountability measures that no other state has implemented.

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David Roberts

In 2022, Democrats narrowly won a trifecta in Minnesota — House, Senate, and governor — whereupon they launched into an absolute frenzy of activity, passing bills on everything from abortion to paid leave to gun control to free school lunch to clean energy. Vanity Fair called it a “tour de force for progressive legislation.”

I covered the state’s new clean-energy law on a previous pod, but I also wanted to take a closer look at the big transportation bill that was signed in May. It passed somewhat under the radar, but it’s got some very cool stuff in it.

One key feature is that it requires both state and municipal transportation-planning agencies to take the state’s climate goals into account when assessing new projects — to hold themselves accountable to those goals. As obvious as that may seem, it’s not something any other state has done.

To discuss the significance of this and some other provisions of the bill, I contacted one of its primary authors, first-term state Representative Larry Kraft (D). We talked about what these changes mean for transportation planners, the kinds of transportation projects that can reduce emissions, the new money the state will raise for public transit, and the state’s new e-bike incentive (!).

By the way, if you enjoy this conversation, you should know that Kraft co-hosts a podcast of his own, on climate policy in small and mid-sized cities. It’s called City Climate Corner, with co-host Abby Finis. Check it out.

All right, then, with no further ado, Representative Larry Kraft of Minnesota. Welcome to Volts. Thank you so much for coming.

Larry Kraft

Oh, my gosh. Thank you for having me. I'm super excited to be here.

David Roberts

This is cool. You are a freshman legislator. You entered the Minnesota legislature in 2022, last year. It's sort of hilarious to me: You slipstreamed into the most exciting and productive legislative session for Democrats in living memory that I'm aware of. Like, I hope, you know, on some level, this is not what politics is normally like, Larry.

Larry Kraft

Yeah, I have good timing. And I tell you, I hear that. And what I tell people is, you know "I'm sure you're right. But at this point, it's all I know. So let's keep going."

David Roberts

Yeah, you just go in and you start passing bills, changing things right and left, wow. The Minnesota success story, I think people have heard a lot about it by now. There's more bills than you can shake a stick at, more progress, just a wild amount of progress. But let's focus on transportation. So Minnesota is similar to many other states in that transportation has become the largest source of greenhouse gases in the state. I think it's 25% —

Larry Kraft

Yeah, 25, 27%.

David Roberts

— in Minnesota. So this is sort of my overall impression: Especially at the state level, is there's been this sort of, like, parallel tracks going for a while now of on the one side, happy climate talk, which ends up mostly focused on the easy stuff, which is electricity, right? And then transportation over here on this other track just expanding, getting more and more carbon intensive willy nilly, and the twain have not really met. So this is like what's happening in Minnesota, really. To my mind, maybe Colorado got there a little bit ahead of you. But really what's happening in Minnesota is the first time that people grappling with climate change really are taking on transportation in a serious way.

So let's start by just talking about what kind of targets are on the books in Minnesota now, prior to this transportation bill. Let's just talk about sort of like, what targets have been set in terms of greenhouse gases and in terms of VMT, vehicle miles traveled.

Larry Kraft

Right. So in 2007, Minnesota passed. Actually, it was a bipartisan bill on climate that set state goals as 80% emission reductions, greenhouse gas emissions reductions by 2050, and then set some interim targets. In this last session, we updated that to be net zero by 2050. And then on the transportation side, there's been folks that have been working on this for a few years and set a vehicle miles traveled reduction goal of 20% reduction per capita by 2050 and 14% by 2040.

David Roberts

Are those targets, are these sort of aspirational things, or are those binding in some way? Are those statutorily binding?

Larry Kraft

They were not statutorily binding. It was in a climate action framework that the governor initiated that the VMT target started. But I think what we did this session was to give some teeth behind them and some mechanism to actually achieve them.

David Roberts

Right. So before we get to that, let's talk a little bit about RMI. Rocky Mountain Institute did a big study basically looking at what would happen for Minnesota were it to hit those VMT goals, what would be the sort of economic effect, say a little bit about those conclusions and how it came to those conclusions, like why those things would happen.

Larry Kraft

RMI came and did a presentation about what was going on in Colorado early in our session. And then we're doing the analysis on Minnesota. But what they said was, if we could hit the vehicle mile travel goal of 20% reduction per capita by 2050, it would save Minnesotans $91 billion. And that was from a mix of things like just number one, not needing to drive as much and the cost of cars being $10,000 - $11,000 per year. Saving money there, but also a lot on the health side by the fact that you'd see a reduction in air pollution and the savings that would come from that and then also just from not as many people dying on the roads would be a significant savings.

David Roberts

So $91 billion cumulatively for the state, which I think I saw, RMI broke it down. It's like $3 something billion a year, which is not a small thing in a state the size of Minnesota.

Larry Kraft

No, it is not.

David Roberts

So this is a worthy goal. So you passed this big transportation bill. It has a bunch of stuff in it, a lot of things. But what I found most intriguing is the requirements it puts on transportation planning agencies. So explain to us what the Minnesota Department of Transportation has to do now that it didn't have to do before this bill passed. What is the new regime?

Larry Kraft

Right. So it starts by saying that MnDOT — MnDOT is how we refer to it — has to set greenhouse gas emission reduction goals statewide, commensurate with the overall state goals, and then has to split them out regionally in a way that makes sense. And specifically that means in certain areas of the state, more metropolitan, there's going to be a bigger opportunity to reduce emissions and VMT than there may be in some greater Minnesota areas. So it has to start by doing that. And then what it has to do is look at if there are new projects on its system that were to increase capacity or increase VMT and emissions, that it then will have to offset them in some other way.

David Roberts

Yeah, I want to get to that. But it also puts this same obligation on municipal planning organizations, does it not? So at the state level and then also at the municipal level.

Larry Kraft

It requires for the metropolitan regional planning organizations, especially in the Twin Cities area, which is the seven-county area around Minneapolis and St. Paul, it's about 55% of our population. So yes, it does that there. And then the other piece of it is for the metropolitan area, that organization has to incorporate those targets into its regional plan such that cities that are part of the region have to incorporate the climate targets as well as the VMT and greenhouse gas emissions reduction targets and transportation into their comprehensive plans.

David Roberts

So it's kind of a fractal thing here. The Minnesota Department of Transportation has to plan around these emission goals and then, at the smaller level, the municipal organizations do. And specifically, the Twin Cities Metropolitan Council has to incorporate that in its city planning.

Larry Kraft

Correct.

David Roberts

It's kind of funny. Like these states pass these greenhouse gas targets, which you would just assume, well, of course, the transportation agencies have to take those into account too. Like, why wouldn't they? But as far as I know, this is the first — I mean, this goes beyond even what Colorado did, I think, doesn't it? I mean, are you aware of another state that has formalized this kind of thing for its transportation planners?

Larry Kraft

Not in the same way that we have. I think there are pieces of it and we certainly learned a lot from Colorado. We talked to them and we modeled the way we were starting from a lot of things that they were doing. But we definitely really thought about there was a piece of this that was transportation focused on MnDOT and the fact that you have to address land use to really get at long-term transportation emissions reductions. And so there was another part of the bill and initially started as two separate bills, but the other part was very focused on land use and how do we incorporate that? And then, they came together.

David Roberts

Interesting. And the land use stuff is mostly down at the regional and municipal level, right? I mean, that's where most of those decisions are made.

Larry Kraft

Correct.

David Roberts

And now those decisions have to be made with greenhouse gas goals in mind.

Larry Kraft

Yes.

David Roberts

It seems to me on some intuitive level that if you have a project that is going to expand highway capacity, it is almost by definition going to increase greenhouse gases and vehicle miles traveled, is it not? And so if the state goal is fairly rapid reduction in greenhouse gases in VMTs, it looks like the implication is you just need to stop building new highway additions. I assume that's not what's going to happen. So how does that work out? How do you do an addition to highway capacity that doesn't increase VMT or GHGs?

Larry Kraft

So the interesting thing is in working through some of the objections on this with the city and county engineers, they analyze some previous projects and sometimes you have a project where you're maybe expanding capacity, but it eliminates a lot of congestion that has flowed over onto other roads. So the GHG emissions might in some cases not be negative or might not be all that negative. VMT is a little bit of a different story. So what the bill provides then is that if there are increases from induced demand or whatever, that they then have a prescribed set of things that they can do to offset that.

Ideally first within the project themselves, maybe it's by adding more transit, maybe it's by adding some micromobility or some bicycle pedestrian infrastructure, but there's a set of things that can be done to offset any induced demand increase.

David Roberts

Let me pause on this induced demand question, because this is one of the sort of long-running issues in transportation. One of the long-running controversies is that the Greens are always yelling that these state departments of transportation make these completely unrealistic calculations. Like if we add another lane to this highway, it will ease congestion and everyone will flow faster. And then inevitably what happens is you add the lane, more traffic comes to fill up the lane, congestion remains as bad or worse than ever. This repeats over and over and over again. So who's going to be sort of in charge of the analysis, I guess is what I'm asking?

Who is making the calculation about whether and how much a project will reduce or increase those metrics?

Larry Kraft

That is the responsibility of the Department of Transportation. That said, they do have to publish the results of the analysis on any project on their website, so there's a transparency that's required within it.

David Roberts

And so people can check. Are they cognizant of this induced demand thing? Would you say that they're relatively progressive in the way they do these calculations? Because state departments of transportation vary very widely across the country.

Larry Kraft

Yeah, well, I will say that I think they are and they were a willing partner as we created this legislation.

David Roberts

They're not going crazy in opposition? That's another thing I was going to ask about. This seems like this would be exactly the kind of thing they hate. What was their sort of disposition around it?

Larry Kraft

You know, because there had been work done over the past several years in Minnesota on this stuff. A few years ago, they brought in someone by the name of Tim Sexton who's the Assistant Commissioner of Sustainability Planning and Program Management. So I don't know how many DOTs have someone with that title, but he's explicitly focused on this kind of area. So they kind of knew that something like this might be coming and had thought through and were prepared to have good discussions on it.

David Roberts

Interesting. So the party that is proposing the expansion of the highway is the party that will be responsible for offsetting its emissions. So, who is that party? Is that generally a private developer? Is that the state? Or, who exactly is the person or entity in charge of these expansions?

Larry Kraft

This is one of the things we had to work through in that it happens in different ways. Sometimes it is the DOT themselves that's doing it, but often it may be a regional planning organization or a city or a county where the funding is coming through. So they're responsible for thinking through what happens with their project. And the way this works is ideally you would find a way to offset it within the project itself. But if they can't for some reason it is possible then to offset any increases in a series of other ways of looking at things in areas that are more challenged from an environmental justice perspective or elsewhere within the region. Or even if not, they can look statewide.

David Roberts

Hmm. So if I'm I don't know a city in Minnesota and I'm proposing to widen the highway coming into the city, so I submit that project to the state DOT, state DOT, analyzes it and says "this will in fact increase greenhouse gas emissions and VMT." So I, the city planner, then first look at the project itself and try to figure out how to do it more lightly. Or then I look around at other things I could do in my city. And then if worse comes to worse, I look around statewide and I'd find projects that what reduce VMT and greenhouse gases.

Larry Kraft

Exactly.

Larry Kraft

There is an interlinking process that's specified, and so it looks at things that you can do locally, but if not, you can connect with other projects or other actions elsewhere within the state that would reduce emissions. So, maybe you can't reduce emissions where you are, but maybe there's something else you can interlink with that is where transit is being added or where additional pedestrian or bicycle infrastructure is being added in another project. And so you can interlink the projects.

David Roberts

And so, what are these offsets like? What are the sorts of things if I'm the city planner and I'm trying to offset the increases from my highway widening, what are the kinds of things that are on the table here?

Larry Kraft

Right, so there are nine of them listed right now. One is a transit expansion. Another is transit service improvements, active transportation infrastructure, micromobility infrastructure like shared vehicle services, transportation demand management like van pool or shared vehicle programs, parking management, changing production of parking requirements, parking cost adjustments, land use could be residential or other density increases, mixed-use development, transit-oriented development, Infrastructure improvements related to traffic operations like roundabouts or reduced conflict intersections. And then also one for natural systems in the area such as prairie restoration, reforestation, urban green space. So those are the things that are envisioned right now.

David Roberts

Interesting. And all of those are sort of within a city's power because I'm just sort of imagining these sort of cross jurisdictional. I mean, one of the big problems with transportation policies, I'm sure you're aware, is it crosses over so many overlapping jurisdictions and overlapping areas of control. I'm just wondering if it's always going to be in an individual city's power to make all these other changes, is it going to have to collaborate with other agencies or other levels of government?

Larry Kraft

Yeah, so in many cases they will have to. And as we work through this, this is a process that happens quite a bit today of coordination across regions. But one of the requests from the city and county engineers and the Department of Transportation was to create a working group, which has started meeting, to figure out in more detail how impact mitigation can happen, how there can be a trading between different projects. So one of the things we did in the legislation was create this working group that's meeting now and will come back with recommendations on how to implement this in specific by the end of the year.

David Roberts

And it will be the state DOT that is also responsible for assessing those mitigations and putting a number on them, sort of quantifying them?

Larry Kraft

Yep.

David Roberts

The reductions have to outweigh — this is another question I had: When you say the project has to be in line with the state goals, you could read that a couple of ways. One, you could just say, "well, it can't increase greenhouse gases and VMTs." It has to reduce them. But to be in line with the state's goals, the state's goals require relatively rapid reduction. So, is there a case where a project will have to mitigate more than all of its increases?

Do you know what I mean? How much does it have to decrease them, or does it just have to come in negative at all?

Larry Kraft

Well, I think the way we worded it was such that the projects had to be consistent with MnDOT meeting its goals. So that does envision some level of reduction, not just offsetting. So the portfolio of projects that are being done have to be meeting these reduction goals. So there is some level of emissions reductions that would be envisioned in that.

David Roberts

And one thing I didn't hear among the list of mitigation actions was anything about EVs, just getting more EVs on the road. How do you see that? I mean, obviously that's not going to do anything for VMTs, right? It will do something for greenhouse gases. How do you see EVs fitting into all this? Are they going to be one of the tools in the toolbox of the sort of city that's contemplating something like this, or do you want to keep that separate?

Larry Kraft

Well, initially we had kept that separate. It's possible that this working group can come and say, hey, look, we'd like to include it for X reason, but I think EV is super important and we need to hit that hard as well. But part of the reason for this is that the transition to EVs won't happen fast enough in order to reduce emissions to where we need to. And so VMT is really important to do that as well. Additionally, by getting at VMT reduction, we make the transition to electrification easier and faster.

David Roberts

Yes.

Larry Kraft

So we're keeping that separate to focus this on the infrastructure I would say. But you know, we'll see if someone proposes a unique way to incorporate it.

David Roberts

Minnesota, though, has separate EV policies, though, right?

Larry Kraft

Yes, we know.

David Roberts

At this point, I'm repeating myself a little bit, but I just want to underline that it is a little wild that this is the first time a state has told its Department of Transportation: "No, we're really serious about those goals we passed. We really mean it. Act on them, take them seriously." You're the first state to do this. You said you worked with MnDOT productively. Have you gotten feedback from the city level, the municipal level? I'm sort of curious what city level policymakers think of this, because in some sense, it's going to be mostly cities where this plays out.

It's mostly cities where these mitigation actions are going to be taking place, adding bike lanes and whatnot. Have you gotten feedback from the municipal level?

Larry Kraft

Yeah, I would say cities and counties. So, yes, as we worked through this legislation, there was a lot of interaction at the city and county level on the traffic planning side, met a lot with city and county engineers, and one of their biggest concerns was how would this impact projects that they were working on?

David Roberts

Currently working on?

Larry Kraft

Currently work on. Like, "Oh, my gosh, I'm doing route X Y and you're going to make me stop." So one of the things that we did is said, "No, look, it's not reasonable for us — with an engineer, if you've got something planned out, the last thing you want to do is throw them a wrench midway or close to the end of the project." So we dealt with that by saying, "Look, this is going to start in February of 2025 for anything that's not in an advanced stage of design. So you have time to think about it, you have time to plan it into your process."

David Roberts

Right.

Larry Kraft

Another issue that was raised quite a bit was around safety and was pushed a lot to say, "Hey, we should exempt projects if they were being done just for safety reasons." And after some thought, I really pushed back pretty strongly against that because that would be putting safety against greenhouse gas or vehicle miles traveled reductions. Like, you can do one or the other, but you can't do both together. And that's just not true. We have to do both. And in fact, in many ways, doing vehicle mile traveled reductions will increase safety. It's been shown to do that.

So the real thought was, look, just as safety is one of the foundational things that you must do in transportation planning, we're elevating these greenhouse gas VMT climate considerations to be at a similar level. So when you plan a project, it has to be done with safety as well as with climate considerations. They also came back about the Mitigation Working group. That was a thing that they worked on with MnDOT, proposed back to me that we could really use time and a group to think of exactly how this is going to work and exactly how the trading across projects would work.

David Roberts

It's a lot of devils in those details, I would imagine.

Larry Kraft

Right. And also, not something necessarily that from a legislator that I could go in and say, "Boy, this is how it needs to work." It was obvious that when they came up with this idea, it was a really good idea. So we put that in.

David Roberts

I could see this going a lot of different ways. The whole discussion about offsets generally is, I think, there's a lot of suspicion about offsets, and this is a different kind of offset, a different context. But some of the problems still seem to apply, which is, are all the entities proposing projects going to be flooding to the same cheapest, lowest hanging fruit offsets? Which I'm not sure what those would be. Maybe just like a car sharing program or a van sharing program, just the easiest. Do you think this is actually going to sink its teeth deep enough to get big projects in the works, like big new light rail or serious density or serious rezoning?

Do you think this is going to prompt the kind of big bold things that need to happen at the city level to really change the transportation landscape?

Larry Kraft

That's a great question. I do think it will change the way people think about transportation projects. I remember one of the meetings I had with the city and county engineers and they said, "You know, we can't really do this well unless we deal with land use." I'm like, "Absolutely." Now, that said, you kind of made it sound these big, huge projects. I do think at the same time, this year we put a lot of money behind our mouth here in that we created a new sales tax within the metro area that's going to generate $440 million for transit and then ramp up from there per year.

David Roberts

That's in the Twin Cities area.

Larry Kraft

Yes.

David Roberts

Tell me a little bit about that tax, because a new tax is obviously a big thing, controversial. How did that come about? Was this just looking for revenue sources for transit?

Larry Kraft

The transportation committee — and this was in the house led by chair Frank Hornstein — was looking at the full transportation needs across the state. And we had been, I would say, underfunding transportation for a number of years. So there was a big gap and there was a number of mechanisms, fees and things we used to close the gap. And for transit, especially in the seven county metro area, was a three-quarter cent sales tax, of which most of that goes to transit. And so that was the key way of addressing the money we need on an ongoing basis for transit.

David Roberts

Well, a sales tax, as I'm sure you're aware, is one of the most regressive forms of tax. Were there other kinds of taxes discussed? More progressive taxes? Like, I live in Washington, in Seattle, where we don't even have income taxes, and so we end up funding everything with sales taxes. And this is a source of great angst for our local progressives, because on the one hand, you want to do good things, but on the other hand, you don't want to crank up the financial pressure on the poorest people to do them. So did you hash through those issues?

Larry Kraft

There were a lot of things that were looked at. This was the one that was doable. And I will say I totally agree that in general, sales taxes are regressive, but so is lack of transit.

David Roberts

Yeah, it's true.

Larry Kraft

Really regressive. We heard a story of one math teacher, middle school math teacher, whose car broke down and used to take 20 minutes, half an hour to get to work and then in transit was taking an hour and a half to 2 hours. So that is incredibly regressive. And so it's certainly an issue, we think, with where this money is being directed, that it makes sense and maybe for where we're at overcomes the regressive nature of the tax.

David Roberts

And is this tax money devoted to transit by law or is there room, fuzziness in there?

Larry Kraft

It's devoted by law.

David Roberts

So this all goes to transit.

Larry Kraft

Just to clarify that the three-quarter cent sales tax, I think it was five-eights of it go to transit. And then the remaining one eight, I think, is for roads and bridges in the area.

David Roberts

So most of it for transit.

Larry Kraft

Yep.

David Roberts

And for those of us who don't have the pleasure of living in Minnesota, what's the transit situation now? You got the Twin Cities area, is your big metro area. Is there light rail? Are there subways? Are we talking about mostly buses here? Like, what is this money going to be going to?

Larry Kraft

It's a combination. There is light rail that's expanding, and there's buses and a lot of new bus rapid transit.

David Roberts

And isn't there somewhere in the bill a big long distance passenger rail line, am I making that up?

Larry Kraft

No. No, you're not. There is. Looking at a passenger rail line from Minnesota to Duluth. Duluth is about two and a half hours to the north of us, right on Lake Superior. So there's a line there. And then it's also investigating a line that would go from Minneapolis up to Fargo-Moorhead area.

David Roberts

Interesting. Are those high-speed or are they just normal Amtrak rail?

Larry Kraft

They're not high-speed in the sense I mean, the one to Duluth, I think the top speed would be around 90 miles an hour or so. 90 - 100 miles an hour.

David Roberts

Not like French or Amsterdam.

Larry Kraft

No. Or the Japanese bullet trains. Not that fast, but still pretty good.

David Roberts

Okay. See, aside from this new requirement on transportation planning agencies, which is a novel thing in the world, as far as I'm aware, there's a bunch of other stuff in this transportation bill, as you say, there's a new sales tax which is devoted mostly to transit. What are some of the other, I mean, this thing is a bit of a transportation Christmas tree. There's all sorts of delights in there. What are some of the other pieces that are worth sharing?

Larry Kraft

The other pieces to this is that we connect to the metropolitan area. So within the metropolitan area, the Metropolitan Council, which is our regional planning organization, needs to take the targets developed by MnDOT and build them into their regional climate action plan, and then those become guidelines for each city's comprehensive plan the next time they do comprehensive plans. And that will happen in the 2026 to 2028 timeframe for comprehensive plans for cities that go through 2050.

David Roberts

Interesting.

Larry Kraft

So they will have to now build in climate considerations as well as land use transportation to match the things that MnDOT has put together.

David Roberts

And that's new?

Larry Kraft

That is new.

David Roberts

I meant to ask this before, and we were talking about mitigation measures, but I would assume that zoning changes qualify here as mitigation measures. Or do we know that yet? Has that remained to be seen?

Larry Kraft

Well, there's certainly specifics to be worked out, but that would fall under the land use mitigation action. So yes.

David Roberts

Yeah, because I know there's been a lot of good work in the Minneapolis area on this stuff already.

Larry Kraft

Yes, Minneapolis has done some land use changes in their 2040 comprehensive plan.

David Roberts

And there's some money for bike and pedestrian infrastructure. What's that look like? How does that play out?

Larry Kraft

Yes, there's a bunch of money for active transportation, grants and the like. And then there's also a new program for e-bikes, a rebate program for e-bikes.

David Roberts

Everybody's favorite. How big, what's that look like?

Larry Kraft

I think it's 2-3 million a year for the next couple of years, and then we'll see how that goes. And I imagine — It's interesting, it's one of the things I get asked about the most is, "Hey, when's the e-bike credit available?"

David Roberts

People are fascinated by this whole subject.

Larry Kraft

So we'll see; that might run out quickly.

David Roberts

And that's just like point of sale rebates type of thing. And I know Colorado piled some of its own EV rebates on top of the federal EV rebates. Have you guys done that at all?

Larry Kraft

We did. That was not in a transportation bill. The EV rebates were in our energy bill. And we put rebates in for new vehicles, I think $2500, and used $600. And we kind of matched the federal guidelines to what kind of vehicles they would apply to. So for the new vehicles, it's anything under $55,000 in sales price and for the used, anything under $25,000.

David Roberts

Interesting. What about equity? Obviously when transportation, energy or transportation honestly, equity is hovering around that discussion, it's inevitably the most vulnerable and the poorest communities that suffer the most from transportation pollution tend to have the least access to transportation choices, et cetera, et cetera. What sorts of things are built into this bill to address the equity question?

Larry Kraft

That was a really key part of this. And when we look at the mitigation aspects for mitigating an increase in emissions if it's not doable within the project itself, the first place that a project is expected to look is within an area that's been impacted by environmental justice issues in the past. And maybe that's living close to a highway and subject to higher degrees of air pollution or lack of access to transit or anything that folks have been impacted on an environmental justice perspective. So that's the first place that folks are supposed to look for mitigation. And after that then you go to other areas within the region and statewide. So we tried to build that in the plan right up front.

David Roberts

You know, I threw this out on Twitter. One question I got a lot of which I think is on the mind of anyone who has been involved in these sorts of programs, which is: What about accountability? So say I'm proposing a highway widening project. MnDOT runs the numbers, tells me it's going to increase VMT. And so I'm looking around for mitigation measures. I spend a bunch of money on, I don't know, a vanshare program in a low income community. And then, you know, "based on our projections that will reduce VMTs X amount, you're clear to go build your project."

Is someone following up to see if the program, the vanshare program, actually does reduce VMTs? In other words, is this all prospective, or is there some follow up here to ensure that these targets are actually being met?

Larry Kraft

Well, that's a great question. And as this is not yet implemented, we have some thinking to do on how that happens. But because this is an overall goal for MnDOT overall and many of the mitigation actions are around greenhouse gas emissions and VMT within their network, I think there's somewhat of a built in tracking mechanism built in that they have to keep looking at that. But as we get to some other mitigation actions that maybe go outside of that, I don't think yet we have in the legislation, about how do we make sure that that happens and follows through? It's something that is worth thinking about as we implement this in the coming years.

David Roberts

Yeah, and I was wondering the same thing. You tell a city to account for these things, but what happens if the city doesn't? Is there a stick here if either MnDOT or the sort of municipal organizations don't do this or don't do it well, is there a penalty?

Larry Kraft

Not currently in the legislation here. But some of these processes that are being worked —like with I talked about that the cities would have to build in things into their comprehensive plans. That's an existing process. One of the things that we tried to do with this is build it into an existing process that folks were used to working, and where there's some back and forth that happens in accountability in multiple cycles of the processes. So that's the hope with it. We'll have to see, as this gets implemented if there's other sticks and things that are needed.

David Roberts

Yeah, and I was also wondering if there are and maybe this is something to think about in the future, too, if there are carrots for municipal regions or counties that go beyond what's targeted, sort of above and beyond what's expected based on these goals, are there inducements to exceed these targets?

Larry Kraft

Yeah, that's a great question, and I always prefer carrots to sticks. So though sometimes you need both of them. I think one of the things that the working group has said is: "Look, we're going down this path and we think we might want to ask you to provide more money to be able to do some of these mitigations." And I've told them: "Look, I'm open to kind of revisit this and propose some things as we figure out how this is going to be implemented." So I think it's likely that something like that will happen, but we'll see.

David Roberts

Let me ask you then about the politics of all this. Kind of famously, Democrats won a trifecta in Minnesota in 2022 and are going hog wild doing stuff which is just so counter to the norm in US politics that everyone's sort of, like, staring with their jaw open. But specifically on transportation, as you were forming this bill, is this just a Democrat versus Republican thing? Is there any more nuance to it than that? Did you get any Republican help? Were there any unexpected allies or was there any opposition from within what you think of as your coalition? Like, how did the politics shape out?

Larry Kraft

Yeah, well, the other thing I want to point out is this legislation we're talking about got rolled into this broader transportation bill.

David Roberts

Right.

Larry Kraft

So there's a lot of politics about the broader bill as well. But on the stuff that I was working on, I don't think I got much in the way of Republican support for it. That said, my approach was to meet with everyone that had an objection and listen carefully to it and incorporate what made sense. And that worked out very well in terms of, I think, making the bill and legislation better. And so at the end of the day, while I might not have gotten any Republican support, I think the opposition wasn't as strong as it might have been.

David Roberts

Yeah, because you would think, like, the stereotype would be that Republican is rural, rural areas hate all this and will fight it. I don't know if that's what you found?

Larry Kraft

To a certain extent. But the way we address that is by saying, first of all, that in many ways they were right, that it's harder to reduce VMT in a greater Minnesota area than it is in a metro area. So then, the instruction for MnDOT was to set targets appropriately, recognizing that you may need to get more reductions from metro areas than rural areas. Another thing that was raised was, "Look, when we do a highway expansion or a grade separation, it may pull a bunch of traffic that previously was on more local roads." So what we said was: "Look, it's not VMT on a certain road, but it is on the network."

So we're able to say: "Look, that's a good point. You want to look at the network overall so that we properly take into account stuff." They raised objections and where it made sense and made the bill better, I incorporated them.

David Roberts

But you wouldn't characterize the opposition to this, to your piece in particular, as something that the statewide GOP sort of rallied around, freaking out about. I imagine they had so much to freak out about this past year. Maybe you escaped some of the worst of it.

Larry Kraft

There was certainly some opposition, but I think we dealt with it in an intelligent way. And, yeah, there was a lot of other things they were freaked out about. So maybe this got less freaking out than it might have in a non-trifecta year like this.

David Roberts

It would be so fascinating to see what, if anything, comes up in the implementation of it. Right? It's so hard to predict. It's kind of a new thing. It would be really interesting to see what sorts of issues arise. Let me ask you about something that's sort of outside of this, and maybe you won't have anything to say about it, but I feel like it's germane to this discussion at least. So Minneapolis is increasingly beloved of the national urbanism community. It's doing all sorts of great things with zoning and transit, etc. And it had this really bold plan for 2040, this really bold vision for 2040, which involved transforming zoning across the city.

Lots of infill, lots of density, etc. Really like a green urbanist's vision thing. Everyone loved it in my world. Along come some local NIMBYs forming groups with "environmental" in their name, sued the thing, and now a judge has put a stop to it, sued it specifically, saying it will be bad for the environment. And the judge stopped it specifically on the grounds that it will be bad for the environment, thus causing everyone in my world to want to tear their hair out. I wonder if you just have any comment on that situation in general, how you think that's going to play out, what you thought of that judge's ruling, and how you think that's going to play out.

Larry Kraft

Well, in terms of how it's going to play out, I don't know that I can have my crystal ball that accurate on it. But I will say I think that the objections to it are incredibly short-sighted. And so I hope —

David Roberts

You don't think casting a shadow on a neighboring building is sufficient damage to the environment to warrant stopping the whole thing?

Larry Kraft

And, you know, the things that Minneapolis is trying to do — and by the way, I would like to try to do some of those on a state level. I really appreciate that you did an episode with Jessica Bateman in Washington, you know, we want to look to do things like that in Minnesota. So that's one thing. I think we can do things at a state level. But to object to what Minneapolis is doing on an environmental basis when what they're doing is really beneficial to the environment long term and to climate action just strikes me as really short-sighted. And it does feel like NIMBYism.

David Roberts

And this sort of gets at my broader question, which is once the rubber hits the road, once these municipal organizations are really told, like, "No, you can't expand that highway unless you do some other stuff, unless you do some rezoning or bike lanes or whatever," are you worried about local NIMBY opposition? Like, everybody in my world is worried about this. All the kinds of changes you're talking about to mitigate GHGs and VMTs all frequently face this sort of opposition. Do you lose sleep over that?

Larry Kraft

Well, I certainly worry about it, but I will say the kicking off of this implementation group that got going was really encouraging to me because there were folks in there that had some real objections to it. But they put those aside and said, "Alright, let's figure out how to make this work." And I think with engineers and with planning stuff, if you give enough runway and say, "Look, these are the boundary conditions with which you have to work with," they can do it. And I'm really convinced that they can. The problem comes in when you change those boundary conditions on them at the last minute.

But if you can say, "Look, this is what you need to plan for the next 20 years, this is how you need to think," then they will build that into their approach. So my hope is that through this implementation group, the issues will come up, but we'll figure out the right kind of planning structure and implementation structure to make these trade-offs and then it will just start working.

David Roberts

I mean, it's one thing to have a plan. It's another thing to stick to your plan when you confront a room full of elderly people in matching T-shirts screaming at you, that's a different kind of thing.

Larry Kraft

I tell you when I started this process and folks would come with objections, I'd say, "Look, I'm really open to listening to all and working them in, but we have to start from the perspective that the Earth doesn't negotiate with us. We have to get to this point. So let's talk about how let's talk about if you have changes to make this better or to deal with objections that I haven't thought about because you're the experts. But as long as we still are getting to that end goal, that's a good discussion to have."

David Roberts

Okay, well, by way of wrapping up, this is, I feel like a huge piece of the overlap of greenhouse gas policy, of decarbonization policy and transportation policy. That sort of Venn diagram that overlap has been notably and lamentably empty or close to empty for a long time. So this strikes me as a huge step, just telling the transportation side of government, "No, we're serious about this. You really got to do this." So this seems like an awesome foundation. What is next for transportation policy, do you think, in terms of greening and decarbonization, for instance, just to toss an idea out there, is there a low carbon fuel standard along the lines of what we have now up and down the West Coast? Is that on the table or what else are you looking to next?

Larry Kraft

Yeah, so a low carbon fuel standard is on the table. There's quite a healthy discussion going on in Minnesota about that, and it sometimes does divide the progressive community with just concerns about overly incentivizing ethanol.

David Roberts

Right. Yes.

Larry Kraft

So that's when we're going to be going through, I think, a lot more transportation on EVs and electrification and this tie-in with land use. So, I do think housing policy is part of this too. Right. The stuff that Jessica Bateman did in Washington.

David Roberts

Yes!

Larry Kraft

So we have a significant housing deficit in Minnesota. We have to build a lot more homes, especially middle housing, but we need to build them in the right places and we need to build them in the right way. So to really get at transportation, not only do you have to electrify, but you have to think about these land use issues. So, I think the intersections there will happen.

David Roberts

How this is wildly out of your area, but just as a final note for those of us who are not intimately familiar with Minnesota politics, how secure would you say this trifecta is versus y'all having a feeling like, "Man, we got to get everything done real quick, real quick like." What's the sort of midterm future of Minnesota politics?

Larry Kraft

Yeah, that's a great question. Let me also say on the politics side of this, one of the reasons this got done I'm a freshman, right? But it was the support of leadership. So the Chair of the House and the Chair of the Senate Transportation Committees, Representative Frank Hornstein and Senator Scott Dibble recognized the importance of this and were really strongly behind it. Now on our trifecta, Minnesota is a fairly evenly split state. We're purple, probably with a little bit more of a blue hue, but in the House we have a 70 to 64 majority, which is three seats.

And in the Senate there's a one seat majority.

David Roberts

Yeah.

Larry Kraft

So it's close next year, only the House is up for reelection. So whether we have a trifecta for the next two years after that will be dependent on the House results. I think we're going to be able to keep it. I think the way we governed are improving Minnesotans lives, so I think we'll be able to keep it. But we have work to do. I will also say that as I look at this means two things for me who's very focused on climate work is I do want to get everything I can possibly get done next session because I know we have a trifecta then.

But another reason is climate sort of demands a level of urgency. So I'm pushing for stuff to get done as quickly as possible. But I think we can keep our trifecta at least for another two years and then beyond that, 2026, we'll see.

David Roberts

Well, it sure would be nice if getting in office and doing a bunch of things that tangibly improve the lives of your constituents translated into political advantage. I don't know if we still live in a world where that simple equation holds anymore, but it sure would be nice. Well, thanks so much for coming on and walking us through. This is really I think this is sort of a little bit of a dark horse story, an untold story. What a big deal is to have this. It sounds procedural, but it's crucial. So thanks for coming on and walking us through it.

Larry Kraft

Oh, thank you so much for having me. Really enjoyed it.

David Roberts

Thank you for listening to the Volts Podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much and I'll see you next time.

In this episode, Maine State Senator Nicole Grohoski discusses an upcoming ballot measure that gives Maine voters the opportunity to replace the state’s unpopular for-profit utilities with a nonprofit public utility.

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Text transcript:

David Roberts

Maine’s two big investor-owned power utilities — Central Maine Power and Versant Power — are not very popular. In fact, they boast among the lowest customer satisfaction scores of any utilities in the country, perhaps because their customers face some of the nation’s highest rates, suffer more and longer outages than average Americans, and pay more to connect rooftop solar than ratepayers in almost any other state.

This November, Mainers will vote on a radical alternative: a ballot measure to replace the two for-profit utilities with a single nonprofit utility that would be called Pine Tree Power. Maine and many other states already have lots of small nonprofit municipal utilities, but this would mark the first time a whole state with existing private utilities decided to make them public en masse.

Naturally the utilities are opposed and have dumped $27 million and counting into a campaign to crush the measure; supporters have mustered just under $1 million.

To discuss this David vs. Goliath fight, I contacted one of its champions, Democratic state Senator Nicole Grohoski. We discussed why she thinks a public utility would perform better, what it would do for clean energy, how it would be governed, and what other states can learn from the effort.

With no further ado, Maine State Senator Nicole Grohoski. Welcome to Volts. Thank you so much for coming.

Nicole Grohoski

Thank you so much for having me. I'm thrilled to be with you today.

David Roberts

I am super excited to talk about this issue. There's a lot of ins and outs I want to cover, but maybe let's just start with a brief history of this thing. So the idea here is, as I said in the intro, to replace Maine's two big investor-owned utilities, Central Maine Power and Versant Power, with a single publicly owned main utility called Pine Tree Power. Tell me who first had that idea? Where did it first pop up? I know it was legislation and then it got vetoed. Just tell us a little bit about how we got to where we are now.

Nicole Grohoski

The history is really interesting, and I'll try to not spend too much time on it, but I think it's really important to start with the reality here in Maine as a backdrop. So a couple of things that are important to know for listeners is that we, as Mainers, find that our electricity isn't really affordable or reliable and our utilities aren't trustworthy. So we have, for many years running now, the worst customer satisfaction in the country, some of the highest rates in the country for electricity, and those just keep going up. We have experienced a 20% increase this summer, with another increase coming in January.

And we also have the most frequent outages in the country. And there are a couple of other reliability metrics that we're not doing so well on, including the length of outages and how long it takes to restore power. So basically what we see here in Maine is that the status quo of these for-profit multinational corporations is just not working for us. About a tenth of our residents in Maine received disconnection notices earlier this year because they just couldn't afford to pay their bills. And it's not working for companies or big corporations that really rely on low cost and reliable electricity to compete.

So that's kind of the background. So a number of us were wondering, does it have to be this way? Is there an alternative to worst of the worst? We are Maine, we are very proud and independent, and we like to be leading, but this is not the way that we wanted to be leading. So there was a lot of grassroots pressure. In 2017 we had a big storm, and the power was out for days. But at the same time, there was a billing fiasco, which resulted in billing errors for over 100,000 customers, which is in a state of 1.3 million people, that's a very big percent.

So there was a lot of pressure, a lot of phone calls to legislators, to the Public Utilities Commission, to the public advocate about these utilities. And so I think that really planted a seed for a number of folks. Specifically, Maine's first public advocate pointed out to some members of the legislature, including Representative Seth Barry at the time, myself, and a few others, that there were other options and that the financial and local control aspects of those options might be really helpful for Maine. So we started meeting in 2019 with the previous public advocate, economists, labor, legislators, people that were part of a group called CMP Ratepayers Unite.

And that's when we formed this idea of creating a consumer-owned utility for Maine that would be non-profit and similar to the ten other consumer-owned utilities we have in Maine. I don't know that we had a name for it at that time, but we do now call it the Pine Tree Power Company. So those were the early days. And then to sort of fast forward, the Legislature commissioned a study which was done by London Economics International in 2019 to learn more about the economics and also legal pathway here. Then, of course, 2020, everybody knows what happened then, things kind of went on pause. And then in 2021, we wrote a bill. And that bill passed in both chambers in Maine with bipartisan support. As you mentioned, the governor did veto that bill.

David Roberts

And that bill was to create the utility or to put the question to voters.

Nicole Grohoski

That bill put the question to voters, and it's very similar to the language that we'll be voting on this November. So we did revise the language based on some feedback from the governor, and that is the language that is now in front of us to vote on this November, November 7. And in order to get the question on the ballot we had hundreds of volunteers working together to collect around 80,000 signatures in total, which is a little bit above the requirement needed to get a question on the ballot in Maine.

David Roberts

I'm a little curious why — this is a Democratic Governor Mills. What was her rationale? I mean, I guess I can imagine her rationale for opposing the public utility, but what was her rationale for opposing asking voters what they thought? Did she have a good rationale?

Nicole Grohoski

Not in my opinion. I'm sure in her opinion it was great. But we read the veto letter for the most part. There was very little in there that was substantive. Some of those minor changes that we made are all things that we would have happily made in advance had we had outreach from her office about them. You know, the unfortunate thing with governors in Maine is that we have yet to elect one that has campaigned using our clean elections, publicly funding campaign option, which is something that most legislators use. So you can draw your own conclusions there about the — money in politics may have been at play.

I can't say for certain.

David Roberts

Yeah, we should just make a note here because a couple of podcasts we've done here on Volts are about state laws prohibiting utilities from using ratepayer money to lobby and pay off politicians. Maine does not have one of those laws.

Nicole Grohoski

Well, we actually did just pass a law. We were one of four states earlier this year to be sure that ratepayer dollars are not going for lobbying. You know, industry membership, group memberships.

David Roberts

Oh, interesting.

Nicole Grohoski

You know, Edison Electric, for instance, Chambers of Commerce, et cetera. So that is a new law. It will be in effect in about a month. So we'll see if that improves things.

David Roberts

Just in time or actually just a smidge too late. So the bill of particulars here then, against these two utilities, as you say, they have really low ratepayer satisfaction scores, lots of power outages, more than usual, higher rates, some of the highest rates in the country. Like every state, Maine has a Public Utility Commission that is meant to regulate its utilities. That has members appointed by the governor or elected? I'm not sure how it goes in Maine.

Nicole Grohoski

In Maine, the commissioners are appointed and then subject to Senate approval.

David Roberts

So why not just use the PUC to sort of get these utilities in line? That seems like it would be the sort of first order of business.

Nicole Grohoski

It's a great question. I mean, I think everyone kind of wants to default to using the systems we have in place, but I have a couple of thoughts about that. Our Public Utilities Commission I do think is full of folks who are hardworking and really trying to get under the hood with utilities. But there's a lot of information there that the utilities really understand best. And so when you have questions, you're going to ask the utilities and there is sort of a long term back and forth relationship there. Some people might call how that turns into regulatory capture sometimes.

Additionally, we do have the ability to fine the utilities if they're not performing up to snuff and that has happened. It doesn't happen that often, and the most recent fine, I think was around $10 million. At the same time they had a significant rate increase and are pulling out over $100 million in profit every year. So it's not really proportional and we could theoretically increase those fines a bit. But there is hesitance. I think the legislature has interest in doing some of that but the utilities are of course not interested and I think we would see another veto pen action is my guess.

But all that being said, this effort to create a consumer utility has led to a lot of us just digging down into what is the history of utilities in this country and regulation. And what we found is that utilities are natural monopolies so it makes sense for there to be regulation because there isn't competition. But the folks who sort of started the effort to create public utilities commissions were those who were going to be regulated. And so there has been this hand in glove relationship since the start around the regulators and the regulated.

David Roberts

It's not ideal.

Nicole Grohoski

That's probably a subject of a whole other podcast but —

David Roberts

It doesn't work quite like you would want it to.

Nicole Grohoski

Exactly. And additionally, I would say I have recently been talking to folks in other states and other people have served as public advocates. And what I find remarkable is the backflips and cartwheels that we go through with regulation to try to outfox the utilities when, by no fault of their own, the investor owned utilities are created with their number one mission to be maximizing repair profit. So it's like we could keep trying to think of creative and clever ways to balance this out. But at the end of all of it, I keep coming back to the fact that we don't have our roads, which are critical to our economy and our safety and our way of life in the private sector; and nor are our schools, nor is our military.

Why does it make sense for something as important as our electricity grid to be subject to for-profit motivations?

David Roberts

Listeners will be rolling their eyes right about now because this is something I say I find a way to say it almost every episode no matter what we're talking about. But utilities, they are structured such that they make money insofar as they spend money. So all they really want to do is deploy more big infrastructure. And so as you say, like PUCs find these elaborate Rube Goldberg mechanisms to sort of beg and plead with them to do things like efficiency or distributed energy, know on and on, inter, regional transmission, name it, all of which are sort of just counter to the basic incentive.

So as you say, you can spend the rest of your life coming up with more and more elaborate ways to try to trick them into doing something against their interests. But at a certain point you just got to grapple with the central issue which is that they're set up wrong, they're set up badly, they're set up to not want things that are in the public interest and at a certain point you got to just deal with the root cause. Anyway, sorry to go off on my standard canned rant there. So then a skeptic will say these two utilities, just so people are clear about this, these are not vertically integrated utilities.

These are just distribution utilities. They just have wires, they just distribute power. They do not own generation. They're dealing with a certain set of supply issues, a certain set of power plants, a certain geography. Maine is very heavily forested which is a nightmare for transmission lines for all the obvious reasons. So it just has a sort of set of things that it's dealing with. And so I guess the skeptic is going to ask what reason do we have to believe that given the sort of same resources that Pine Tree, a public utility, would perform any better?

Nicole Grohoski

Well I think we have a lot of evidence that it would because we already have ten consumer owned utilities in Maine. Just for an example, there is one that's called Eastern Maine Electric Co-op. That's a traditional co-op. It is more rural than most of Maine. You might find it interesting that it is serving about 1.2% of the state's load in kilowatt hours but it is in an area that's twice the size of Rhode Island. Now EMAC, which is in rural downeast Maine is directly adjacent to the territory of Versant that I live in and the cost for delivery in EMAC is nine cents and the cost for delivery in Versant is 13.1 cents per kilowatt hour.

So I don't think that's just some kind of magical happenstance that when you take profit out of the equation you're just paying less. We know that together CMP and Versant are sending out about — was last year was $187 million a year in profit. So I think if Mainers are in charge of our utility we can decide do we want to use that money to lower rates? Do we want to use it to reinvest in the grid to increase reliability? And I think it would probably be a mix of both of those things.

David Roberts

And that amount of money you think is material enough that it would show up as improved performance, show up as measurably improved performance?

Nicole Grohoski

I do think so. I mean I think for your listeners, while Maine is large and rural we do have 1.3 million people. So, when you sort of divide those numbers out it does make a difference. And we've had some independent economic analysis that shows us that Mainers would be saving on average $367 a month, excuse me, a year, because of the fact that we're basically going from expensive rent for the grid to a lower cost mortgage. So I think it's easy to explain it to folks in terms of, like, "What's better when you're looking for housing, dropping your money down a rent hole, black hole for the rest of your life, or swapping out to a mortgage where you've got a lower interest rate than what we see now with the guaranteed return on equity that happens for our for-profit utilities."

David Roberts

Yeah, this was another piece I wanted to ask about. So part of why you think this will be cheaper for ratepayers is just you take that huge slice of profits that are going, as you say, out of state to the owners of these utilities and keep that in state and that alone will buy you some better service. There's also the issue of investor-owned utilities expect and want and are guaranteed relatively high rates of return on their investments and often resist making investments if the rate of return is lower than that. But as you say, a public power utility can be more patient with its capital, right?

Can make investments with lower returns as long as they pay off eventually, right?

Nicole Grohoski

Yeah. So we see here in Maine that the utilities are getting a ROE of 8% to 12%. And we know that firstly that's kind of astounding because it's not all that risky. Most people are paying their bills.

David Roberts

Crazy. It's guaranteed. It's huge and it's guaranteed. It's wild what it is. This is like the safest business on the planet as being a regulated utility.

Nicole Grohoski

Couldn't agree more. And on the flip side, the Pine Tree Power Company can access low-cost capital through revenue bonding at 3-5%. So when we think about paying off that debt over many years with compounding interest, when we think about the fact that our grid really isn't ready to electrify our economy and experts expect it's going to need to be, increased two to three times. Now is the right moment in time, I think, to move away from high cost, low-risk investment to low cost, low-risk investment before we literally triple our grid.

David Roberts

Tell us a little bit about how the utility would be governed or structured and what implications you think that might have.

Nicole Grohoski

I love this question. I am a public servant and so I believe in local governance and people getting to vote and go to public meetings and have a say and all that is built into the ballot question. So the Pine Tree Power Company would have elected board members and there are seven of them, one for each grouping of five Senate seats, state Senate seats. And those members then turn around and appoint six members who have specific expertise in things like utility law and management, concerns of workers, concerns of economic, environmental and social justice, things like that, that we really want to make sure those folks are at the table.

And this group of 13 people, they serve six-year terms each of them. And of course, there's like a little bit of a lead-in time because they'd all be elected at once, where some of them served shorter terms at the start. But point is, they are people in our communities. They have to be living in Maine. They have open meetings that are subject to freedom of access laws. And in order to best serve the public, I think they would be doing a lot of public outreach. And that's something that in talking to managers and board members from other consumer utilities in the country, I've been really impressed with how much local engagement they have. I think Sacramento Municipal Utility District, they said they're hosting 1300 community meetings a year.

David Roberts

Good grief.

Nicole Grohoski

A couple a day on average. But they have, I think they said 95% customer satisfaction. So people feel like they're valued, their experience matters and they also have a plan to get to 100% clean energy by 2030. So our Pine Tree power governance is very much in the spirit of "It's a public good. It should be publicly governed."

David Roberts

There's a little bit of a controversy in Maine a few years ago. I don't remember all the details, but it was about a big transmission line that would have brought hydro from Canada down through the woods of Maine. It was fought and I believe killed by popular resistance. And there was a lot of, at least nationally there was a lot of talk of like here again we have environmentally minded locals blocking things for environmental reasons, but in a short-sighted way that's going to be worse for the environment overall. In the long term, they're NIMBY's. We've got to figure out a way of dealing with this problem, et cetera, et cetera.

So this leads to my question, which is: if you have a governing board that is elected by local people, and it is the local people who are often the source of the NIMBYism, do you not have some fears? That this would lead to a more NIMBY rather than less NIMBY operation of the utility, which is going to be difficult when, as you say, this is the time when every state everybody needs to be increasing and bolstering their transmission systems. Do you worry that local control is going to translate into more rather than less NIMBY opposition to new lines?

Nicole Grohoski

I'll put it in a way that I think makes sense to me as a person in Maine who's intimately familiar with what you laid out, which is at the root of that decision, was a fundamental lack of trust in Central Maine Power. A trust that it would be doing anything in our best interest, that it would be giving us appropriate benefits, that it was really after anything more than profits. And so I think it wouldn't be true that as soon as Pine Tree Power was created that everyone would immediately trust the company. But I do think it would be a fresh start.

And on top of that, with elected and appointed leaders spending time in communities and just energy literacy, I think in general would increase because it's something we would be talking about more if we had to elect the board. I'll say I think that people's interest in energy policy has gone through the roof this year compared to where it was in the past. And people are asking just really great questions, a new curiosity around electricity that I hadn't seen before growing up here. So I think that the outcome would actually be that folks would feel like they had a say in how the transmission was cited, who was benefiting if we remove the profit motive.

Imagine if that money that would have gone to profit was actually going to community benefits. That might really change how people feel. And I think that here in Maine we are sort of skeptical of what's being pushed on us by people from away, quote unquote, is a saying we have. I don't always love it, but it is accurate in this case. You've got Central Main Power, owned by Avangrid, then owned by Iberdrola, based in Spain, telling us, "Oh, we've got this great deal for you." And people are skeptical of that. So I think we have a greater chance actually of doing transmission right and in a way that people can accept if there was this broader community process and a lack of for-profit skepticism that comes naturally to us here.

David Roberts

One of the criticisms of the two existing utilities is that they're kind of slow-walking clean energy in particular. So I wonder if you could just say a word about what that means and why and how we think Pine Tree would be better on that score. Because it's not obvious. These are just wires utilities, right? So they're not dealing directly with clean energy generation. So what are the issues around clean energy and how will Pine Tree be an improvement?

Nicole Grohoski

So, historically, we have seen that the utilities do spend a lot of time and money in the State House, not just behind the scenes, but also right out publicly testifying against clean energy bills. Now, that has slowed in recent years, but certainly in the previous gubernatorial administration, that was a very common practice.

David Roberts

If I could just pause there, I guess I just don't fully understand why, like, if you're a company that's just running wires, what's it to you?

Nicole Grohoski

Right back to the return on equity question. So, these utilities make more money when they build transmission lines than when they upgrade the distribution system. They get a higher rate of return, right? So it is in their best interest to continue with the model of large far-off generation facilities compared to local rooftop solar type solutions or microgrids or battery storage. So that's the first part of the problem, I think. And secondly, I think some of these utilities just really are not very nimble. They're sort of in the business that they've been in for a long time and thinking about how to create a dynamic grid that has time of use rates that actually work, for instance, or bidirectional power.

We have had smart meters in this state for over a decade and I can't see how they're being used in any kind of smart way. I mean, people are still calling the utilities to let them know the power is out.

David Roberts

It's just baffling to me. Like, if I'm in the utility business, this is like my time to be a hero, you know what I mean? After 100 years of sleepy operation in the background, all of a sudden the world is calling upon me to be cutting edge and be the hero and save the world and instead, I'm just going to "I just want to keep doing things the way I've been doing." I don't know, people are disappointing.

Nicole Grohoski

No comment.

David Roberts

Yeah. So I read in one of the stories about this. One of the opponents of this measure said, quote, "The people behind this proposal have no actual plan to lower rates, improve reliability and enable a swifter energy transition." The implication being that the fans of this measure just think that making the utility public is going to be sort of automagically, make everything easier and cleaner and cheaper, but there's no actual plan to do so. Is there a specific plan for how Pine Tree would operate and how it would do these things? Has anyone modeled out sort of you know what I mean?

Is there more than just hope that the structure will do the work for you?

Nicole Grohoski

Well, I think that the person who said that spent some time cherry-picking certain things in the ballot language but missed the bigger picture here, which is we have to start by saying yes on November 7 and then at that time then we have an election for the board of directors and it goes on from there. But until that time the Maine Public Utilities Commission cannot compel the utilities to give over their very private data to do that kind of in-depth modeling that is going to be the very next task for the Pine Tree Power Board once it exists and that is spelled out in the ballot question. You know, these utilities, I'm just going to be level about it: They don't have a plan either.

And I can tell you that because the legislature last year had to pass a law requiring them to do integrated grid planning and think about how is it going to work to increase renewables on the grid, to increase demand as people install more heat pumps and use electric vehicles. They're not doing that or if they are doing it they're not doing it in any kind of way that is transparent or subject to review. So I think it's like a great bait and switch tactic.

David Roberts

Aren't they supposed to create integrated resource plans? I thought that was something that all utilities had to do.

Nicole Grohoski

I think they have some planning, but it is clear from the way that the interconnection queues are looking, the very high cost they're pushing onto developers for even just what turns out to be basic grid maintenance, there isn't really — maybe they have something that says "plan" at the top, but I'm not sure that all the nuts and bolts are actually there.

David Roberts

Yeah, I meant to hit on interconnection before because that's one of the critiques also is that they are slow-walking interconnection of distributed resources, etc. Presumably they're doing that, or at least they say they're doing that to protect the grid. Do we have reason to believe they're slow-walking that on purpose such that Pine Tree could substantially speed up the interconnection queue?

Nicole Grohoski

We do have reason to believe that specifically because of all the complaints that we've received as legislators. We did ask the Public Utilities Commission to look into this and they hired the Interstate Renewable Energy Council, or IREC, to do a study. And the IREC findings were basically especially around Versant, which is in eastern and northern Maine. These guys are some of the worst actors we've ever seen in the United States. They are requiring things that they can't justify why they're requiring them, and we can find no reason from an engineering perspective to require them. And your listeners might find it fascinating to know that for Versant customers, the average cost of interconnecting your rooftop solar to the grid is $10,000.

David Roberts

Jesus.

Nicole Grohoski

That is not normal is what I'm told. Another great story that I've heard from a couple of constituents is that they need a transformer upgrade to interconnect their rooftop solar. Okay, that might be true, and that upgrade is going to cost you $1,000 - $1,500. But we can't get the parts for two years.

David Roberts

Oh my goodness.

Nicole Grohoski

Now the same solar installers that are working in my area are also working in CMP's area Central Maine Power. Because I live my district includes both, and the installers are saying "CMP says they can get it in two months." So then I asked my constituents "Can you file a formal complaint at the PUC using this process we had to create because this is such a rampant issue?" And when they do that and go through the whole process, then that transformer has arrived and been installed within two to three months time. So I don't know what to say about it.

I can only say what I see from the outside and the experience that I have heard about from people that pick up the phone and call me. But it seems shady to go from two years to two months.

David Roberts

Let's grapple here with what is probably the biggest and most difficult issue around all this, which is say Maine voters say yes to this, and it goes forward. Basically, it would involve the state of Maine buying these two utilities assets from the utilities, and depending on who you believe those assets are worth anywhere from $5 to I think CMP is now saying it could get up to $13 billion. So that's a big public expense. So how's that going to get financed? Who's going to pay it? How long is it going to take to pay it? Have we thought through in any detail how that process works?

Nicole Grohoski

Yes, definitely. And that was a big part of what the London Economics analysis included was that legal analysis of what that purchase price process would look like. We also have been able to look at this transition as has happened in other communities in the country, and we created an expedited and refereed process to determine the purchase price. And all told, from this fall to switch over to Pine Tree Power, we expect it to take three to four years. What we know from the LEI study is that this is a completely legal and constitutional effort. It's helpful to remind folks that because these are actual monopolies, they only have the right to be doing business because we give it to them.

And in the Maine statutes, it literally says the PUC can take it away.

David Roberts

Yeah, I mean, of course, again, this drives me crazy. I'm reading articles about this and of course, just once I'd like there to be a good argument had in public instead of idiots. But all the Republicans are now saying "This is a communist takeover of private business by the state. It's Communists. Why don't we call it Chinese electricity?" I've read, some of the dumbest quotes.

Nicole Grohoski

Are you in the comments section?

David Roberts

No, these are legislators. This is not even I mean, there's barely a distinction anymore. But like, the Republican legislators are saying this now. So it's worth just emphasizing the point that you just made, sort of drawing a line under it, which is these businesses have been granted a monopoly by the state and granted guaranteed returns by the state. So of course the state can take that back. Of course this is legal. Like if the state grants, the state can take away if the state is granting it on the grounds that it will be of service to the state's residents and it's not anymore, then of course the state can take that monopoly back.

It's just crazy viewing. It's not like Maine is going to go take over the potato chip industry.

Nicole Grohoski

We have no interest in that.

David Roberts

This is not a normal business. Utilities are not normal private businesses. They are state basically state created entities. And so of course, the state can uncreate them if it wants to. Sorry, I know that will not have any effect at all on the dumb things Republicans say about this.

Nicole Grohoski

Well, I do want to clarify. We do have some really strong Republican support, from certain legislators as well as just regular folks. I mean, that was the greatest thing about collecting signatures for this initiative, which I did and my family did and many other people I know was that when you remove it from a debate in a state house, regular people just get it. They get that this is really important to our economy to have an electricity grid that works for us and for our health and safety. And they also understand that maybe this is not a place for profits.

And I've had folks wearing Birkenstocks and folks wearing MAGA hats sign the petition because I think Maine people are really resilient. We are proud of our ability to solve problems and I think the majority of us believe this is something that we can do and that we probably could do it better than some far-off foreign monopoly.

David Roberts

Anyway, I interrupted you. You were talking about how these giant bills are going to get paid. Basically you say it's going to take about four years to do all the work, to transfer everything over. Would the $5 billion or however much it turns out to be, be paid off over those four years or how will it be financed?

Nicole Grohoski

No. So we did meet with some municipal bond banks. This sort of acquisition, like in the case of Long Island, has been paid off over a long period of time. And that's how we're able to see the rate reduction. You know again, similar to renting versus owning. I was able to buy a home. My mortgage is less than my rent would be, but I am still paying it off. And even with the interest, it's still less. So we have the ability through revenue bonding to borrow that money backed by the ratepayers, not actually by the state government and the general fund, but by the ratepayers.

We have the ability to borrow that money, and then pay it off over time, and borrow more as we need to build out the grid.

David Roberts

Would it being a public utility enable it to draw on state money? Because one of the points a few pods ago we were talking about a new offshore wind bill that would draw money from state coffers rather than from ratepayers. And one of the sort of arguments and defense of that is taking tax money from state taxpayers is much more progressive than taking it from ratepayers. Basically you're getting a much more progressive source of funding. Is there any talk of Pine Tree being able to draw on state money or would it still just operate as a utility and get all its money and revenue and stuff from ratepayers the same way a private utility would?

Nicole Grohoski

The enabling statute has it separate. I think that that is really important, especially to our union workers because they had concerns about becoming public sector workers and what that would mean for their right to strike, for instance. So we have ensured that they are private sector workers.

David Roberts

Oh, interesting.

Nicole Grohoski

Whether or not a future legislature might say we're able to maintain that and have the utility doing efficiency programs that are paid through the taxpayer dollars versus ratepayer dollars, I can't predict. To your point about regressivity, one of the things that is required in the bill language for the Pine Tree Power Company is to establish lower rates for low income residential customers in the first five year plan. So we are trying to address that challenge that you're absolutely correct. It's the regressive funding structure, unlike taxation.

David Roberts

Also, one of the criticisms of these utilities is that they're sending all these cutoff notices, they're cutting off people from power, which is bad for all obvious reasons. But is Pine Tree going to pledge not to do that? And if it doesn't do that, where does that money to cover those people's rates come from? Because that would seem like an additional expense because whatever you might say about cutting people off, it does save the utilities money.

Nicole Grohoski

Right. Well, we do have what's called the Arrearage Management Program here in Maine and that does help folks get out of arrears and that is ratepayer funded program. So that is a somewhat fiscally progressive approach to that. You know the details of that program are probably more than you'd want to know. But the long and short is if you get back on track then some of your debt will be just forgiven. But it's not forgiven by the utilities, it's forgiven by your neighbors.

David Roberts

Right. Well, would Pine Tree pledge not to cut people off? Like, is that part of the campaign here or how would it treat cutoffs ?

Nicole Grohoski

You know, it's a good question that surprisingly I don't know if anyone has posed to me it is not in the legislation one way or the other. I'm of the belief that if rates go down and we could have rates that were income stratified to some extent, that the amount of disconnection notices that we saw earlier this year would go way down just economically. But I think it would be really a decision of the board. And then I'm also not sure if the Public Utilities Commission if there are any rules on the books because this utility, unlike a lot of consumer utilities in the country, is regulated by the Public Utilities Commission as if it were an investor owned utility.

So, there may be specific rules about that already.

David Roberts

Yeah, I would just think though, if you're trying to sell this, making this public rather than private, one of the things you could sell is like we think this is a public right to have electricity on some level.

Nicole Grohoski

The one other thing about it that just comes to mind is that a couple of years ago during COVID, people were especially concerned about the disconnection notices, not knowing if they were going to be receiving a next paycheck but we were told that the disconnection notices were necessary in order to provide certain assistance. So the utilities said, "Oh don't worry, we're not actually going to disconnect anyone but we have to do this to get them into this next program." So, I don't know if that would come into play here but I'm not convinced that the utilities wouldn't have ultimately shut the people off but that was a way that they spun it at least.

David Roberts

One more kind of semi-technical question that's a little bit of a side thing but is of interest, I think, to Volts listeners. One of the provisions in the IRA, the Inflation Reduction Act, is that it makes some of the tax credits direct pay, which means you don't have to pay taxes to get it back. You can get it back directly as a check and one of the categories of entities that would qualify for this is tax-exempt entities. So I wonder, has anyone done any thinking, and maybe this is too in the weeds but done any thinking about what advantage it might pose for Maine to have its utility be tax-exempt, whether it will benefit from the IRA through that.

Nicole Grohoski

It is something we're thinking about because we were excited to see that direct pay provision sort of leveling the playing field for publicly owned generation which is another topic I'm very interested in, but I think it remains to be seen. In the case of Pine Tree Power, it is not allowed to own generation and it may be permitted to own some storage as is necessary to maintain the grid functioning. So I'm not entirely sure that that direct IRA provision would help in this case but what I think it does is sort of change the paradigm a bit there that may then also shift to other things. If the federal government says let's have an ITC or PTC for transmission lines, the next step might be —

David Roberts

Praise be.

Nicole Grohoski

Well, let's make sure we set it up the same way we've just done with generation. Yes, I think it's a really important conversation even if it doesn't have a direct immediate effect on the Pine Tree Power Company.

David Roberts

Interesting. As I think anyone could predict just from what we've said so far, even knowing nothing else about it but what we've said so far, I'm sure people could predict that the private utilities in question are not excited about this happening and have mobilized to prevent it from happening. So tell us a little bit about the campaign against this. Is it as hysterical as one would predict?

Nicole Grohoski

Yeah, I mean hysterical is one word for it. Deeply troubling is another phrase that comes to mind. But these are utilities, like I mentioned, about the amount of profit that they make and that's just off of their Central Maine Power and Versant holdings. But Central Maine Power is just a small, small fraction of the entire Iberdrola conglomerate. So, yeah, we have seen them spending a lot of money against the campaign. They've put $27 million toward the campaign, both utilities, as of the end of June. So we expect to see more of course.

David Roberts

Not a small amount in a small state.

Nicole Grohoski

No. And honestly, talking to my neighbors, people are very upset by it. They're kind of irate that they're the people whose power goes out and doesn't come back on for a couple of days. They're the folks who had to spend $10,000 for a generator which isn't part of a clean energy solution last I checked. And there go the utilities putting $27 million toward just running ads.

David Roberts

Yeah, I mean, are they experiencing it as a flood of ads? I mean, $27 million must allow you to kind of dominate the airwaves.

Nicole Grohoski

Yes, the airwaves are definitely bought up, as far as we can tell. And they have just their two donors, which are the utility parent companies, which are Avangrid and Enmax.

David Roberts

Are they funding 100% of this?

Nicole Grohoski

100%, yes. And these utilities, lest they tell you how amazing and green and climate-friendly they are, they are gas utilities, Avangrid and Enmax anyhow. And then on the flip side, we are a smaller organization. We don't have Mainers' pockets to pickpocket on a regular basis.

David Roberts

I'm guessing you guys haven't hit $27 million yet. How much money have you have?

Nicole Grohoski

You're closer to around a million, I think. And that's over 1000 donors, most of whom are just regular donors giving what they can because they understand these differences. And also I think the big difference is the utilities are putting out a lot of fear, doubt, scare tactic type ads. And on the flip side, what we're offering people is something different and something positive, something that we can all lean into and make sure that it succeeds because it would actually be ours. So I think that's resonating with folks.

David Roberts

What are the scare tactics specifically? Are they saying this will be expensive or what?

Nicole Grohoski

Yeah, expensive. I mean, you quoted some of their numbers and it's laughable. They're like, "Oh, we're going to get $13.5 billion." Well, they're worth $5.4 billion. That's what they pay taxes on. That's what they filed their official paperwork saying. So I think especially as we learn more and more about how decrepit certain portions of this grid are, they'd be lucky to get a little bit over that. So that's one of them. "Is there a plan? We don't have a plan, but do they have a plan?" is another one. You know what, a lot of it is just to my sensibility is a little insulting to Maine people.

You don't know what you're doing, that kind of thing. Meanwhile, we're going to keep the line workers who are doing the work and we're giving them a retention bonus because we value their expertise, because they're the ones that actually know how the grids work, not the CEOs and the CFOs.

David Roberts

Yeah, it is historically pretty easy though just to I mean, when you're fighting against change, you barely even need arguments. You know what I mean? You can just say "Booga booga booga change" and you're halfway there, it seems like.

Nicole Grohoski

Well, I think that's why we're in such a unique position in Maine because while that can be kind of an initial gut reaction, I think people here are curious. We've certainly seen plenty of campaigns where one side was outspent a lot by the other and it didn't make a difference. We have led in other policy areas. Ranked choice voting could be one recent example. Clean elections one of the only states that splits our electoral college votes. So I think Maine people, I think we're interested in things that are different if they make sense to us.

David Roberts

Where is the public on this? Do we know do we have enough polling or survey data or what have you to know kind of what the level of support is or where the public is on this? Do we have a barometer? Do we have a measure here?

Nicole Grohoski

Yeah, I think the most recent public polling was probably a couple of months ago. But what it showed was there were people that were solidly in each camp but a lot of undecided voters and it really put us in a dead heat in terms of the people that were decided. And what I think is interesting is folks are not being swayed by Central Maine Power and Versant ads mainly because we don't trust them. They have not been good faith actors.

David Roberts

Are they creating fake groups like "Mainers for puppy dogs and grandma"?

Nicole Grohoski

Yes, Maine Affordable Energy is one of them. Yeah, so they sound pretty good, but all you have to do is google that and you find out pretty quickly, because of our disclosure rules, that's 100% utility funded.

David Roberts

To the extent that the public supports this, are they viewing it as primarily a green thing, a thing about clean energy? Or is it primarily " Screw these out of state —," you know what I mean? Like a Maine pride kind of thing. Is it a reliability? Do you know what it is about this that the public has taken from it? What it is the public is supporting when the public supports it?

Nicole Grohoski

That's a great question and it does vary depending on the person and their interest and maybe even where they live in the state because the utility rates are the worst where I live compared to all the other districts in the state. So it depends. I think if you're a person who tried to interconnect and you got told you have to wait two years and $10,000, then it might be about greening the grid. But I think for a lot of folks underlying whatever their specific reason might be, it is that question of trust. I think about this all the time we have aggressive clean electricity goals, but 50% of our carbon emissions in this state are coming from vehicles and we are the most heating oil dependent state in the country.

So we've got to get people onto the electricity grid in order to have any hope of cleaning it up. But it's really hard for me to knock on someone's door and say, "I really hope you'll consider changing your whole house over to heat pumps, even though we have below zero temperatures sometimes. Or I know that the power went out for a week last year, but would you consider an EV?" So I think that in order to make this transition work, we have to have utilities that people trust and that are providing just basic service. People should not have to think as hard as they're thinking about if their electricity is going to be there for them.

David Roberts

Yes, that's such an important point. And so generalizable too, like if electrification is the thing, then people have got to trust the institutions in charge of electrification and they do not have much public trust these days. So that's an interesting argument in favor, I think, of making utilities more accountable, more public. What about the other big argument against one of the big scare things is you have to buy all these assets, which is like a big bill, a big one-time bill. The other scare story is that utilities are going to immediately sue, that this is going to get mired in the courts, and that it's going to take 4, 5, 6, 7 years to even get it all settled, and until then it will be chaos and no one will know what's going on and blah, blah, blah.

So realistically, what's your view of, say, voters approve this in November? What is your view of sort of how that plays out and when and how the inevitable legal wrangling gets resolved?

Nicole Grohoski

Basically, the Pine Tree Power Board will offer a certain amount for the utility infrastructure. I don't expect that the utilities will accept that on first pass you're buying a used car, you don't just take the first price. Right. So we would expect some negotiation, but if that doesn't work, then it will go to the courts. And there is a refereed process that's spelled out in the legislation in the Superior Court that then can be appealed to the Supreme Court in the state of Maine. But there are timelines set up. So it cannot go on for years and years and years, because at some point, if you lose or win a case, that's it.

You have one appeal. I think it's funny that this argument is coming from the utilities because if there are any lawsuits and if it got dragged out, as they say, even though we've protected against that to the best of our ability, that's coming from them. That is a choice that they are making.

David Roberts

"Don't make us do this."

Nicole Grohoski

Yeah, so it's kind of ironic but additionally, one of the things that comes up is how do we know the utilities will continue to invest in the meantime? And it's like the best parallel I could say to that is if I'm going to sell my house, I don't just stop fixing things before I sell it. I keep it up in really good shape. And in fact, utilities would have an incentive to invest more because usually they don't just sell it for exactly what it's worth. There's usually a multiplier. We expect it to be like 1.5 times.

So we actually have increased the oversight capacity of the Public Utilities Commission to ensure that there isn't any of that sort of last-minute gold plating going on, because that is actually what we'd expect, not the further disrepair scenario.

David Roberts

Oh, so you think if this goes through, they'll plow a bunch of money into high dollar upgrades just to boost their price that you have to pay for them?

Nicole Grohoski

That's what I would do if I were them. Fortunately, we're going to keep an eye on that on behalf of Maine people. But if you are able to invest a million dollars here and in two to three years time make $1.5 million because that's the multiplier that the courts assign, that's pretty good.

David Roberts

Yeah. So what's your timeline in your head then? What do you envision? At what point is there just the one public utility operating and all this is behind us? Were you willing to predict?

Nicole Grohoski

Yeah, we're looking at fall 2027, so four years from now, and that includes having the elections for the board members next year. So that's the first major hurdle, which I think is exciting, especially because living in one of the more rural parts of Maine, we don't always feel here that our interests are represented at the Public Utilities Commission, which is folks from southern Maine. And I think this geographic component is really compelling to, you know, so that's our first step. And then basically we have to get a lot of information. I mean, the board would have to get a lot of information from the utilities in order to know what purchase price they should put forward, what's the business plan, what does the revenue bonding look like, and make sure they can secure that financing through a large municipal bond market.

So that takes time and we want to make sure we do it right. On the other hand, doing nothing is also a risk that I think sets people in my generation and folks younger than me behind economically and environmentally for decades. So a couple of years to do it right is definitely worth it.

David Roberts

Okay, final question then. I can see lots of Maine-specific reasons why one might argue that this is a good deal; these utilities are particularly bad, Maine has a particular set of problems, it has a particular sort of public culture, a culture of participation and a culture of civic engagement, et cetera, et cetera. Lots of Maine-specific reasons why you could make the case for this. I wonder, to what extent do y'all have your eyes on other states and trying to make this the beginning of something bigger? Like, do you believe that taking private utilities public is a good idea across the board?

Is that something you'd like to see become a national trend or are you just purely focused on Maine? How do you think about the influence this may or may not have on other states?

Nicole Grohoski

I think that all the issues we've had in Maine are what led us to looking around for solutions, but it is a structural imbalance that we have with the regulated monopolies when they're for profit. So, I do think it is something that is exportable to other states. We people in our coalition have been working with and talking to people elsewhere in the country who are looking to make a similar transition also elsewhere in the world. It's kind of interesting. The Scottish power is also owned by Avengrid, which owns Central Maine Power, and they are looking to become a public, truly public utility over there.

So, in doing this work, we've found a lot of interest for that business model change. And I think as we become another case study, we are standing on the shoulders of other case studies that have happened in this country. And as we become another one for folks, I think that we'll see some opportunities arise. And I would like to see that because I want every American to be able to afford their electricity and to be able to have clean energy and not a lot of hurdles to getting there, because we are literally all in this together as a country and as a world with our climate crisis.

David Roberts

That seems like a wonderful note to wrap up on. Nicole Grohoski, thanks so much for coming on and walking through this with us. It's super fascinating and I think it will be an example to the rest of the country one way or the other. However it plays out.

Nicole Grohoski

We're hoping that we're a positive "yes" example. We're working every day toward that. And I want to thank you, David, for having me on and talking about this topic, which is, I think, endlessly important and fascinating.

David Roberts

Agreed, agreed. OK. Thanks, Nicole. Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts. WTF. Yes, that's volts.WTF so that I can continue doing this work. Thank you so much and I'll see you next time.

In this episode, organizer Jeff Ordower of 350.org talks about how the environmental movement can shift its focus from blocking what it doesn’t like to building what it does.

(PDF transcript)

(Active transcript)

Text transcript:

David Roberts

It is a much-discussed fact that the environmental movement cut its teeth blocking things — mines, pipelines, power plants, and what have you. It is structured around blocking things. Habituated to it.

However, what we need to do today is build, build, build — new renewable energy, batteries, transmission lines, and all the rest of the infrastructure of the net-zero economy. Green groups are as often an impediment to that as they are a help.

So how can the green movement help things get built? How can it organize around saying yes?

Recently, the activist organization 350.org hired Jeff Ordower, a 30-year veteran organizer with the labor and queer movements, in part to help figure these questions out. As director of North America for 350, Ordower will help lead a campaign focused on utilities standing in the way of clean energy.

I talked with him about organizing around building instead of blocking, the right way to go after utilities, the role green groups can play in connecting vulnerable communities with IRA money, and what it means to focus on power.

All right then, with no further ado, Jeff Ordower of 350, welcome to Volts. Thank you so much for coming.

Jeff Ordower

Thank you so much, David, for having me. I'm excited to be here.

David Roberts

Okay, well, I want to get to 350 and climate activism in a second, but first I'd like to just hear a little bit about your history in activism, which is mainly on the labor side. And what I'd really like to hear, and this is probably like a whole pot of its own, but insofar as you can summarize, I'd love to hear from your perspective when you were working as an organizer in labor. Looking over the fence at climate activism, what was your sort of take or critique like from the labor perspective? What did you think climate activism was doing right or wrong?

Or what did you think you could bring to climate activism from the labor side?

Jeff Ordower

Yeah, I both did labor organizing and I come out of base-building community organizing. I actually come out of the notorious ACORN was where I spent the first half of my organizing.

David Roberts

The late, lamented —

Jeff Ordower

Yeah. So it's very similar. But I started in labor, moved to ACORN very quickly, and then as ACORN was destroyed, both helped to start new community organizing efforts. And then lately, over the last few years have been involved with labor organizing. And it's interesting because I really started tracking what was happening in climate around Copenhagen, which was 2008, 2009, at the same time where ACORN was going through its difficulties. And we were trying to figure out what to build and how to build it and how to build something that was more intersectional. So I was — the personal piece of my story is I was working in St. Louis, which is where I'm from, and part of what we do as community organizers is think about how do we challenge the local power structure?

It's about power and it's about how we build power for folks who don't have the power that they need and help collectively do that. And St. Louis is, like many midwestern towns, is kind of a branch office for many Fortune 500 companies these days. So the most powerful players in the region were coal companies. Peabody Coal was the largest private sector coal company in the world. Arch coal was the second largest in North America.

Both were headquartered in the St. Louis region because it's at the confluence of the Missouri and Mississippi rivers. So, as the only Fortune 500 company in the city limits of St. Louis that was getting tax breaks, there were lots of reasons to fight Peabody and so started on a campaign about that, but there was also this tremendous excitement that was happening. So we were both at the beginning of the Obama administration. There was a time of great hope. For those of us who —

David Roberts

I recall vaguely, vaguely distantly.

Jeff Ordower

Well that's interesting. So, for climate folks, they're like, "Oh, this is not a time of great hope." But the fact that after six or seven attempts, depending on how you count it, at winning health care for everyone in the country, I look back at that early days of Obama and say, wow, we got financial reform to some degree, but we got health care was the most important thing that changed so many people's lives. So I actually think climate folks view that era a little bit differently than we might in having really a generational win. And I'm sure we'll get into this a little bit later, but it is how I think about IRA is also the next generation or the next generational win that we've gotten.

But, looking at that, I think the sheer number of resources that the climate movement was mustering — you know there were many organizations in St. Louis at the time that had been newly created that were doing work. There was a global movement, there were these incredibly ambitious, and I just want to say badass, for lack of a better word, youth, climate activists and organizers. So I think there was a lot to be admired about what was happening. And the fall of 2009 with 350 managing a global day of action, it's when I first started tracking 350.org. So, that was where I really lauded at what was happening.

The climate movement was so exciting to think about the global nature, to think about what they were doing. I think where also looking over the fence where things seemed harder was I think about organizing. And I think many of us, community labor organizing, think about organizing and not mobilizing and how folks build longer term power. And it was less clear to me how the climate movement was doing that and how really the most affected people were — you have a lot of people whose job was to whether it was to get signatures or to do lobbying. But there didn't seem to be formations not just where people could speak from their experiences but also really exercise the longer term campaigning and power building that was necessary.

And so that felt like, and still feels to me a little bit like some of the weaknesses in the climate movement. And obviously more than a decade later, we also have strengths too. I mean that the Sunrise movement is the complete counter to that actually moving folks in hubs in a very significant way for youth organizing. I think, 350.org with our 100 chapters, that the game has changed somewhat. But at the time it really felt like much more emphasis on mobilizing, much less emphasis on organizing.

David Roberts

Right. So people would show up in the streets and march but you didn't see the sort of long-term accretion of power coming out of that?

Jeff Ordower

Yeah, and it's not just the accretion of power, it's also the relationship of having real organization where you have folks who are directly affected by issues, make decisions collectively. That's how things get stronger. It's how you figure out tactics that work. It's the relationship between staff and members. It's members figuring things out. Building of power comes through some trial and error and that comes through a process of collective work where you have democratic organizations. And that's similar — it's the most clear in labor fights because if the workers aren't really willing to fight the boss then you can't have a union no matter what.

David Roberts

Right.

Jeff Ordower

And you can think of a thing as an organizer that should work. But really, it's what people who are going and working on the shop floor or these days working in an Amazon warehouse or working in a Starbucks, what they think is going to give them the courage to stand up to the boss. It's not what you think as an organizer. And so I think that's what's so important and that comes over time and building that. And I think where the climate movement sometimes struggles is it has just some of the sharpest, most brilliant policy minds in the world but it doesn't always have that relationship with folks who are the most affected to be able to figure things out and have this trial and error that organizing really is about.

David Roberts

So let's then talk from a really high level, 30,000 foot level or whatever the phrase is about where the climate movement finds itself. Sort of what kind of moment is the climate movement in right now? I think you have said and written that this is a sort of historic turning point. How would you describe that in a broad way?

Jeff Ordower

Yeah, I think it's kind of two parts. So one, we've had this historic generational win with IRA in the US. And so the one piece of it is the task before us is whether we can rise to the occasion and use it. And I know in previous podcasts and I sometimes use the pod to talk about previous pods, but both the IRA is filled with carrots and not sticks. But I think we can do a lot with those carrots. And I think we can really transform our energy system and also do that in a way that promotes equity and justice and it's an opportunity before us.

And then the second thing is we also have to do that while recognizing that all of the above is insufficient, that we actually do need to convert the way we live and we work so we can't just continue to build pipelines and mine coal and also add in some renewables. There has to be a real transformation. We have to make some hard choices and we have to and this is where it comes back to power. We have to build the collective power to do that. So I think we're at a crossroads. We have more tools than we've had before in the toolbox, at least in the US, to really have a just transition. So it's a question of whether we can step up and build the power that's necessary to consummate that transition, if you will.

David Roberts

Well, let's talk a little bit about that because the premise of this conversation is sort of the attempt by 350 and I think probably broader than 350, but we'll focus on 350 —

Jeff Ordower

Definitely broader than us, yes.

David Roberts

To sort of pivot from purely oppositional trying to stop fossil fuels from getting built, to a more prospective, forward looking support for building things, right? This is a big topic in green circles right now. There's this whole school of thought that liberalism is not used to building things and the whole approach of sort of abundance and building is different than what we're used to. We have to reorient ourselves, et cetera, et cetera. At a general question about that, which I think is probably the one that strikes most people first and most forcefully, is just this: The conventional wisdom in organizing or the conventional wisdom about organizing is just that it's easier to get people fired up about things they hate and oppose and want to stop.

For one thing, it's just clearer, right? When you stop something, you've stopped it, right? It's a clear win. It's not ambiguous. You got big, evil, corporate bad guys that you can demonize and sort of rally people around that. And just generally, like, anger fires people up. And the sort of conventional wisdom is that it's very difficult to organize around building for a lot of reasons, I think we'll talk about, but just for a million reasons. There's a lot more arguments among advocates about what to build, where to build, when to build right? And what are the right trade offs and all these kind of things.

So do you agree with that general conventional wisdom? Do you think it's true that it's just easier to get people fired up around anger and it's more difficult to do this sort of forward looking thing that you're thinking about here?

Jeff Ordower

Yeah, it's a very good general philosophical question because for decades with comrades, you have the conversation do you organize out of anger or do you organize out of love? I think that this is a related question and the answer is I think polarizing and organizing out of anger is important and matters and lots of people do that and works for them. But I also think organizing out of a vision of what's possible and the world in which we can live and what's possible if we can open the door and really change material conditions for folks, I think that is just as compelling and I think folks will join and build together as well. Now I'm thinking about this question.

There's many directions we can go in this, but I do want to say organizing for solutions doesn't mean that we're just organizing to build renewable energy or utility scale solar, wind. It also means there's a lot of people, people and their companies and their corporations that are in the way. And so we still have to clear out a lot of these barriers. And it's not just fossil fuel companies, but it's also the pernicious role of utility companies.

David Roberts

Oh yeah, we're definitely going to get to that.

Jeff Ordower

Okay, I didn't mean to jump ahead.

David Roberts

Oh, my friend, we're definitely getting to that. I know you're the North American director now and so maybe you won't have anything to say about this and we can just cut it if you don't. But one of the interesting things when I had lunch with May, the head of 350, a few months ago, she was talking about this shift. And one thing she told me that I had not understood, I don't think, is that a lot of the impetus for this turn away from sort of pure opposition more to building things came from 350 branches in the developing world.

Jeff Ordower

That's right.

David Roberts

And I think maybe naively you would think those are the people getting hurt worst by oil and gas pipelines and have the least environmental protections down there and that's the protection they need. But they say otherwise. So maybe talk a little bit about why that is.

Jeff Ordower

Well, I think people are clear that they're getting hurt by pipelines. I also know, again, it's hard for me in the Global North to be like, "Here's what people in the Global South think," but here's what's been reflected to me that — first of all, when you talk with many activists, in the Global South. They say whatever is happening for us around emissions just generally is a drop in the bucket compared to the damage over the last hundred years that countries in the Global North have caused. But related to that, there's the reality of like, what do people need to actually get the energy that they need?

And that's around renewable energy that's around solutions. Energy is just so unaffordable. It's increasingly challenging given what's happening, given the war, and given that, again, the Global North is going to capture all the oil and gas that they can. And given the issue with governments that having a real ability to have diffuse solar is absolutely critical to how people can live and get what they need to do. And so I think for many of our groups, if you talk to folks in the Philippines at 350, they'll say our ability to actually deliver solar to more remote fishing villages is absolutely critical.

And that also as a bulwark against the increasing level of climate chaos that we're facing. Unfortunately, the grids are weak and get knocked out all the time. And so if you're facing typhoons, if you're facing hurricanes, you need to have some kind of resilient energy. And so I think folks are talking about the solutions for those two things, and they're not saying it in the context of like, let's build pipelines and renewables. They're also saying some of this gives us the ability to think globally about how we're campaigning. So how are we actually moving resources, the trillions of dollars over the last few decades that have gone in all the different ways from the Global South, the colonial practices that still exist and the imperialist practices that still exist.

How does money and money moving from south to north, some of it is about how we move money back from north to south, and how we as a global organization, push for that and campaign for that so that that can go into solutions. And there's pretty interesting dynamic governments, new governments in Latin America and Colombia and Brazil, places like the Marshall Islands. Folks are talking about Kenya, where there really is a commitment to change energy policy and practices. And so it's a huge opportunity if we, as a global organization with allies, can do the work that we need to do to redistribute the wealth instead of having it go upward.

So I think that's the context through which we're thinking about solutions.

David Roberts

They need energy, is what seems obvious.

Jeff Ordower

Yep.

David Roberts

I hadn't really thought about like, they need more energy. And so just stopping bad energy is not enough.

Jeff Ordower

No, that's right. And for many years of campaigning against Peabody Coal and St. Louis, and fascinatingly, going to their shareholder meetings so that we could both ask questions and occasionally disrupt them, they would do these presentations on energy poverty. The coal company's role is they're eliminating energy poverty in Africa. And actually no, we need to be thinking about what's the real way to deliver energy so that it's also not controlled by — If we think utilities are bad here, right, South Africa, where you've got rolling blackouts for hours a day because of the huge amount of corruption of utility companies and the coal companies, how do we actually create real grassroots, real community controlled power is absolutely critical.

David Roberts

So let's talk about utilities then. So it sounds like the main way that this sort of turn toward building is going to manifest is a focus on utilities. So maybe just say a general word about how they fit into that frame, why you think they are a good target and the right target for organizing.

Jeff Ordower

Yeah, they're the main thing. There's other things too and I'm sure we'll get into them. But utilities are particularly pernicious for a number of reasons. The first is they're not interested in sharing their power, right? They want to control transmission, they want to control how energy moves. So they don't want a grid where you have lots of rooftop solar and lots of other sources of transmission. So they're actively blocking that in all the ways that they can. Almost every utility company is and they're worried about their profits. And so it's anything from how they spread misinformation to how they're messing with permitting and transmission.

So that's the first thing is they're actually blocking the transition and then they're interested in really where they make a good chunk of money. Some people have characterized utility companies as like they're not actually interested in the generation transmission of electricity. They're really interested in building things. But it is often what we see is that's what's sexy is to build things?

David Roberts

Yes. Well that's what gets them their rate of return, right? Listeners are bored of hearing me talk about this but that's literally how they make their money is by building big things and spending a lot of money and that just the consequences of that cascade down to everything, right.

Jeff Ordower

And spending our money. So they're like, oh well, you're right, we're not going to do coal, we'll build frac gas plants and that'll be the transition. That's the bridge fuel that we need. Right, so you've explained it much better than I'm going to but that's certainly how they're structured and what they want to do. And then I think because the fact that the way we get energy is dependent on the profit system, I mean, that's obviously also problematic but it really plays out in a way that's very dangerous for working people, low and moderate income people because you're faced with outrageously skyrocketing bills.

And so there is a link between what happens in terms of how energy is produced and the same companies threatening to cut people off, not providing the power they need to provide. Or as we see with every heat wave, unfortunately, every summer is folks making decisions about not turning on air conditioning, not doing the things that they need to do to stay cool or to stay protected from the weather. Similar in winter and how many deaths there are of lower income folks because of heat waves, because people are scared that they're not going to be able to pay their bills. So it's both cut off, it's the threat and it's really the impact on — we have two energy systems people who can afford it and people who can't afford it.

And it's the same utility companies that are part of that. So these issues are interconnected and utility companies are and again, I think you've talked about this on previous podcasts in a much deeper way as not a policy person than I will, but there's the whole web of the ways in which utility companies influence things through ISOs the impact of utility companies and expertise that we don't have as consumers on public utility commissions and public service commissions. And a way in which sort of there's a self perpetuating kind of ecosystem of how decisions are being made.

David Roberts

They are enormously influential for all the reasons we're talking about, but they're also because of that kind of self perpetuating, largely closed ecosystem of decision making. They're also relatively obscure to most people, just to the average Joe or Jane on the street. You bring up like Big Oil, all the associations come along with that. Like people get that rapacious oil executives, that's a very intuitive frame. But like utilities, I'm just not sure people know what they are, what they do or have any real sense of them. Is that a challenge in organizing around them? Just sort of like that basic educational piece of like this is the entity that is between you and this is the reason these things are happening. Are people responding to that?

Jeff Ordower

Yes, I think they really are. I think actually, while people know about oil companies, people also know you're writing a check to your utility company every month and you see the rates increase and you don't understand why you didn't use any gas in the summer and you're still getting a bill for basic services. Or you don't understand the outrageousness of heating bills and cooling bills, particularly as weather becomes more extreme. So, I think we are finding that folks are pretty fired up about their utility companies. I think what's harder is, and this is our next step and this is our organizing challenge, is how do we get folks to really think about challenging that in a way in which they think the game — to your point, this closed circuit we've got closed circuits on transmission and closed ecosystems, on how decisions are made and how do we get people to believe that their voice matters, that there's things that they can do that are going to change a rigged system so that it works for consumers and ratepayers.

David Roberts

I guess that's what I was getting at. That's what's opaque is, you know, there's a utility, you know, you get bills from them, but how they come to their decisions and how you as a random person could get involved or insert yourself in that, I don't think most people know intuitively. So what is the answer to that question then? Because even if you do know about utilities, it's still not obvious what the answer to that question is, so what does it mean? Is this mostly about sort of public PR campaigns drawing attention to them, bashing them so that they feel pressured to change?

Or are you talking about organizing around more specific stuff like getting people into PUC meetings or getting people into shareholder meetings? So what does it look like to organize against a utility?

Jeff Ordower

Yeah, I think it's all of the above. And when I say we actually want to talk about the bigger we because to the point this is not 350.org driving this, there's a lot of groups doing really interesting work on utilities. So folks are getting into shareholder meetings and rallying outside and having some people inside and some people outside to get utility companies to change the way they operate. Folks are engaging in a more robust way than I've seen in years. Actually, ACORN used to fight utility companies and 20 years ago was really the height of our fights against utility companies, both winning more money for subsidies and doing everything, including folks blocking the trucks.

Usually, there's a cut-off date in the colder weather states like April 1 or April 15 where you can't cut anyone off for non-payment, and then on April 15, trucks would roll out and ACORN members would block those trucks. So 20 years ago, you saw much more robust fights against utilities. We're seeing this really popping up in lots of places. There are organizations going to PCs and PSEs and that's really exciting. We're seeing folks really thinking about shareholder meetings in a different way. And then some of the most innovative things are also both legislatively and using the power of the ballot.

So legislatively, three states have now passed legislation and we're hoping this is setting the stage for many more. I believe it's Massachusetts, Connecticut, and Maryland. I want to say that forbid utility companies from using ratepayer money for lobbying, which would make sense, right? We're paying our bill.

David Roberts

Seems so obvious, right? Just seems so obvious.

Jeff Ordower

I know. Capitalism, David, that's how it works. You get to sell a product, then you can use our money to lobby against us. So we're hoping that that sets the stage for many, many more states passing this and that even these are the kinds of legislation that could have bipartisan support. And again, this wasn't us thinking about this. This is many groups doing it. And then there's a different set of things that are also possible, which is in Maine, we're seeing a critical fight, Pine Tree Power, where they're trying to use the power of the ballot to basically eliminate the private utility companies and create publicly owned utilities.

David Roberts

Yes. Stay tuned for a Volts pod on that very subject.

Jeff Ordower

Oh, fantastic. Yes. So elections in November, and I think last I checked, the two major utility companies that spent $18 million to try to beat it. I'm sure that I'm looking like do I have a little what is that countdown to show how many more millions they've spent in the last week.

David Roberts

Yeah, maybe the right sequence is first you pass the law preventing them from using shareholder money for lobbying. Then you go after try to make them public. So that's utilities there's a lot of sort of vulnerable points, I think, where you can get in there and bash utilities, where they're subject, I think, to public mobilization. But you said the turn toward building is broader than that. So what are some of the other pieces that you see? How can activism organize around building?

Jeff Ordower

Well, what's really exciting, and one of the groups in the 350 Network Council, Minnesota 350, really did some significant work as part of a larger coalition, for example, with their Climate Action Plan in Minneapolis, to think about how IRA funds really can help them change and electrify the whole city, particularly starting in lowest income neighborhoods, neighborhoods of color first. So I think there's a lot of tools in the toolbox to do this. Many other organizations are thinking about this as well, where there are progressive mayors and progressive city councils to think about. The IRA money itself is not sufficient to transition whole cities, but it gets you pretty far.

And so if you can find some bridge funding, if you can do a windfall tax on profiteers or a corporate tax or something, that you can find additional resources to really move in an aggressive way to electrify a whole city. So I think one thing is thinking about larger scale industrial policy and lots of brilliant — both policy groups and organizing groups and groups that are doing party building and political work. The major organizing networks are thinking about this kind of work where how do we really transition cities? So I think that is in the building category and it is within our reach given the additional influx of money.

And then I think there's a second thing, which is the direct pay provisions of IRA, where school districts where public buildings can install the solar that they need to install rooftop solar. And then they're getting a check from the federal government to be able to do that.

David Roberts

As opposed to a tax credit where you buy the, whatever, the item, and then later when you file your taxes, deduct the item on your taxes, get the credit for it. This is just you buy the item and you get basically the refund at the point of sale. You don't have to do it through your taxes. It's only available to schools and nonprofits. I feel like there's a couple of other categories too, but it's a couple of categories of entities are eligible for direct pay.

Jeff Ordower

Right. And these are entities predominantly that don't pay taxes, right. So they're getting money that they wouldn't have normally gotten. Because you're right, the other things are in tax credits for entities that pay taxes.

David Roberts

Yeah, and all of those seem like good points around which to organize, like schools, churches and nonprofits and things like that.

Jeff Ordower

It's absolutely so clear in schools, I don't know about you, but I went to school in St. Louis and there was one wing of the school that was air conditioned. So everyone wanted to take social studies classes because that was the only wing that was air conditioned. Everything else, you're in school in late August in Missouri, and it's 97 degrees. But yeah, so many schools, the facilities issues, and we were seeing just waves of school cancellations because of the extreme heat. So it's really helping kids learn, too. There's such an opportunity. It's not just about that it's cool to have solar on top of schools, but it actually makes a difference in kids being able to sit and learn.

David Roberts

Yeah, I've always thought that was like a low hanging fruit. And I've always been puzzled why there isn't more organizing around that, but just healthy interior air for schools and electric buses so they're not breathing diesel fumes and efficiency upgrades so that they can stay cool in the heat. These bring together your environment people and your school people, and like, parents who are the most rabid, ready to organize demographic in the world. I've always wondered why there isn't more action around that.

Jeff Ordower

Same here. And I think this is the challenge before us is whether we can spur this kind of action in organizing. And this is something that ought to happen in red states and cities and blue states and cities. And so I think this is the excitement, and I think folks are just starting to wrap their heads around this opportunity and this possibility, and so let's see if we can do it. But this is I think the challenge before us as organizers is whether we can muster the enthusiasm that's necessary, because you're absolutely right, this is the link.

David Roberts

I read your piece about IRA. So say a little bit more then about how you see the opportunity IRA presents. We've talked about this on the pod a couple of times, but just how you envision using IRA to organize around building things. What do you think are the opportunities it provides?

Jeff Ordower

Yeah, and I think this is where we started the podcast, which is about the role of how we think about organizing, which is what I think right now may end up being very different as we're talking to groups, as parents are getting in the struggle in their school districts, as they're meeting with folks. What it ends up looking like on the back end is different. But I think some of it is we need to do some basic education with folks. So folks understand what is possible and what they can do. Because it does seem there are parts of it where I'm like "Oh, this seems too good to be true. What's the catch?"

So really, to talk about the possibilities, I think the second is if we're talking about school districts. And you said this before, what do we do? Why aren't there more fights about this? I think people are pretty particularly in big cities, there's a lot of despair about the state of school's infrastructure. Right. The major project schools were built in many places decades and decades ago. And so they're dealing with just basic infrastructure problems of lead pipes and bad water and asbestos pops up here and there. Like I know in Philadelphia, where I live now, they've had to shut down schools because of safety concerns.

And schools are so underfunded. It's really leading with the vision there. And there has to be a little bit of a fight and a little bit of a push. And then I think having folks realize that there are going to be in city after city, in school district after school district, there are going to be bureaucrats and I actually use this term fondly, there are going to be folks within the system who are going to be trying to figure this out. And so we need to figure that out together. And I think some of the missing piece is, we in organizing, this is going to be a slight shift from how we think about organizing.

I laid this out before where we said, okay, we're going to fight the utility companies. That's right. But also there's a way in which we can have some relational power because there's folks within the bureaucracy of these systems trying to figure out how to make things work. And we're going to need to co-conspire and collaborate with those folks as well and believe that we have the access and can be heard. And I think many times people don't feel like they're heard at cities, states, federal level, we've talked about this in the context of public utility commissions.

So we're going to need to try out and see if folks can be collaborators and will be heard by the bureaucracies that are going to need to take care of this opportunity or step into this opportunity, I should say. And that's where the excitement is. But it is going to be something different for us and it is going to be a little bit of a shift that we've got to figure out.

David Roberts

Yeah, and I have a question about precisely that shift, which is especially on the left, I think there's just this very sort of deep, almost instinctive suspicion and hostility toward "the man", whatever guise "the man" takes in a particular situation. But the idea of you as a nonprofit organizer collaborating with, say, a utility, or maybe collaborating with private companies sometimes who are trying to build things in innovative ways or collaborating with institutions that leftists have more traditionally just fought will inevitably bring some measure of like "You guys are selling out. You're getting absorbed into the man. Like you're collaborators with the man."

Now that sort of sentiment. Do you worry about navigating that at all?

Jeff Ordower

Not if we're doing real organizing and people are making — I think this is where the democratic process comes in handy is if a group in X city is making a decision based on a set of meetings and actions, some of which will be actions, some of which will be meetings, some of which will be research that they're doing this and that it's based on a collaborative process, then I think that's a defensible decision. I think where we get into it is if we're talking about big picture decisions and someone's like telling people what to do. But I do think that's the magic of organizing is folks can handle pretty nuanced conversations and decisions and they have to live that through.

And so, for example, those of us who come out of community organizing, there's something called research actions. And what that means is before you make a decision to start a campaign, you often pick up the phone and call the people who might be decision makers and see if they'll meet with you and tell you what it is that you need. Like who's the targets? What do you think? And usually it's interesting because you do three or four of these meetings and everyone's like "Oh no, we're not responsible for that, someone else is." But then you build an analysis and then you can make the decision about what your campaign is, who are your targets and what you're doing.

And so, I think this is similar in that if we can get to the table with some of the folks who are making the bigger policy decisions for school districts, for public buildings, those folks are then going to give us the information that we need to collaborate and that offer will be there. And that folks can decide that. And so, I think that's where organizing matters. And I do think with public institutions I'll say two more things about this. I think public institutions, it's not selling out and that we're not just I think that is a view sometimes that we have.

And I kind of think I don't know, I'm just going to say it. So, I think there is an elitism among many, both folks within government, the political class, some set of kind of elite policymakers that believe that if you didn't go to an Ivy League school and if you didn't, that there are folks who are qualified to tell you what policy should be. And then there's a great set of unwashed people who just want to fight things and can't deal with complicated subjects. And my three decades of organizing, David, that is absolutely not true, right?

We have lobbied for very complicated sets of banking regulations of things — folks can get this. And I think it's when we cut the steps there. And I do think the more elitist folks who are doing this aren't doing this because they hate people in Middle America or something. That's not what's happening. But what's happening is, I do think, for example, this is where utility companies are the problem, are trying to set up the way money moves, the way advertising moves. They're trying to set up these false choices, these false juxtapositions, and saying that people can't handle that complexity.

And I think we've really set up this level of elitism and we need to push back against it. And my experience is when the process means that folks will really figure out what makes sense based on where we're trying to go, if we can make that set of decisions. But again, I don't want to well, actually, that's not true. I'm happy to spend the whole podcast critiquing utility companies, but I think they are creating these false choices, right? We saw this in California around the rooftop solar regulation, where the utility "No, no, no. Low income people. We're not going to be able to have subsidies for low income folks.

If all the middle class people have rooftop solar, then we won't have any money for lower income folks." And so they're creating these false juxtapositions and we're buying into that. And that we can't buy into that, we actually have to believe the folks will understand and will want to fight together. And that's why I think the utility work, it's so important that we bring together constituencies of folks who can't get net metering together with lower income folks, working, folks who can't pay their bills. I think that's where the synergy happens and that's where we can make the good decisions around organizing.

David Roberts

Speaking of that, one of the things I always have appreciated about the labor organizers I've spoken to, I mean, obviously there might be a trace of naivete about this because I'm from the outside looking in, but my impression is that the labor movement is extremely focused on and realistic about power. They recognize that power is the thing, that it's not who has the best arguments or the best slogans. It's just what are the concrete results here and how can we organize in such a way as to create further results? And so from that perspective, you've written that IRA sort of all these pots of money give activists a chance to go in and organize groups of people who have not necessarily traditionally been part of green organizing, like low income communities, et cetera, et cetera.

My question is, how do you do that in a way that isn't just — because I feel like the climate movement has been sort of not very good at this — how do you do this in a way that makes winning the next battle more likely? How do you do it in a way that builds power over time and isn't just about one win or one bill or one sort of victory? How do you organize in a way that makes the next bit of organizing easier, that builds your institutional power? Are there general principles to guide us here?

Jeff Ordower

Absolutely. So power is critical. Power is about size, it's about scale, it's about mobilization. It's about the ability to really move, to act and move the things we want to move. And so that is investing in longer term institutions. And part of the reason why I came to 350 was because we had 100 local groups and they weren't just in Brooklyn, but they're in Montana or they're in Sioux Falls. They're in places where we need to be doing that work and we need to be then investing in the size and scale and ability of not just our groups because that doesn't matter.

It's about a larger ecosystem of how lots of organizations are working together, building their size and scale and scope, including with labor unions, to the degree that in the place where we can collaborate so that we are building stronger organizations so each win strengthens us and strengthens our ability to then move the next thing. And that we're thinking some number of steps ahead around that too. So I think that's absolutely critical. And I think having campaigns where and again, people join and stay in organizations where they have a voice, where they have a say. And so going through the process, going through the steps of running the campaigns and winning the campaigns and needing the participation of everyday people in order to do that develops leaders and keeps those people in so that we can continue to grow for the next step that we're doing.

David Roberts

I want to press you on a couple of things.

Jeff Ordower

Absolutely.

David Roberts

I'm sure you've heard, I'm sure you're aware of the larger conversations going on about speed and about building. And one of the sort of standard critiques of the green movement is that it is too accustomed to blocking things and is still sort of instinctively blocking things. And now all these sort of environmental laws that were passed for good reasons are now being sort of turned and used to block building things. You hear not just about NEPA on the national level, but like in California, the California Environmental Quality Act is being deployed to stop infill, to stop zoning reform, to stop bike lanes, to stop basic public places, to stop low income housing.

And then there are environmentalists fighting solar fields in the desert because of the species, or that they're fighting transmission lines through the forest that could bring hydro and lower emissions intensity, et cetera, et cetera. There's a lot of this going on around. Is this turn toward building going to involve at any point direct confrontation with friends over these sorts of issues, over these sorts of clashes of values and trade offs? Is at any point 350 going to come out and say, "Yes, this is a short term damage to the environment depending on how you measure it. But it's a long term step we need to take. And so we're going to come out in favor of building this thing that other environmentalists are coming out against." In other words, are you going to put some real skin, real organizational skin in this game?

Jeff Ordower

I certainly hope we will. I do want to draw some distinction. I know you didn't say this, but I think there are some red lines for us too. We're not going to compromise on the ability of indigenous communities to determine what happens with their lands. For example, we think absolutely that things that are built or things that are mined on indigenous lands, indigenous folks should get a say in that and should get to control what's happening on their lands. So there are some red lines. And the second thing is, I think we're lumping conservationists and environmentalists and everyone not worrying about all the labels, but everyone's sort of in the same pot.

David Roberts

NIMBYs.

Jeff Ordower

Yeah, the NIMBYs versus, and I do think that there is a level of hard — organizing is about having challenging conversations with people too, and it is about asking tough questions. And the group process is about people trying to think about what there is for the greater good. And sorry, I'm going to go on a slight ramble, but I do think this is important. So the folks who are blocking the wind in wherever I forget, is that Martha's Vineyard? Those are the uber-rich and it's about impeding their view. And we need to fight with those folks, whether or not they claim they're environmentalists or conservationists or whatever.

And the NIMBY folks, we really do have to challenge them. We have to challenge NIMBY folks in a whole variety of ways, right, because all of the issues are tied together, as you pointed out, affordable housing, having single-family zoning that's required in some places, that's unconscionable, right. There needs to be multifamily housing. There needs to be we need to have less class-segregated housing, not just in California, but everywhere. And so we need to fight those things and we need to push back against people who are using NIMBY, who are using levers. And that's very clear.

And we're going to take some difficult positions around that and we're going to be pushing our folks and we're going to be challenging our groups to do that. We also, though, this is an opportunity, there are going to be a set of like, each decision is going to open up a can of worms, but a set of other decisions. So if what we're saying is Exxon or Chevron is then going to build big wind or utility-scale solar and wind and that's getting built, that's not what we want to do. And that's not the reason, the opportunity for the transformation.

What we're trying to do predominantly is fight for community-controlled solar and wind, right? We're trying to change, not just change the way that we need to convert. And so the most profitable rapacious corporations, as you called them, David, although I agree 100% that they can just fund the next wave of things. So I think we want to use the opportunity as best we can to really change the power dynamics, to change the way the grid works, to change who produces it, who controls things and how they're controlled, and to bring many more things into the public domain and to really diminish the power of the richest 0.1 of 1% who are controlling things.

So there's going to be fights and challenges, but also we need to think about how this opportunity really creates a more equitable system, really gives the opportunity for some of the most disadvantaged folks and neighborhoods and communities over time to actually be first in line for the benefits that are possible with this just transition. And we need to think about that and we need to put so much more energy into fighting that as well.

David Roberts

I guess I'd push a little more though. It's fine and good and great to organize around solutions that both produce more renewable energy and cut low-income people in on the benefits and involve community control, et cetera, et cetera. Those are all great, but those are like the puppy dogs and grandma of this space. In the real world, there are lots of times when you just can't get all of that, where you have to decide about trade-offs. You have to decide getting more renewable energy is worth less than optimal ownership structure or whatever. Or like getting more renewable energy is worth some sacrifice of some piece of some ecosystem.

There are trade-offs and I think what I hear constantly from outside the green movement is that green groups are refusing to grapple with these trade-offs. And I guess what would really convince me that there's a turn here is a group taking some of those trade-offs head-on and being explicit about their willingness to compromise in some areas, to get advances in other areas. That seems to me it's what building is about. And what building involves is inevitably you're not going to be able to just do community solar. That's not going to solve the problem.

They're going to be bigger, more difficult things, more difficult trade-offs. And I just wonder, is 350 going to be the group to go out and be more explicit and be more honest about those trade-offs?

Jeff Ordower

First of all, it would be great to be in a position where we were sitting at the table, where our members and leaders were sitting at the table, and there was a set of "Here's what we're going to do as a society, and here's how we're going to get the huge amount of energy that we need. And here are the decisions. What do you all think? How do we make these hard decisions?" So I think the answer is yes, we are willing to do that. But also it's a question of like, what does that mean? Which decisions are hard, which particular decisions are the ones that we're trying to make and it's time, place and conditions around that.

And so I think generally we understand on a very basic level, we're not trying to run campaigns that are against large-scale renewables, right? But I want to give a very specific example about utility-scale solar and wind because I think this is really important and it talks about some of the first barriers that have to be cleared out. So one of the things that we're seeing is the unions, particularly utility unions and the building trade unions tend to be — you know, you saw this in California with the International Brotherhood of Electrical Workers being on the side of PG&E around solar hikes.

And some of that, we've got a first barrier, which is — it's part of what's happening with the auto worker negotiations right now — is we're really talking about why are folks siding with the status quo, what are the parts of the status quo that are set up in a particular way? So if you're building out utility-scale solar and wind and you're a worker on that, you're working for a temp agency; you don't have any union protections in 80 or 90% of the cases. You're driving across the country for a three-month gig and then sleeping in your car till your per diem comes in. So all of that is like there's a lot of things that we have to push for before we get the — there's not an equal power dynamic where we're all sitting at the table and being like, "Here are the sacrifices that some people are going to have to make or some ecosystems are going to have to make to get to the energy grid that we want."

Right now, there's a lot of fighting to do just to clear the path so that we've got good jobs in renewable energy, that we've got good jobs making electric vehicles, that we've got the ability for utilities to stop building new gas plants and start investing in the renewable energy production that they need to, including having a more diffuse grid. So I'm not saying that the choices won't be coming down and that some of them won't be hard. But right now there's a lot of underbrush that we need to clear out, a lot of fights to pick that sort of change the power dynamics so that we have a way to do what we need to do first.

And let's see how far and how fast we get just by changing the way workers are treated, by changing the way communities are treated, by changing the way that people have the ability that they're going to directly benefit from this utility scale community benefit agreements, from having utility scale solar and wind in their backyard. So that's not because Amazon told X Energy Company to build this, but that actually people are going to benefit in their bills by having utility scale solar and wind and then I think folks are going to be a lot more ready to make some of the challenging choices. But let's get to the table first. Let's talk about power. Let's really talk about power and not have the conversation in the abstract.

Right. Another critique you often hear is that green groups, and I think this is probably a critique you hear about NGOs generally, really, is that when they reach a certain size, their internal sort of organizational motivations take over. Like the preservation of the organization takes over and the health of the organization itself becomes a top priority of the organization and they sort of take their eyes a little bit off the game and that they end up — And so my question is, if 350 and other green orgs try to make this shift, try to shift more toward building, and it doesn't fire people up as much as say, the pipeline battles did, just how committed are they to this? Are they committed enough that they're willing to sort of maybe take a hit in terms of email responses or the number of people showing up at events or the amount of small donor funding that comes in?

David Roberts

In other words, are they willing to push through maybe some sort of diffuse organizational resistance or diffuse resistance to this because they are committed enough to it? Or is this the kind of thing where you're sort of testing and if the membership doesn't like it, then you are going to sort of withdraw? I don't know that you can answer that question on an abstract level, but you see what I'm getting at.

Jeff Ordower

Oh, I see exactly what — now, you're throwing the cans of soup at the nonprofit industrial complex, as it were. And I appreciate that. I certainly can't speak for the sector. I think part of what makes us different and unique is a couple of things. One, as we talked about earlier, because we're a global organization and we're trying to really function to some degree as a global organization, we're going to stay the course on the solutions work because that's being driven by the most impacted communities in the global south. And so we're obligated to follow their lead and we're going to stay that course.

The second thing is the funders are not a monolith and people do things because of funding and not because of funding, et cetera. But the reality is, it is about what our chapters, what local groups of 350 want to be doing. It is about both making suggestions to them and it is about having a program where people can do the work. And some of it is because some of the state groups that are both independent of 350, but have the 350 name and are part of a network council of 350 groups, have already been moving and doing solutions work.

And so they're ahead of where 350.org is. And the same thing with many volunteer run groups that we're actually hearing it the other way. I'm not worried because groups are ahead of us on solutions and we're in some ways, like running a little bit to catch up over some of the great work that's happening.

David Roberts

What about the other side of that: the donor community? Because another critique you often hear is that whatever the young people might want to do, the young people have their heads on straight, they're ready to go, but they depend on money, basically from foundations that are run by what's the polite term? Aging white boomers who might not be, let's say, totally clued into the latest in politics and the latest in organizing. And in some sense they have to chase the money. So what's your sense of the donor foundation community's posture on all this? Do they have a clue?

Jeff Ordower

Well, certainly around IRA Implementation. They ask —

David Roberts

Speak freely, Jeff.

Jeff Ordower

What did I say about — don't talk about the donors. I will say again: Members are not a monolith. Groups are not a monolith. Donors are not a monolith. There are some really interesting foundations that are thinking in very large terms about the opportunities that the Inflation Reduction Act has to really remake industrial policy and why that's critical and not just why that's important, but also how this changes the politics as well. That the way we're really delivering things for people. And that also to your point in talking to folks in the Biden administration, the way that translates into votes as well.

So I actually think the donor class does understand what we need to be doing on solutions, does understand what we need to be doing to deliver for people so that they understand that actually investing in robust government, robust, functional government is something that is in our collective interest.

State capacity, yay! That's on the Volts T shirt whenever I make one.

How do I get one of those? What's cool and is happening in donor communities these days is I think there are so many different levels. To your point on the youth. Yeah, there are some aging boomers that are sitting at big foundations and fancy buildings, usually on the East Coast. But there's a lot of folks now on the West Coast who came into money recently. There's a lot of young people who have inherited money who have much more fundamental challenges to capitalism and how they got their found wealth in the first place. So this is unique again, in my three decades that we're seeing a level of philanthropy that is actually becoming increasingly democratic, becoming increasingly kind of challenging status quo and systems.

And it's not 100% there yet, but I'm confident. I feel like there's like something for everyone within philanthropy right now.

David Roberts

Interesting. All right, well, we're out of time. So let me conclude on a positive question. If I'm just an individual, I support decarbonization and I've already bought my heat pump or whatever, and I want to get involved in activism that advances decarbonization, that helps things get built. Where do I look? Where do I go? Who do I join? Where do I aim my fire?

Jeff Ordower

Well, obviously I would like to say you should join 350.org. And I know we'll have a lot —

David Roberts

Let's get that obvious answer out off the way.

Jeff Ordower

But I do want to say I think you should join something that is local, I think because we're trying to build things. So there may not be a 350 chapter where you are. If there isn't, we'll help you build one. But there may be something else. There may be a different formation that is also thinking about building. There may be something if you're young, there may be something in the Sunrise movement and there might be something in Indivisible. There might be something in a base-building group that's through the Center for Popular Democracy or People's Action or Community Change where you can get involved.

There's organizing happening almost everywhere in the country and you can get involved. And I do think that great minds are thinking alike and that we're at a unique point right now where folks are really scrambling. We are scrambling in a good way to try to figure out how to implement this transformation, how to do it in a way that is equitable, that is just and that is clearing out, that is sort of contesting for power against those who are holding it and building the world in which we want to live. And so there is something for you to get involved locally wherever you are.

And I hope that you do that. And I really hope that you're both fighting the pernicious utility companies but also meeting with the person in charge of all buildings in the school district to figure out how you're going to get rooftop solar in your school district. And I think those two things go hand in hand and are going to help you transform your community.

David Roberts

You might say think globally, act locally. Then what might be the suggestion?

Jeff Ordower

That's not the Volts T-shirt?

David Roberts

There's going to be a lot of text on my Volts T-shirt. Jeff, thank you so much for coming along. This is really interesting. It's really fascinating to watch this movement try to reconfigure itself on the fly under intense time pressure, under intense moral pressure, etcetera, etcetera. It's fascinating to watch. So thanks for coming on and talking us through it.

Jeff Ordower

Appreciate that. And we're not going to get it right. I think part of what's great about organizing is you iterate and you try to figure it out. And that's having the community of practice of being able to do things, make mistakes, get some things right and continue to push. And that it's going to be a collective effort that we're going to need millions of folks to be involved in. And we're excited about that opportunity. So thanks for having me on.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much and I'll see you next time.

How can the US make it easier, faster, and cheaper for homeowners to install rooftop solar? In this episode, Sunrun CEO Mary Powell shares her vision for boosting not only residential solar, but other forms of residential electrification too.

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Text transcript:

David Roberts

In Australia, one out of three households has solar panels on the roof. In the US, it’s one out of 25. That probably has something to do with the fact that in the US, rooftop solar is twice as expensive, twice the hassle, and takes twice as long to get installed.

Why is the process so broken? And what could be done to make it smoother and faster?

To discuss these and related matters, I went to the source: Mary Powell, the CEO of Sunrun, the nation’s largest residential rooftop solar company — or more accurately, the nation’s largest residential electrification company.

Before taking the top spot at Sunrun, Powell spent more than 20 years in leadership at Green Mountain Power, Vermont’s largest power utility and a nationally recognized pioneer in clean energy. Sunrun brought her on to help the company move into products — batteries, EV chargers, virtual power plants — that were once thought the province of utilities.

I talked with her about how to speed up the rooftop solar interconnection process, the role of net metering, Sunrun’s move into vehicle charging and VPPs, and the future of distributed energy.

All right, then, with no further ado, Mary Powell of Sunrun. Welcome to Volts. Thank you so much for coming.

Mary Powell

Oh, my pleasure. I was looking forward to chatting with you.

David Roberts

Mary, I'm looking at my notes here and I have — let me just count real quick — one million questions to ask you. So, we're going to have to move quick here because I've got so much. But just by way of framing, I was in Australia recently and was listening to them talk about their rooftop solar success story there, the sort of rooftop solar miracle. So the US is at, I think, something like 4% rooftop solar penetration. And Australia is up around 30%, 35%, something like that. One out of every three households, mainly because it is two to three times less expensive and way, way, way faster to get on your roof there.

Most of what I want to talk about are in different forms. How can the US process be made cheaper and faster? That's kind of, I think, the theme of our discussion here today. But before we get to the reality of why things take so long, let's talk a little bit about perception. So I guess Sunrun is now the biggest residential solar company in the world — I know, in the US.

Mary Powell

Yeah, certainly in the US. Yeah, we're the largest, not just residential solar company, but we are the largest in the combination of solar-plus-storage. So we really see ourselves as a clean energy lifestyle company, and we're really well positioned to meet customers wherever they are on their clean energy journey and help them transform their lives to something that's more affordable, certainly something that's cleaner. So we have solar, we have storage, we have sophisticated electric panels, we have EV chargers, and of course, we have that amazing partnership with Ford on the F-150 that you can use to back up your home.

David Roberts

Going to get into all that later.

Mary Powell

Good.

David Roberts

But I assume as part of what you do, you do a lot of consumer research, a lot of talking to homeowners. So the first thing I'm interested in really is what do US homeowners say they want when they come to you? Why are they now installing rooftop solar and batteries? Why are they doing it? Or perhaps even more to the point, what do they say about why they're not doing it? What are the sort of pain points you hear about from customers?

Mary Powell

So the reason customers are going solar, and increasingly, as I said, solar-plus-storage in California now we're up to probably about an 80% attachment rate. So customers that are going solar really want the benefits of storing their energy as well and having the resilience and the comfort and the peace of mind that comes with that. Back to what I'm hearing from customers: It's so interesting. I would say for so many years, largely it was an industry where customers were enticed to go solar to save money, so they knew they could save money off of what they were paying their utility.

And Dave, that's still true. I mean, in every market that we sell in, the cost per kilowatt hour that you generate on your roof is lower than the cost you're paying your utility. So many customers still find the value of savings to be very appealing, but it really has evolved over time where so many customers, I talk to customers every single week as well as I've worked in our stores and I've been in customers homes. And increasingly what you're hearing is that they just want stability. I mean, I've heard so many customers have said to me, "Mary, like, it's fine if I save money, but honestly, I just want greater independence and I want stability.

I want to know that the price isn't going to go up of the energy that I'm getting." And of course, you also have so many customers that want solar energy because of the clean energy attributes. But so many customers now are really enticed around the energy independence we can provide. And then, as customers increasingly adopt electric vehicles, that makes them painfully aware of what they're paying on the kilowatt hour basis with their utility. So that also then entices them to really want to go solar.

David Roberts

So what do they say is stopping them then, the ones who are not pulling the trigger?

Mary Powell

I would say back to your opening. We don't make things easy, not Sunrun, but in the country, we don't make it an easy process for customers. And then I think for many customers, I've heard many customers who come back to us later because they say, well, it just feels like such a big decision and a big project, and then when they realize, "Oh, actually, I don't have to put any money down, it gets installed in a day." In many cases, we now can install up to two homes in a day. So they're starting to see it's not a big infrastructure project.

But I think for many customers, they initially maybe feel that it does. But also to your point that you started our conversation with, there's a lot, particularly in some parts of the country, it's a very onerous process and a long process, and some customers just drop out along the way.

David Roberts

I think because there's only 4% penetration in the US, it's still somewhat of a novelty to most people, I think. Most people probably don't have a really good sense of what's involved. So maybe just walk through what is the process of getting solar on your roof and what are those pain points? What are the points that are difficult and take a long time?

Mary Powell

It's not uniform, so it's different all over the country. It really depends on the state that you live in and the utility that you're served by, as well as then sometimes also local regulations and restrictions. But let me talk it through in sort of the easier and then the maybe more challenging state. So in the sort of more straightforward geographies, you could have a conversation with your salesperson, you could have a quote. Within days, you make a decision.

David Roberts

So, nobody needs to come to your roof now to figure out your suitability anymore. Is all that done by satellite and whatever now?

Mary Powell

Yes, there's a lot of advanced technology that we can use to understand whether a customer is suitable. In the process we do have somebody, actually, we do have photos that we have to get and we obviously want to verify everything. And so you start with that initial consultation, you get an initial design and then, yes, we go through the steps of finalizing that design, making sure it's the absolute right design. Once we understand the nuances of your home, once we understand the electrical infrastructure, the roof, the design of the roof, the age of the roof, the layout, and then that moves into full design.

And then you have to obviously work through interconnection with the utility and any permitting that needs to happen.

David Roberts

When does that happen, though? Does that happen as I'm planning my system? Or do I build my system and then contact the utility and say "Hey, I've got the system, I want to connect" ?

Mary Powell

Well, first of all, at Sunrun, what we do is we want to make that easy for all of you. And I first went solar 14 years ago, bought the system outright in Vermont with a local company, and then since then have gone with solar storage and EV charging with Sunrun twice and once before I became CEO. And they make it very easy. So they made it a very easy process. So they basically just keep you updated. But Sunrun is the one that shepherds through all of those process steps that we then make the customer aware. I mean, obviously for the customer, it may entail that somebody has to stop by the home if there's local inspection that needs to happen, but we basically shepherd that for the customer.

But you have to work on interconnection. So again, in some jurisdictions interconnection is actually very straightforward. Vermont's a great example of a very solar friendly state where the utilities make the interconnection process very easy. There's some states where it's very time consuming with months of delay for studies or paperwork. There's many states where the utility interconnection for home solar and battery systems, the costs can range from one hundred dollars to ten thousand dollars depending on study costs or required upgrades. Yes. And then there's some where there's just solar is prohibited.

David Roberts

Yeah, there's more and more areas now where they're just saying "No more." Right. Like you're cut off. Which seems kind of crazy.

Mary Powell

Yeah, it does to me, too, particularly as a former utility CEO, because even if I were facing what they like to call a solar-saturated circuit, it's an amazing opportunity just to put some storage, some power packs or utilizing some other storage technology at the substation and basically just soak up all that energy and use it exactly when it's best suited for the grid. So there's many, many solutions that we could absolutely see.

David Roberts

It occurs to me that if the customer is just interfacing with Sunrun and Sunrun is hashing through these difficult and extended interconnection processes, it seems like a business risk for Sunrun, basically is the customer aware that it's not Sunrun's fault basically that it's taking so long? Are those tricky discussions?

Mary Powell

I'm a firm believer in really setting expectations appropriately up front. So we've done a lot of work on that, on our customer obsession and customer experience to really make sure that right up front it's all laid out so that they understand the steps of the process, but they don't have to necessarily be exposed to having to deal with all the steps. So again, in many cases when you lay it all out and you tell a customer "So in your jurisdiction it's going to take six months, and these are all the reasons why," most customers are okay with that. But to your point, when things increasingly become more complicated through that process, there's obviously a risk of losing some of those customers and they don't end up going all the way through the whole process.

David Roberts

Right. Well, let's talk then about interconnection process. As you say, it's not ideal that it differs so radically from one utility to the next. And it's not ideal that it can take three to six months. It's not ideal that it's impossible now in some areas. So what are some reforms? Like what are some steps to take to make that whole process smoother and more predictable and more uniform. And who needs to take those steps?

Mary Powell

Right. And back to your example of Australia. Again, the differences are exactly what you're talking about. The differences are that it's very standardized there. So those are the kinds of solutions that we're seeing that could help reduce costs and speed up deployment of home solar and batteries. So it's really having standardized costs for residential interconnection so that there are no surprises or unequal costs that will make a project too expensive for a family. For example, in Illinois, through the Climate Equitable Jobs Act enacted, they enacted a $200 interconnection fee so there are no surprises with upgrade costs, and it remains affordable for all households.

So there's great examples all over the country. I think it's really about how do we make those more standardized, faster and more affordable interconnection with online and standardized interconnection technical requirements, such as allowing meter collars. I don't know how much you've spent time looking at meter collars, but meter collar adapters, they avoid main panel upgrades, so they save time and costs. So dozens of utilities allow for customer owned meter collars, but the majority still continue to block their use. So again, a really simple change. Utilities could easily allow third party certified electricians to approve main panel upgrades, also avoiding increasing and unnecessary utility delays.

Those are a couple of examples. There's also ensuring interconnection access with smart inverter functionality. A few states have enacted fast and open interconnection rules that leverage smart inverters. For example, Hawaii now uses a combination of a voltvar function and a volt watt function to avoid the need for distribution, circuit hosting capacity, and customer service upgrades.

David Roberts

Explain it at my grandma level. What is the significance of a smart inverter? What does that get you? What does that do for you?

Mary Powell

I think the easiest way to explain it to grandma or anybody is really, when you think about it, the design of the utility system is literally like the same fundamental design as 100 years ago. So when I use these names and these technologies, it's really simply saying, moving towards putting technology on the grid that makes it smarter and more effective so that it's more flexible to allow additional solar energy on the circuit. So it kind of gets back to what I was saying about the example of where we have utilities that are saying no more solar in XYZ territory. They could solve that through some of these kinds of technologies.

They could also solve that through just, again, putting storage in substations along those circuits so it allows them to then utilize that energy. So even on clogged circuits, customers can interconnect solar and batteries to the grid and they can avoid high upgrade costs.

David Roberts

And what is SolarAPP? Tell us a little bit about that initiative.

Mary Powell

Yeah, SolarAPP was launched by NREL in 2021 to basically address the permitting times and to cut down on permitting.

David Roberts

Which is different than interconnection.

Mary Powell

Yes.

David Roberts

Permitting comes before or after interconnection or it's all at the same time?

Mary Powell

To me, that's all at the same time. I am sure there's a linear process to it that I'm not aware of. But at the same time as you're having to get things ready for interconnection, you're having to work through the permitting process.

David Roberts

Who is permitting? Who is the permit coming from? Is it the city?

Mary Powell

Yes, the local AHJ. So it's the local jurisdiction that you're dealing with. So that is one of the reasons that the development of the SolarAPP was so powerful. Because you're dealing with so many different jurisdictions that in many cases were using an intensely manual process and they also had just nuances that weren't necessarily meaningful, but they were historic. Do you know what I mean? They were just in place. So what was really cool about the work that Sunrun did with NREL and others was launching SolarAPP. And again, it has helped. It was launched in 2021 to cut down on permitting times.

David Roberts

It's just to standardize that process, that's what the app is meant to do?

Mary Powell

Yeah, it's to automate it, but it obviously takes time to get the local offices using the technology. But to date, we have more than 24,000 permits that have been issued via SolarAPP across the country. So that's very powerful because it took what was a weeks to months long process and made it instant. So it ends up saving consumers, installers, and local governments time and money.

David Roberts

Yeah, I would think the local governments would want that, right? I mean, I think it would be desirable for them. I can't imagine them resisting why they would resist such a thing.

Mary Powell

Well, I mean, human behavior, right? Don't we all —

David Roberts

Yeah, I often can't imagine why people would resist things. And yet there they are resisting them all over the place.

Mary Powell

Exactly. No, I had the same reaction way back in 2007 when I launched an incentive as a utility for our customers to go solar, I had the same reaction. I was like, why would anybody resist this? This is just the future, right?

David Roberts

Yes, turns out people can come up with all kinds of reasons to resist.

Mary Powell

Exactly.

David Roberts

So that's interconnection, which is a utility thing that needs to be standardized, and then there's permitting, which is a local jurisdiction thing, which also needs to be and is being standardized. Are there other soft costs? Because this is the thing, right? Like, we're buying the same cheap panels here that they're buying in Australia, so it's not hardware, it's all these soft costs that are making ours take longer. Are there other soft costs?

Mary Powell

That's why we should be able to deal with it because the biggies are exactly that: The interconnection and the permitting. And again, one of the things I was really thrilled with was just about a year ago, California did adopt a mandate requiring cities with populations over 50,000 and counties with populations over 150,000 to adopt an online automated permitting platform like SolarAPP. So we are seeing Colorado also recently adopted legislation which established a million-dollar grant program to implement SolarAPP because there is cost to implementing it. So back to your question of like, why wouldn't they use it? You know, it's still converting a manual process to an automated one.

And we've also seen work in Maryland as well where the Maryland Energy Administration requested money from DOE to support SolarAPP efforts. So I do see on the permitting side, I definitely see some progress happening. And on the soft cost on the interconnection, again, there are some bright lights, but a lot more work could be done to bring down the cost significantly for consumers.

David Roberts

I feel like every pod I record at some point we come to the problem of "utilities being utilities" being the main issue. Okay, let's jump to a few other subjects then, which may or may not be slowing things down and I'd like to get your read on. I hear a lot in the clean energy world generally about labor, labor shortages, sort of shortages in the trades, a shortage of trained electricians and everything else. Is that something you're struggling with right now? Like are you having trouble finding people to do the work or is that —

Mary Powell

No, we really aren't. I mean, it's really interesting to me leading Sunrun, it's so powerful the kind of work we do. We are a highly attractive employer and in fact, I'm out and about on a regular basis talking to installers and electricians and the story I hear over and over again is that they are really thrilled to have the opportunity to work at a company like Sunrun. I mean, we treat people well, they get good benefits, they get compensated well, and the attraction of working in clean energy.

David Roberts

I've heard, though, that I think, one of the sort of traditional dings on the whole notion of a just transition, which you often hear is that the old jobs in fossil fuels are unionized and really well paid and et cetera, et cetera. And the shifting to jobs like solar installers, which are less well paid, more often gig work, et cetera, et cetera. So you don't think that's true?

Mary Powell

No, I mean, in fact, really, again, where we're pulling people from the most on the installing side are people that have been working in the construction business. And in fact, just with electricians that I was meeting with when I was down visiting some of the branches in Massachusetts, were telling me how, again, it's not just the pay and the benefits, it's also the stability, and frankly, the way they're treated at Sunrun. So no, what I'm hearing is it's providing a lot of really good opportunity — I mean, honestly I was a bit surprised just because we have all talked about there's going to be a real challenge with electricians in particular.

And so I continue to be pleasantly surprised that we have a really good amount of applicants. Yeah, we haven't had any challenges in saying "Oh my gosh, we can't meet the demand in XYZ Market because we can't find the people that we need."

David Roberts

Let's talk a little bit then about supply chains. There was a lot of hubbub in the last couple of years. Lithium got expensive, there were shortages of materials, there was panel shortages, silicon shortages for a while, panel shortages. I haven't kept it all straight in my head, but there's a lot of difficulties with the supply chain. So I have a couple of different questions about that. One is just where does that stand? Are you currently able to get what you need at a reasonable price? Are the supply chain problems being smoothed out?

Mary Powell

Yeah, they are. There were a lot of things going on at the same time in the last couple of years with COVID. So, yes, there were some real challenges. We've been at this now for 16 years, so we've always been a leader in ensuring that our suppliers meet the highest standards in the context of all the existing rules and regulations, but also really then shooting for the highest standards possible. So we've always had that in place. So, when there were different federal challenges that needed to be met, we knew it was a matter of time until we met those with our suppliers.

The real challenge was the COVID-related challenges, and that impacted, as you know, panels, it impacted storage. Now the pendulum has swung, and what we're finding is that as we look out to the end of this year and into next year, we actually see declining costs.

David Roberts

Yeah, I saw lithium has started nudging back down again already.

Mary Powell

Yes, exactly. So, as we look out, we're actually seeing declining costs in our inventory. Right now, we're absorbing just a lot of the inventory that we built up candidly because of some of the challenges, and we wanted to make sure that it didn't slow us down. But no, so, I would say right now we're feeling pretty good.

David Roberts

And this is a broader question and I don't really know how freely you'll be able to speak about this. But one of the sort of philosophical things, animating IRA, the Inflation Reduction Act and all the Biden legislation is this notion that it is a threat, a national security threat and an economic threat for China to dominate supply chains in all these technologies. That means processing of raw materials straight up through anodes and cathodes batteries, panels, the whole nine yards. And there's a big effort in IRA to onshore and or friendshore, as they say, supply chains. What's your general take on this at kind of a philosophical level?

Do you agree that it is smart for the US to try to move supply chains on shore, even perhaps at the expense of slightly more expensive panels? And there's the whole tariffs issue too, tariffs on Chinese panels, et cetera. Do you agree with that general push or do you think it's better just to buy all the cheap panels you can get and accelerate deployment?

Mary Powell

Candidly, one of the things we're pleased about is that the Inflation Reduction Act is encouraging US manufacturing, you know, and the domestic content adders are real. Do I think that will have a positive impact on the US economy? Yeah, absolutely. Do I think that's going to have a positive impact for Sunrun? Absolutely, actually. I mean, from a broader perspective —

David Roberts

What do you get out of it to have US-manufactured panels?

Mary Powell

Just more choices of more vendors and companies to work with, more competition. I don't think there's anybody that is launching an effort in the US that is saying, "Well, I'm going to launch it, but I'm just going to be a lot more expensive, and everyone's going to buy it." So I think that the desire is to have competitive manufacturing. It'll take time to see how that plays out. But yes, we've already used US sources wherever we can and so the idea of having more available to us is of course attractive.

David Roberts

One question, I got to know, I threw it out on Twitter that I was going to talk to you and one thing a lot of people are interested in is whether higher interest rates are affecting your business right now. This is a big subject in the clean energy world that recent interest rate hikes are doing damage, say to the offshore wind industry, for instance. Are you seeing that how's that playing out in your business?

Mary Powell

Yeah, for sure. I mean, higher interest rates have affected, I mean, they're going to affect utilities and utility rates in a significant way and they have absolutely affected, I think, every fabric of business and society in some way. And for sure for Sunrun because really a lot of what we do is we finance for customers. So we give customers the opportunity to buy through a third party ownership model, which again so many customers love, and allows us to have a really wonderful long relationship where then we can sell them additional products in the future. But yes, so a lot of what we do is financing, and we have absolutely had to absorb the higher costs in the market.

We had flexibility to do that because honestly, in so many jurisdictions in the country, we were selling at like 30% below the utility. Again, utility prices went up dramatically over the last few years. So that gave us headroom to deal with those price increases that were coming through not just in that, but also because of the supply chain challenges that you and I just talked about. We had to absorb some of the costs associated with that over the last couple of years. But really what we found is we had significant headroom in the markets that we were in because of how high the utility rates were.

So we were still able to provide in all the markets. We do business in a value proposition which is below what customers are generally paying the prevailing utility rate.

David Roberts

And you think that you could weather that for an extended period of time, do you worry about this in the long term?

Mary Powell

Like everyone. The interest rates continuing to elevate, just continue to make some aspects of business tighter. But yes, I feel very confident in what we do in the value proposition we provide customers and the flexibility that we have to create other value streams that help offset that increase in rates. Like for instance, one in particular this year, it's really, really powerful now that I would say all across the country, but particularly like in a really important market like California, we're no longer just selling one product. So for years we were basically monetizing — every customer was worth the value of one product, we were selling them.

And now across the country, but particularly in some of our most important markets, we're selling every single customer two significant products. So that really helps offset some of the other cost pressures from rising rates.

David Roberts

And here's a question that might seem kind of dumb and obvious, but I still would be curious what you think is IRA helping? I mean, obviously IRA is helping. What impact have you seen in the year since IRA was passed on your business?

Mary Powell

I mean, the most significant impact on us was just the extension of the federal tax credit. So that was effective right away and having not just having it extended, but having the stability of saying it was over a very long period of time was very, very powerful. The other incentives are going through the process to make their way to the market. So energy communities is one where, again, if you're helping customers in fossil fuel based energy communities go solar, there's additional incentives in those communities. Sunrun was already selling in a lot of those communities, but they didn't really get identified until about this summer.

The other incentive that we're really excited about is the low and modern income incentive because despite what people think, the majority of households installing solar are low and modern income households in the United States. So the fact that we're going to be able to help more of those customers go solar and have storage and have energy independence and feel more safe and secure in their own homes, it's very, very powerful. So that is one that we're really looking forward to. And then back to your earlier question, the domestic content adder. I think it is encouraging some domestic manufacturing, but it also is something that is going to have an impact on making our packages for customers more affordable because some of our partners will be able to take advantage of that domestic content adder along with us.

David Roberts

On to another very hot topic, which is net metering. For those listeners of Volts who are not familiar with net metering, I can't imagine who they are at this point. But this just means if you put solar on your roof and you generate more than you use, you can sell it back to the utility. Net metering sort of determines how much the utility pays you for that power. Let's start here. California has been wrestling with this and wrestling with this, and wrestling with this because the critique of net metering is, from its critics: They say if you wipe out the bills of residential solar homeowners, then all the fixed costs of maintaining the grid get lumped onto who remains.

Basically, prices rise for those people who can't afford solar, and then the solar people — This is a long, endless debate, but anyway, California has been wrestling with it, finally came out with its new version of net metering, and then got roundly beat up in public, went back to the drawing board, and I think have come out with the new, new net metering. So I guess my first question is just have those revisions downward in what California is paying affected your business?

And just more generally, what's your take on net metering? How much of your business relies on net metering?

Mary Powell

So what my takes is, going back to initially how you described it, and again as a utility leader, I saw solar and distributed energy and then storage — we were the first to partner with Tesla on their Powerwall way back in 2015 — I saw all of those things as obvious, necessary evolutions of a 100-year-old way of thinking about providing energy to homes and businesses and to refashioning the grid. So I've always felt that when you take a lens of "How do I make this a valuable asset in the future?" you get two very different answers than when you take the lens of "How am I going to deal with this disruption and this new technology that I'm feeling threatened by?"

So, from a big picture perspective, I think the most significant thing that has been missed in this is the question of how should the utilities leverage this transformation versus resist it? So to put a point on that, and again, the argument about, "Well, they're not using as much yet, they still need the grid" — we've pushed energy efficiency as a society for decades, right? And so a customer that's made a ton of energy-efficient investments and has gotten their bill down to a very low amount, should they be penalized for that? Back on the philosophical thing, I think that's a very interesting question.

But what is more important, from my perspective on this topic, is that what you actually will find, if you look at the data of what's happened over the last seven years, is that solar customers tend to be the first customers that then want an electric vehicle, that then decide they want a heat pump, that then decide they're going to go with the induction stove — like a lot of customers. What we found, and now I'm talking from a utility perspective, but we see this as well at Sunrun, what we found is actually in many cases, we ended up supporting more load at that home than we did before because they were the leaders of electrification. The really cool thing, if you think about it from a "How do I leverage this transformation" versus resistant perspective, is it gets really cool when you start thinking about, well then how if that home has solar-plus-storage plus a smarter panel like we put in homes now, we've started partnering on that. Right.

What you in essence do is you create for the utility an amazing capacity to have smart controllable load all over the grid. So I can't answer the question, it's like, why are we staring at the blade of grass instead of the lawn? Because that was for me, the sort of challenging part of dropping into California right as this was all happening. I kept saying, "Geez, I think the biggest problem is this whole thing is based on a look-back study." We need to be looking forward. We need to be thinking about how do we radically collaborate and actually create a world where we're helping by having all of this smart controllable load which will then make the grid more affordable for everybody.

So that was always the orientation I took, Dave. I mean, I never took the orientation of, "Oh geez, you're generating your own and now you want me to buy it and you're using less." I took the orientation of "Where are we going with this, this could be really powerful and it could be a really powerful way to save money as a grid operator." That was the way I looked at it.

David Roberts

I think some of the smarter net metering critics approach it from basically that perspective, saying like, this is a relatively old school, kind of primitive way of compensating for this. It's not sensitive to time of use, it's not sensitive to geography and grid conditions. That's because households are getting more sophisticated and because the ways grid managers are interacting with households is getting more sophisticated. We need to basically evolve beyond net metering to something more smarter and more nuanced. Do you buy that or do you think that net metering is good enough?

Mary Powell

I've always been bullish on the notion of solar and storage in every place. I mean, we're actually going to be offering storage only to customers by the end of the year, going into next year. So, again, I think storage alone is a great standalone product in the energy transition. But for customers who've gone solar like to have storage, we feel like that's really powerful and that's been where we've been headed for years. The only reason we don't have more of it on the system is really back to your earlier question on the supply chain challenges, right?

So storage just wasn't readily available for a couple of years and I think that slowed things down. So policies and approaches that encourage more storage on the system, I think that's a very forward way of approaching the energy transition. But back to my earlier point though, and the way I looked at it from a grid perspective, and in fact we did, we attracted, we actually held like a forum in a part of the state where we knew we could really leverage having a lot more solar energy capacity online. So we made it super easy. We brought solar installers into town, we showed them the areas where it would be great if they could install more.

So I think there's ways to do it that way and there's also ways to do it in the context of so then just put some storage on some of those circuits. When I look at the speed at which we need to all be moving in the context of the energy transition, my view is we should all be working with the lens of coming at it from a place of abundance, of how do we get more. I mean, again, we're scaling at a gigawatt pace.

David Roberts

Yeah, that's wild.

Mary Powell

As a utility executive, I know how hard it is to bring on a gigawatt, right? So why wouldn't we want to leverage homeowners? They're the ones paying for these generation assets to go on their roofs, right? So why wouldn't we want to continue to encourage it and then just get smarter and better at how we capture that in a way that is useful from a grid perspective? And there are many ways to do it. Again, you know, having all of that smart controllable load that you could have through companies like Sunrun is really incredibly powerful.

David Roberts

Do you see any — you know because California is not the only state that is contemplating reducing their net metering rates or imposing fixed fines or costs on solar homeowners? Basically, the generosity I think is declining in a lot of places. Do you see any appetite for going off-grid? Do you see that in the future, more people wanting to go off-grid? And is that any part of your business yet? Are you helping anybody go off-grid yet?

Mary Powell

There are customers that are interested in it. Even as a utility, I offered customers the opportunity to go off-grid years ago. So I think for some customers that is what they want to do. But I think for your mass market, I think for your average American, being interconnected makes a world of sense. And leveraging these technologies can dramatically reduce outages, can dramatically reduce challenges that we're having with the grid. In 2022, more than 140,000,000 people in 40 states dealt with blackouts or calls to conserve power due to extreme weather. So that's a great example. In California, we real-time dispatched back to the grid that stored solar power that then helped every other person on the grid.

For me, it is so much like what we really need to do is reframe and be thinking about how do we radically collaborate? Because again, the grid let's go back to the grid. The grid is like 40% economically efficient. It's not built for economic efficiency. It's built for the worst minute of the worst day that happens every ten years and then 20% some, right? So one of my big drivers in really embracing distributed technology was that. Because I was so tired of the old thinking of beat the peak: "Oh, we got to chase the peak," and then you had all these peakers, right?

David Roberts

Yes. Overbuilding.

Mary Powell

Right. Why don't we focus on flattening and crushing the peak? Why don't we focus on eliminating? The way to do that is to get to a grid that is as — I used to like to think of it, where you become like the symphony conductor of an orchestra of a ton of instruments. You have EV technology that you can use now to support the grid. So it's really how we could make the entire grid more affordable by embracing distributed smart controllable load and being able to store it and dispatch it. So this year alone, we're installing a nuclear power plant's worth of solar just this year.

And when you think of that attached to storage, it is it's mind-blowing.

David Roberts

Another excellent segue to my next question, which is about, speaking of being a conductor of an orchestra, is about virtual power plants. These are also a hot new thing in the energy world. And for those who don't know, a virtual power plant is just a bunch of distributed energy resources. Panels, batteries, cars, smart panels, water heaters, what have you, coordinated by a single entity in such a way that they act like a big — well, it's kind of misleading to call them virtual power plants, actually. This is one of those things. It's dumb terminology because they're not just producing power.

Right. You can also coordinate them to store power. So it's like virtual power plant plus storage, virtual generation plus storage.

Mary Powell

Well, it's a power plant. Like, how I think of it is there's nothing virtual about it. It's a power plant.

David Roberts

But also a big battery.

Mary Powell

Yeah, well, that's my point. It's actually a distributed, flexible, amazing power plant. Like, again, as somebody who ran a utility —

David Roberts

It's the coolest power plant.

Mary Powell

It's the coolest power plant you could have. Just seriously, from a utility perspective, we had a bunch of peakers, right? And you have to run tests, you have to make sure they're running for like that one hour of that one day a year that you're going to need them. And then guess what? Sometimes that big hunk of metal, it doesn't turn on and then you're out of luck. Right. When you have a distributed power plant and you have all these devices you're pulling from, guess what? If a few of them you don't pull from, you still have 99% or 95%, right.

That's not true. With a fossil-based peaker planner, it's either working or it's not. And I can tell you when it's not. It's painful, as we all know.

David Roberts

Yeah. This is one of the dumb things I always hear because you always hear critics being like, variable power has to have 100% backup. And I'm just like, that's ridiculous.

Mary Powell

Right.

David Roberts

A natural gas power plant, you need 100% backup because if it doesn't come on, then the whole thing doesn't come on. But as you say, there's not one single failure — point of failure in a virtual power plant. It "degrades gracefully" is, I think, the system architecture term for it.

Mary Powell

Yeah.

David Roberts

So I didn't actually know until very recently that Sunrun had gotten into the virtual power plant business, the aggregation business. Just tell me a little bit about what that looks like, where you're doing that, and kind of like how's it going so far?

Mary Powell

Yeah, actually, one of the reasons Sunrun got on my radar and I think I got on Sunrun's radar so many years ago, was because I think we were the first on the utility side to do a virtual power plant, and Sunrun was the first on the solar storage side to do a virtual power plant.

David Roberts

When you say "we" just for listeners benefit, you were in Vermont at —

Mary Powell

Green Mountain Power. Yes.

David Roberts

— at Green Mountain Power.

Mary Powell

Yeah. So that was one of the reasons that Lynn and I got — Lynn, who was the co-founder and former CEO of Sunrun — Lynn and I got on each other's radar was because of our work and our work both seeing that, "Oh, my gosh, like, through collaboration, we can modernize the grid and make it more affordable for everybody." So Sunrun's had many different programs. I would say one of the ones that I think is most exciting, to tell you the truth, is the most recent one because we've learned as we've gone along and we did a project with Patty at PG&E where our customers in California were able to participate in a three-month program.

PG&E compensated our customers. So these are existing Sunrun solar-plus-storage customers that we've had in many cases for years.

David Roberts

How many were involved in this? I just mean, like, scale, roughly scale wise, hundreds of thousands? I have no idea how big these things —

Mary Powell

We're in the tens of thousands with PG&E. So what's really cool about that program is, again, it's to help with summer reliability. And again, back to what we were talking about. You can have big peakers you can rely on, or you can have these distributed resources. And so, again, what PG&E wanted to do was leverage these distributed resources. So the customers received a notice that they could get paid $750, which is real money to households. Right, $750 —

David Roberts

Is that per year or just a flat fee?

Mary Powell

It was just a flat fee for these three months. So it was for three months they were getting paid and with no impact on their use of the storage. So it was also done in a way to make sure that if there's an outage, they would still have the storage and still be able to use it for resilience, which so many customers want. So I think it's a great example of the kind of program that really can scale.

David Roberts

So you're not doing the thing where you call these people and say, "Hey, can we take some of your storage?" This is all automated. Sunrun is controlling all these things centrally. And you're not interfacing with homeowners about it.

Mary Powell

Our whole vision is to make life easier for customers. One of the things that I was never a fan of was energy policy that was about making lives harder for customers. I think most Americans have enough things to worry about when they come home. So we want to make their lives easier.

Yeah, tell it to Texan ratepayers.

Exactly right. So if they have time of use rates or — we want to make all of that easy for them so that it all just happens behind the curtain, if you will, and they get the best optimized value for their home and they don't have to worry about anything. They can just live their lives and use energy when they need to.

David Roberts

So do you see the virtual power plant thing evolving where — because just a flat upfront fee seems like for a test project is fine, but do you think these things will evolve where compensation for the homeowners involved will be more sort of scaled to the amount of use you're getting or scaled to — you know what I mean? Sort of like variable, the compensation for homeowners, is that going to evolve or do you think just writing them a check upfront is the best way to do it?

Mary Powell

I think undoubtedly it will evolve just because this is still a relatively new space. So when you look at any evolving system, you're going to see different mechanisms. You're also going to see because we don't have every state is different, every utility is different. So I don't see a homogenized like "This is the program." I think it's going to definitely be very jurisdictional. So based on the regulatory and utility climate of the state in which customers live in, I can tell you the reception from our customers to this program was glee.

David Roberts

If someone offers you $750 for you doing nothing at all.

Mary Powell

Right, exactly. So, they just feel like they were so smart to make the decision to go with solar and storage. And when I look to the future three to five years out and I see what's happening from a climatic perspective to the utility system and to the utilities, I just see this as this value really just growing immensely, both from a Sunrun perspective as well as for the customers that we serve.

David Roberts

In terms of VPPs, is there policy help you'd like to see, or is this just a matter of utilities sort of deciding to do it and try it? Or are there sort of systemic changes you think need to be made? Or is this just utilities getting with it?

Mary Powell

For sure in California, I mean, the policymakers and the regulators, they set up the framework to encourage PG&E, for sure, to do this type of a program. I see it coming from different directions, but largely coming more from the policy perspective and the regulatory perspective than the utility perspective, except for the few more enlightened ones.

David Roberts

The partnership with Ford is really interesting. So, basically, the idea here is that people who are buying a Ford F-150 electric can opt into this package deal, where they also get, with the Ford F-150, they get a charger that is bi-directional. Such that the Ford can charge their house, which is cool, and also optionally solar panels so they can buy if they want, the full meal deal. And a home battery, too. I don't know what all is part of the package that's available to them, but I'm curious how that's going? Like, are Ford customers taking that up?

And of course, numerous people, hilariously, numerous people ask me, are they going to throw heat pumps in with that package at any point? These partnerships of trying to get electrification technologies in a bundle, how's that going so far? And do you see that expanding in the future?

Mary Powell

It's going great. I mean, I think I started with, like, we see ourselves as a clean energy lifestyle company. I mean, what we are about is meeting customers wherever they are on the customer journey and helping them to transform their lives in ways that make it more affordable, more resilient, have them feel more safe and secure in their own homes and have some sense of energy independence. So yes, we were so excited about the Ford partnership. I will tell you that Ford was very pleasantly surprised with the uptake of the number of customers that wanted the full bi-directional.

So, again, if you went online and you just wanted to buy the Ford Lightning, you could buy a basic program that doesn't include, like, the bi-directional charger is, of course, more expensive. It's the higher end Ford F-150 Lightning. And they were really surprised at how many customers wanted the bi-directional charging. So we've been very pleased with the partnership. Many of the customers did want to talk to us about solar. Some already had solar because, as I said, there's such a strong statistical correlation between EV adoption and solar adoption. And then to your point on heat pumps, yes, absolutely.

We do see the future as being one where we can provide customers with very holistic, easy to transition to bundles of products and services.

David Roberts

Yeah, I was going to ask, is that the end state we're moving toward here, which is like a homeowner can just call up Sunrun and say, I want the package, and then you'll come in and electrify the stove and the water heater, the furnace, whatever, panels, batteries. Is that sort of what you're heading toward?

Mary Powell

Definitely. Directionally, that is absolutely what we're headed towards. My passion has always been, how do we make the energy transition easy for consumers? And one of the ways that when consumers move quickly, it's usually because you have found a way to make it easy for them. So yes, we're continuing to explore all facets of expanding the relationship and doing it in a way that works for customers and works for Sunrun.

David Roberts

Let me ask about this, your basic financing model, the lease model, which is people pay nothing upfront. Basically, you are installing and owning the solar panels and you're selling the power to the homeowner. So the homeowner doesn't pay anything up front, they just buy the power from you, basically.

Mary Powell

Right, and they save on what they would otherwise be paying the utility.

David Roberts

Right. From their perspective, the only change is lower electricity bills. Sort of financially. But that means you own the panels and that means when the 20 to 25 years is up, you're responsible for those panels. So, I'm wondering what your general thoughts on end-of-life stuff, recycling, and just the financial burden, which I assume is going to be substantial, of you being responsible for dismantling and doing something with all these panels. How does all that figure in?

Mary Powell

First of all, we do meet customers wherever they are. So, we do provide the customers with the opportunity: They can buy the system outright if they want to, and they can also get a loan if they want to. So, just to be clear, but I love the third-party ownership model because as I mentioned, I went solar 14 years ago myself in Vermont, at my home in Vermont with a local installer. And I had no way of knowing, two years later, is it working? Is it not? Like, who do I call? So one of the things we find, customers just love the ease and the convenience of not having to worry.

And now we're getting these great reports, these impact reports, out to them so they understand how much their system is generating and the impact it's having on their life as well as the planet. So we love these longer-term relationships. We also find that, again, so many customers that we sold solar to so many years ago are now on — we have quite a long list of customers that now want us to come back and attach a battery. We also provide an EV charger as well. It's not just the Ford F-150 partnership. We also have a Sunrun branded EV charger.

So we see real opportunity over that time to expand and deepen the customer relationship. As it relates to the technology: The technology is good to go for 30 to 35 years. With many customers, over the course of that time period, they'll contact us. In many cases, actually, it's multiple customers because again, the panels are on the home and the average American owns their home for about seven years. So we also find it's a great way to add more customers because the customer who then moves tends to want to become a Sunrun customer. And then we adopt a new Sunrun customer, and we're also getting more sophisticated in our outreach to those new customers that are taking over homes and providing them the opportunity.

We can upsell them to, in many cases, more solar, we can upsell them to storage. So we see a lot of value in having that longer relationship relative to when the technology, when a panel needs to be turned out or a change needs to be made. We partnered with Solarcycle, which is a leader in solar panel recycling, and so we really love our partnership with them. But again, we see real opportunity to continue to renew the relationships with customers over the long term, to expand the solar that they have on their roof. And when they need it, we'll be there for them to basically take the system down and put a brand new system on.

David Roberts

So you're not worried about recycling, you're not worried about because there's a lot of hype around now about solar panels piling up in landfills, et cetera, et cetera. Do you feel good about the general state of recycling for these technologies?

Mary Powell

Let me just put it this way. I feel as somebody who's been in energy a long time and having built a wind farm, I mean, you still have to think of end of life, of just about anything. So when I look at it, compared to other energy technology, I'd say 30 to 35 years is a really good length of time and just then be responsible and how you can recycle. So I'm really excited that so many of the components can be recycled, as I would be just about any part of society. It's nice when we can recycle things and put them to use.

David Roberts

So you sell to residences and I guess you sell to small businesses and commercial as well?

Mary Powell

No, we're just residential.

David Roberts

Oh, pure residential.

Mary Powell

Yeah, we're pure residential. The only thing that you could call quasi-commercial is we do multifamily housing. And that I'm really excited about. We're the largest supplier of multifamily housing projects. So, again, those are, generally speaking, low and moderate-income rental housing where we help the renters also save money through the project that we do with the owner of the multifamily housing.

David Roberts

So there's no thought then, because I got a bunch of questions about community solar. I got a bunch of questions about solar on parking lots people are obsessed with solar on parking lots. Are you going to get into any of that or is this a pure residential play?

Mary Powell

I mean, we have so much opportunity ahead of us on the residential side. I too am a huge fan, particularly of carport solar. I did a project myself back in 2018 to do that. So I'm a big fan of it. I think it makes so much sense, particularly as we're seeing so much more EV adoption. To have solar and have charging right there wherever possible makes a lot of sense. But for Sunrun, we see just tremendous opportunity in accelerating this customer-led revolution, which truly, Dave, that is foundationally what I've always seen. Which is why even way back in 2007, I really embraced this technological advancement because I always saw that ultimately this is a better system from a customer lens.

It's a more reliable system, it's a more energy independent system. And so we see tremendous opportunity to continue to accelerate the customer-led revolution and bring them so many more ways to improve their lives in the clean energy transition.

David Roberts

One of the advertised benefits of DERs (Distributed Energy Resources), generally speaking, is that they defer the need to build new power lines, basically new distribution lines, in some cases new transmission lines. This is one of the things that in the net metering arguments constantly comes up sort of on the solar side of things is, "Well, we defer TND costs." But as far as I know, there's no way to compensate them for that. As far as I know, they're not actually being compensated for that deferral. Is there any way they could be or how is there any mechanism through which they could actually see that value?

Mary Powell

Yes, it's true. That can happen. And that was exactly when I used the example of — it was actually Rutland, Vermont, where we held a Solar Summit and we encouraged development of rooftop residential solar by private companies in that city. It was because we also saw that we could use it as a non-transmission alternative and basically save customers — in that case, I think that project was like a little over $100 million by putting online more solar energy capacity in that area. So it kind of, for me, gets back to the broader point. When we were talking about net metering, which is if you brought leaders to the table looking at how can we create a more affordable grid for all, you might find, you'd end up paying them more than you're paying them through some of these net metering schemes.

David Roberts

If you avoided a 100 million dollar outlay, some of that value, it seems, ought to go to the solar. Right. And it's not now, I don't know exactly how that would work or what the mechanism would be.

Mary Powell

Yeah, and again, some of it, it's not inherently the utility's fault. Like, they're also part of a broader regulatory construct that is really largely incenting them to build stuff.

David Roberts

Yes.

Mary Powell

So again, it was really our focus on customer obsession, on innovation, and on keeping rates low that led us to a lot of this innovation that I think is just a nice postcard from the future for so many other parts of the country.

David Roberts

Final question. Solar panels at this point are very straightforwardly commoditized. They're very standardized and have been for a while. Batteries are sort of getting that way, pretty commodified. Are there big technological advances that you have your eye on or that you think are intriguing in this? Specifically in the residential sort of electrification space, it doesn't seem like thin film. I mean, maybe thin film will make a comeback. Or maybe solar in the windows, the window pane solar, there's all these different battery chemistries. But today at least, the business is standard PV panels, standard lithium LFP batteries.

I think in the home, lithium-ion in the cars. Are there big technological advances that you think might shake things up?

Mary Powell

One of the things that's very exciting about where we are on the energy transition is frankly the amount of investment that's just going into clean energy and going into clean energy technology. So I'm humbled by and excited by different things that I hear that are happening. What I can tell you, sort of as I take a longer view, I just get excited at like, "Oh my gosh, I'm sure there's going to be all of these amazing evolutions that you and I could never concoct today." But back to the here and now, in the here and now, the things that I'm really excited about are yes, first of all, solar technology has continued to improve.

But the other thing that's happening is you're really seeing improvement in not just sort of the capacity of storage. So again, back to the Ford F-150 Lightning. I mean, that sucker can back up your home for up to two weeks.

David Roberts

I know, it's insane. People don't appreciate it's so much bigger than a home battery.

Mary Powell

Yes, exactly. But the other thing that's happening that's so exciting, for instance, with our partnership with Lunar, which was founded by Kunal from Tesla, is they're also working on ways to make it so much easier and faster to install and embedding a lot of the technology in the storage device. So we're also seeing improvements, like back to where you and I started this conversation of friction and things that make things more costly. So even a year ago, storage was just longer and harder to install than it is today. And I see continued advancements and improvements in that so that we could get to like maybe a 20 minutes install.

So, again, back in the day, it was multiple days sometimes just for — I think my solar project I told you about was days here. And now we have crews that are in some cases doing two solar installations in a day. And with storage now getting easier, that all will be a real unlock from a consumer perspective.

David Roberts

And what about the sort of home coordination? You're getting into that a little bit with the bi-directional charger, but are you going to get further into sort of the kind of smart panels and the things that are like coordinating loads and all this kind of stuff?

Mary Powell

We can already do that. So, I mean, that is something that we already can do. And again, we had a partnership that we launched a while ago with Span using their panel, which is just really cool, particularly if you live in a part of the country like California where you're going to have outages a lot. One of the things I love about that partnership is it gives the homeowner the ability right during an outage to decide, oof, I actually think you can just open the app and you can say, I'm just going to shut off this and I'm going to use this.

David Roberts

Right. I did a podcast with the Span CEO a couple of years ago. People should look it up.

Mary Powell

Yeah, for sure. So again, yes, that's what I mean about the excitement of like, oh my gosh, if we all look forward the power for utilities of our capability to be able to package load back to the grid when the grid needs it the most from an economic perspective. We could really get away from this tired, old fashioned, "beat the peak" thinking and really move towards a future where it is a fully orchestrated maximized energy system that is a lot more affordable for all.

David Roberts

Well, that seems like a great place to wrap up. This is so interesting and fascinating. I'm so into the distributed energy thing in general and the household thing in particular. I think we didn't really get into this, but in addition to being technologically fascinating like we've been discussing, I really feel like politically leading with, "Hey, we're going to reduce your bills and make your stuff work better" is just politically way better than leading with, "Hey, we're going to tax everything you use," or "Hey, we're going to give a billion dollars to this big corporation and trust me, they're going to do cool stuff."

Politically, it's so much more potent to start with households.

Mary Powell

It is to that point. That's another thing that really struck me. I mean, I think it was way back in 2012 when I saw data on how homeowners felt about this. Right across the political spectrum, there was dramatic support for solar for different reasons. Some people saw it as energy independence. Some people are attracted to the clean energy benefits. Some are attracted because they want to save money. But it's why I've always felt like this is just going to be an accelerating customer led revolution because it's something that just provides Main Street America with what they've been wanting for years.

David Roberts

Mary Powell of Sunrun, thanks so much for coming and sharing today.

Mary Powell

Awesome, so nice to chat.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much and I'll see you next time.

Clean-energy transmission lines in the US are horribly congested, and buildout of new ones is agonizingly slow. Yet while other parts of the world use grid-enhancing technologies (GETs) to significantly improve performance of existing transmission lines, the US system has been resistant to deploying them. In this episode, Julia Selker, head of a GETs trade group called the WATT Coalition, discusses the potential of GETs.

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Text transcript:

David Roberts

One of the primary threats to the clean energy buildout spurred by the Inflation Reduction Act is a lack of transmission. Models show that hitting our Paris climate targets would involve building two to three times our current transmission capacity, yet new lines are desperately slow to come online. Meanwhile, existing lines are congested and hundreds of gigawatts of new clean energy sits waiting in interconnection queues.

Wouldn’t it be cool if there were some relatively cheap and speedy ways to get more capacity out of the transmission infrastructure we’ve already built? To ease some of that congestion and get more clean energy online while we wait for new lines to be completed?

As it happens, there are. They are called grid-enhancing technologies, or GETs, and they can improve the performance of existing transmission lines by as much as 40 percent.

It’s just that, in the US at least, utilities aren’t deploying them. They’ve been tested and deployed all over the world, but the US system has resisted using them at scale.

I contacted Julia Selker, head of the Working for Advanced Transmission Technologies (WATT) Coalition, a GETs trade group, to discuss exactly what these technologies are, their enormous potential to ease grid congestion, why utilities still resist them, and what kinds of policies can help move them along.

So with no further ado, Julia Selker. Welcome to Volts. Thank you so much for coming.

Julia Selker

Thank you so much for having me.

David Roberts

This is, to me, a very exciting topic that is like many exciting topics in the world of energy, somewhat obscured behind a wall of jargon and technical sounding terms. So we're going to do our best up front to decode some of this and lay it out in a simple way so people can grasp it. But before we get to GETs, before we get to the GETs, let's talk just a little bit about the need here, the need for more capacity on the transmission system. Run down a little bit, because I know you've done or have been involved in some research on grid congestion and things like that, give us a little rundown of why this topic is so important right now.

Julia Selker

Yeah, absolutely. The United States is basically desperate for transmission capacity and there are a few ways that we see that in data, and one is transmission congestion. So this is a quantification of the cost of a transmission constraint. So if you don't have enough transmission to deliver the cheapest electricity, you'll then have to turn on a thermal generator or something more expensive than a wind or solar generator, for instance, and that will increase costs for consumers. So back in the day, let's say 2016, the market monitors found $3.7 billion of congestion in the regional transmission organizations and the independent system operators that actually transparently report congestion data.

And if you scale that to the whole US, we're looking at about $6.5 billion in congestion in 2016. But in 2022, the national number was over $20 billion in congestion.

David Roberts

20 billion.

Julia Selker

20 billion. It's rising astronomically. And it makes sense: There's more low cost generation available, gas prices are going up. So the redispatch cost is another term for this is going to get higher as you have to curtail more renewables and dispatch more expensive generation because there's just not enough transmission to deliver all the clean energy. So we also see this in clean energy interconnection costs and delays. Back when there was a lot of headroom on the grid from large scale infrastructure expansion back in the day that projects could interconnect at lower costs and with faster timelines.

But now projects are seeing bigger and bigger upgrades, all that headroom is used up and projects are seeing tens or hundreds of millions of dollars in transmission upgrades that need to happen in order for them to interconnect to the grid.

David Roberts

Volts listeners will recall just a few weeks ago had a pod on interconnection queues and they'll recall that sort of you get in a single file line and if you happen to be the project that triggers a need for a transmission upgrade, that whole cost gets added to your project, which renders many projects unviable. And that's just happening more and more often now because the grid is more and more congested and there's more and more upgrades needed. So it's making that process take longer too.

Julia Selker

Yeah, and beyond the cost. I've heard from clean energy developers that they are looking at seven years to actually make the transmission upgrade, or in one case, four years to szslchedule an outage to begin construction. So that's not sustainable at all. And there are policy actions that are taking place to try to make these processes more efficient. But the fundamental issue is there's not enough transmission capacity and we need to be finding it fast.

David Roberts

There's no way to fiddle with processes enough to get around that, which is there's just not enough transmission capacity.

Julia Selker

Exactly.

David Roberts

Given all that, we need more transmission capacity. New transmission capacity takes forever to build in the US. Which is a problem a lot of people are working on. But even reforms look like they're years out and then more years out to build the new lines. So here we have then this set of technologies that can help us get more transmission capacity out of the existing grid. The GETs, the grid enhancing technologies. So let's talk about first what counts as a GET and let's run through the big ones.

Julia Selker

Sure. So there are some practical reasons that certain technologies would fall under the GETs category, and there are some policy reasons too, so I'll cover both of those. But the items that we think about are does this technology make use of the dynamic capabilities of the grid to increase transmission capacity? That's sort of the practical category. So, we're used to thinking about transmission lines, transformers, substations. We install them, and they have these set capabilities that are based on really conservative assumptions. And when you have digital technologies and high tech communications, you can actually monitor these assets and make more efficient use of them depending on grid conditions.

And another value we look for from a technical perspective is the redeployability. So if you build a new transmission line, great, you have a new line right where you put it. But with these technologies, you can use them as stopgap measures. If you have a big line under construction and you want to reduce costs in the interim, or you're expecting grid topology or the grid assets to change or increase, but you're not sure how. It's still kind of a zero regrets option because you deploy it, it pays for itself quickly and you can move it later.

David Roberts

Right. So redeployability just means you can put it on a line and if you don't need it on that line anymore, you can take it off that line and put it on another line. It's not a permanent addition to a line.

But it could be. Certainly there's no expiration date, but the flexibility is —

Right, you can leave it on, but you can move it if you need to.

Julia Selker

Right.

David Roberts

And so, given those parameters, let's walk through the three big ones. The first one helps elucidate something you said. I think the first one is called dynamic line ratings. So, I think the important background for people to understand here is today you build a transmission line, you have the transformer and the line, the familiar pieces of infrastructure, and basically a grid operator has to know how much energy can I push through that line? And to come to that number, they make some estimates about how much will the line sag if power is going through it, what are the sort of ambient weather conditions typically in this area?

So, they do these estimates to come up with a capacity estimation for that line and the grid operator uses that estimate. But of course, because these are estimates that you're doing sort of in advance, you have to be very conservative. You have to be careful that your estimates are not on the high end so that you don't overload the line and blow stuff up. So all of which adds up to the fact that existing transmission lines typically only use like 30% to 40% of their capacity. Is that right? Just out of sort of an abundance of caution because you just don't know specifically in real time what's going on in that line.

Is that roughly correct?

Julia Selker

Yeah. So historically a lot of transmission lines use a static line rating, so they'll assume it's going to be a hot day and that there's not very much wind. The wind has the highest impact on the cooling of a transmission line. So they're like, "Okay, this is how much the line will be cooling, and this is how much the current would heat that line. And that's our limit." But they might use that limit year round, even in the winter. So transmission owners have been updating to seasonal ratings. That's an improvement. FERC is requiring lines to use ambient adjusted ratings, which will take into account temperature by 2025.

But like I said, dynamic line ratings also include wind. They're at a more granular level, so they might be updated every 15 minutes, for instance.

David Roberts

Right, so dynamic line ratings, if I could just back up dynamic line ratings just means you attach something on the line that will give you real-time information about those conditions that you were previously estimating on a seasonal or yearly basis.

Julia Selker

Yeah, it could be on the line itself. It could be on the transmission tower looking at the line with LiDAR. It could be a weather station, too. It could even be in the fiber optic cables that are strung on the same towers as transmission lines. Those are really good temperature measurement tools as well. So there are lots of different approaches to dynamic line ratings. And they're not just real-time, they're also forecast, which is really important, because when you're making your dispatch decisions, the day ahead forecast is critical and maybe even further ahead. So that's one of the major values of DLR.

Once you've had the sensor on your line for a few weeks or months, you know how the line heats and cools, and you can use those forecasts.

David Roberts

Right. So, long story short, by getting more real-time data about the conditions around a line and reliable forecasts around the condition of the line, basically, grid operators can get closer to the actual capacity of these lines rather than stopping so far short out of caution. So how big is that delta between, say, I was using a yearly, static yearly, rating for a line, and then I shifted to DLR, so I was getting real-time information about that line and good forecasts. How much more, theoretically, can I push through that line once I have DLR attached?

Julia Selker

Yeah. So in one 2021 deployment across three states, DLR exceeded static reference ratings by 9% to 33% in winter and 26% to 36% in summer. And so that's a big range, of course, but you're still looking at big capacity increases. And also the fact that the extra capacity found in summer was higher kind of shows that they were probably using seasonal ratings. And the summer rating was very conservative in terms of heating. But then in this same case study, the DLR actually found 15% of hours either matched the static rating or was below the static rating.

So DLR also shows you in cases of extreme weather, for instance, whether you should be running less power along the line. And if we're dealing with weather patterns like heat domes and these unprecedented situations, that's when that kind of monitoring could be really life saving.

David Roberts

Right. Because even with the caution of static ratings, with extreme weather, you might exceed even those bounds.

Julia Selker

Right.

David Roberts

So basically, DLRs can tell you what's really going on. So that's somewhere from 9% to 33%, more transmission of power through the same line, through the addition of DLRs.

Julia Selker

Right.

David Roberts

More or less. And then the second one, even nerdier sounding, "advanced flow power control," what do we mean by this?

Julia Selker

Yeah, so there are existing technologies that utilities use to control power flow, but the advanced ones are just that much better. Basically, these are devices that go at the substation between the generators and the load. And often in that pathway, you'll have multiple circuits that could deliver power. But power likes to follow the path of least resistance we say. Technically it's impedance, which is a combination of resistance and other items. But advanced power flow control can adjust that impedance to push and pull power over different circuits. So say you have one circuit that's just maxed out 100%.

You have two circuits that are more like 20, 30%, you can push that power off of the maxed out circuit onto the others, and then you can actually add generation behind them.

David Roberts

One of my theories about this is that the sort of average person on the street, their familiarity with technology is mostly around the Internet and phones and stuff like that, and digital stuff. And I just think the average person on the street, probably, if they have thought about it at all, thinks in their head that the people controlling the grid just have much more fine grained digital level control than they actually do. But the standard practice now is for the power to just go the way it goes based on physics. And if it runs into a congested line, you're just screwed.

So this is like the advance here is just you can push power where on your system it needs to go based on availability, which seems so — such a rudimentary level of control. It's a little wild that it's new, it's a little wild that we didn't already have that, I think.

Julia Selker

Yeah, there are sort of analog approaches to all of these GETS in terms of: There are ways that you can reroute power manually by flipping switches, or you could use emergency line ratings instead of dynamic line ratings where you say, "Okay, I could run more power for 2 hours or 15 minutes," but we have the technology to do that more strategically. And that means you can do it every day instead of in these sort of emergency situations.

David Roberts

Right. And you can do it, I presume, much faster digitally than you can by running around physically throwing switches.

Julia Selker

Right.

David Roberts

And so, the third of the big three here is "topology optimization," the nerdiest sounding one of all. So, I think people are familiar with topology, like a topological map, which shows you heights, basically shows you elevations. So, in grid terms, the topology of a grid is just sort of the equivalent of elevation in that sort of like power will go, quote unquote, "downhill" towards the easiest place to go. That's the topology of the grid. So, what does it mean to optimize that topology?

Julia Selker

Basically, it gives you sort of a map of everything that's going on on the grid. All of your power lines, all of your generators, all of your load and topology optimization software lives with a system operator or other entities could use it, but they can say, "Oh, we see congestion here, what are our options for reducing it?" And one example is you might see congestion on line A, and if you switch off line B, that actually balances everything out so that line A is no longer overwhelmed. So, it's counterintuitive sometimes. And that's why we need software to do it, because today transmission owners would undertake reconfigurations, as they're called, manually by flipping switches.

But it's just based on operator experience, whereas this software lets you actually look at all of the options, all of the interventions and quickly assess the system impacts. Because the other thing is, like I said, it's counterintuitive. It takes some math to figure out exactly what's going to happen when you switch something off.

David Roberts

Right. Especially as these things get more and more complex, the amount of interactions involved. I mean, again, not to beat this point to death, but it's just wild that today grids are run by Bob, who just knows this grid because he's rode this horse for 20 years and he knows its quirks and he's going around physically throwing switches, trying to get things to work smoothly. It's just so much more analog. I think that people have it in their heads that these things work. So, this just replaces Bob's intuitions with software basically that analyzes the shape of the grid and can come up with solutions for which switches to throw that will maximize the smooth performance of the grid, basically, yes?

Julia Selker

Yeah. And it's worth acknowledging that when we had a bunch of thermal generators that operated really consistently that we knew their costs, there wasn't this variability. You didn't have to be so dynamic in your operation of the grid. But the fact is we're moving into a new era and that means that the dynamic capabilities of the grid will absolutely be very valuable. So, for instance, topology optimization could reduce congestion costs in PJM by 50% in one study, just by reconfiguring the grid, depending on —

David Roberts

50%?!

Julia Selker

Right. And that was $2.5 billion in 2022. That was the congestion in PJM.

David Roberts

Good grief, that's a large number. The grid is getting more complicated, not just because variable renewables are coming online, but also like distributed renewables. So, like distribution grids are going to start becoming producers also. And once you get that level of complexity, then you quickly get way beyond what any one person can intuit, no matter how long they've worked with that grid, right. At that point, you need software.

Julia Selker

Definitely.

David Roberts

So, these are the big three that I always hear discussed when people talk about grid enhancing technologies. Dynamic line ratings, which sort of watch the line and tell operators what's going on around that line in real time and what's going to be going on around that line in the next day or two so that grid operators can increase the throughput of those lines. And there's advanced flow power control which allows you to move power around as it moves through the grid to the least congested areas. And then there's topology optimization, which is sort of optimizing power flow through the grid at a system level, which as we say, is getting increasingly complex and requires software.

These are the big three. Are there other sort of like the category of things that could help the grid work better? Seems pretty capacious. Are there other technologies that sort of qualify or that are around the periphery here? Or is it just those three?

Julia Selker

Yeah, I'm not as much of an expert in the other options, but energy storage can be deployed as a type of power flow control. Basically, if you site your batteries at the substation, they can inject power or consume power strategically in a way that also changes power flow. So that could count. And then other technologies that increase transmission capacity much faster than building new infrastructure: There's reconductoring with high performance conductors and superconductors potentially, tower raising. There are these other technologies, but they don't have that dynamic aspect to them that GETs have, and then GETs are also very low cost.

Very low cost. We'll get into that, I'm sure. But reconductoring a line is a level of capital expenditure and a type of technology that utilities understand and they're ready to use.

David Roberts

Right. Can we just pause to define reconductoring? Is that just literally replacing the line itself, the actual wire itself?

Julia Selker

Yeah, exactly.

David Roberts

With just better wire, better higher capacity wire?

Julia Selker

Yeah, there are a few different types of technology, but a basic way that you would increase capacity would be to use a stronger core in your transmission line. So right now most lines have steel cores and steel, when it heats, gets a lot weaker.

David Roberts

Right.

Julia Selker

If you're using a composite core, then you won't have that sag that the steel would have and it can withstand a lot higher temperatures.

David Roberts

Right. So that gets you somewhat higher capacity with the same sort of towers. But as you say, it's not the kind of dynamic real-time control that sort of characterizes the other GETs. And I think for our purposes we can just sort of slot energy storage under advanced flow power control, since that's basically what you can use storage for in this instance is helping power move around more rationally through the grid.

Julia Selker

Just an aside, we usually say advanced power flow control.

David Roberts

Advanced power flow control. So is APFC the — ?

Julia Selker

Yes.

David Roberts

All right. Advanced power flow control. Yeah, that makes more sense. I don't know why my notes have it backwards. Advanced power flow control, none of these trip off the tongue. So I think the next question, the obvious question is the numbers you cite in terms of increased capacity that you can get out of these things are pretty mind boggling. Like, DLR can get you up to 33% more capacity. Topology optimization reduces congestion costs by 50%. This is the point I want to emphasize most in this pod, is that these are not marginal gains here, necessarily.

Like, you can get big chunks, big amounts of new capacity with these things. So how much do they cost relative to, say, reconductoring, putting new better wire through or building a new line? What's the sort of cost scale here?

Julia Selker

Yes, well, the fun and frustrating thing about GETs is it's hard to generalize. Every deployment will have a different value, different payback period. Some places are windier, sometimes there's a hill in the way, what have you. That's why these ranges will be big. But I have some good examples in terms of costs. For instance, PPL Electric Utilities just won the Edison Electric Institute's Edison Award, the 95th award for their deployment of DLR. They're the first utility to deploy DLR in markets, in operations.

David Roberts

The first US utility to do that.

Julia Selker

Yes.

David Roberts

Wild.

Julia Selker

Yes, in 2023. Whereas Belgium was all over it in 2008. So we're a few —

David Roberts

2008?

Julia Selker

Yes.

David Roberts

So these are not new. Like, DLR, for instance, is not new. Not brand new technology.

Julia Selker

No, it's getting better every year so that there's a benefit there, but we're way past due to bring it into common practice. But PPL's sort of flagship deployment, they had a line that was seeing $23 million of congestion a year, and they could fix it by rebuilding a price tag of $50 million. So that's a little over two years payback. That's not bad for transmission, certainly, but instead used DLR, which cost a quarter million dollars. And so that's a big cost savings. And when you talk about the payback period, it's infinitesimal.

David Roberts

Yeah, no kidding. That's a quarter of $1 million rather than $50 million to build new lines. That's quite a delta.

Julia Selker

Exactly. And so we often talk about net savings. So a deployment of advanced power flow control devices saved $70 million in congestion costs over a three and a half year transmission outage. So that's a net savings. I don't know how much the deployment cost, but $70 million is not chump change for one deployment. And another, widespread deployment of advanced power flow control in the United Kingdom saved half a billion dollars in production cost savings by enabling new renewable energy and then also in avoided investments in new infrastructure. So half a billion dollars for like 50-odd power flow controllers.

David Roberts

That's wild. So huge potential savings here. Relatively cheap to install. One thing I'm a little curious about is what do these physically look like? What is the physical process of installing, say, DLR? How long would it take and how disruptive would it be for a utility to go put DLR on a particular line?

Julia Selker

Yeah, like I said, there are multiple approaches to DLR, so there are some that would require no outage at all. So if you're installing a sensor on your tower that's looking up at your line, or if you're using the fiber optic cable, then you don't have to take an outage and you immediately start getting data about the line temperature and ambient conditions. And then, as I understand, it takes a few weeks for that data to give you the right information for forecasting. But you're in business within months. And the sensors that go on the line, it's not that big of a difference.

I think you do need a short outage to put a sensor on the line, but very short. It takes a couple of hours in a helicopter to install the sensors. So again, you'll be in business in months, and you'll see that 30%, 40% increase. And it also corresponds, of course, to when wind generation is highest. If the wind is cooling your line, then it's also spinning your blades.

David Roberts

Right. And what about advanced power flow controls? I imagine there's a couple of different technologies there, too. But is that how fast or disruptive is a deployment there?

Julia Selker

Yeah, again, we're looking at just months to procure the devices and install them and have them operational. So really fast, I guess, is a short answer.

David Roberts

And same with topology optimization. That's just installing software, or are there physical changes you have to do to do that?

Julia Selker

Yeah, no physical changes. Installing software and then training your staff to use it. Again, really fast.

David Roberts

Which is no small thing. It's a diverse set of technologies. And as you say, every installation will be different since every sort of line is somewhat different, every sort of grid system is different, et cetera. But has anyone modeled sort of the cumulative possibility here, the cumulative effect they could have, say, if, like, every US utility got religion on this and went out and installed GETs on all their systems and all their lines, do we have any idea sort of the cumulative effect that could have?

Julia Selker

Yeah, as you can imagine, they're somewhat complicated to model because we're looking at dynamic conditions. But the Brattle Group back in 2021 did a great study called "Unlocking the Queue." And so they used the Kansas and Oklahoma grids as a little case study, medium sized case study. And they looked at the interconnection queue as it stood. They looked at planned upgrades, they looked at weather snapshots, and then they looked at GETs deployments. So where can we optimally use GETs to increase transmission capacity? And they found that if they didn't install any GETs, the Kansas and Oklahoma grids could sustain 2.6 gigawatts of new wind and solar generation using traditional planning approaches.

And then with GETs, you double that. We would have room for 5.2 gigawatts of new renewable generation without any other grid upgrades.

David Roberts

That's which two states again?

Julia Selker

Kansas and Oklahoma.

David Roberts

Ah, very windy states. So you could install double the clean energy with GETs basically than without is what they found?

Julia Selker

Right. And this was a pretty conservative study. We did not allow any import/export changes. So that really limits the value. And so I feel great about this result. And the total installation of GETs would have cost $90 million. And the production cost savings just from having that cheaper generation available would be $175 million a year. And then there are other benefits, there are jobs, there are lease benefits for the community.

David Roberts

So $90 total to install it, and then $175 million of savings per year from then on.

Julia Selker

Exactly.

David Roberts

And presumably that will filter down to consumers, that will lower costs for consumers at the end of the line. What does it do to reliability? Has that been sort of studied or modeled?

Julia Selker

Yeah, that's a little harder to quantify, but we have some ideas for sure. Basically, if you can see how your system is performing and you have options for how to respond to changes, that is a net improvement on reliability. Right? You have awareness, you have flexibility, and you can improve your resilience and reliability. And then also I mentioned case studies of advanced power flow control, saving money during an outage. Topology optimization has also been demonstrated to, for instance, save $40 million over a nine month outage. So when you're dealing with contingencies and outages, these tools can help you do that at lower cost and with more optionality.

David Roberts

All right, so this brings us then to this $61 million question, or whatever the term is, the big question, which is if we have in the US right now huge problems with grid congestion that is blocking the buildout of clean energy that we all say we want and that in fact, we're plowing tens of billions of dollars into. And there's a solution on the table that gets us considerably more transmission capacity quickly at relatively low cost compared to building more transmission: What the hell? Why aren't utilities, why aren't RTOs and ISOs, why aren't states and state legislatures, why isn't everyone beating down the door to put these on?

It just seems like an interim solution that takes the pressure off of all our current problems relatively cheaply. So what am I missing here? Why is there resistance? Why are there not laws mandating these things? Why are utilities resisting at all? Let's start with utilities. Why aren't utilities doing more of this?

Julia Selker

Well, very big question, and I'll start by saying you're doing your part because one of the big barriers is just awareness that planners and utility executives and regulators and stakeholders don't know that these technologies are available. They don't understand the benefits. And so I'm out here trying to tell the story and share examples and that's an issue and just general inertia.

David Roberts

I mean it's kind of their business to know these things, isn't it? I have limited sympathy for that. But okay, so they're not aware. I guess here's what I'm obliquely getting at which regular Volts listeners will roll their eyes as I harp on this all the time but I'm not telling you anything. The basic utility model is they make money by spending money. They make money by deploying large physical assets and getting a guaranteed rate of return on them. So if you're telling them "We can with something that is super cheap and doesn't involve deploying much money, get you more capacity out of what you already have and avoid the need for you to deploy a bunch of big physical infrastructure," basically you're telling them you're going to reduce their profits.

It's pretty straightforward. It's the same story behind energy efficiency and distributed energy and everything else. Anything that reduces the need for utilities to spend money and deploy physical infrastructure is going to be resisted by utilities. I'm just assuming that's one of the dynamics at work here.

Julia Selker

Yeah. I want to be a little nicer to the utilities and say these aren't going to make them money. They're going to have to do like you said, this is a really small capital expenditure and it's a change in their operations and processes so, right: It's not a money-making opportunity. I think, and I've been working on GETs since 2019 that there's been a shift that utilities realize they're going to have the opportunity to build as much transmission as ratepayers will pay for. Right. This is a transmission building era.

David Roberts

Right. Not like there's going to be a shortage of demand. Even if you deploy GETs, it's still going to be building as much transmission as you can.

Julia Selker

Right. A lot of our grid was built 70 years ago. It's time to replace things. We need large interregional transmission. There's going to be a lot of transmission built. So I believe and hope that utilities are seeing that they need to be showing that they're maximizing their infrastructure. That said, they can't be blamed for doing things the same way as they have for decades. So they're going to be risk averse. They have this lower returns on lower capital expenditures and historically they're only responsible for reliability planning. They're only responsible for building transmission to deal with reliability issues.

And that goes back to the history of thermal generation, when that was all we needed to get a good system. But, in the future, we need to plan for reliability and clean energy integration and customer cost savings. Because at the end of the day, the utilities need to demonstrate to FERC that their rates are just and reasonable and economic transmission planning is going to be a part of that.

David Roberts

You know you say, "You can't blame utilities." Maybe you can't, I can blame them a little bit. But how could they be induced to do it? Because in one obvious way is they're under legal obligation to have just and reasonable rates. And I think if you're a ratepayer advocate or a state regulator, you could reasonably say: "It is not just and reasonable to ignore giant cost saving, reliability boosting opportunities, that it's both unjust and unreasonable. So therefore, you have to do it." Are people trying to do that through rate cases?

Julia Selker

FERC is working on that. FERC is looking at a few different models for grid enhancing technologies. So, one big-picture way to think about it is requirements versus incentives. And they're both a little bit tricky when it comes to grid enhancing technologies. So for requirements, one model that FERC is thinking about is a threshold where if you have a certain amount of congestion every year on your line, then you have to look at dynamic line ratings. And that's good. It's simple and clear, but there are still loopholes when it comes to a requirement. There's no transparency, really around transmission constraints.

So if a utility comes back and says, "Well, actually, there's some other limiting element. So dynamic line ratings don't help." We're not sure that a requirement will be the most effective model, but it would lead to more deployments in certain cases. So that's one good approach. And the other is an incentive which would drive the utility — say it was based on congestion cost savings. It would drive the utility to look for those most congestive lines and try to solve a problem with really low cost solutions if they were getting compensated based on the net savings, for instance.

David Roberts

Right. I mean, those make sense to me, although I'll just register one last time, and then I'll let it go. It's a little crazy that you have to bully or force or beg or incent utilities to do cheap things that could save a crapload of money. This is like, we come around to this in the clean energy world again and again and again. Why are we begging utilities to do these things? It's insane that their incentive is not to have the best service at the cheapest possible rate. Like, it's insane that they have to be brow beaten to do these things.

Julia Selker

Well, I mentioned that Belgium is really far ahead on dynamic line ratings. And in 2021, someone from the Belgian transmission system operator testified to FERC, and he said that ten years ago, when they were installing dynamic line ratings, the utility engineers were resistant. I think he said they looked at him like he was crazy, but that now whenever they run into congestion, they immediately go to dynamic line ratings. So as much as we want a fast and transformative transition, these things take time. But I feel like we're going to follow in Belgium's bold footsteps.

David Roberts

Well, what about PUCs? What about state regulators? Like, presumably they could be made aware of these things and they could push are they doing so?

Julia Selker

Yes, the Joint Federal State Task Force on Electric Transmission, which is a group of ten PUC commissioners from around the country, and then also FERC commissioners, met in July and discussed grid enhancing technologies. That was their agenda for two and a half hours. It was a really great discussion, lots of great ideas from state commissioners in terms of how GETs should be deployed, the barriers, etc. So that was super promising. And then they can take various actions. So for one thing, the Infrastructure Investment and Jobs Act came with $14 billion of formula and competitive grants from the DOE that grid enhancing technologies would be eligible for.

So for the formula grants, every state is allocated a certain amount of money and they can propose projects and a use for that money. And then the DOE sends them that money. And then, for the competitive grants, states and utilities and nonprofit utilities, for profit utilities, there's different grants for different entities. But they can again propose a grid enhancing technology deployment and have it — many of the programs have a 50% cost match, for instance, and that could include that workforce training that I talked about. So these are really low cost devices. Obviously, maybe the 50% cost share isn't huge there, but if you're doing that first deployment and you have to update your systems and you have to train your staff, then maybe that cost share is more meaningful.

And certainly for nonprofit utilities that are on shoestring or relatively shoestring budgets, that sort of savings should be really significant.

David Roberts

So that's $14 billion in the Infrastructure Act, not specifically for grid enhancing technologies, but for which grid enhancing technologies are eligible.

Julia Selker

Right. And if you generalize that Brattle study that I talked about, with the $90 million of GETs deployment roughly over the country, we would expect $2.7 billion to deploy GETs optimally over the whole network. So we don't need $14 billion, but we're not going to get it also.

David Roberts

Yeah, I know this is the crazy thing. It's so cheap that dumping money on it is almost beside the point. Like it's so cheap already that whatever the problem is, it's not money. Right? It's not money being available. Are there other federal programs in place that are attempting to juice GETs along? Like, I know the DOE has a gajillion different grant programs and I know the Loan Programs Office is getting involved in nascent technologies and there's all these different programs. Are there other pieces of federal policy that are aimed at this?

Julia Selker

I want to say no, but I could be forgetting something. I will say that there are national lab groups working on grid enhancing technologies in different ways. There's a sort of separate funding for demonstration projects, for instance, for utilities. So again, sort of targeted at deploying your first project because that's the expensive one, that's the hard one, and then the ball is rolling.

David Roberts

So grants in the Infrastructure Act. And then there's this meeting of PUC commissioners that are getting behind it. What about FERC? You mentioned FERC is doing some things — FERC, the Federal Energy Regulatory Commission, for those who don't know that by now — what's FERC doing on this? It seems like it ought to have a key role here.

Julia Selker

Yeah. So two recent FERC orders included GETs so order 881, which was about managing transmission line ratings, required utilities to use the ambient adjusted ratings and then for RTOs to prepare their systems to accept dynamic line ratings. And some RTOs already can. For instance, PJM is set up based on that PPL deployment I talked about. But all the RTOs have to be able to accept DLR by 2025. So that's a good start.

David Roberts

In what way are they not currently ready? What does that mean to get ready? Like if you're just going to go clip a LiDAR onto your transmission tower, what does it mean to get ready for that?

Julia Selker

Well, you have to be able to accept forecasted line ratings, and those will change. So when the RTO is deciding which generators are going to be dispatched and they are going to use the dynamic forecasted line rating to do that, that's a change.

David Roberts

Right. So, it could change their planning, their sort of integrated planning, do you think?

That's an operational change, I would say, in terms of how they're dispatching generation. And you could talk to people who will make it sound really hard. I hope it's not as hard as some people make it sound, but I think it's doable, especially by July 2025.

And that's FERC 881. You said there was another one.

Julia Selker

Yeah. So, Order 2023, which was about interconnection, requires the evaluation of alternative transmission technologies in interconnection processes. It leaves a lot of discretion currently to the transmission owners in terms of how they're used. And we've seen other processes in the US that leave a lot of discretion to the transmission owners. And that means you get uneven results.

David Roberts

Yeah, I was going to say, I was reading your reports and it sounds like in a lot of cases, like the case was presented to the transmission owner with all the information you've told me. Seems like an obvious no regrets, easy win. And then they just don't do it and don't explain why. That's sort of one of the things that was mysterious to me. Is that just inertia? Is that just habit? I mean, they don't explain. So you obviously can't answer that question. But it is mysterious.

Julia Selker

Yeah. I mean, one example that I have from a renewable energy developer is that there was a 1% line overload identified in the interconnection study between RTO seams. And as we talked about, DLR is going to fix a 1% line overload almost all the time. Just because the static rating is so conservative. It doesn't have to be a very windy place. So the upgrade that was identified in this case was $400 million to fix that 1% overload and the TO refused to consider DLR.

David Roberts

It's just wild. As opposed to like a buck fifty. Yeah, I really don't get that. I guess the positive story you could tell is just habit and culture and that that will change over time as these things starting to get deployed and are more familiar. Is there something obvious that you would like FERC to do that it's not doing?

Julia Selker

Oh, yeah, I've got a list.

David Roberts

Everybody's got their FERC list?

Julia Selker

Oh, yeah, wish list. So they've got their notice of proposed rulemaking on transmission planning. We hope they go a little further than they went in the Interconnection rule in terms of requiring the use of GETs in transmission planning. They have the threshold requirement that I was talking about for requiring the study and implementation of dynamic line ratings, for instance, if there's a certain amount of congestion on a line. And then incentives: FERC was tasked by Congress, I think, about 20 years ago to create electric transmission incentives policy for transmission technologies, and FERC did a workshop about performance based rate making approaches that's that, for instance, cost savings, utilities getting compensated based on the savings they enable.

Yes, but that hasn't moved much since 2021. And then also transparency because grid users and stakeholders don't have the information that we would need to understand what the potential is. SPP gave a lot of information to the Brattle Group to undertake that study I talked about. But generally, if you ask PJM how many lines see $2 million of congestion a year, they might tell you that, but they might not have on hand what's causing that congestion. So this transparency question is big. And FERC started getting into that with transmission planning and cost management work with the Joint Task Force.

They had a technical conference where they brought up the idea of a transmission monitor. So that's also interesting to us.

David Roberts

Is there a role here for sort of just the public, just advocates? All of this seems kind of technical and it's all being sort of hashed out by these technical bodies and these working groups and federal agencies. Is there any role here for sort of just public advocacy for the public to get involved?

Julia Selker

Yeah, why not? There are some legislators who've proposed, like federal legislators, who proposed legislation around grid enhancing technologies. So Senator Martin Heinrich has legislation to include GETs in a transmission tax credit. Representative Kathy Castor has a bill on including GETs in interconnection. There's been some movement since that was introduced, but there's federal legislation that can be pushed for. And also, the Federal Congress oversees FERC to some degree and has conversations with them. So your Congressperson can always push FERC to act on these issues. Leader Schumer wrote a letter to Chair Phillips at FERC in late July asking him to move on the GETs proceedings.

So pressure on legislators is good. And let the public utility commissions know that you're looking for more efficient use of the existing transmission infrastructure as well. And state policymakers, too. State legislators, they can all call on the utilities to embrace these tools. And part of the barrier, not the most significant barrier, but part of the barrier is that utilities don't want questions about why they're using this new technology. So if they're getting their state regulators and legislators telling them to use these technologies, that's one less thing for them to worry about.

David Roberts

Yeah, this does seem like one of the areas of policy where states are a little more movable and good things might get going in states and then work their way up to the federal level. That's sort of been the path of most good policy, energy policy in the last decade or so. Final question. You say these things have been around for a while, they're getting better, but they've been around for a while. Who in the U.S., if anyone, is actually using them? And then part two of the question is who in the world is using them?

Where are these things actually in use?

Julia Selker

Yeah, so GETs have been piloted by dozens of utilities in the United States.

David Roberts

Love their pilots.

Julia Selker

Yeah, that's the good news. I mean, since the late 90s, dynamic line ratings story goes way back. So they're out there, like I said, the first operational use of DLR just recently. But even power flow control, for instance, has been used. There's this great story a transmission engineer told me about. They were going to have to interconnect a generator. They were going to have to rebuild a line in case of an outage. You have to plan for N minus one, like something going out contingency. So they were going to have to rebuild a line for that.

Instead, they were able to install a power flow controller and the power flow controller was never used. That contingency never happened. But just by putting in this device, you didn't have to do this whole big rebuild. That would not have given that benefit. So that's an example.

David Roberts

I saw on your map that Europe is covered in these things.

Julia Selker

Yeah, lots of dynamic line ratings in Eastern Europe, for sure. Southern, Eastern Europe, Belgium, the UK. So in the UK, National Grid has an incentive regulation that a) gives them funding for innovation: So if they're using a new technology, there's that initial support. And then they also have incentives for saving money through innovation. So when they install those advanced power flow controllers that create half a billion dollars in savings, they're getting compensated for that in a way that when the National Grid US does it, they don't get compensated directly like that. But it's great that National Grid US and UK have some knowledge sharing and National Grid US is one of the more ambitious utilities in terms of GETs, I think partially because of that.

David Roberts

Well, this is all super interesting. Julia, I just think it's so important for people in this world, in the energy world, to know that transmission is a bear. It's a difficult problem. It's the difficult problem. But we're not just stuck waiting for new lines to get built, right? We're not just stuck waiting for these interminably slow processes to go forward. There's tons of stuff we can do now with these existing technologies to move things forward, reduce costs, get more clean energy on the grid, et cetera, et cetera. It's available now. And so people, when they're pounding the table about transmission, they should add this to their arsenal.

You can act now. There is something to do now about all this. So thank you for coming and sharing the good news with us.

Julia Selker

Thanks so much. And yeah, we're just sitting on all this dormant capacity that's untapped, right? So once we start using these technologies, suddenly we open up these lines and these circuits to carry so much more for us. And then when we're planning the future grid, we can consider these technologies too, and make sure that we're building the line that's the most useful to the system, because we have all this other flexibility and extra capacity. So we shouldn't be making planning decisions based on the assumption that the grid is a static asset.

David Roberts

Yes!

Julia Selker

Certainly, so, yeah, really exciting technologies. Thanks for having me.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at Volts.wtf. Yes, that's Volts.wtf so that I can continue doing this work. Thank you so much. And I'll see you next time.

In this episode, Reed Hundt, the CEO of the Coalition for Green Capital, discusses the merits of green banks, quasi-public or nonprofit institutions that provide seed capital to accelerate the growth of clean energy. There are more than 20 active green banks at the state level. Now Biden has proposed a federal green bank. Hundt explains how it could help.

Full transcript of Volts podcast featuring Reed Hundt, August 13, 2021

(PDF version)

(Active version)

As we speak, Democrats in Congress are at work putting together a budget reconciliation bill that will include enormous swathes of President Biden’s agenda, including his climate agenda.

One of the policies being discussed for inclusion is the creation of a “Clean Energy & Sustainability Accelerator,” more commonly known as a green bank.

The idea of a federal green bank has been floating around forever. There was one in the ill-fated Waxman-Markey climate bill of 2009 (which never made it through the Senate) and there’s been one introduced in Congress virtually every year since.

But this time it might happen! So it’s time to brush up on what a green bank is and what it does.

It would not, contrary to some popular misconceptions, be an agency of the federal government, nor would it finance projects purely with federal money. Rather, it would be an independent, nonprofit entity that uses an initial grant of federal money to pull private capital off the sidelines and into climate-related projects. After the initial grant, the bank would be self-sustaining.

The model has been tested: there are green banks in more than a dozen states, which have generated $5.3 billion in clean energy investment since 2011, including $1.5 billion in 2019 alone. And there are more than 20 states where the process of establishing a green bank has begun.

These state- and city-level green banks are popular and successful, but because states and cities tend to be short on funds, they too often lack the capital needed to fund worthy projects. Right now there are more than $20 billion worth of projects that are eligible for green bank funding and are now waiting. One of the roles of a federal green bank would be to capitalize all those local banks, to get all those projects rolling.

To learn more about green banks, I was happy to talk to their greatest champion: Reed Hundt, the co-founder and CEO of the Coalition for Green Capital. Hundt has been advocating for green banks for over a decade — including seven years on the board of the Connecticut Green Bank — and it is largely through the coalition’s work that the network of state and local green banks has been established.

I was eager to talk with Hundt about how a national green bank would work, the kinds of projects it would fund, how it would account for equity, and the potential if it’s done right, for a green bank to accelerate the clean energy transition.

Reed Hundt, welcome to Volts, thank you for coming.

Reed Hundt:

Thank you very much. I was talking to a friend of mine in Tennessee and he told me that you're from Tennessee. He said that you were the best analyst and commentator about energy issues in the whole state of Tennessee.

David Roberts:

I don't know whether that's damning by faint praise?

Reed Hundt:

Well then I said to my friend, “No, no, the two of you are,” because the person I was talking to was my high school classmate Al Gore.

David Roberts:

Oh, funny! Yes, he and I have bonded over our Tennessee roots before.

I want to talk about green banks with you, but real quick, by way of setting context before that, let’s talk history. Obama faced a similar situation [to the one Biden faces] — different in a lot of ways, similar in some ways. But you wrote a book about Obama's response to the crises he faced that was extremely critical of Obama.

So as we contemplate what Biden should be doing in this similar situation, let's review real quickly, what did Obama do wrong and what does that tell us about how Biden should be approaching this mess?

Reed Hundt:

You're in a very small club, which is the club of people that know about the book called A Crisis Wasted, and as a founding member of the club, I’m very happy to have a new member.

So the problem in 2008-09 was that, as Rahm Emanuel said at the time, a crisis is too good to waste. But all of the advice to the President-elect was small where it should have been big, constrained where it should have been bold, and was short range rather than long range. The people were not badly motivated, but in retrospect and at the time, their counsel was insufficient to meet the needs, not only of the moment, but of the next 10 years. The big difference for the Biden administration, and indeed for the entire Democratic Party in the current year, is the decision from the very beginning of this presidency and of this particular Congress to follow what Larry Summers himself said in 2008: the risks of doing too little are much much worse than the risks of doing too much. 

Larry didn't follow his own advice then, but the entire Democratic Party is taking it to heart now.

The second learning that the Biden people took from the past was not to do just one thing at a time, in sequence, and then run out of time, but to do everything on every front as fast as possible, pressing on every single topic: the democracy agenda, childcare, the COVID relief, climate change, infrastructure. All topics are being pursued in parallel, simultaneously.

The tactical decision of the Obama administration was to do one thing at a time, in sequence. The problem with that is that it played into the hands of opponents who correctly felt that, if they could delay action, ultimately inaction would triumph — entropy would take over.

So the decision made by President-Elect Obama was to do climate change and energy legislation after healthcare, instead of simultaneously. The decision made by this President was to do them together, to do all things together. That's why the reconciliation package includes climate change measures as well as childcare.

So there's two different things: one is go big, and the second is do everything in parallel.

David Roberts:

That strategy is coming to a head with the reconciliation bill, which, indeed, is gigantic and contains just about everything you could think of. It'll be a real interesting historical A-B test if this new strategy does in fact work better.

Reed Hundt:

And it's a test that has to be passed, right? In terms of the role of government in the United States to stop a climate catastrophe, this is the last chance.

David Roberts:

Among the things being proposed for inclusion in the reconciliation bill is a green bank. I've been following this area for a long time and I have heard about green banks, in the background or on the periphery, over and over again. It seems like an evergreen idea that never seems to get over the finish line.

By way of framing this discussion, maybe you can just tell us in the simplest terms, what is a green bank?

Reed Hundt:

A green bank is a publicly funded institution that aims to combine public and private investment to build something. You have to believe that public-private investment is a good thing, or you won't like a green bank.

Public-private investment is how we build all infrastructure, actually, so it shouldn't be too challenging to say, “Let's have public-private investment to build the clean-power platform.”

Let me give you an example of the way that a road is built. A state government or a county government issues a bond; the bond is purchased by the private sector; the private sector then, through the mechanism of the bond, provides the money. And then, overwhelmingly, the state contracts out to the private sector to actually build the road. That's a public-private investment.

The road might not be owned by the private sector, or it could be owned by the private sector, but the ownership is not the point — the point is that it was private money that was pushed through a municipal bond that created a form of financing that built the road.

There are five major infrastructure platforms: sewage, water, transportation, communications, and power. For all five, there is some version of public-private investment.

So point one is, we're talking about public-private investment. Point two is, to contribute the public side of it, let's have a national bank with a network of state and local banks. That's what the green bank idea is.

David Roberts:

One intuitive reaction to this is, if these projects are profitable for private funding and private financiers, what is the role of the public side of this public-private partnership? What is the state doing?

Reed Hundt:

The role is to cause the projects that wouldn’t otherwise happen to occur. They basically fall into three categories, which I call clean up, clear out, and catalyze.

So here's clean up: invest public-private money in neighborhoods and communities where one, carbon energy is not affordable, and two, the byproducts of creating carbon energy are not breathable. That's investment in renovating homes so that they are using rooftop solar or community solar, so that they're insulated effectively. If you do that, in the low- to medium-income households in the United States, the cost of that investment per home will be greater than the income of the household. So somebody else has to provide the money; it has to be the contractor that says, “I'll put up the money and you'll pay me back over time.” That's the shared-savings model.

Well, the private sector does not jump enthusiastically into that activity; it has made almost no headway into that particular market. That market’s potential size in West Virginia alone is more than $40 billion of investment.

David Roberts:

Let's pause here, because I think this confuses some people. There's a big pot of profit, there's a profitable market, there's money to be made. Why isn't private finance already flooding into these areas if there's so much money to be made? What’s the barrier?

Reed Hundt:

In the case of investing in low to medium households, our number one barrier is private sector investors don't know the space. Typically, even though the capital investment per household is twice the median income, that means it's only $80,000. So $80,000 - $90,000 financing, that's beneath the purview of major commercial financiers across the country. So that's the “too small” problem.

Number two, there's the “don't understand” problem, meaning most private sector financiers don't know whether an individual household is a credit risk or not, and because they don't know they don't take the credit risk.

Number three, they have more lucrative activities to engage in, many other more lucrative activities. So they say, “why put the money into an $80,000 upgrade of a household in Marshall County, West Virginia, where the return over time might be in the neighborhood of 4 percent or 5 percent a year. Why do that?”

So it's not that it isn't profitable, it's that it isn't as profitable as investing in Microsoft or a data center or some other high growth activity. Therefore, the role of public investment is to catalyze the private investment to take a little more risk, to aggregate the small financing projects so that they can be sold as a package, to fund small businesses that will actually knock on doors and get people to agree to have the small business do the upgrade.

Those are the primary roles the public part of the investment can play and then the private sector money is pulled in — the goal is to pull the private sector money in.

David Roberts:

Right. So the green bank is in a lot of ways taking on the transaction costs.

Reed Hundt:

Yeah, that's exactly right. That's probably the core point, you just made it.

The “clear out” problem is to clear out the obstacles to massive private sector investment. As you know, a major obstacle in the electricity market is stranded costs, meaning the amount of money that a utility has invested in the old carbon power platform — they need to recover it somehow.

The regulator of the utility says, “well, I have to recover what I invested in the old before I can invest in the new,” but we need them to invest in the new at an accelerated rate in order to stop climate calamity.

So how do you get rid of the stranded cost problem? You have the green bank step in and say, “I'll help you out on the stranded cost,” and then the utility — which in 80-85 percent of the country is a private entity, not a public entity — goes, “oh, well fine, if the stranded cost problem is solved, I'll accelerate the move into the clean-power platform.” That's “clear out” obstacles.

David Roberts:

That sounds more like public grants, just giving them money so that they can clear their plate. Is there some way that that those kinds of things pay themselves back?

Reed Hundt:

Yeah, the technique is called securitization. You basically securitize the stranded cost, and the public entity gets paid back at a slow rate over a fairly long period of time.

David Roberts:

Right. So in this sense, the green bank is providing patience that private capital wouldn't.

Reed Hundt:

Yes, right. You clean up the hard-hit areas, you clear out the obstacles, and then that's how you catalyze the private sector investment. And the net result is that over a 10 year period the accelerator, which is the congressional name for a national climate bank, will pay for itself.

David Roberts:

Right. So this whole idea of a green bank is premised on the idea that markets are not, in fact, perfectly rational, and are, in fact, leaving all sorts of profitable opportunities on the table that they need to be nudged into.

Reed Hundt:

Or you can say that markets are not perfectly efficient. You would think the financial crisis of 2007-2009 proved that point for everybody, right? You’d think that the volatility of Robin Hood would be proving the point to anybody right now, but it's not really disputable that markets are not perfectly efficient at all times in all segments.

The problem, when we talk about the transition from carbon power to clean power, is we can't wait for the markets to figure out how to achieve efficiency, because we've got to get rid of the emissions basically yesterday.

David Roberts:

So we would not be jumping into a national green bank without experience; you and the coalition that you lead have been helping to establish green banks in states and cities for years now. Tell us a little bit about what you've learned from that experience and how they are performing at that level. Are they doing better or worse than you expected?

Reed Hundt:

Better in all respects except one: we haven't been able to attract massive public sector capital.

David Roberts:

That’s because states don't have any right?

Reed Hundt:

That’s the why. Ben Franklin said, “experience keeps a dear school, but a fool will learn in no other,” so I'm the fool.

We presented the idea of a green bank to Larry Summers, Tim Geithner, and Peter Orszag in the 2008-2009 transition, and they said they didn't want to do it, because they prioritized recapitalizing the big Wall Street banks. They didn't want to create a green bank. And also, the economists were suspicious of public-private investment.

David Roberts:

It seems like capitalizing a green bank, relative to the amount of money involved in recapitalizing the big banks, would have been kind of a rounding error. It's not really that much we're talking about, is it?

Reed Hundt:

As it ended up, the money for capitalizing Wall Street, which was appropriated by Congress, was $700 billion, and the Treasury Department did not even use $400 billion of that. They did not even use it.

Davird Roberts:

That would have been a nice green bank seed.

Reed Hundt:

They could have used, I don't know, a fourth of it, an eighth of it, to create a national bank. Or they could have said to one of the big commercial banks, “we'll give you extra capital for you to set up a national climate bank.” They didn't do these things, I think because there was a failure of imagination of disaster.

That's a phrase from Henry James, the novelist. He said, “you need to make sure you have the imagination of disaster.” Not putting too fine a point on it, but disaster is what the IPCC said we are now experiencing with the climate. They just said it. But in 2008, the imagination that would enable anyone to know that by 2021 we would have irreversibly committed to a staggering increase in temperature by human causes … you know, it should have been knowable, but it wasn't knowable. Or if it was knowable, it wasn't acted upon.

However, I would say the idea of the green bank was popular and bipartisan even then. It was passed in the House Energy and Commerce Committee by a 51 to 6 vote, and that means a lot of Republicans voted for it. It was passed out of the Senate Energy and Natural Resources Committee on a bipartisan vote. Senators Bingaman, a Democrat, and Murkowski of Alaska endorsed it. They also endorsed a clean electricity standard.

Neither the green bank nor the clean electricity standard ever got to the floor of the Senate. Had they gotten to the floor of the Senate, they would have passed rather easily. There probably would have been 65 votes. The Democrats accounted for, depending on the week, either 58, 59, or 60 of those votes.

Both those things would have been law. They didn't become law because the Democrats made the perfect the enemy of the good and waited for the cap-and-trade bill that never emerged from committee.

David Roberts:

Oh, I remember. I remember. We couldn't get a federal one back in 2008, so then you dispersed your minions out to the states and cities. Where are the green banks now and what are they doing?

Reed Hundt:

Well, there are 21 of them in 15 states.

David Roberts:

Wait, how's that? Are there multiple ones in some states?

Reed Hundt:

Yeah, Maryland, for example, has three, because the governor vetoed the idea of creating one at the state level. So there's a nonprofit that operates across the state, and then a county-sponsored green bank, and a Baltimore green bank. That's all because Larry Hogan, the governor, wouldn't create a statewide green bank.

In New York, there's two, and kind of on and on it goes through 15 different states. And then there's 22 more states where people are raising their hands saying, “help us create a green bank.” If the Senate budget resolution passes, and if the reconciliation language matches the resolution, then at last we will have the accelerator funded. The very first thing that the accelerator should and would do would be to capitalize green banks in every single state.

David Roberts:

That means establishing them even in states where there currently isn’t one. Is that correct?

Reed Hundt:

We’d go to the governor of Tennessee, we would say, “do you want to create one? Well here's the capital from the federal government, here's the mission that's defined in the statute.” And if the governor said no, we'd ask the legislature. And if the legislature said no, we'd find a nonprofit that would do it.

David Roberts:

So you don't need a government to be involved.

Reed Hundt:

We’d ask them, but if they refused, if they treated it like the vaccine, we then would move to a nonprofit, because look, at the risk of really being simple-minded here, we are all breathing the same air and the same emissions, not just nationally, but globally, and so we can't leave any state out of the conversion from carbon to clean.

David Roberts:

Would the primary function of the federal accelerator be to funnel money through these state entities?

Reed Hundt:

The primary function is to accelerate the transition from carbon to clean, and do it in a way that helps low-income households and creates a lot of jobs and lowers instead of increases prices to the consumer. That’s the mission, and the mission would be pursued primarily through the network of state and local green banks, because most of the solutions would have to be local. Not all, but most.

Here's an example: it would be great to find the incentives that cause heavily driven vehicles to be driven by electric motors. In a national fleet of 200 million plus vehicles, at the most 20 million are truly heavily driven.

The average mileage per year is 15,000 miles — a total of 3 trillion miles for the country. But the heavily driven vehicles are driven 70,000 miles a year, 100,000 miles a year, 150,000 miles a year. You'd want to have an incentive system that would cause them to go electric as soon as possible, because they're relatively small in number and they account for a huge fraction of the emissions.

How would you implement that? You would do that locally. You'd look for the small business person in Memphis, or the fleet that’s operating in Nashville, or the delivery trucks in Knoxville, and you would say, “what does it take to convert you to electric?” You do it locally; you wouldn't say one size fits all.

FedEx is a great example, because they're headquartered in Tennessee, so you would talk to FedEx locally.

David Roberts:

So the federal money would be funneled through the Tennessee-based green bank.

Reed Hundt:

But with a unified mission, not like everybody does whatever they like.

David Roberts:

Are there examples on the non-local side, things that only a federal bank could manage?

Reed Hundt:

We would call them “special strategic situations.” An example would be catalyzing transmission. First of all, almost by definition, transmission always crosses state borders. Consequently, it's not going to be productive to have multiple state green banks cooperate to solve a transmission problem.

David Roberts:

That process is already complicated enough.

Reed Hundt:

It’s complicated enough. A typical obstacle that you'd want to solve in transmission is to be the anchor tenant, the entity that says, “I'll take the product, and I'll pay for the product.” Then all these other people that connect to the transmission line, all the local distribution networks, they all say, “if there's somebody that's guaranteeing the first slice of payment, then I’ll join in and sign up too.”

That's the anchor tenant problem that holds up transmission, and is a fundamental problem for every big infrastructure project of any kind at all. Who's the first user? That's the kind of thing where you'd want to see the national green bank step in and say, “I’ll guarantee that.”

Another example would be a major sea-coast resiliency project that might cross state lines, like between South Carolina and North Carolina. A third example could be (going back to heavily driven vehicles) national fleets, like a rental-car fleet.

Where you have a national or interstate problem, you want the centralized entity to act. And lastly, you want the central entity to be aggregating all of the loans, selling them into the commercial market, and raising new money to recycle the original government investment.

This is important: the way to fund this green bank is one-time. Give it all the money and then never appropriate any money again. Let it recycle that money.

David Roberts:

Is it going to make money, enough to churn more out? How does it fund itself?

Reed Hundt:

If you were an investor, you'd be better off investing in Microsoft or JP Morgan, but the goal, in the aggregate, is to have all the investments be positive. And in fact, over the last 10 years, 99.38 percent of all green bank loans have been profitable.

David Roberts:

Oh, wow!

Reed Hundt:

Not very profitable, but profitable.

David Roberts:

No Solyndra? No failure that gets tied around their necks? Nothing to demagogue here?

Reed Hundt:

Except for 0.62 percent.

David Roberts:

I saw you mention in a different interview that these green banks are not technically banks — they're “mission-driven loan funds.”

Reed Hundt:

They're not deposit-taking banks. Why are they called green banks? I sat in Congressman Van Hollen’s office in January of 2009 and said, “this is what we what we want to do.” He said, “it's a great idea.” I said, “what do you want to call it?” He said, “I want to call it a green bank.” I said, “Congressman, ‘green’ and ‘bank’ are the two most unpopular words you can come up with.” He said, “people will get used to it.”

David Roberts:

Well, “mission-driven loan fund” doesn't exactly trip off the tongue either.

One more technical point about the loans. You make a point of emphasizing that these are not guaranteed. This is not like the DOE loan program, where the loans are backed by the full faith and credit of the federal government. What's that distinction?

Reed Hundt:

Really, really important. This idea of a nonprofit institution is not new. It is the way the government has chosen to achieve goals. In the Corporation for Public Broadcasting, the government chose to have non-commercial broadcast by funding a corporation for public broadcasting. But it didn't want to control it, because it didn't want Sesame Street to become a propaganda agency, right?

The government gives money to the World Bank to accomplish international purposes, but it doesn't guarantee the World Bank's obligations on the US government's balance sheet. There are many other examples of using nonprofits precisely to avoid government control and avoid the government guaranteeing the debt.

A counterexample is Fannie Mae and Freddie Mac, where everybody always knew that in a crisis, the government would guarantee the debt. When the crisis occurred in the summer of 2008, George Bush signed a bill called HERA (wife of Job), saying the government would guarantee the debt of Fannie Mae and Freddie Mac. That's what this isn't.

David Roberts:

This avoids the moral hazard that comes along with that.  

Reed Hundt:

Precisely. By not having the federal government guarantee, it means that the form of financing can be very flexible. It can be convertible debentures, it can be equity, it can be a secondary debt, it can be primary obligations, it can be deferred payments — you can have all kinds of flexibility.

Most importantly, you can have the deposit in the nonprofit be the basis for borrowing and lending, which is exactly what a commercial bank does with its deposits. That's how you get leverage and the reason the accelerator would pay for itself over a decade. It would borrow and re-lend on its on its deposit, which is the public funding.

It would be able to do that enough times over ten years that it would generate enough profit for the private sector that in turn there would be enough tax revenue to pay for the initial deposit.

David Roberts:

A related question: if I'm a listener out there of a conservative bent and I hear about a giant, federally funded institution meant to shovel money out the door, obviously my first concern is, how do you prevent it from becoming a slush fund where politically favored projects get money? What sort of oversight and assurances can we have that this will be independent, and not end up captured?

Reed Hundt:

Well, the uses of the money are defined by the statute that conveys the money. It can't spend on what it isn't authorized to spend on.

Secondly, to have suspenders as well as a belt, the charter of the nonprofit defines what it can do.

Third, it would be more transparent than anything, meaning every quarter — for all the world to see, and everybody in Congress to see, and every reporter to see — all the uses of the money would be disclosed.

Ultimately, as is the case whether you're talking about the Department of Defense or the University of Tennessee or the green bank, you have to trust the people. Nobody should ever think the people don't matter.

David Roberts:

I'm going to get back to that later, but one thing I want to hit before we go on too much longer: you mentioned a couple of times that this is about directing money to low-income projects. For this federal accelerator, would there be some sort of equity screen or equity set-aside? How will it address equity?

Reed Hundt:

The bill that’s been passed in the House of Representatives this year …

David Roberts:

Wait, can we pause there? The bill that was passed in the House — is that the one that’s on the table for reconciliation, as far as you know?

Reed Hundt:

Yes. The drafters of the reconciliation package in the Senate — and they're going to begin work momentarily — will look at the bill that was enacted in the House a few months ago and translate it into reconcilable language.

That language requires that 40 percent of the money benefit low- to medium-income households.

David Roberts:

Got it.

Reed Hundt:

Similarly, any state or local green bank would be obliged to adhere to that requirement.

David Roberts:

Obliged in order to get federal money? Are equity screens built into state banks already? Is that a common thing?

Reed Hundt:

Not already, but if the accelerator is funded, then the accelerator would have a contract with the green bank in Tennessee that said, “this is what you’ve got to do.” So low- to medium-income households — which in Tennessee are all over the state — would necessarily benefit from a minimum of 40 percent of the money.

David Roberts:

Interesting. The obvious example there is upgrading low-income homes with insulation and solar panels. Are there other examples? Do you have favorites?

Reed Hundt:

That's a big example. Another would be: low- to medium-income households, in many cases, have people that use heavily driven vehicles for work. Maybe in a rural area they drive far to find gainful employment. Maybe they're a small business operating out of the house and driving the truck around to work on contracts. That's a good place to replace a heavily driven vehicle with an electric car. And the electric car is going to be cheaper.

The third example is, if you're able to clean up a neighborhood, and the people aren't breathing emissions, the health benefits are real and immediate.

David Roberts:

This is a side topic, but it's one of my personal obsessions: what about the whole cluster of issues around transit and zoning and density? This is a climate topic a lot of people I know are infuriated doesn't get more attention. Is there any way of funneling some of this money to, say, a public transit system or something like that?

Reed Hundt:

I hope and believe the accelerator would complement all the other programs that are going to be in the reconciliation package, or in the bipartisan deal the Senate voted on today. The Department of Transportation, in both of these instruments, is going to have a lot of programs to put into effect that involve public transit. Where there's a missing piece, something the accelerator could pay for to liberate the Department of Transportation's money, that would be a complimentary role to play.

But we have to wait for the legislative smoke to clear to know exactly what has been passed.

David Roberts:

We're all on the edge of our seats over here. When you’re advocating for green banks before legislatures, is there a favorite success story that couldn't have happened without green banks?

Reed Hundt:

There are many. I was on the board of the Connecticut green bank for six years. In the important and interesting category, we electrified a dam in Connecticut. There are thousands of dams that don't generate electricity that could generate electricity. But they're all relatively small-scale. The commercial financiers don't want to get involved; it's a great role for a state and local green bank.

David Roberts:

The coalition requested $100 billion from federal lawmakers as seed funding. As you've emphasized, this would be a one-time grant that gets the thing going. It would be self-sustaining from then on.

I believe in Biden's jobs bill, he proposed $27 billion.

Reed Hundt:

Yeah, that's right.

David Roberts:

Is that enough? Could a bank leverage that up and make it bigger? What’s your take on the level?

Reed Hundt:

You know the story about, if you chained 1,000 lawyers together and threw them to the bottom of the sea, what you would call that?

David Roberts:

Ha, yes, I'm familiar.

Reed Hundt:

A good start. $27 billion would be a good start. $100 billion would be a better start. But we've got to start. We've got to catalyze public-private investment and prove that private sector money can flow into these activities at a far greater rate, quite safely and prudently. That's the goal.

If it's $27 billion, or if it's $100 billion, it'll be enough. We've got to get these green banks going in every state; we can't leave anybody out. More is better, but $27 billion would be a good start.

David Roberts:

This might be a silly question, but is there any upper end? Do you have any sense of the limits of a bank, or limits of the economy to absorb it, or anything like that? How much money could you deal with?

Reed Hundt:

The way to look at this at the macro level is, what is private savings and what is private investment? Ever since the crisis of 2008-09, private savings in the United States have been much higher than private investment. Whether they are pension funds, commercial banks, or high-net-worth individuals, people are sitting on large amounts of cash that is not invested in productive and useful infrastructure.

David Roberts:

What's the reason for that? Are there just not enough investment opportunities?

Reed Hundt:

Yes. Economists sometimes call it “secular stagnation.” They sometimes call it a “savings glut.” Basically, it's fear of the future. Many investors are paid to be fearful, because fearful can be prudent.

We simply have to clear away the obstacles, to mitigate the fear and unlock that private-sector investing. How much? Quite literally, if private investment had equaled private savings since 2009 — which is normally the case in a healthy economy — the economy would be about $5 to $7 trillion bigger.

David Roberts:

Whew.

Reed Hundt:

The carbon-to-clean transition could be and should be the biggest investment opportunity of the century. The increase of wind and solar power from the current market share to the necessary market share is about a 4 to 5X increase in market share. That alone is about a $3 trillion business opportunity.

There's no way public investment should need to or ever would invest that much money. The goal is to catalyze it and to have almost all of it be private money.

David Roberts:

So theoretically, it would be easy to deploy $100 billion.

Reed Hundt:

Oh, very easy.

David Roberts:

A helpful way to think about a green bank is: you've got this giant pool of savings, sitting there with fearful investors, and the role of the green bank is to go before the investors and ease some of these transition costs, set up some of the structures, basically prepare things so that it's easier for private capital to flow into these projects.

Reed Hundt:

And it has to happen quickly, because we don't have a moment to lose in terms of reducing emissions. If we had all the patience in the world, if we had “world enough in time” as the poem says, then 30, 40, 50 years from now the whole world would be based on wind and solar and maybe a little bit of nuclear — because it's cheaper. But we don't have 30, 40, 50 years.

I've been part of this before. When I was FCC Chairman for the Clinton administration in the ‘90s, the question was, how was private investment going to make it possible for you and me to talk via the internet and all these other communications devices that didn't exist then? How were we going to go from wire-line to wireless? How were we going to go from analog to digital? How were we going to go from a long distance phone call to what we're doing now?

The answer is, the government needed to clear out regulatory obstacles, catalyze private sector investment, and encourage the transition, which is what we did. About the same amount of money was spent over 15 years to have the communications industry be completely transformed as we now need to completely transform the energy sector.

David Roberts:

Just a couple of additional political questions. You mentioned that there's transparency, there's oversight, but in the end, you have to trust the people involved in managing this.

As Republicans and Democrats trade control, we've seen policy wildly swing back and forth. We've seen Trump roll back or degrade all kinds of Obama initiatives — green initiatives, regulatory initiatives.

Is there anything you could do to make a green bank resistant to Republicans trying to screw it over or twist it in some way? In Australia, when the conservatives took over, they tried to appropriate green-bank money for fossil fuel projects. Is there any structural or regulatory way to prevent that, or is that just the nature of democratic government?

Reed Hundt:

You have to not put your trust in regulation. Political change changes regulations. You have to trust the integrity and viability of a nonprofit institution. You have to have a bipartisan or nonpartisan board. Let's have the charter and the conditions of funding clearly defined, but then let's trust the people. Let’s say, not that it's more important than politics, but that the vagaries of politics from election to election can't change the purpose. The purpose has to be executed on or we’re cooked. That's why you have to do this.

The idea that there can and should be trustworthy institutions — that's a belief you have to hold to have any success. You have to believe in that, whether they are religious institutions, nonprofits, or other examples of civil society. You have to believe in that and you have to try this one.

David Roberts:

Republicans are all over the place on climate change right now. You think they could be brought around to affirmatively supporting?

Reed Hundt:

State and local green banks, where they exist, draw bipartisan support. As I said, the idea was bipartisan in 2009. The House bill that was passed had Republican co-sponsors. It should be the case that this mission is nonpartisan or bipartisan.

It’s a big country and there's always somebody that doesn't want to do anything, but we don't really have a choice here. We’ve got to try every institutional technique, every technology, every method, because we can't lose the battle against climate catastrophe.

David Roberts:

The green bank is your baby; I assume that's what you’re making calls about and lobbying for. But if that's your number one, what's your number two and three for reconciliation?

Reed Hundt:

For me, this is number one, two, and three. The shoemaker should stick to his last.

I've been doing this for 12 years. The main thing I need to do is summon all of my energy to focus on this one thing and not be distracted.

But I'm not alone. This is a big movement now. We have hundreds of people employed in state green banks already. We run a consortium of green banks; we meet every two weeks and have been for years. We've raised more than $5 billion of private sector money into different projects. We have more than 100 environmental organizations supporting this, we have the president supporting it, the House of Representatives voted for it. I'm not trying to say I'm not involved, I’m trying to say, it ain’t just me.

David Roberts:

As a final question, we started with a little history of how Obama, in your estimation, went too small, thought too small, hedged his bets too much. By way of wrapping up, I'm curious, what is your assessment of Biden and Democrats so far? Does it seem to you like they've taken those lessons to heart? Are they doing what you want them to be doing so far?

Reed Hundt:

Absolutely. The bipartisan bill is an amazing accomplishment. Amazing.

David Roberts:

I don't know why it exists; I can’t explain it.

Reed Hundt:

It can't be gainsayed. What did they get, 19 Republicans or something like that to vote for it?

David Roberts:

Yeah.

Reed Hundt:

It is amazing. The president had the patience, the Democratic leadership had the patience, Republicans were helping and willing. The previous president said “don't vote for it” and 19 of them voted for it.

David Roberts:

And the COVID relief bill, they didn’t go small on that either.

Reed Hundt:

This is a great country. We try pretty much everything else and then we usually get it right. It's just that, right now, we don't have a moment to lose with respect to the climate. That's the reason this thing is called the accelerator.

David Roberts:

All right. Well, thank you for taking so much time.

Reed Hundt:

Thank you, I really admire your work and thanks for talking to me.

Energy storage as deployed on the US grid today has a dirty secret — it actually increases carbon emissions. In this episode, Tierra Climate founders Jacob Mansfield and Emma Konet discuss their vision to incentivize emission reductions by making batteries and other energy storage eligible for carbon offset.

(PDF transcript)

(Active transcript)

Text transcript:

David Roberts

It is widely understood that decarbonizing the grid will require a large amount of energy storage. What is much less widely understood is that batteries on the grid today are generally not reducing carbon emissions — indeed, their day-to-day operation often has the effect of increasing them.

Yes, you heard me right: most batteries on today's grid are responsible for net positive carbon emissions.

I was quite disturbed when I first found out about this, mostly through the research of Eric Hittinger at the Rochester Institute of Technology, and I wrote a piece on it on Vox way back in 2018.

Contemporary research suggests that nothing has changed in the ensuing five years — most batteries still behave in a way that increases emissions. But a new startup called Tierra Climate is trying to change that. It wants to incentivize emission-reducing behavior in batteries by making it an eligible carbon offset.

Just as a renewable energy producers can make extra money through the sale of renewable energy credits (RECs), battery operators could make extra money through the sale of carbon offsets on the voluntary market — but only if they change the way they operate.

It’s an intriguing idea and the only real solution I’ve seen proposed to a problem that no one else is even talking about. So I wanted to chat with founders Jacob Mansfield and Emma Konet about why batteries increase emissions today, what incentive they would need to change their behavior, and what’s required to set up an offset product. And yes, I recall that Volts recently featured an episode extremely critical of carbon offsets — we’ll get into that too.

So, then, with no further ado, Jacob Mansfield and Emma Konet. Welcome to Volts. Thank you so much for coming.

Emma Konet

Thanks for having us.

David Roberts

Emma, let's start with you. You worked at a battery company before jumping to this startup. Let's walk through a few basics here. Let's just start with this question. If I'm an investor and I want to build a big battery and attach it to the grid, how would I make money? What are the sort of routes through which I could make income with a battery?

Emma Konet

So batteries typically have three ways in which they make money. The first one is, I think, what everyone traditionally thinks of a battery doing, and it's called energy arbitrage. And basically that just means that a battery buys power when the price is low and it sells power when the price is high.

David Roberts

Right.

Emma Konet

And the difference between those prices is what the battery is paid. Of course, some energy is lost through the process of storing it, and so batteries are not 100% efficient. So that's kind of the traditional idea of how batteries operate. But that's actually not really what a lot of batteries are doing on the grid today. Instead they provide what are called ancillary services and those are basically products that help to keep the grid frequency at 60 Hz. It's really important for reliability, just in everyday power grid operations, that that happens and the grid operates more efficiently when it's in a tighter band, around 60 Hz.

Batteries are really good at providing those products because they can very quickly ramp up and down and they can provide those products around the clock.

David Roberts

Yeah, this is a really cool thing about batteries, just to sort of insert kind of an aside here is those grid services used to only be able to be provided by giant spinning mass, giant fossil fuel power plants. So it's very cool that we have this basically digital source now of these grid services — is much more precise.

Emma Konet

Exactly. And just much more efficient. So that's the second revenue stream available to batteries and then the third is what's called capacity revenue. And this is not available in every market, but it's basically available in every deregulated market outside of Texas. And it's like long-term grid planning. So the grid operator looks at the expected demand forecast on the time horizons of years rather than days or weeks and determines how much power plant generation capacity it's going to need to satisfy that demand in the future. Then it creates a market to establish the price of what basically it costs to bring new generation online to meet that demand and also to satisfy power plants that are retiring and going offline and that we need to backfill. So that is another service that batteries can offer.

David Roberts

Paying them to be available basically.

Emma Konet

Exactly. Yeah, exactly.

David Roberts

And you mentioned this, but maybe it's worth clarifying a little bit. Capacity payments are obviously only available in areas with capacity markets, so that is restructured areas other than Texas. Because as Volts listeners may or may not know, Texas has this energy only market with no capacity market. So what about in areas where there are still vertically integrated old school utilities? Can batteries make money in those areas, and is it the same way?

Emma Konet

So that's actually a really good question. And there's a lot less transparency in vertically integrated markets, so it's not obvious to say exactly what batteries are doing. And basically the utility decides the operating mode of the battery. And I think the biggest distinction between vertically integrated and deregulated markets are that in vertically integrated markets, utilities can rate base the cost of bringing new generation online, whereby in deregulated markets that has to be supported by the fundamental economics of the power market. And that's why deregulated markets are so good at getting lowest cost dispatch. And that was why basically they deregulated in the 90s. It's basically that batteries functionally do the same thing, they're providing frequency services and probably doing some energy arbitrage and are online for capacity in vertically integrated markets. There's just much less transparency on how they're being paid and how much of that is essentially being subsidized by rate payers.

David Roberts

And let's just say a little word about grid services, because, as we mentioned, it's very cool that batteries can provide these services, sort of voltage regulation and stuff like this, but I think people should understand that this is not a large burgeoning market. Like the actual demand for grid services is relatively limited and close to being saturated now. Or sort of like how much headroom is there in that particular slice of the market?

Emma Konet

I think a lot of developers also would like to know the answer to that question, because when ancillary markets saturate with storage, that's going to be a major revenue stream that has price pressure on it, so that revenue stream will decline. Basically, ancillary markets are — I'm just going to use Texas as an example, because it's the market I'm most familiar with — we just are hitting around 85 gigawatts of load in the energy market. And in contrast, ancillary markets are between three and five gigawatts, so much, much smaller in scale. And we are not far from having three to five gigawatts of batteries in the ERCOT market operational.

It's a little bit of a moving target because the grid operator, ERCOT, can move around the quantity of those services that it procures, and that's actually changed a bit. They've released a new ancillary product in ERCOT this summer, so it's not exactly a certainty. But I think certainly in the next two to three years, we'll see some significant price pressure on those services. One thing I just want to note here is that when we talk about batteries getting compensated, it's not a clear cut "batteries can win in these markets with respect to paying back their costs."

A lot of batteries actually struggle to make enough revenue to meet their break-even hurdle. This is just one more pressure on the product that's been keeping them afloat in the past couple of years. So I think this is really concerning to developers and they're sort of looking for new ways to compensate storage for the services that it provides.

David Roberts

Right, yeah, I was sort of getting around to that. The grid services market is relatively close to saturated, let's say, but if that's true, then it's definitely going to be saturated well before we get anywhere close to the amount of storage we think we're going to need to decarbonize. So this is not going to be a big driver of additional battery deployment. And as you say, like, just in general, and you made this point to me when we talked earlier, Emma, it's just very difficult, even today for batteries to make money, period. For all the sort of talk about batteries and how much batteries we need and the sort of gigantic quantities of storage we're talking about needing, it's very difficult for them to make money in today's market.

Emma Konet

You're right. You're absolutely right. I think they're the sexy new thing that everyone's really excited about and gets a lot of buzz. But when you actually operate them and see the revenue they bring in versus the revenue you expect them to bring in, I think it's a little bit of a reality check for folks that are investing in storage, which is really problematic because we need to continue to invest in storage, continue to build storage in concert with renewable energy in order to get this power grid to net zero. So we can't lose momentum here and if we start to see the economics stall out, that might be what happens.

David Roberts

Putting grid services aside, let's talk about arbitrage. So your basic: buying power when it's cheap, selling it when it's more expensive. One of the things that you've found, that Hittinger's research found, and that your research has found, is that today, at least, your typical sort of arbitrage will have the effect of raising emissions. So just explain why that is. How does that work exactly?

Emma Konet

Yeah, I think it's actually, just to put a little bit of a finer point on it, it's not necessarily a blanket statement that doing energy arbitrage will increase emissions, but it really highly depends on where the battery is located on the grid.

David Roberts

Right.

Emma Konet

In fact, some batteries are located in places where they can significantly reduce carbon emissions. But energy markets and power markets do not incentivize batteries to site in those places. They incentivize batteries to site in places where they aren't reducing emissions on the grid through energy arbitrage. And the reason why that happens is because — well, there's a few reasons — but the big reason is because of the round trip energy efficiency of batteries. So some energy is lost due to the resistance when storing the electrons.

David Roberts

What is the average efficiency of deployed lithium-ion batteries on the grid today, roundabout?

Emma Konet

It's around about 85%. So it's actually quite efficient for battery technology. It's basically the most efficient batteries we have. And every other technology that can do longer duration for cheaper is usually sacrificing efficiency.

David Roberts

Right. But it's still the case that for your arbitrage to make money, you need not just to sell power when it's more expensive, but it has to be like more than 15% more expensive because you got to sort of compensate for the lost power.

Emma Konet

That's exactly right.

David Roberts

Yeah. So as we're saying, arbitrage does not intrinsically increase emissions. It entirely depends on where the battery is and what time it is and a lot of other factors. But today we think they are increasing emissions. So how do we know that? Tell us a little bit about the study you did.

Emma Konet

So we are partnering with a company called REsurety. It's been around for about a decade and they produce a data set called a Locational Marginal Emissions Rate, which basically measures the carbon intensity of power. So you can kind of think of it in terms of CO2 tons per megawatt hour at every point in time and space on the grid. And what it really is truly getting at is the incremental carbon impact of injecting a clean megawatt hour onto the grid. And so we can leverage that data to take a look at a battery's historical behavior and actually measure what the carbon impact was of its charge and discharge cycles, including all of the things it may be doing to satisfy other markets like ancillary services.

So I think what's really critical is that in some cases it's better for a battery to cycle more and do more energy arbitrage, but it might be selling an ancillary service instead, because that's more profitable. And as a result, we're not getting the carbon impact that we want to see. And some reasons for that might be a battery might charge uneconomically in the real-time market to satisfy a state of charge requirement for carrying ancillary obligation. Or a battery might charge and discharge very rapidly to respond to the frequency regulation signal that is completely divorced from the carbon signal.

And so you start to see these behaviors that are incentivized for the battery to make money, but that don't actually correlate to emissions reductions.

David Roberts

This is the theme of this whole pod, is there is no freestanding financial incentive for batteries to operate in a way that reduces emissions. They're just simply not incentivized to do that.

Emma Konet

Exactly.

David Roberts

Yeah. And I just want to say about locational marginal emissions, because this is an important concept for people to get, and it sounds technical. Locational Marginal Emissions (LMEs), but basically so at a given point on the grid, at a given time, if you add a unit of demand for power, what power plant is going to come online to satisfy that next unit of demand? Righ, so people will know, in restructured markets, you generally buy power from the cheapest generators first and sort of stack it up. As demand increases, you bring the more and more expensive generators on.

And so the locational marginal emissions in a given spot is just like that next unit of demand. What is the next power plant that comes online? And if the next power plant that comes online is a fossil fuel power plant, then you have higher locational marginal emissions in that one spot, basically. And this will change, as the name suggests, from place to place on the grid and from time to time. Like it depends on time and place. And this sort of ability to — people who listen to my pods on hourly matching and all that kind of stuff, trying to sort of hourly match your power consumption to clean generation, will sort of remember this concept.

It's just very granular. It's different from averaging the emissions in a particular place over a year or over a month or something like that. It's really sort of real-time data. And so this is what you're looking at when you're studying how batteries behave, is what is their effect on locational marginal emissions when they charge and discharge? And what you found is that generally they're increasing Locational Marginal Emissions when they come on.

Emma Konet

That's right. So we did a study in ERCOT where we looked at 24 operating batteries in the calendar year 2022, and we found that over the course of the year, 19 of them actually increased carbon emissions. Only five of them reduced emissions, and only one of those batteries really did so meaningfully. And that battery was a paired solar plus storage facility. Kind of telling, definitely sort of tells us where we think the market needs to go to have a big carbon impact from storage. But what I think is the most interesting thing we modeled out in this paper is what could have happened or what would have happened if we were actually compensating a battery for the carbon that it abates.

And how does that change behavior? And we really found three things, and that's some batteries that are not in locations that allow for carbon reduction and that are just not emissive, we can actually reduce their carbon footprint and make them less emissive. And then batteries that are in locations where they can reduce emissions, but they're not doing so because there are financial incentives for them to sell other services. We could actually flip those batteries from being emissive to being abating. And then a battery that is already abating because it's in a really good spot on the grid and it's paired with solar, for example, we can actually double the impact and pull even more carbon off the grid.

So it kind of runs the gamut of all the different places and operating modes that a battery might be located and operating in, and it can have a substantial impact on its behavior.

David Roberts

So before you leave the study behind, though, this is just you just studied batteries in ERCOT, which is the Texas energy-only market, as you say. Other restructured markets are somewhat different in that they tend to have capacity markets as well. And then there are vertically integrated markets. How confident are you that you would find roughly the same thing if you studied other power markets? In other words, is this a generalizable phenomenon that arbitrage tends to increase emissions?

Emma Konet

It really depends on the stage of renewable penetration of the grid. So I think when we think of grids that are furthest along in the renewable energy transition, we think of California. We're actually, our company is not targeting markets like California because they have a lot of state regulatory support in the form of mandated procurements for storage. So batteries are kind of just getting built off the back of that. And then Texas has a pretty significant renewable energy penetration, but it's also a market where there's not state support for storage or really green energy in general from a regulatory perspective.

The other markets that we think of are probably the biggest opportunity, are probably MISO and SPP. Because there's a wealth of renewable energy in that part of the country and that renewable energy is getting built. It's in the interconnection queue right now. So we're going to see that penetration increase and I think we can start to basically see the trends of these markets move as more and more renewable energy comes online. So to answer your question about "do we think this is replicable?" I think the answer is yes, especially as more renewable energy comes online. But the critical difference being capacity markets, which is kind of the one little wrinkle — like Texas doesn't have those.

So we have to think about how does this all play nice together with capacity markets.

David Roberts

Yeah. And you say the grid services market tends to lure operations away from what might otherwise reduce emissions. Does the capacity market have the same effect?

Emma Konet

Well, I think the capacity market impacts a battery's decision making actually with respect to siting more than anything else. Different capacity markets have different rules with respect to operations, maybe some must-offer rules or just availability requirements. So in terms of like operating mode, I don't expect it to have a big impact but it's more in terms of where you put the battery. So when you have a capacity market that power has to be deliverable to load in order to get a capacity payment. And to be deliverable to load, it has to be studied under a system impact study which is an AC power systems model that looks at power flow and it can be not deliverable if there's not transmission capacity.

And really unfortunately where all the renewables are located is where the transmission capacity is bottlenecked. So it doesn't incentivize a battery to go site itself near renewable energy where it can have the highest carbon impact because it's going to have to sacrifice potentially a capacity payment or pay hundreds of millions of dollars in transmission upgrades which would kill a project.

David Roberts

Right.

Emma Konet

So that kind of points to why this product is even more necessary in markets with capacity markets because we need to incentivize storage to site in places that have high impact but we need to pay them so that they are not having this opportunity cost in the capacity market.

David Roberts

Right, because right now if they deliberately sited in places where they could have the most positive effect on emissions they would be sacrificing capacity revenue basically.

Emma Konet

Yeah, they could be and I think "would be" is probably the right word. Obviously every location is different and transmission infrastructure is getting built and things are changing. But generally speaking yeah, where the power is bottlenecked is typically where the renewables are producing and so it's kind of a misalignment of incentives and I think there are a lot of people working on transmission and interconnection reform and I think that needs to happen as well. Given my experience trying to work with stakeholders and ISOs and all the different people that make those processes go, this is a much faster path.

It's to just build the batteries where they need to be and pay them to be there. And then in that case, the battery acts as an aid to the transmission system as well. So it can be highly beneficial.

David Roberts

And so it's fair to say that in the fullness of time, this problem will go away. Right. Like eventually, once we have enough renewables on the grid and there's enough transmission built, then batteries will start just naturally behaving in a way that reduces emissions.

Emma Konet

That's right.

David Roberts

But that's potentially quite far away.

Emma Konet

Yeah, I think it's quite far away. And anyone who's worked in development and interconnection and trading, it's a sticky, sticky process.

David Roberts

I'm a bit of a wonk, so always my first instinct when I hear a problem like this, we have batteries out there that could potentially be having positive impacts on the social good, but are not because of screwy financial incentives I want to reach for public policy. So I just have to ask: If you were emperors for a day and the US political system was not grossly dysfunctional at almost every level, what type of public policy would solve this?

Emma Konet

Yes, I also like public policy, so I looked into this and did some modeling. Basically, we can use a production cost model which simulates a power grid on a fundamental level. It looks at bids and offers and structure and generators and all that stuff. Essentially, what we found is that if you add a battery to a grid without a carbon price, based on how all the mechanisms of power markets work, you would see emissions increase today. If you add a carbon tax and we just threw one in for $50, basically. So essentially what it's doing is it's causing generators to just bake that cost into their power offers.

You see emissions go down, same grid, same model, all you're doing is changing — you're internalizing that externality and it basically solves the problem. So, a carbon tax, I think, is probably the most effective way to go about that. And I think Jacob has some thoughts on this too. So I know I've been talking a lot; I'd love to bring him in. But that's kind of my take on it. And like you said, it's really hard to imagine a world in which that happens at a federal level in this country.

David Roberts

I'm painfully aware. So the carbon benefits are not being valued today. A straight-up carbon tax would value them and would probably solve the problem at some reasonable level of carbon tax or some of the many sort of kludgy ways we have of kind of simulating a carbon tax, like maybe something sector-specific or something that goes through utilities. But anything that basically sort of values carbon is going to get at this problem.

Emma Konet

That's right.

David Roberts

Jacob, any policy thoughts before we sadly abandon public policy and move on?

Jacob Mansfield

Yeah, I think in an ideal world, I think having something close to, like a Pigouvian tax, which is kind of a fancy economics term from my undergrad, would be a good way in which you could build something that's somewhat revenue neutral, where you're taxing the emitters, you're subsidizing the abators. And that would create this clear transfer of value that's really meant to eventually decarbonize and transition the entire grid. I think the challenge is just there's not the political wherewithal or the willpower to do so. And especially in an inflationary environment like we are right now, it probably seems somewhat unsavory to use a tax-based approach. Which is why I think we lean more into leveraging voluntary carbon markets.

David Roberts

But taxes are good. I'm just going to plant that flag before we move on. Yay, taxes. Okay, so given that politics, US politics is pretty dysfunctional, we're probably not going to see a carbon tax anytime soon. Tell me about this idea. So the idea basically is that a battery that reduces emissions, that changes its operations in such a way as to reduce rather than increase emissions, could sell those reduced emissions as carbon offsets. So just tell me a little bit about the idea and how it would work.

Jacob Mansfield

To back up a little bit, I think the reason why we're talking about this is because of the fact that, one, we've seen voluntary corporate activity be a huge driving force for adopting new technologies.

David Roberts

Yes.

Jacob Mansfield

So my background was all in power origination, doing transactions between large scale wind farms and solar farms and corporate clients that were looking to procure renewable energy for their sustainability goals. And just to level set right now where things stand, over half of all the renewables developed in the United States have offtake agreements in place with large commercial and industrial customers.

David Roberts

Yeah, that's really wild. I don't think people get that because I think maybe people in my world have a little bit of a skepticism towards corporations. I don't think people get just what a huge force corporate procurement has been in driving renewable energy in this country. As you say, like half the renewable energy in development is for a corporate entity that wants to claim it's reducing its emissions. I mean, that's not small potatoes.

Jacob Mansfield

Yeah, no it's incredible and I think that it's a really good thing, in terms of free markets and companies themselves adopting these initiatives voluntarily. And I think if you take it one step further so if you put that in context with batteries now batteries have not had that to date, right? They don't have any sort of environmental attribute that they can sell. They don't have renewable energy credits as an alternative revenue stream. So the question is what do they really sell or what do they package to receive more investment? And given the state of affairs where batteries may not be a great financial investment for some developers, the reality is that there's not a lot of investment going into batteries.

And so Bloomberg put out a report earlier this year about how the green energy transition eclipsed a trillion dollars of investment. But when you actually look at the numbers, about half of that went to renewables. And when you compare battery investment to renewable investment, $0.03 for every dollar that goes towards renewables is being invested in batteries. So there's gross underinvestment in batteries. I think it's in part because there isn't the financial revenue stream to really compensate batteries as net abating assets versus being generating assets.

David Roberts

Right. And as Emma said, there are some markets like California, where the penetration of renewables is sufficient to cause problems unless you have energy storage. And in those markets, they are kind of getting off their butts and trying to explicitly support batteries and battery investment. But that's only in the places that have kind of been forced to it by the physics of the power system. Not these sort of larger markets where penetration is lower.

Jacob Mansfield

Right. And I would even say beyond California there's other markets like Massachusetts has the clean peak standard. New Jersey has been bouncing around the idea of adopting something similar to compensate batteries for reducing emissions. I think that there is some momentum towards supporting batteries in some mechanism. I think that the tension there is: What is the actual instrument used to encapsulate those environmental attributes?

David Roberts

Yeah. Is there no consensus? Is there no sort of like standard model?

Jacob Mansfield

No, not really. And I think that's where it's really being derived in private markets where you have companies that are also adopting an emissions-first principles kind of framework for thinking about this and where they allocate resources. And then at the same time, you have kind of the burgeoning data space around LMEs with REsurety, Singularity, Watt Time, Energy Maps. You have a whole host of folks that are dedicating themselves to building out these data sets that I think we're getting to the point where you can really use an emissions-based approach to estimating and quantifying what the abatement impact is of a battery.

David Roberts

If I can just pick up on one bit of that and spell it out a little bit. So this emissions focus by corporates is somewhat new. So to date they've mostly just been sort of like stampeding to buy renewable energy wherever, wherever and whenever and counting that against. But now that we have this, more sophistication about the granular effect on emissions of a given investment — so, like a wind farm in one place might reduce net emissions much more than a wind farm in a different place. Especially true for solar, I think. So now corporates are taking, like, as you said, a sort of emissions-focused look at this, which is where can we invest in things that have the maximum emissions impact?

And that's what locational marginal emissions, that's what all that data gathering is allowing them to do.

Jacob Mansfield

Yeah. And if I could add just one more thing. I think there are some changes in the actual standards within corporate sustainability that are going to move in that direction. Chiefly, the greenhouse gas protocol, which I think like 97% of Fortune 500 companies have adopted, provides guidance on how to estimate your emissions in the scope 1, 2, and 3.

David Roberts

Right, so they're being pushed to do this not just voluntarily.

Jacob Mansfield

Exactly. And so, scope 2 guidance, which is how you essentially estimate your emissions from electricity, is going through its biggest overhaul in the last decade. And so in 2014, they updated it to have a market-based approach, where you could take advantage of if you purchase RECs or you enter into PPAs to megawatt match and say "I'm offsetting my total annual load of electricity." But now, given that we have the data to more granularly estimate our emissions, we're starting to think about well, maybe if I'm on a dirty grid where I'm consuming electricity mostly from gas and coal, and I'm buying power, from a wind farm in Texas, where in the panhandle, where it's already mostly green, maybe I'm not actually having the impact of being carbon neutral while I'm still claiming that I'm 100% renewable energy supplied.

David Roberts

Right, you can offset your electricity without offsetting your electricity emissions.

Jacob Mansfield

Exactly.

David Roberts

And so they're going to need to do this. And so enter batteries then. So how do you slipstream batteries into that kind of system?

Jacob Mansfield

It's worth noting that under that construct where people are already supporting wind and solar, I think the next evolution is batteries. And from the corporates that we spoke to, some of them have told us that they think that buying more wind and solar is sort of table stakes and they see a lot of importance in supporting batteries as the next stage in decarbonization. And it's worth noting too, as we add more renewables to the grid and as penetration goes up, you're going to have more resiliency issues potentially, and you're going to have to rely more on fossil fuels to solve for the intermittency problems. And the benefit is that potentially batteries, if sited and operated appropriately, can really supplant thermal units like coal and gas, wean off the grid's reliance on fossil fuels and allow us to run the grid the way that we hope it to be, which is 100% renewable energy.

David Roberts

Right. So to do that, we have to incentivize that behavior. So the idea here is corporates going out on the voluntary carbon offset market, corporates looking to offset their emissions. Basically, you want to make batteries that reduce emissions eligible as an offset. So tell me a little bit about how that would work because I have no idea. Is there a governing body running voluntary carbon offset markets? Do you just go out and say, "hey, we've got some offsets" and people start buying them? Do you have to get certified by someone or how does all that work?

Jacob Mansfield

Yeah. So it's interesting because it is a voluntary space, so there are a lot of different players and lots of folks trying to figure it out and chart new paths every single day. But I think generally speaking, the accepted pathway would be for us to work with a carbon registry. And so we've joined a consortium of players. It's called the Energy Storage Solutions Consortium, which is comprised of corporates and battery developers. And so we're charting a pathway to try to get a methodology in place with Verra. And so Verra is one of the key carbon registry bodies that exists, it's a nonprofit.

Verra actually accounts for 70% of all the voluntary carbon offsets that are issued. It's gotten some bad press recently due to nature-based offsets, but the reality is that they've actually become much more stringent as a result of it, which hopefully is a boon for us in terms of getting something passed and getting something through that passes muster. And the goal for that is to have a check in place such that if we're working with developers to certify projects, issue offsets, get them minted through Verra and have a validator that's a third party audit the entire process.

You have all these checks and balances in place to ensure that whatever's being purchased by a corporate really is going to pass the test of time. And it's really going to be something they can use for their sustainability goals.

David Roberts

Right, well, this seems like a good time to sort of wrestle with the offset question then. Because a few weeks ago I had Joe Romm on, very critical of the offset market generally. And I know at this point that offsets have kind of even, I think, maybe among the general public gotten a little bit of a bad reputation as sort of scammy. So talk a little bit about how you see these kinds of offsets fitting into the market and sort of how confident people should be in them relative to other kinds of offsets. Like how would you pitch this to someone who's skeptical of offsets, let's say?

Jacob Mansfield

Right. And those are the folks that we talk to on a weekly basis, so it's nothing new from that end. I think the reality is that this is just a fundamentally different type of product than what exists on the market. To zoom out a little bit, there's sort of a bifurcation between avoidance and removal offsets and then also between nature-based and things that are not nature-based. So avoidance typically means there is some sort of activity which might increase emissions. If we forego that activity, then we will avoid emissions.

David Roberts

Right. This is the classic counterfactual that is so problematic.

Jacob Mansfield

Right. So it's been pretty challenging in terms of deforestation, like someone threatening to chop down a forest or a parcel of land and then claiming that's an avoidance because they didn't do it, because they got compensated. And that's pretty problematic. And the reality is that that requires you to make a guarantee of some sort of activity for hundreds of years, meanwhile still recognizing revenue up front for something that hasn't yet fully come to fruition. I think the reason why this is pretty different is that we're getting to the point now where power markets are pretty instantaneous and things — the grid, what supplies electricity is fairly instantaneous.

And so the reality is that at the end of any given day, we can look back and calculate what was the empirical impact of a battery on the grid, and we're not making claims of 100 years into the future, what's going to happen. We can actually look back and say, "this battery that was charged with renewables at this time, discharging at this point in time reduced our reliance on this thermal unit." And that's the type of avoidance that I think is markedly different than a nature-based solution.

David Roberts

Right. So this would be then maybe if we think of it in terms of — because I think as a rough and ready heuristic in the offset market, generally, you get what you pay for. So these nature-based offsets are sort of legendarily, notoriously cheap, which is why people buy so many of them. But they're cheap because they're mostly junk, I think. And then you have, as you said, the removal offsets, which are literally tons of carbon buried, right, tons of carbon sequestered, which is about as certain as you can get, that you're offsetting a ton if you literally bury it.

And those are incredibly expensive right now, I think, because the technology for capturing and burying carbon remains incredibly expensive. So where do you think battery offsets would come in between those two poles?

Jacob Mansfield

Yeah, I think right now, nature-based offsets, the high end is probably like $20. And then you have CDR DAC that are in the hundreds of dollars, even north of $1,000. And then you have some things in between. But for the most part, I would use those as the key price points. Now, going back to our study, what we saw was we did a sensitivity analysis on carbon price because we wanted to know how much can you shift behavior? We found that there were diminishing returns. Like batteries can't infinitely abate carbon unfortunately. No matter what price of carbon you attach to them, there is a finite limit.

And so what we found was it comes down to the proverbial question of: Is the juice worth the squeeze for a battery operator? Like, if we attach a price of $5 per ton of CO2, it might move the needle slightly. But if you're only increasing the total revenue to the operator by a couple of percentage points, that's not meaningful enough to go through all these hoops and hurdles. So then it comes down to, "okay, what's the point at which this is meaningful money for batteries to move from being in the red to being in the black and changing their behavior?"

And so based on our study, we found that it's between fifty dollars to one hundred dollars. And to put kind of more mental benchmarks around that, if you think about RECs, and specifically high impact RECs which are increasing in popularity right now, people are paying as much as $20 per REC or more with maybe a carbon abatement of maybe 0.3 to 0.4 tons per megawatt hour. And when you convert that to per tons, that's already between thirty dollars to fifty dollars per ton of CO2. So we don't think we're totally off from that, but also with the co-benefits of improving grid resiliency and building more batteries which will help us in enabling more renewables to be built as well.

David Roberts

So in the middle then, somewhere cheaper than carbon removal, but probably more expensive than nature-based and RECs.

Jacob Mansfield

Yes.

David Roberts

In the $50 to $100 per ton range. And would that amount of money be different in different markets or is the idea to sort of standardize here across markets so that the market sort of allocates efficiently across different regions?

Jacob Mansfield

Yeah, I think the beauty of this is that you can actually have price differentiation across batteries where the batteries that are the lowest hanging fruit that are more easily enabled to change their behavior, to reduce emissions, they may fetch a lower price than someone who's a little bit stickier or harder to abate. So I think that there is opportunity for price discovery where based on the price point, maybe we need to hover closer to $50, in which case we need batteries that are going to more easily shift their behavior to do so, to justify creating these offsets. But as the price goes up through time or there's higher demand for these types of offsets, maybe that's where you get to the higher hanging fruit of other batteries that are more difficult to change their behavior starting to be economically incentivized to change their behavior. So I think in general it would be a market force where the product generally could be fungible.

There's a claim that maybe it could be an inset or someone could want to source these from the ISO or the grid that they operate in. But the benefit of it being denominated in carbon is that it could be fungible across batteries, which is also beneficial in the event that you have an outage or you have an issue with any single asset, you now all of a sudden have a number of other assets that can offer a similarly qualified product.

David Roberts

Right, and you can imagine corporates wanting, preferring to pay batteries that are on the grids where they are operating right in the name of this sort of hourly matching. People are talking about some sort of hybrid of hourly matching and emissionality that's probably too geeky to get into in this pod. But you can imagine a corporate paying a little bit more to change the behavior of batteries that are producing the power that they're using.

Jacob Mansfield

Yeah, and I think this also affects the siting as well. And I actually would probably hand it off to Emma to kind of chat more about how that affects the siting.

David Roberts

Emma, let's talk a little bit about if, say, $50 a ton carbon offset money were available to batteries, grid-scale batteries, how would that change their behavior and who builds what and where?

Emma Konet

Well, batteries are always operating in the market to maximize their revenues. So, you know, one of the products that Tierra Climate is offering is optimization services to help batteries maximize their revenues across carbon markets and energy markets. It's kind of difficult to answer that question as a blanket statement because every market has different prices for different things, and those prices are constantly changing as the grid is evolving. But generally speaking, as soon as you attach a price to carbon, even a smaller price of carbon, like once you basically jump the hurdle of like, "okay, we are in the contract and I'm actually going to operate my battery in a different way," even a smaller price of carbon can start to change behavior. And so basically, batteries will stop selling perhaps responsive reserve service or spinning reserves in favor of cycling the battery more to capture arbitrage opportunity that maybe it otherwise wouldn't have gone for.

And a really critical example I think we see is that on a typical grid, pretty much anywhere in the US, you're going to see maybe a $20 - $30 difference between the lowest price and the highest price of the day. But batteries degrade when you cycle them, right? And basically the kind of value that I think that the industry has landed on is about $25 to cycle the whole thing. And so if you are only making like a couple of bucks or it's uncertain if you're going to be able to capture that, it's like, "why do I cycle my battery, I'll just sit there and sell something else and not take the degradation and just collect my money doing ancillary."

David Roberts

Right.

Emma Konet

But as soon as you attach $50 to that and obviously carbon and megawatt hours are not one to one, but let's just assume roughly you're displacing a unit that's one ton per megawatt hour, then all of a sudden your arbitrage opportunity goes from 20 - 30 to 70 - 80. And that now can incentivize much more cycling. And I think as battery developers are looking to the future, they're going to start saying, "hey, this part is available to us. So let's go to the place in the grid where we get the max arbitrage opportunity and kind of let's maybe not so much worry about these small ancillary markets that aren't going to be relevant to us in the next five years."

And so we might actually see battery operators and developers flocking to renewable-energy-rich areas that allow them to cycle the battery frequently and capture that arbitrage. And then we have that whole discussion about capacity markets which kind of throws a wrinkle into it. But I think generally speaking, the price of carbon should be discovered in a way — we'll have price discoveries such that it incentivizes the behavior based on the demand for the tons.

David Roberts

Presumably, if there's a spot on the grid where there are considerable arbitrage opportunities that could reduce emissions, those will saturate too, right? Those are not infinite. So the idea of putting a price on these is to just start filling those in, basically.

Emma Konet

Yeah, and I think a lot of the big energy arbitrage opportunities that we see are driven by transmission constraints where basically you have one part of the grid that's bottlenecked. The emissions factor gets really low, basically zero or perhaps negative. And so it's a charging opportunity. So that's going to change as we both build more batteries and build more transmission. But I will make a comment just on what we've seen happen in markets where it's kind of like "if you build it, they will come." You build a transmission and you alleviate a constraint and now all the power can get out and then a bunch more renewables build right behind that transmission because that's where the renewable-energy-rich areas are.

Those aren't moving right. Like we know where wind is in Texas, it's in the panhandle. So we go build projects there and then we fill up the transmission again. And we've just seen this, it's like history repeats itself. So I don't really have the concern that on the long time horizon for batteries that they're somehow going to cannibalize the opportunity, I mean, maybe for a few years and we see a cycle where the opportunity is less. But we got to build a lot of transmission to solve this problem and transmission is very hard to get done in this country and we also need more renewables and we need more batteries.

And so these trends are going to continue. You're going to continue to see an arbitrage gap in both price and emissions in certain parts of the grid, basically in perpetuity.

David Roberts

Yeah. And this might be kind of a dumb question, but it occurs to me that if you establish a situation where batteries are making money because there is grid congestion, right, I mean, that's sort of like what is making some of these arbitrage opportunities so big is that there's a lack of transmission. Then if somebody comes in and builds transmission in that area, they are going to be taking revenue opportunities from those batteries. And do you worry at all that this is going to sort of set battery owners and operators against transmission, put their incentives against more transmission?

Emma Konet

This is something I've thought about a lot and I think, just not to get too technical here, but there's kind of two different flavors of transmission constraints. One of them is like a thermal constraint which is basically like an isolated singular, one line or a couple of lines that's causing extreme price action. And typically we see that price action on the upside, where we see really expensive units have to ramp up to satisfy demand. Then the other type of flavor is a voltage constraint where basically you're trying to push a large amount of power across a wide region of very — we call it like an interface.

And those constraints are more persistent, harder to solve with a single transmission line. You can't just come in and say, "oh, I built a transmission line, problem solved." It's kind of this integrated whole process that you have to go through to solve that. And in the meantime, the interconnection queue is filled with generators that want to interconnect. So I don't really think that's going to happen. I think it could happen if you're trying to site a battery to just capitalize on a small constraint — like we saw this in West Texas with the Permian demand with oil and gas load.

Basically, as oil and gas started to electrify their process of extracting, we saw a bunch of electricity demand in West Texas and it caused prices to skyrocket. Some batteries sited there took advantage of that for a couple years. They built like two transmission lines and the opportunity went away. But that's not really what we're talking about. We're talking about just these endemic structural issues within the grid where we're trying to get renewables from the middle of the country to the coasts to the load centers. That structure is not changing.

Jacob Mansfield

And if I could just add something else, I would say that MISO did a study where they examined what would be the most cost-effective way of decarbonizing and they evaluated if you used purely batteries, used purely transmission or a combination of both, which would be the most cost-effective way. And the answer really is you need both. So it's sort of an "all of the above" approach where this isn't going to supplant the need for transmission, but it certainly is going to help alleviate it. And especially where we are so far behind, and we'll be constantly behind as we electrify everything.

I think it'll be really imperative that we are building more batteries in tandem with building more transmission.

David Roberts

Yeah, I think we can see in a couple of ways that in some sense this opportunity that you're trying to monetize is temporary and going to go away at some point. But that point is far away, it's plenty far away that there's plenty of money to be made in the interim. So maybe by way of wrapping up, I would just ask this seems like a good idea, right? We have this problem with batteries. Now they're operating in a way that increases emissions. We have a relatively simple intervention which is just monetizing carbon reductions in battery operation by way of offsets getting some of that corporate money flowing to batteries to incentivize them to operate in a smarter way or a way that is more emissions conscious.

Where are you in this effort? And have you had when you talk to corporates, are they open to this idea? When you talk to sort of offset the people analyzing and sort of assessing offset quality, all these entities involved, who would be involved, is there interest? How far away are we from seeing this happen somewhere?

Jacob Mansfield

I think it's a spectrum, depending on the corporate, their stance on sustainability, the tools that they're looking to use. What I have found generally in our conversations, the short of your answer is "yes, there is interest from corporates." And in fact, there was a deal executed last September that was made public where Meta did a pilot transaction with a battery developer in Texas called Broad Reach. And I think that's really put it on the radar that this is potentially feasible.

David Roberts

Wait, what did Meta pay for?

Jacob Mansfield

We don't know the exact contract terms, but in general, the idea was they were compensating these batteries in Texas to reduce emissions through this type of LME construct alongside REsurety. And I think that's like a really core data point to say there are pioneers in the space that are looking to do these types of transactions. And I think that the corporates that are most closely aligned with doing this are ones that, again, have done a litany of renewable transactions. They're looking to now move towards grid resiliency as the next phase of their sustainability agenda, maybe have an emissions based approach, and their other alternatives aren't that great.

Whether it's doing a toll with a battery, financing batteries, a lot of things that would involve incurring significant risk to a project versus a very elegant instrument where you pay for performance for these projects to have an incremental revenue stream and also reduce emissions in an empirically validated way.

David Roberts

What's between you and this happening?

Jacob Mansfield

I think it's just that it's so early days, so that transaction was done a little less than a year ago. Now, I guess we're entering September. But yeah, it's putting the wheels in motion in terms of corporates wanting it to be validated through a nonprofit like Verra and getting that stood up. I think there's a lot in terms of getting batteries to the table and formalizing those partnerships, and that's where we hope to really play a role as an intermediary. Again, going back to my experience as an originator, looking at the PPA market, it's taken decades to get to the point where things are becoming standardized by intermediaries.

And I think that there's a lot of value to doing that at the outset where this can be a standardized fungible product that corporates can easily execute in and standing it up early relative to it being something far down the line later on when the market's already taken off.

David Roberts

If you had to put a time prediction, like, what year will the first corporate buy the first official battery offset?

Jacob Mansfield

So in some ways, you could say it already happened with Meta, but I would say —

David Roberts

Yeah, did Meta get an offset out of that? And if so, how? If that product hasn't been set up yet, or did Meta just get a good feeling out of that?

Jacob Mansfield

I can't speak for them, but I would say in general, I think it was the idea is that eventually, with a certified process in place through a carbon registry firm like Verra or Gold Standard, they can use those assets towards their sustainability goals. I mean, but there's a lot of other companies that have done transactions that have been off registry. You could say a lot of CDR support has been for projects that don't have methodologies in place, but they're doing it to support novel technologies. But to go back to your original question of when, I mean, putting that aside, I would say next year is probably a really good bet in terms of maybe having something in place to get approved offset. Everything in terms of the stars aligning and corporates being interested in supporting batteries. I think more and more we talk to corporates, I'm pleasantly surprised into how much they're already talking to developers, how much they're already thinking about this issue. And so I think we're just bringing it to the foreground and also providing a solution as opposed to pointing at all the problems. And I think that's really important for moving this area forward versus just setting it back and saying, "headline, there's all these issues and there's no solutions to it."

David Roberts

Awesome. Well, hopefully, yeah, when I revisit this in five more years, there will be a different story to tell. All right, well, Jacob and Emma, thanks so much for coming on and walking through this. This is like a weird, obscure little side problem in the renewable energy world that I feel like hardly anyone's aware of, and it's great to see someone actually attempting to solve it. So thanks again.

Jacob Mansfield

Thanks again for having us on. Appreciate it.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wt. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much and I'll see you next time.

In this episode, Johanna Bozuwa of the Climate and Community Project shares a progressive vision for permitting reform and the factors that could speed up the US clean-energy buildout.

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(Active transcript)

Text transcript:

David Roberts

To achieve its Paris climate targets, the US is going to have to build out an enormous amount of clean energy and clean-energy infrastructure in coming years. But that buildout is going slowly — painfully, excruciatingly slowly — relative to the pace that is necessary.

This has given rise to considerable debate on the left over what, exactly, is slowing things down. Much of that debate has come to focus on permitting, and more specifically, on permitting under the National Environmental Policy Act, or NEPA.

A deal that would have put some restrictions on NEPA in exchange for reforms to transmission planning was effectively killed by progressives toward the end of the last congressional session, leading many people inside and outside the climate movement to accuse progressives of being The Problem. They are so attached to slowing down fossil fuel development with NEPA, the accusation goes, that they are willing to live with it slowing clean energy. And that’s a bad trade.

Progressives, not surprisingly, disagree! Their take on the whole permitting debate is summarized in a new paper from the Roosevelt Institute and the Climate and Community Project: “A Progressive Vision for Permitting Reform.”

The title is slightly misleading, since one of the central points of the paper is that permitting under NEPA is only a small piece of the puzzle — there are many other factors that play a role in slowing clean energy, and many other reforms that could do more to speed it up. I called up one of the paper’s co-authors, Johanna Bozuwa of the Climate and Community Project, to ask her about those other reforms, the larger political debate, and the progressive community’s take on speed.

All right, then. With no further ado, Johanna Bozuwa from the Climate and Community Project. Welcome to Volts, and thank you so much for coming.

Johanna Bozuwa

Thank you so much for having me, David.

David Roberts

This is a hot topic, as you're well aware, permitting and the larger issues around it. And so, before we jump into specifics, I wanted to start with a few sort of broad, call them philosophical, questions.

Johanna Bozuwa

Perfect.

David Roberts

As you know, progressives have been under quite a bit of fire lately, not only from their typical opponents on the right and in the fossil fuel industry, but from a lot of sort of centrists and even a lot of sort of allies in the climate movement. For — I think the general idea is they are too attached to stopping fossil fuels and not yet supportive enough of building out renewable energy. And the mechanisms that they rely on to slow and stop fossil fuels are also slowing and stopping renewable energy. And so I think the general critique is that they ought to swing around and be more pro-building and loosen these requirements, et cetera, et cetera. I'm sure you've heard all this.

Johanna Bozuwa

Yes.

David Roberts

So I guess I'd just start with this question. Is, do you think the progressive — and by the way, I meant to say this by way of a caveat, I'm going to be sort of using you as a spokesperson for progressivism, which I think we both realize is ridiculous.

Johanna Bozuwa

Right, exactly.

David Roberts

Progressives are heterogeneous just like anybody else. There's no official progressive position. But as a crude, let's just say as a crude instrument here, we're going to ask you to speak for that perspective as you see it.

Johanna Bozuwa

Perfect.

David Roberts

So in your opinion, do you think progressives have taken it into their heart that things are moving too slowly and they desperately need to move faster?

Johanna Bozuwa

My answer to that question is that I think speed is progressive. You know, David, I don't need to tell this to you or any of the people that listen to this podcast or even progressives. We're dealing with the existential threat of the climate crisis and lives are on the line. And so I think that as progressives, we do need to take the speed question seriously. And I think what I would push back on is the fact that people have this myopic focus on permitting as the thing that's slowing everything down. And especially when I'm talking about permitting, NEPA permitting.

David Roberts

Right. We're going to definitely get to that.

Johanna Bozuwa

Yeah. And I just think that when it comes to this question of "Do progressives believe in speed?" I think that they actually very much do. And one of the things that I get frustrated with sometimes, when I hear these arguments like "Oh, progressives don't want to build anything," I think what progressives are interested in is building the right thing. And if we think about the United States and how our energy system rolls out today, we have a real issue that fossil fuels can expand at the same time as renewable energy is expanding. Like when it comes to fossil fuels, we can actually export that.

We are now the biggest net exporter of LNG and crude oil. And I think that progressives are particularly aware that if we do the wrong thing on permitting then we're actually not only expanding renewable energy — and maybe poorly done renewable energy — but also the fossil fuel industry knows how to use these tools so much better than our renewable energy developers. And we are going to see just a massive expansion that we absolutely don't need right now. If we think the climate crisis matters.

David Roberts

What about the argument which goes like this: Fossil fuels are reaching sort of a structural peak and decline. Renewable energy is getting cheaper and cheaper and cheaper. It's on the rise. So if you just, all things being equal, make it easier to build everything across the board, renewable energy will win that race and so it's worth doing.

Johanna Bozuwa

I just don't think that argument is true, look at how much power the fossil fuel industry still has in making these decisions. Like if we look at who is behind the recent push for permitting reform: It was largely the oil and gas industry. There's definitely some more nuance that's there, but they have significant power to move things and move them faster than the clean energy world. It's a question of when you're rolling back some of these bedrock environmental laws that the pie — it's not that the part of renewable energy in the pie is getting bigger. It's that even if we are getting more renewable energy, the pie itself has expanded so that we're having fossil fuels and renewables expanding at the same time.

And it's not fully pushing out the power of the fossil fuel industry.

David Roberts

Well, then, how about this? And this is the final philosophical question before we get down to some nuts and bolts. Do you agree that there are going to be trade-offs as we pursue speed? This is, of course, the big discussion right now is that if you really double down on speed, if you really pursue speed with everything you've got, there are inevitably going to be some trade-offs, some other progressive values that have to take a backseat. And that might be other environmental impacts. It might be impacts on communities. It might be, you know, name it. It might be that we have to loosen up a little bit on those other things.

Do you think that there are those trade-offs?

Johanna Bozuwa

I think that there are some trade-offs. You, I think, had my colleague, Thea Riofrancos, on the pod some time ago talking about lithium extraction, right? And the fact that if we are going to decarbonize our transportation sector, it is going to take extraction in order to accomplish that. Right. And there are substantial and significant impacts that has in terms of water contamination in some of the most drought-impacted parts of the United States, that is something that we need to be thinking about. And I think what my hesitation is when it comes to so much of this conversation is that we're talking about deregulation as the way to do speed instead of actually talking about planning and coordination.

And from my perspective, it's the planning and coordination that allows us to think through the decisions we're making with a far better sense of what's happening instead of a "get government out of the way, we'll figure it out" project that — it didn't really do great things for the planet. Are we going to do that again and trying to fix it? That seems like a silly mistake to make.

David Roberts

Yeah, that's a really important distinction. I'm glad we get that out up front. Because I hate when we go from, "Yes, there are trade-offs" to therefore "Let it rip, let everything go." As Thea said on the podcast, we can acknowledge those trade-offs and thoughtfully try to minimize them through planning.

Johanna Bozuwa

Exactly.

David Roberts

So let's start with this. As you say, there's this sort of what we're calling the permitting debate, quote unquote. Permitting debate is actually a bunch of debates and they're all kind of getting squished together under this notion of permitting. But in fact, there's a lot of things going on here other than permitting. So maybe talk just a little bit about all the disparate things that are now sort of getting lumped together under that rubric.

Johanna Bozuwa

Exactly. So I think just to put a point on it, often when people are talking about permitting, they're talking about this unfocused conversation about cutting red tape. But really what it comes down to is where the fight is right now in particular on the national stage is around NEPA. So the National Environmental Policy Act, but wrapped up into all of their arguments are all these other pieces that actually are maybe more of the problem than particularly NEPA. So, you know, four of them, just to start us off, obviously we do have NEPA. That's part of the permitting process.

We have local and state zoning permits, approvals, things like that. You know, going to Georgia County to make sure that you can put something through. Then you have third, these contracts or arrangements that are actually between private organizations. David, I know you had folks talking about internet connection queues — that often is part of the permitting debate, but it's actually about who gets to go onto the transmission that's being built.

David Roberts

Let me pause there because I want to make a point that I'm not sure everybody understands and I'm not even sure we made it in that pod. But the ISOs, the ...

Johanna Bozuwa

Independent service operators. I know I always mess it up. RTOs. ISOs.

David Roberts

Yes, I know. ISOs and RTOs. I could never call that to mind. But anyway, the ones who are sort of running the transmission systems and running these queues are not public organizations. Those are not state organizations. They are private consortia of transmission organizations and utilities and things like that. So it's not something that the state can come in and just directly change. I just think that's worth sort of putting on the record.

Johanna Bozuwa

I think that's a really important point and I think we'll probably dig into this further. But the idea that and I think you talked about this on the pod last time, but there are so many different kind of private actors that are operating within the RTOs and ISOs with not actually a huge amount of oversight, as it currently stands.

David Roberts

Yes, or transparency.

Johanna Bozuwa

Or transparency.

David Roberts

Or accountability, really.

Johanna Bozuwa

Yeah, exactly. And it turns out if we're looking at what's really miring the buildout of renewable energy, a solid amount of it is right there. Is in the interconnection queues. I think it was Southwest PowerPool — takes like eight years sometimes to get the developer to get their project through. And those are for projects that already have their offtaker and have all their permitting in place. So it just feels quite misguided for us to spend all of this time talking about permitting when we could be actually diagnosing the problem —

David Roberts

And you said there was a fourth.

Johanna Bozuwa

— and there's a fourth. The fourth one, I would say, is just operation and construction permits, like some of the pollution discharge stuff that is at some of these more local levels. And those four don't even include some of the other things that stop things, which is like access to capital, utility squabbles, supply chain slowdowns, these whole host of other issues that are just being swept under the rug because it's very alluring to say, guess what? I have the one quick fix to make sure that renewable energy gets built in the United States.

David Roberts

And local NIMBYism. I'd throw that in.

Johanna Bozuwa

Yeah, yeah, local NIMBYism, absolutely. Add it to the pile, exactly. So and NEPA's not going to do things about local NIMBYism in the same way that's the local and state zoning stuff.

David Roberts

Yeah, I think people really want, for obvious reasons, they're frustrated by everything going so slowly and everybody wants there to be sort of like something to cut the Gordian knot, sort of one, as you said, one weird trick. And that's, I think, why people are grasping onto NEPA because it seems like that's one big thing we can argue about and change. But as you say, the reasons here are very disparate. But let's just take a second to talk about NEPA. I go back and forth on this, but is it, do you think the progressive position that NEPA is okay "as is" and doesn't need any changes?

Like, do you think there are problems with NEPA and how it's administered?

Johanna Bozuwa

Okay. My feeling on this is that the case about NEPA is overstated, especially as we describe so many other things, even outside of the permitting process that matters. But if we're going to talk about NEPA, I think overall the projects are going through pretty quickly. There was a new study, actually, this month by, I think, David Adelman that did a really comprehensive look at wind and solar NEPA reviews over the past ten years, and he found that less than 5% of Wind and solar projects required. The EIS, like the Environmental Impact Statement, which is the one that takes the most time usually, can be two and a half years or whatever, but they're going through with categorical exclusions or some of these faster ways to move wind and solar projects through, or just projects in general.

And he found that there was very little litigation involved, which is often like the dog whistle, I feel like, of some of these folks who are calling for permitting.

David Roberts

Yeah, I was surprised when I looked at that study. It's a relatively low percentage of those projects that get litigated after they're done.

Johanna Bozuwa

Right, exactly. And I think if I were to make any improvements to NEPA, the thing I would do is bulk up the administrative state. Jamie Gibbs Pleune wrote a kind of corresponding piece of research to our permitting report where she investigated and talked about NEPA in particular with Roosevelt. But she was looking at another paper and found of 40,000 NEPA decisions that the US Forest Service looked at, the biggest causes of delays were actually from a lack of experienced staff, budget instability, and honestly, delays from the applicants themselves not getting their stuff in on time. So I just feel as if we're going to do anything to make NEPA better, give the BLM, give US Forest Service, give EPA far more funds, training, staff empowerment that's going to actually move these projects even faster through the pipeline when they're actually moving relatively quickly.

And these places have experienced chronic understaffing and lack of empowerment. So there is work to be done there. I don't want to understate that, but I think that it's a reasonable thing for us to accomplish without rolling back and applying a very neoliberal frame to how we get this job done.

David Roberts

Yeah, I would say it does seem like NEPA has sprawled a bit since it was passed. Originally, it was supposed to be major projects that came under NEPA review, and the court basically decided that all projects were under NEPA review. And so there's just thousands and thousands now that just have these little sort of not very long delays because they get these categorical exemptions. But there's just a lot of — it's very sprawling, it seems like, and unfocused. This is one of those areas where I feel like there are procedures of the administrative state that could work better and more effectively.

But at this point, liberals, they've just been under assault for so long. And liberals just know if you open this can of worms, if you open it up to review, there's just a pool of piranhas that want to go in and strip it bare. And so they just don't open it for review. Like, there's so many things like this. Like, if we could have a good faith process of actually trying to do what NEPA is supposed to do better than NEPA does it, I feel like, yeah, there's stuff we could improve, but Joe Manchin doesn't want to improve it.

Johanna Bozuwa

We don't want Joe Manchin in charge of what NEPA looks like and what's the more muscular version that takes into consideration the real-life climate impacts. Because I don't know when you're talking there, David, a thing that comes up for me is the reality that we will have more things happening on the ground. Like, let's say you put transmission in, we have a wildfire crisis. Now all of a sudden, the stakes are higher when it comes to these things like environmental review that are very material that I think also aren't talked about as much as they should be. And so, yeah, I can imagine things being shifted and changed within NEPA so that it works better for the current context.

But I think that, as you describe it, could be a real political problem for us to do that type of work right now. And we have other mechanisms that can move us much more quickly in the interim. Like, is this really the thing we want to be spending our time on as progressives? The answer is no.

David Roberts

And I also think if you look at the reforms that were sort of ended up getting jammed through, like of all the thoughtful things you could do to NEPA to make it work better, just a sort of — page limit, like a page limit on reviews: Seems like it's such a blunt instrument. It's such a crude way of approaching this.

Johanna Bozuwa

Oh, and I think it's going to get them into serious trouble. If you want a thing that is going to increase litigation, try adding an arbitrary deadline and page limit to something with no administrative capacity.

David Roberts

Okay. We could do a whole pod on NEPA, but I don't want to get too — our whole point is it's not the sole or even main impediment here. So at a slightly more granular level, let's talk about what you think is actually slowing down clean energy infrastructure build out. And there's a few categories your report covers starting with transmission, which is, I think, the big one.

Johanna Bozuwa

Yeah, totally. And I would agree with you. I mean, transmission planning is kind of in shambles in this country. It's not up to the job.

David Roberts

Yeah, I don't think literally anybody on any side of anything would disagree with you about that.

Johanna Bozuwa

Exactly. And I think there are a couple of reasons for that. One is that multistate transmission buildouts are incredibly hard to do in a federalized system. We just have so many different actors that are vying to hold on to their particular part of the market, especially with our vertically integrated utilities that don't have much interest in allowing other utilities into their service territory. And in deregulated states, utilities are kind of out of the picture for deciding where new generation is being built. So there's not a lot of efficiencies that are built into that. So we just get this really haphazard development, if development at all, of our transmission system, which I think is just quite a failure.

There are so many clear opportunities to do much more clear planning around this.

David Roberts

Yes. And then what about big large-scale renewable energy projects like big solar, wind, geothermal, what is in practice, slowing down their build out?

Johanna Bozuwa

Yeah, so I think that when it comes to some of these larger scale projects around solar or wind, you're running again into projects that aren't thinking strategically about where they're being placed. So if we're looking at the amount of land that we're going to need with the energy transition right. Wind and solar take more space up than one natural gas plant. And I think that there's just like a clear lack of land use planning when it comes to these larger scale projects when we could be doing it far better. Right. And thinking about what are the areas that make sense and are going to limit the amount of impact on our landscape and on communities and actually deploy it in those areas.

And I actually think there are answers to that question.

David Roberts

Well, we're not to answers yet. We're dwelling on problems.

Johanna Bozuwa

Okay, all right —

David Roberts

So how does that slow down? I mean, what does that manifest as? How does that slow down the build out?

Johanna Bozuwa

Yeah, well, the way that that manifests is that you're putting big renewable energy projects in tension with things like agriculture. You're putting big renewable projects in tension with our biodiversity goals. And so those are the things that are going to potentially mire the development and deployment of these larger scale projects — in addition to getting them attached to the transmission and making sure that it's colocated with the transmission we need.

David Roberts

Yes, the aforementioned interconnection queue issue, which alone is like, "That's a lot of years," which as you say, that's a lot of years tacked on the end of all the other stuff they have to go through. Like once they have to go through all that other stuff, then they get in the interconnection queue and wait and wither, etc. And then another thing you take on here is a big piece of the clean energy buildout, which I think a lot of people don't really think about as much, maybe don't enjoy thinking about as much, which is the sort of minerals and metals aspect of it. A big part of IRA, the Inflation Reduction Act, is an attempt to onshore supply chains so that China does not dominate them.

But that means onshoring some mines and some minerals processing which are not necessarily environmentally friendly, not necessarily things people like having in their backyard. So what's slowing those things down?

Johanna Bozuwa

I guess I would say there are two pieces that are happening. One is just that this is a pretty new area and there are so many price fluctuations that are happening. There's all of these big mining companies that are shifting ownership, trying to figure out financing. Right? So there's a lot that's happening there. And mining companies are not the best known for having perfect environmental impact statements or anything like that, that's going to get them mired right. And then you add in the fact that as we talked about earlier, a lot of where these lithium reserves are is also in extremely — like the likelihood for drought is a lot higher if you're looking, for instance, at the Salton Sea in California or, you know, over in Nevada, these are places that we actually have to be extremely careful about. And also it just takes a really long time to build a mine like this isn't something that happens the next day. Right. It's like 10 to 15 years in the future type thing. So it is a longer time frame that's going to be even longer if we aren't thinking, again, about who is impacted, how they are going to be impacted by the mining itself. What is that going to do to air quality, water quality, all of these different things?

It's a really big part of the permitting discussion, or of the transition discussion in particular that is being discounted in the United States.

David Roberts

And one more bit on problems, before we transition to recommendations. I noticed that one thing you don't get into a lot in the report is the expression of those state and local level permitting issues. And a lot of those I think, are tied to environmental review. And a lot — like, for instance, the California Environmental Quality Act (CEQA) is just sort of like legendarily at this point, a tool for local NIMBYs to stop things happening. Like we just read a story that was bouncing around Twitter a few days ago about these wealthy people — I forget what county they were in — but they were suing because someone had moved a playground closer to their house.

They didn't like the sound of the kids playing and so they sued. And part of it was that the city had not done a proper environmental review under CEQA of moving the playground. And you hear stories like that all the time. Do you think you said that NEPA is not as big a problem as people say? Do you think state level environmental review is a serious problem, a serious barrier, at least in some places?

Johanna Bozuwa

I think it just really depends on the place. And I think that's part of why as we were writing a national paper, being able to dig into the detail and differentiations between all of these different places seemed like a big haul for a small paper. So yeah, I think that there are these pieces at the local level, the zoning things, right? People are historic preservation boards that are saying like, "No rooftop solar because we don't like the look of it." Yeah, that's some BS in my mind and I think we do need to figure out how to manage that.

And I think what this comes into conversation with is a little bit of like, what is the community review process? What does that look like and how do we manage that?

David Roberts

Contemplating the variety and number of those instruments at the state and local level is really overwhelming and really does make the problem feel so intractable because it's just like, as you say in a federalist system, it's like every bit of reform is not just one bit, it's 50 bits. Every bit is 50 fights.

Johanna Bozuwa

Totally agree. And I think that's why we get stuck in these gridlocks sometimes. And also when we get to solutions, I think there are some examples that we can draw on and utilize our little multi tool of ideas of how to move this forward.

David Roberts

Final thing before that, because I forgot about this bit, but actually it's worth making a note that it's actually easier for fossil fuel infrastructure to get NEPA permits than it is for clean energy projects. It's something you note in the paper. If anything, NEPA is easier on these pipelines and stuff. Even though Joe Manchin is complaining ceaselessly about it.

Johanna Bozuwa

Yes, and I mean, I think that's why in particular, people who have been fighting the fossil fuel industry for so long, look to this group of folks, more center left folks, that are saying "Repeal NEPA, let's do it, we want to build." They're saying, "Oh my gosh. What you're doing by saying that is saying that the West Virginian that I have been fighting alongside is going to be decimated by this pipeline that's being passed now." So there are really high stakes and in a lot of the permitting process that we saw at the federal level, it also implicated the Mountain Valley pipeline.

Right. And that type of infrastructure getting a pass when it couldn't even get some of its permits at the state level to just go forth is a really, I think, scary potential because that locks us into decades of extraction.

David Roberts

Yeah, I feel like that was not covered well when this whole thing happened. You know, the Mountain Valley Pipeline: It's not that it was like stuck unfairly in a bureaucratic tangle. It just sort of straightforwardly was polluting and so it couldn't get the permits, the permits were rejected. It wasn't like stuck in some queue or something. It was just straightforwardly a polluting project that could not qualify under US law to go on. And it was just like jammed through. So I feel like the outrage of that didn't really penetrate partially because everybody's on this like "everything needs to go faster tip" and so they just kind of slotted it under there.

But we don't want things that straightforwardly fail environmental review going forward do we?

Johanna Bozuwa

Exactly, like, I would like, that the Cuyahoga River does not catch on fire again. And that's the reason we have environmental review and NEPA. And also I would like it to be able to stop more fossil fuel infrastructure.

David Roberts

Yeah, I know. And this is the other thing too, as though we're supposed to have some sort of content neutral opinions about permitting as such. I'm just like, "Well, I want more good stuff and less bad stuff. Can I have that opinion?"

Johanna Bozuwa

Exactly. That's so crucial too, where there are ways for us to stop permitting new fossil fuel infrastructure and permit the hell out of good renewable energy projects. That's a political possibility that Biden actually had signed up for and now is stepping back on.

David Roberts

Yeah, I mean, it's politically tough, but let's be positive here. You have a lot of recommendations in here, all of which are juicy, all of which could probably have a podcast of their own on them. There's no way we can cover them all. But you sort of have your principles and recommendations grouped under three headings. And the first one, which I think is the one that is most directly germane to the speed question, is enabling more coordination and planning. And I think this is a huge thing. This is one of my soapboxes I get on all the time.

I really want the climate movement to take this up is that we've had decades and decades of for lack of a better term, neoliberalism and this sort of instinctive free market stuff. And it's not like any major developed economy actually stops planning. What happens when you claim you're not planning and you claim you're being a free market is you just move planning behind closed doors or bury it in the tax code where no one can see it or understand what's happening. And then that results in whoever has the most power and money winning the planning fights.

So I'm done with my soapbox. Let's talk about restoring our ability to do public, transparent, cooperative planning. Let's talk about a few of the items under here. And first is just land use planning. What do you mean by that and what would it look like?

Johanna Bozuwa

So, land use planning, as we talked about earlier, it turns out that one fossil fuel plant is a lot smaller than the types of assets that we need to build. That's just a reality of what we're working with. And so that necessitates far more land use planning to think about how do we get the most out of the least amount of space that is going to do the best for keeping the lights on. And so there are examples of how we can do this type of land planning. And one example I want to bring up actually is in California.

So there was the Desert Renewable Energy Plan that was basically where states and federal agencies came together and they were looking at the Mojave and Colorado desert area. It's like 22 million acres.

David Roberts

Very sunny.

Johanna Bozuwa

Yeah, very sunny, exactly. Very sunny, very good for some solar. And what they did is that they coordinated a plan for this entire region so that it was prescreened for issues. So they said, okay, we're going to look at the biodiversity impacts of things being put here. We're going to look at the cultural or tribal impacts, the environmental potential impacts. And so after they did that kind of, what's called often like a programmatic study, that meant that the developers that came in to build the stuff there don't have to go through some more involved environmental impact assessment or study because it's already done.

And so that meant that because they had done all of that work ahead of time, projects are getting approved so much faster. They're getting approved in less than ten months. And have, I think it's been now this zone has been around for about ten years and I don't think there is one litigation case. So that is just such a good example of land use planning where it's like thinking ahead of what we need and how we're going to do it. And that still does allow for private developers to come in, even though I might even argue that we could do even more planning and fill in the gaps with some public transmission or public renewable energy.

But we can get into that later.

David Roberts

And we did an example from California, so I think now we're constitutionally obliged to do one from Texas too.

Johanna Bozuwa

Absolutely. Well, exactly. Thank you for setting me up so neatly, David, for the Competitive Renewable Energy Zones of Texas, which was such a success. So this is a very similar situation where the legislature directed the PUC, the Public Utilities Commission to plan where new generation and transmission was going to be located, routed, all of this. And so by doing so, they allowed for this proliferation of wind in Texas, a place where you might not expect a massive amount of wind to be. And I was reading a study the other day that said that in the past ten years, the CREZ line, so the Competitive Renewable Energy Zone, represents 23% of all new high voltage lines in the US.

David Roberts

Good grief.

Johanna Bozuwa

Right?

David Roberts

Yeah. They're actually building I mean, I don't know if people know this, they're actually building transmission in Texas. I'll just talk about how transmission never gets built. They're building it there because —

Johanna Bozuwa

They had a plan.

David Roberts

They planned in advance. Yes, they had zones where it got approved and so you didn't have to then go there and do the entire like a transmission developer didn't have to go somewhere and then do the entire thing. Right. Do the entire review, do the entire land use review and the environmental review. They didn't have to start over every time that stuff was done in advance.

Okay, point made. There more land use coordination and planning. That's the states doing it. But you could imagine the feds getting into that somewhat. You have these jurisdictional issues and federalism issues that are a bit of a tangle, but it does seem like the feds at the very least could do some informational, advisory planning and assessment on a bigger level, don't you think?

Johanna Bozuwa

Oh, absolutely. Actually, we do have a lot of private land in this country. Absolutely. But there is a lot of land that is owned by the federal government. So they're actually implicating a lot of this already. And it makes far more sense for an actor that has that kind of meso level understanding of what we need to build to be involved in those processes and be doing kind of a national assessment of where should those zones be. Like CREZ that's going to have all of these benefits and is going to allow for the most kind of efficient way for us to be deploying renewable energy while also taking into consideration these biodiversity, tribal nation relations and all of these things.

That's a good role for the federal government to actually play.

David Roberts

Okay, we're going to pass quickly by two of these since I've done pods on them. But as you say, one is the interconnection process, which is probably the biggest thing right now, slowing down renewable energy getting built. I did a whole pod on that with RMI's Chaz Teplin a few weeks ago.

Johanna Bozuwa

A fantastic one.

David Roberts

Really encourage everybody to go listen to that. There's a lot of recommendations in there for how to improve the interconnection process, how to improve things in batches. To return to a theme here, a lot of that has to do with just more and better planning on the ISO's parts.

Once again, like, think in advance a little bit and you can skip some of this case by case stuff, but I encourage people to go listen to that pod. Another one, which we've touched on slightly, which I also did a pod on, is just and I think this is so important is just the capacity of the agencies that are doing these reviews. These are at the state level and at the federal level. These agencies have been cut to the bone. They're all, all understaffed, desperately behind, and that, of course, makes things go slower. So all these people who are whinging about reviews, if they're not talking about bulking up agency capacity, I just have trouble taking them seriously because that is the lowest hanging fruit you could do.

But I did a whole pod on that several weeks ago about government capacity and about some of the provisions in the IRA that are meant to bulk up capacity at these agencies. It's just a matter of money and hiring. So we're going to check that one off the list. Let's talk a little bit about this next recommendation, which is about more publicly owned energy and transmission. What do you mean by that? What would that look like?

Johanna Bozuwa

Yeah, so this is kind of trying to answer the question of building where private companies will not, right? Like, we do have this problem of not having the long-range solution in the mind's eye, right? And we have this system in which there isn't a lot of this coordination that's in the mind's eye of a developer, right? Like, they're focused on their development, whereas the state government, federal government, has a little bit more of like, "Okay, what are we trying to accomplish? We are trying to handle the climate crisis. And that means we need to move as quickly as possible to deploy as much renewable energy as possible.

And it turns out we actually do have some capacity and to actually build this ourselves." And we've done this in the past, admittedly, in a much less dense energy system. But the New Deal is a really good example of this, where the U.S. either directly financed or built itself a massive amount of transmission and energy infrastructure, like the Rural Electrification Administration that FDR put in place. It electrified 80% of the United States land mass in ten years. And when we're talking about the climate crisis, I would like to go at that clip. So I think if there are ways for us where we have a standstill where things aren't getting built fast enough, where can the federal government, the state government come in with a little political muscle and do that building?

And I think that there are additional kind of benefits to doing this too, which include the fact that if you're building public renewables, for instance, you're also probably going to value having higher and better-paid jobs. You are probably going to, in comparison to a private developer, probably thinking a little bit more about some of those community benefits. And I think that there's a real win there that actually kind of creates a baseline for the rest of the private industry in a good way too.

David Roberts

Instead of just nudging and incentivizing private developers to do these things, we could just do them.

Johanna Bozuwa

We could just do them and we can also show them the way a little bit too. Right. Like right now, right. We just have the Inflation Reduction Act. Fabulous. We love the climate investments. It's so great. And also it just largely relies on tax incentives, right. And in those it's like you get a little bit more if you use local steel and if you have high wage jobs, all these things. And we could also just do that, build some public renewables and make it happen ourselves. And also when you have, particularly from a job perspective, right, like a public renewables entity that's building these developments with high wage work, that means that the private developers are afraid that they're going to lose all of their workers.

So then they have to raise their wages too, which is a good thing.

David Roberts

Race to the top, I think they call that.

Johanna Bozuwa

I would love a race to the top instead of a race to the bottom in our renewable energy world.

David Roberts

Yes. Okay, we got to keep moving here. There's a long list. The next one is something we covered, I think, on the Thea Riofrancos post, which is just we know we have to build a lot of stuff, but that's not a fixed quantity of stuff we have to build. Right. We can be more efficient with how we use materials. We can try to build in a less material intensive way. So, you know, what Theo was talking about is encourage more walking and biking and multimodal transportation rather than cars, cars, cars. Like that's a choice. And there are other choices we could make to build a clean, but the less material intensive version of clean.

There's a lot of different ways we can guide things in that direction.

Johanna Bozuwa

Oh yeah, absolutely.

David Roberts

Everyone should go listen to that podcast, too. This pod is like an advertisement for all my other pods.

Johanna Bozuwa

I love it, I love it. Yeah. And just to kind of emphasize, the more that we can invest in efficiency, the fewer transmission lines we might have to build, right? Like if we have a bunch of houses that aggressively go in on multi units. Like, we're having more people housed in multi units. We're creating urban density. We're making the houses that we already have more efficient. All of those things accumulate and make it so that we actually don't have to do the same level of massive deployment, which is a huge win. So we have to — I think it's like questioning some of the assumptions, too, of how much do we need to build.

David Roberts

Right. Maybe not all our private vehicles need to be the size of military tanks and weigh three tons. This segues perfectly into the next one, which I feel like is underappreciated, which is supporting distributed energy resources. Talk about why that's part of going faster here. How does that fit into this picture?

Johanna Bozuwa

So let's say we're able to add rooftop solar to a lot of the rooftops that are around and implement microgrids and put in storage. These are all, again, things that are going to be a lot easier probably to deploy because they're smaller. There's less of this zoning permitting etc. that has to happen when it comes to some of the bigger stuff, where you're going to maybe need environmental review. And so by making those investments in distributed energy resources, you're actually lightening the load again on transmission development.

David Roberts

Right. It's kind of a piece of the previous one, really.

Johanna Bozuwa

Totally.

David Roberts

It's about being less material intensive.

Johanna Bozuwa

Exactly. And I also think the added benefit of doing that, of course, is the fact that we live in unreliable times and it adds additional reliability potential by having things like microgrids deployed.

David Roberts

Yes, many future pods on that particular subject are in the works, are cooking in the Volts oven. Let's go to the second big category here, and this is where I have a little bit of skepticism. So this category is "Enhance community participation and consent." So this is what I want to talk about: You say, let's bring communities in more and earlier. And of course, I think most people, at least most people in my world, when they hear "more community involvement," their palms start sweating. They envision these local zoning meetings with old people shouting at city officials.

They envision nothing ever getting done, everything getting blocked, NIMBY's everywhere. You have this sentence where it says, "Strengthening community participation early in the process will likely move projects forward faster without as much community opposition." Do we know that to be true? I want that to be true. I like the idea of it. Do we know that?

Johanna Bozuwa

Great question. It's worth interrogating. I'm going to borrow a little bit from my colleague that we've already referenced today, Thea Riofrancos, that she often says which is "Sometimes going fast isn't actually fast." So, you know, if we streamline, right, or NEPA gets streamlined or many of these other permitting processes, you cut the red tape and therefore you are steamrolling communities affected by the infrastructure. You're potentially hardening them against the project. And when they feel mad or disenfranchised, chances are they're going to throw the book at you. They're going to throw the book to stop the project. We talked about these arbitrary dates set by some of the permitting system.

You're actually putting yourself up for far more potential litigation and drawn out legal battles because you actually haven't done the work that's necessary to bring that group on side, nor do you have all of your ducks in a row. So I think that there is a justification for defraying conflict and making our odds better at doing that. I'm not saying that we're not going to run into problems and there isn't going to be this annoying mob of Karens that's going to show up every once in a while. But I do think that our odds do look better when we do involve community.

David Roberts

There's a cynical point of view here which says communities are always going to have their Karens. There's always going to be somebody who objects, no matter how early, no matter how much you consult, there's always going to be somebody who doesn't want something near them. The only way in the end to overcome this problem is to take those instruments of delay out of their hands, including the litigation tool, including the environmental review tool, including the community review tool, and just get a little bit more Chinese about the whole thing. Just go do stuff, even if — bulldoze, basically.

I know we want to resist that conclusion, but I wish we knew better. I wish we had better models of moving quickly.

Johanna Bozuwa

So I think actually, since you mentioned the Chinese, I'm going to mention the Danish. And I think that part of this is actually like — we have this problem, right, that we know that deploying renewable energy, deploying clean energy is just incredibly important for the climate crisis. But the benefits are diffuse where the potential negative is pretty concentrated when it comes to these things. And so I think one question we can ask or the permit reviewers or whatever it is, or how we're thinking about developing these projects, is getting in their shoes and asking, what is in it for me?

We can pay people to have some of this stuff, right? So the Danish government in the 1990s was building out a bunch of wind. And so one of the ways that they incentivized this wind development was by incentivizing that part of it is owned by the local government to give them a revenue stream. And that actually helped to limit the controversy. And you'll see that in Denmark, people have kind of higher concepts or like the polling is better for wind. And I was talking with this professor, Nick Pevzner from University of Pennsylvania, who was discussing this really interesting particular instance in which in one of these towns where they were going to be around the offshore wind, they actually brought in landscape architects to design the offshore wind. So that it would be aesthetically pleasing.

David Roberts

The Danes give a shi-, give a dang, about how things look like. What a thought.

Johanna Bozuwa

Huge difference.

David Roberts

Yes, I know. You look at what's the one waste incineration plant in the middle of the town that's like gorgeous. It's got a laser display, I think it's got a ski hill on it. All these kind of things. It seems like we don't care here in the US. How ugly things are. Witness any sort of midsize town or strip mall or the periphery of any city. Everything's just like plain and ugly. Like what if we made things look nice that might improve community —

Johanna Bozuwa

We deserve nice things. Communities deserve nice things.

David Roberts

We can have nice things. And you talk about we should do what's called a "Cumulative impact analysis."

Johanna Bozuwa

Yes.

David Roberts

Again, to me on first blush that sounds like oh, bigger and more analysis: Surely that's going to slow things down. So how do you see that working?

Johanna Bozuwa

Well, again, this kind of takes us to our planning. Right. Like cumulative impact analysis which New Jersey and New York have put in place is this way to discern not just the impact of the project but the accumulated impact of that project and what's already come to date. And I think what you would find in cumulative impact in these places, is that actually it's doing some of what we were talking about before, which is trying to fight off the bad and build more of the good. So that's a way to stop new fossil fuel infrastructure but maybe see benefit around solar or something like that.

These are actually tools that, yes, as you say, at first glance you might think, "Oh my gosh, more? Really?" But what it's doing is assuring some of that larger meso level discerning and also in a lot of ways these are environmental justice tools too. Right. The reason that they're doing that is because it has so consistently been the same community that has had to shoulder the coal plant, then the gas plant, then the pipeline, then another cement factory. Right. And so they're trying to say, "Okay wait, this is out of control. Let's think about where we're putting this and how that's going to burden people."

David Roberts

So the last category here is "Empower a just transition." And I don't think we need to go piece by piece through here since these are very familiar asks from progressive climate people, which is just stop permitting new fossil fuel facilities. Protect the communities that are getting hurt by fossil fuel pollution and set emission reduction targets that will phase out fossil fuels. I think those are all pretty straightforward. I do think the point here, though the larger point you're making with this section is worth underlining because it seems obvious to me, but also frequently left out of this debate, which is if you want to get renewable energy built faster: One way you could do that is through statute and regulation forcing fossil fuel out. Like, nothing's going to speed up renewable energy more than forcing fossil fuels out. Right. It seems so obvious, but it's weirdly left out here.

Johanna Bozuwa

Very weirdly left out. It's a bizarre kind of development that we've seen in the climate realm, right? The IRA, for instance, that is a bill that is great. It creates a lot of carrots, but basically no sticks. And the reality is we need sticks if we're actually going to do this, right, as we were talking about at the kind of outset of the show, we can't let just the entire pie keep on getting bigger and bigger. We actually need to get rid of the fossil fuels. That's the point of what we're doing here. They're the reason that we have the climate crisis.

And so, the best way to get rid of them is to just regulate them out of existence, like eliminate them. And I also think there's a certain amount of private industry hates regulation, but they do love certainty. So what is more certain than a decarbonization mandate that says, like, well, you need to be done by this date? And that actually gets us to more of the displacement than when we just say "Build, build, build just hopefully build the right thing for us, please please."

David Roberts

Yes, I think that's true on several micro levels and it's true on a macro level too. One thing that would help us go faster is if we could just clearly articulate our goals. But we're sort of just hampered by having to beg Joe Manchin for his vote. And to get Joe Manchin's vote, you have to pretend that the whole pie is going to get bigger, that everything's going to grow. That's explicitly the grounds upon which he voted yes on Iraq. He sets it outright. He's like, I voted yes because I thought it was going to grow renewable energy and fossil fuels.

In some sense, politically, we can't just come out and say the goal is to get rid of fossil fuels. That's where we're headed. It would just help everybody, private developers, state and local governments, if we were just on the same friggin page. Instead of sort of like backing into this, we're just backing into everything we do. Trying to sort of like wink wink at one another. Like we know what we're doing, they don't know what we're doing. It's just a bunch of confusion.

Johanna Bozuwa

Right? And I think that it's also a little bit laughable because they obviously know what we're trying to do, right? Like, we're not really hiding the bag. And I think that this speaks to the need for us to be like, this is a 20-year fight, we're not done with the fight the progressive left needs to keep — we can't just have IRA and think that we're done and can wipe our hands. I mean, even this conversation that has come up on permitting shows that people are hungry and need more. And the question is okay, how do we build the actual political power so that Manchin isn't the one that's in the driver's seat?

David Roberts

Yes.

Johanna Bozuwa

I think one kind of last thing on this kind of community consent piece or community engagement that makes me really nervous to tie us back to the permitting realm, right. Is that the people who are potentially going to be railroaded by infrastructure that they don't want is rural America. And if you are pissing off rural parts of the United States right now, that's a very short-sighted game to be playing, right. Because you are potentially taking these rural folk who have just been beaten back again and again, and you're turning them to the right, to a growing fascist right, and giving away a massive voting bloc that is going to be crucial for us to continue to win and win again and keep winning until we actually solve the climate crisis.

So I think when it comes to this kind of larger political project that we're doing on from a progressive perspective, we have to be wary of this idea that this is — not a get it fixed quick scheme.

David Roberts

Yes. We do not want to tick off these particular communities any more than they're ticked off. I think if you talk to Biden administration officials sort of behind the scenes, they will tell you that part of the design of IRA, part of the thinking behind it is we need to flood these areas of the country that were hollowed out by neoliberalism, hollowed out by globalism. We need to flood them with new economic activity and new development or else our democracy is screwed. But it is also the case that you can't just go stomping things down here and there, willy-nilly, without community consent.

They need to have a feeling that they're involved in where and how this is done.

Johanna Bozuwa

Yeah, we're trying to bring them into the fight for a populist amazing future, and shoving this down their throats I just don't think is the most effective tactic. And if you look back to the New Deal, right, so much of it was workers. It was people that were in more of rural America. There were so many of these folks who were standing up and fighting. And if we're not setting ourselves up for that same kind of sea change, then I'm afraid we're not going to be able to win this thing.

David Roberts

Okay. We are just about out of time. So just to kind of review, this is just, I think the point of your report, point of all this is to say the question of speed is not the same as the question of permitting. Technically speaking, permitting is a relatively small piece of the puzzle here. There's lots of other things we could be doing to speed things up that have nothing technically to do with NEPA or even technically to do with permitting. And we've reviewed a lot of them here, and I would commend people to your report to get a fuller picture of them and to think about them.

But let me finish, I guess with, this is all a vision. I love this vision, but politics are politics and we live in a fallen world, et cetera, et cetera. So toward the end of last session, there was this chance to have a permitting deal, and basically it was these sort of arbitrary caps on NEPA reviews, the length of NEPA reviews and the Mountain Valley pipeline in exchange for some pretty substantial transmission stuff, some pretty substantial stuff on transmission, federal transmission planning. The progressive movement rallied to kill that. They called it Manchin's dirty deal. They rallied, they killed it.

And what ended up happening was the NEPA stuff squeezed through somewhere else. The Mountain Valley pipeline squeezed through somewhere else, and the transmission stuff died. Looking back on that, do you think that was the right political move for the progressive movement to fight that bill? And more broadly, do you think the progressive movement is prepared to sort of make the political trade-offs which are going to be necessary since a lot of this stuff that you list in your report is just going to be very difficult with today's current political distribution of power?

Johanna Bozuwa

Yeah, great question, and I think my answer is that the progressive movement still did the right thing. We needed to fight — or the progressive movement folks who were in those fights needed to fight off and make very clear the MVP is not something that we can have — this permitting that's going to expand. It was a big toad to swallow. And I think if we look at some of the transmission stuff, like, sure, it was fine. Was it the things that we were fully looking for? I think it was Hickenlooper's bill, big wires that was in some of those kind of final fights, right.

With the Fiscal Responsibility Act, his bill included something like a 30% interregional transfer. The DOE says we need a 120% increase in interregional transfer. That's just not even at the scale that we need, and we'd be giving up so much for it. So, yeah, we didn't fully win that fight, but I think that from what I'm hearing, kind of at the congressional level, there is the potential for another bite at the apple on transmission. There is still some, as we said earlier, right, everyone agrees that transmission is a boondoggle right now and a hot mess. So I think that should be one of the things that we're thinking about as the progressive movement.

How do we do that? Right? But I don't think I would go back in time and say "Eh, we should just accept Manchin's deal." I think that it was an important political flag to stamp in the ground that, no, we actually don't believe that we should be expanding fossil fuels and renewable energy at the same time because that's not what we need to do. Saying all that, I do think there are things that we can be doing right now to advance transmission. For instance, FERC is looking at some of these interconnection issues right now. Biden should not rest on his laurels until he gets someone approved and appointed to the FERC board.

David Roberts

Hey, there's Joe Manchin again being a jerk.

Johanna Bozuwa

I know, it's so true. But there are things and again, we've already talked on this pod about stuff that can be done at the state level, too. We still have some cards to play in our hand to accelerate and prove our case increasingly and build the case for more federal implementation, too.

David Roberts

Johanna, thanks so much for coming on. I feel like lately the progressive environmental left has appeared in mainstream media and social media more as a weird caricature viewed from a distance than been able to speak for itself. So I'm glad to be able to have you on so we can talk through a little bit about how progressives see this and the larger issues at play and their specific recommendations, all of which I think are great. So people should check out your report. And thanks for sharing your time with us.

Johanna Bozuwa

Thank you so much for having me today, David. It's lovely.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time.

In this episode, right-wing media critic Matt Sheffield and I discuss the disinformation crisis and the climate change crisis, and how they are deeply intertwined.

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Text transcript:

David Roberts

Matt Sheffield started his first conservative media website, bashing news anchor Dan Rather for liberal bias, way back in 2000, and in subsequent years became a key figure in right-wing media criticism.

But the rise of Trump left him disillusioned and he has since become a prominent critic of right-wing media. He now runs a site called Flux dedicated to accurate, inclusive journalism.

Last week, Matt and I got together on one of these live Twitter Spaces things — a glorified conference call, basically, to which people can tune in and ask questions — and had a wide-ranging conversation about the disinformation crisis, how it manifested in climate change, and what can be done about it.

The audio was archived, available exclusively to Flux and Volts subscribers. I hope you enjoy it.

Matt Sheffield

We're doing a space tonight to discuss climate change and the birth of the disinformation economy. And David has been a longtime climate change correspondent and environmental columnist for a while, and he's also the proprietor and publisher, writer, et cetera, of Volts, a newsletter, which he started one year ago today, which he was just recounting that for our previous space, which I accidentally ended somehow. So your experience overall has been pretty good, you were saying? And I think I ended the space inadvertently right after you said you work better alone.

David Roberts

Yes —

Matt Sheffield

I inadvertently proved your point, I think.

David Roberts

Yes. This is why I don't talk to people. Yeah, it's been going great. I have found that readers are excited to go deeper and wonkier and share my obsessions. I'm sure different writers have different opinions about this, but I much prefer it over writing for a general interest publication.

Matt Sheffield

And you wrote a retrospective on your site today that — one of the things you said is that you appreciated not having to reintroduce topics over and over again in terms of — you assume that your current readers actually know who you are and something about the material, I guess.

David Roberts

Right, yes. It's the famed return to blogging. It is a persistent audience who will follow me over time and thus who I don't have to explain that climate change is bad in every post anymore.

Matt Sheffield

Yeah. And I guess it's a way of trying to have a continued conversation rather than one that starts over de novo every time. Right?

David Roberts

Yes. And it's explicitly I mean, I did it knowing that I would be writing for a much smaller audience. It's not a mass audience play. It's very much for a self-selecting group of people who are more than average interested in my subject matter. So I think it can still have influence because I think the people who do read it are sprinkled throughout the world, the energy world, in high places. But I've basically transitioned away from mass writing, I guess is what I'd say.

Matt Sheffield

So now, before you were doing just for those again who hadn't seen what you were doing before you were working at Vox and then before that you were working at Grist, which is a website that's still out there doing climate coverage. How is it different now compared to your Grist days would you say?

David Roberts

Oh goodness. Well for one thing I didn't know what the hell I was doing back in my Grist days. I was hired at Grist as an editorial assistant in I think like 2004 with no background in journalism and no real background in environmentalism which is what Grist was supposedly about and knowing nothing at all about climate change or anything really. So the ten years I spent at Grist were in retrospect it's something I think journalists don't really get anymore these days, which was it was a place where I could labor in obscurity while I learned what the hell I was doing.

Matt Sheffield

Yeah. And I think that's an interesting observation you make there because that is one of the things that's definitely very different about media now is that you and I are both Gen Xers in our forties and in the old days, the media industry was very sort of anti young people in terms of letting them have public facing work to a large degree. And so basically they had people work as research assistants or as publicists or something like that —

David Roberts

Or come up through local papers. I'm old enough to remember when the way you came up through the reporting game is through local papers. And it's interesting if you go through that route you're taught a certain set of skills and rules and norms but I wasn't taught those at all. I had never had any experience in that world at all. So all I was reacting to and sort of shaping myself around was what do readers like? What is helpful to readers? And if you just follow that string you don't end up in the model of the inverted pyramid, daily objective third voice — information is relevant.

You know what I mean? There's no spine to your research. You don't know what you're looking for. And this is the sort of feeling I get from reading lots of objective news stories. It's like a grab bag of facts. It's like a grab bag of true things. They're all true. But how do they hang together? What do they all mean? That's what's missing. And once you approach it that way, what is sort of my narrative here? What kinds of things am I researching? What kinds of arguments am I trying to make that helps you know where to dig and doing that over time informs you more fully I think, than you get informed doing objective style reporting.

Matt Sheffield

Traditional training with journalism has also it made it to the point of the topic today about climate change and disinformation. It made them very basically totally unprepared to understand how a gaslighting campaign was being built right in front of their eyes. They couldn't even see it happening. And you could argue that this was something that probably was first done by the tobacco industry in the 1950s and 60s when they did research that figured out that smoking causes cancer and how do we keep the public from knowing that? But basically that information, understanding how that happened and why it happened, it never really filtered down into elite journalism, I would say.

And climate change was kind of the next area where this —

David Roberts

It happens again and again and it happens — these critiques of the flaws of this style of journalism are things people have been saying for decades now. When I first started in this whole game in the early 2000s, it was sort of the rise of the net roots and the sort of famous like, oh, the bastions of the mainstream media are being stormed by these outsiders, all this blah blah, all this sort of utopian talk. But all these critiques of media that we're talking about here were around then the both sides saying, the sort of fetishizing of moderate being whatever happens to be wherever the two is between, where the two parties are.

David Roberts

All this kind of stuff has been around so long now that I've come to find it very difficult to believe that the people involved don't understand these critiques or don't know what's happening. They get it yelled — if nothing else, every time they go out on Twitter, that people yell it at them. So they've definitely heard it. The thing is, you have know, economists annoy me in a lot of ways, but one thing I sort of have picked up from economists is, it's helpful — one helpful lens on any situation is what is the incentive structure? What are people incentivized, what are people rewarded and punished for?

And you can do that sort of brain-dead, both sides, journalism forever. And there's never a penalty, there's never a downside. Like, you might have people like me yelling at you on Twitter, but in the world of media professionals, that will never count against you. Whereas if you betray an opinion or know, like we saw it during the Trump years, like, sometimes journalists would get really worked up and they'd be like, "I think taking kids from their parents at the border when they're seeking asylum and holding them in cages without telling them where their parents are is bad" and you know, the whole right would just jump on it.

They'd be like, "Oh, there's a biased anti-Trump reporter." And then of course, that would cause the editors and everyone to retreat, duly retreat, like they do every time. And just that cycle over and over again, over time means as a professional reporter in DC, as a professional politics reporter, doing the brain-dead objective, both sides, horse race, blah blah, blah, is without downsides. You can get ahead doing that. There's no risk to it. So unless they're sort of like gripped by a civic spirit or whatever, why would they stop?

Matt Sheffield

Yeah, no, I think that's right. And then besides, from what you're calling effectively market incentives, there —

David Roberts

There are social and reputational incentives too.

Matt Sheffield

Yeah. No, I agree. And the other thing is that just in terms of how being a journalist works in the print business for a long time, there was this term that people use that "I have to fill the news hole." That was how they thought about making their product. But in retrospect, when you think about that phrasing, it's just basically you're going to fill it with what? By shoveling s**t down the hole?

David Roberts

Well, imagine there being any space without news already in it anymore. Show me a news hole in the universe.

Matt Sheffield

Yeah, no, that's fair. And yeah, like a lot of this stuff though. Yeah, you're right that those critiques have always been there, and I'd say they're still certainly relevant. I mean, just yesterday, Politico ran an article in which they criticized Vice President Kamala Harris for being Bluetooth phobic. Because she was concerned that Bluetooth has some security risks as a wireless technology. It actually does.

David Roberts

This is the nonsense things about that. You could go on forever. But just one note, like note that the whole critique from people like us of the mainstream political media in 2006 can be boiled down to two words: Her emails. Right. They spent an absurd amount of time on that ridiculous non-story, and that has become shorthand for the whole critique of mainstream media. So for them to go after Kamala Harris for information security specifically, not for breaching it, but for being too concerned about it, it's hard to interpret that as anything but a deliberate "F**k you" to every media critic of the last five years.

Right? I mean, it's not just any shallow, stupid story. It's very specifically a shallow, stupid story that is the opposite they attacked the last woman for just as though to say as though to flag, "Yes, hell yes, we're going to do this again. Hell yes, we are."

Matt Sheffield

Yeah, well, and it's the opposite. Her behavior is the literal opposite of Trump because when Trump was the president, he had a standard issue iPhone that he was tweeting on and his Twitter account had I think the password was "Make America Great Again." So his Twitter account got hacked twice while he was the president.

David Roberts

The whole four years was among all the other things, it was one long series of sort of horrendous information security stories, leaks and breaches and like emails being Cc'd here and there and emails from illegal accounts. The media didn't give a s**t because they never gave a s**t about infosecurity. That's never what it was about. It was always retrofit from the narrative they wanted to tell.

Matt Sheffield

Yeah, well, and I think the other thing is that there's this sort of desperate, rote idea of making — our job is to hold public officials accountable. And so they think, obviously that is a journalist job. But on the other hand, that shouldn't be the number one principle because otherwise you just end up with these ridiculous stories. So in other words, like the Harris Bluetooth story, basically our vice president is taking too much security. That makes no sense in any possible world except under the rubric of, well, our job is to criticize public officials.

David Roberts

Well, this is what accountability has become, right? It's shrunk to this ridiculous sort of brain-dead version of itself where these reporters just feel like I need to write negative stories about the administration. That's what tough journalism is. That's what real journalism is, just negative stories. And notice if you're not allowed to have any opinions about policy, or about whether it's good to jail children or about morality or about anything, you're not allowed to make any moral or ethical judgments. That means you can't hold a president or vice president responsible in those terms. Right? So the only terms you have to quote, unquote, hold them responsible are just these sort of shallow, like "Yesterday you said one thing and today you said something that sounds slightly different" or like "Oh, in the campaign you said you were going to unite people, but oh, look, people are still fighting" just the most sort of goofy, brain-dead versions of accountability you could imagine. To truly hold the president accountable means you got to care about something and understand something and desire one outcome over another, you know what I mean? And they're just not allowed to do any of that. So what there is of accountability ends up just being these sort of shallow gotcha gimmicky stories.

Matt Sheffield

Yeah, no, exactly. And it is a very big contributor to how we got to this present situation where you have one party that has basically decided that if we lose elections, then we will end democracy. That's our belief now. And if moderation is simply splitting the difference between the two parties, well, then I guess that means ending democracy isn't good. But maybe just trimming it around the edges and curtailing it is okay.

David Roberts

Some Democrats say that democracy is good, critics argue otherwise.

Matt Sheffield

Yeah, exactly.

David Roberts

Well, what I've seen happen is, and we saw this forecast a long time ago in the climate change space, is the thinking is basically what is good for us, our tribe, which is white Christian, rural and ex-urban conservatives, basically the Republican party has become quite monolithic in that respect. So what's good for our tribe? That determines not only what's politically good, that determines what's true. So everything else becomes subordinate to that. Including facts, including democracy, including truth. Everything has become subordinate to what it is in the immediate interests of our tribe. That's what I think you see reaching its sort of absurd reductio ad absurdum results before us now is right-wing media is just "What is true, is what is good for us." So what is good for us? That's what we're going to write. The whole notion of any metric of truth or even any conception of truth, that transcends tribe, that transcends partisanship has just completely fallen out of the picture now. It's just like, what do we need to believe? That is what we shall believe. It's frictionless.

Matt Sheffield

And as somebody who worked in that world for a number of years, all Republican operatives pretty much have this idea that everything is debatable, everything is subject to opinion. It's just a matter of opinion. And so when I was working at NewsBusters and places like that, the demand that we made to journalists was, well, you have to quote what the Republicans said about a thing.

David Roberts

Yes.

Matt Sheffield

And then also not specify whether what Republicans said was true or correct or not. At the same time, one of the things that sort of began my disaffection with right-wing politics was that while I was fine making that demand of people who were claiming to have no views or no opinions, I also felt like that, well, conservatives ought to try to have a mainstream media that reports things fairly and reports progressive opinions as well.

David Roberts

That's what Tucker wanted to do when he first started. Remember, he gave that whole speech. That was his original purpose, was it not?

Matt Sheffield

Oh, it was, yeah. And actually, I haven't mentioned this publicly, but I actually interviewed to be the managing editor, the first managing editor.

David Roberts

Well, you're lucky. Go on, I guess, because those original intentions got nuked upon first contact with the audience.

Matt Sheffield

Yeah, well, no, and that's basically what happened with him, is that he tried doing some reporting on negative reporting about Republicans. And basically American right-wing epistemology is such that if you're a Republican, the only thing you can criticize another Republican for is not being right-wing enough. That's it. Every other criticism is unfair and illegitimate.

David Roberts

Yes, but over time this is what happened. Over time, it went from being unfair to therefore it is false. Right. You could say it's unfair and then you could actually go out and do some investigation and try to determine separately whether it's false. But nowadays it's just "That's bad for us, therefore it's b******t." There's no middle step where they're like, "Oh, should we go find out?" It's just what they need to believe is what's true.

Matt Sheffield

Yeah. And it did manifest in regard to the climate debate, because if you look at public opinion polls before the oil and gas industry began trying to manipulate public opinion through ideological groups and PR firms, Republicans actually were more concerned about protecting the environment than Democrats were, believe it or not.

David Roberts

We're talking about the media. Science in general is very widely trusted, especially used to be very widely trusted in the US. And environmentalism used to be a relatively bipartisan thing. They had to deliberately code it partisan. It did not enter that way. It's not intrinsically that.

Matt Sheffield

I mean, like Theodore Roosevelt, for instance, Republican president was the guy who created the National Park system. That was a very big tradition even in conservatism and certainly within the Republican Party. And so, like, actually weirdly enough, some of the right-wing anti-immigration groups actually grew out of conservative environmentalism because people were concerned that they were going to be overpopulating the United States. Immigrants were, and so we needed to keep them.

David Roberts

Give one thing I give Republicans credit for even like Inhofe early on, I think on some level, on some sort of brainstem level, conservatives like Inhofe appreciated the implications of climate change more fully than climate advocates did. Like, I think he recognized pretty early on, "Oh, this isn't going to be like traditional environmentalism." This is not a traditional conservation issue. If this is real, if this is true, then this means revolution. The facts here carry you to radicalism. If you accept these facts, you are carried inexorably to radicalism. So you have to refuse the facts. I think Inhofe was smarter in recognizing the end of that road than a lot of quote unquote moderates like McCain.

Matt Sheffield

That's an interesting observation. I think. yeah, he realized that there were a lot of implications for industry and Oklahoma being a big oil producing state. Yeah, he realized what that would mean.

David Roberts

Pull the string any direction you want. It means fossil fuel businesses and centers of the economy will be diminished and reduced in power. It means the whole world will have to cooperate if you want to solve it. It means you need stronger international agreements and maybe even some kind of international governance. You know what I mean? It leads away from nationalism and parochialism toward something like humanities get together and cooperate as one. And that's a very basic brainstem difference between conservatives and other people. And I just think Inhofe got wind of that early on. The people who paid more attention to climate change on the right were the ones, I think, to turn against it most sort of vigorously because they, I think, were smarter about where it would lead.

Matt Sheffield

And to that end, I guess early, relatively early on in some of the right-wing pushback against understanding climate science and acting in response to it, there was this scandal that it seems very quaint now that they cooked up a fake scandal that they called Climategate. Can you review what that was for people who weren't paying attention or don't remember that?

David Roberts

Yeah, it's funny because there's a much more recent model that's very similar that will be fresh in people's heads. So basically, somebody we never, I don't think ever found out exactly who, though. One just has to assume it was some sort of right-wing operator of some kind stole a bunch of emails from the scientists who work at the Tyndall Center, I think it was, or I forget, some center of Climate research. I think it was the Tyndall Center for Climate Research. And they stole thousands — in the UK. Thousands and thousands of thousands of emails.

Basically scoured through those emails to find not just points, but to find individual sentences and phrases that could, if you lift them out of context and give them a sinister interpretation, could make it look like the scientists were up to something shaky. And so you're right, it's sort of like it was a template for many, many right-wing faux scandals to come in that the right-wing media did a blitz on it. Questions raised, doubts, like this phrase, what do they mean by this trick? What do they mean they're going to run a trick on the data?

And the right-wing blitzed, media blitzed enough that the mainstream media had to sort of pick it up. Like, oh, everybody's talking about it now. You have to talk about this thing if everybody's talking about it. And so the mainstream media did its sort of "Scientists involved say this is all a bunch of horseshit, but critics say blah, blah, blah." And then eventually after the story had passed from the mainstream media and most people had forgotten about it, all the inquiries and investigations that were set up to put it to rest — and I think in the end there were something like seven or eight separate inquiries — all found that it was b******t, all found that it was nothing, all found that you just get any database of thousands of emails and scour through it and you can find something that you can twist to look bad. But there was no —

Matt Sheffield

Yeah, and just to reference what the supposed malfeasance was, it was basically they were accusing people of having manipulated data and climate records and temperature data, basically. But as you said, yeah —

David Roberts

And this is important to emphasize because I think it also says something about right-wing scandals lately. It's not that there was a germ or a seed of wrongdoing that they found that they then blew up or enhanced or exaggerated. There was no seed. There was nothing there. The whole thing was spun up like cotton candy out of nothing. And that's sort of like — it demonstrated at the time. It demonstrated that they could do that. They're like, "Oh, we don't need to wait for a real scandal. We can just spin one up out of nothing anytime we want to."

And they've done it over and over and over again ever since. They did the same thing with the Democrats e-mails when that Russian hacker in his bedroom stole all the DNC emails. It's the same thing. You go through thousands of emails, you're going to find stuff you can spin to look bad, and by the time investigators or fact-checkers or whoever the hell show up, everybody's moved on and it goes down forever. Like Climategate is gospel on the right. It is in their holy books forever. The truth of all of that will never reach the right-wing base, and the middle doesn't care about it.

So it's like only the people who care on the left are ever going to even know that it was all b******t.

Matt Sheffield

Well, and then, of course, that same playbook is being replayed right now with critical race theory. And that's why it's important for people who are journalists, mainstream journalists, to understand that you exist in a hostile environment and one in which your product is being attacked and you are being subjected to a manipulation campaign. And they don't even now seem to understand that because you're right that basically the goal of these strategies is to use biased right-wing media to create a story out of nothing or very little and then whip it up into such a fever pitch that mainstream journalists feel like they have to talk about it because, well, Republican elected officials are talking about it, so therefore, we have to talk about it.

And then they do, but they never put it in the correct context, which is, this is a public relations strategy and designed to manipulate the public. They never do that.

David Roberts

And there's a very strong bias, human cognitive bias, that is sort of summarized by where there's smoke, there's fire. We have a very strong bias to thinking, if everyone's talking about this, there must be something there. We have trouble not thinking that way even on the left, even after we've seen one after the other after the other, after the other of these b******t things come up, even after we've seen QAnon and we've seen whatever, when Obama was going to launch a military assault from Texas. What was that one?

Matt Sheffield

The operation Jade Helm, I believe.

David Roberts

Jade Helm, you know, Sharia Law, you see them over and over again. But even now, just there's some part of your mind when you see a bunch of different stories on a subject, you almost can't help thinking there's something there. That's how they manage to associate Hillary Clinton with every human flaw, even diametrically opposed flaws, because if you just do it enough, even people who have no sort of primary opinion on the matter will just sort of absorb by osmosis. "Oh, I wouldn't be reading that she's shrill this often if there was something to that, or that she's weak or that she's tyrannical. She must be all the things."

Like people don't have a coherent, rational view of these things in their head. They just absorb ambiently from the media, what's everybody talking about, and this is what right-wing media hacked. And what they realize is now that the sort of grip of the gatekeepers is broken, right? There's no more scarcity in news, there's no more scarcity in information, so there's nobody gatekeeping anymore. Anything can make it into the public realm. And thus, if you want to create smoke and give people the suggestion that there's fire somewhere. You can do it just at will, right.

You don't need anything to build on. And they just do it over and over again. And this is what I think the media denies its responsibility for and culpability for and just its involvement in is like even if your story on subject X is totally factual, just by putting another story about subject X out there, you are in some way or another telling your news audience that it is significant. More significant than other things that receive less coverage. You're contributing to the sort of atmosphere, the ambient atmosphere of information. And that alone is expressing a judgment.

Matt Sheffield

Yeah. In a lot of ways, I think you could argue that we're kind of in a modern-day reincarnation of the time of the era of yellow journalism. And it's weird how when people are learning about that in history, or they're discussing it in some journalistic context today, that people are like, "Oh, I can't believe they were so dumb. It fell for all these ridiculous stories." But that's literally what's happening today. Just to review it, for those not familiar with that idea in the beginnings of mass print publications. So mass print newspapers in the late 19th century, you had this proliferation of newspapers, and anybody with somewhat large enough an amount of money could start one.

And so you had pretty much every local political party had a newspaper, and you had lots of local vanity newspapers as well, of eccentric, crank millionaires, and they were just churning out whatever the f**k they wanted. And it was this environment where there were no holds barred in terms of information, in terms of what you could say, and newspapers would routinely make up stuff and insert it into their copy.

David Roberts

People will believe anything. It's not sort of like, I think, polite to say this in these conversations, but your average schmo is just not going to go into media consumption with all these defenses up and sort of scrutinizing everything and double-checking everything. That's just not how people work. People will believe what they're told, basically from trusted sources, and they'll trust the wrong people. It's interesting. I was listening to a pod about McCarthy and the Red Scare and it was really interesting to me because that got going through what we would now think of as right-wing media, sort of pamphlets and obscure sort of crank radio shows and stuff like that.

And that fanned the flames and that sort of pushed it into the mainstream. And as we all know, it went incredibly far and hurt a lot of people's lives. But in the end, it was still possible for the mainstream gatekeepers to say, "Have you left, sir, no sense of decency?" And to shut the thing down, politicians and mainstream media outlets could basically agree to say, "This is too far. We're shutting this down." And that's how it came to an end. And today I ask you, like, if there was a comparable Red Scare, there's no one who has the power anymore to shut it down.

You could prove the charges wrong to any sort of empirical standard you wanted. You could get accurate information out there all you wanted, but you just can't stop anything anymore. There's no way to stop half the media universe from just churning it forever if they want to. So, I think we're going to see if we get Republican control of government again and Trump in office again, we're going to see something like that. And there will be no trusted institutions left that can step in and say, enough's enough.

There's no Walter Cronkite anymore who can step in and say, Vietnam's gone on long enough and crystallize the change in public opinion. There's no trusted institutions or people that are trusted across borders or across barriers anymore. So, something like the Red Scare today, I just think there'd be zero check on it. There would just be no way to ever stop it. It could go on forever.

Matt Sheffield

It would be probably the Antifa Scare, arguably.

Anna Tarkov

It never stopped, in a sense. Couldn't you say —

David Roberts

Well, they never gave it up, right? They never dropped anything. They never dropped anything. But there was a time they could be held to the periphery somewhat, or at least banished back to the periphery somewhat. There was still a mainstream.

Anna Tarkov

I think, unfortunately. I'm sorry, I've not introduced myself to anyone, but I'm Anna Tarkov. I'm an associate editor at Flux. Hi, David. Thank you for joining us. By the way, I'm sorry I wasn't here earlier. They can't put that genie back in the bottle, as you say. We have to think forward about ways that we can mitigate these types of things. And we've had people that have written things for our side, and we've hosted other types of spaces like this where we are trying to wrestle with this problem, as are, of course, many other of our colleagues and other people who are concerned about these types of things.

And yeah, I don't sadly, no easy answers, but I know that we often have talked about that maybe there could be some broad teaching of critical thinking somehow that a lot of people do come back to that type of thing.

David Roberts

I think that's so wrong. I don't know if you want to have this out here, but I just think that's the wrong direction to look. You're never going to create a society filled with rational people who assess with all these good cognitive habits. It's very difficult to do that, even for yourself, even to be that way for yourself. When you make a conscious effort, conscious constantly, it's never going to be. You can't look to the individual, I guess, is what I would say. This is a social phenomenon to me. All the questions about truth are downstream of questions about trust.

This is all about social trust. The great mass of people have never been scientific thinkers or rational or gone around gathering evidence and weighing the evidence before they draw their conclusions. Most people, most of the time, then and now, just believe what the people and institutions they trust. We need trustworthy institutions.

Anna Tarkov

I do agree with you. I think that we need actually, I would say a multifaceted approach, ideally. And I think that where I agree with you 100% in a way. I also come back to thinking that we're not going to get back to a Walter Cronkite reality, right, ever. So people have to of course, we're not going to turn everybody into a critical thinker and everybody into a brilliant parser of information or even the majority of people. That is impossible. I 100% agree with you. I think that what we can do, though, is in the people that are concerned about these matters as the minority though they may be, that if you can have people learn and exercise these skills, they can have influence on other people who are not brilliant critical thinkers or are able to.

I don't know if that can scale, but on a personal level, I've seen this work in terms of personal relationships, I'm a person who is, I'd like to believe, a good critical thinker, et cetera, and I can affect people in my life and people I come in contact with. And if we can have a again, it's a multifaceted approach that we have to take. One of the problems, of course, is the vast ecosystem of media and other types of actors who are committed to disinformation for various ends. That is a whole other area that —

David Roberts

If you look at the research on like if you look at the research on conspiracy theorists, like Q types, cult members, what you find over and over again from this research, from the disinformation research is it's super hard once someone has been sort of led down this path to get them back. Like, it's high touch, super emotionally intensive. It's a real one on one thing, and really the best you can do is cut off the supply. It's always a supply issue. There's a lot of poison that once it's out there, is just going to do a lot of damage no matter how much you're trying to inoculate people against it.

There's got to be some supply — there's got to be some control over supply.

Anna Tarkov

Yeah, a 100% a 100% —

David Roberts

This is a complicated question: Who do we trust to be that? And it's like the right-wing media spent decades very deliberately attempting like, I remember Rush Limbaugh saying this back in the early 2000s. He's like, academia, journalism, politics, and I forget what the fourth one was. These are the four pillars of deception, which basically means all the institutions are taken over by liberals and you can only trust us. And they've been saying that over and over for 40 or 50 years now. So the question is what institution gets to play the gatekeeper role anymore. Like, we don't trust mainstream media.

We don't trust science anymore. We're going to trust, like, we're trying to get Facebook to do know, we're trying to browbeat Facebook and Twitter into doing it, but do we really want them to be the hand on the supply side? You know what I mean? So there's just no way around the problem of trust. You have to have social trust if you want to have a shared reality that you're all inhabiting.

Matt Sheffield

No, you're right. One of the big issues is religion in regards to fundamentalism. We've talked about several instances of right-wing propaganda operations, such as lying about smoking or lying about the Iraq War, the first one, George W. Bush's Iraq War, and climate change. But I think if you go back even further, you could say that trying to cast doubt on belief in human evolution, that creationism is the original alternative fact. And so because of that, you've got this idea that a lot of people who are Christian fundamentalists in America, they feel like that they know deep down that — they believe the Bible is literally 100% true.

But they know that that's not provable. And they know that, in fact, there are a lot of things that disprove their ideas. And so it puts them in 100% tension with everyone else.

David Roberts

Yes, and also who is convincing within that world. If you have two guys telling you that Jesus spoke to them and told them to start a church and you should join it, which one are you going to believe? You're going to believe the one who's most charismatic. That's what the sort of coin of the realm is in fundamentalism, is charisma, because, like you say, there are no empirical and there's no outside empirical standards you can use. So it all comes down to charisma. And you see this now basically on right-wing media and in right-wing what's left, I guess, of right-wing intellectual circles is it's just performance.

It's just who's a good performer? That's what Ben Shapiro is. He performs argument, you know what I mean? Or performs investigation more than he actually does it. It's all who's most charismatic. I was thinking about that when I was listening to this podcast about Mars Hill. The Mars Hill Church super charismatic guy started it and ended up, you know, being an abusive dick. And I was thinking, that's like, who do you think are the charismatic people who talk loud and a lot and draw a lot of attention to like, those are scam artists. That's why there's so many scam artists on the right constantly.

Matt Sheffield

Well, and that's why I do think that progressive Christians actually are going to be integral to overcoming some of this disinformation, because progressive Christianity in the beginning of the 20th century and some even in the 19th century at the end, figured out that, well, the Bible doesn't appear to be literally true. It appears that there are multiple gods that were in the Hebrew Bible that were squished together and created a single one and that God had a wife and that these gods were members of a pantheon. So that's something — then they basically said, well, okay, that means it's not literally true, but that doesn't mean we have to not believe in God anymore.

It just means that this is a book that was created by flawed humans and we can still get things that we agree with out of it. And there's nothing wrong with believing in some of the ideas and rejecting ones that we don't like. And so that's a much healthier epistemology, and it's one that Judaism had come by a lot earlier than Christianity had. And so that's going to be a big part of helping people overcome some of their intellectual nihilism.

David Roberts

These are kinds of people who want this certainty and want this lack of ambiguity. That's what they're after. How do you convince them to be more cognitively flexible when the reason they came to fundamentalist Christian theology in the first place is that it's easy, very simple, easy answers and a hierarchy that puts them on the top. That's what they want?

Matt Sheffield

Yeah, well, no, that's true. The certitude is very comforting for people who want that. Ultimately, there's probably always going to be people who have that psychological need for certitude. But overall, though, for people who don't have that need, there has to be a better awareness of standing up for uncertainty, for standing up for pluralism, and understanding that these are things that they don't exist by themselves, that people had to fight for them and that you have to fight for them. These are not things that exist because, again, the story of humanity over and over in societies, over and over, is that the rule of the strong oppressing those who cannot resist them, that's the human story over and over.

And so having pluralism, having markets of some kind, these are all creations, artificial creations of governance and of democracy. And so you can have your beefs with it, but ultimately the other systems just don't work as well. But you have to fight for what you have.

David Roberts

Although I would say, and this harkens back to something I said earlier about Inhofe sniffing out the implications of climate change before other people, I sort of think it's a little bit similar with empiricism, and it's a little bit similar with capitalism. If you really let capitalism run, it is utterly destructive to local cultures. It famously sort of standardizes everything. Wipes out and workers move, and it breaks up these communities. This is something I think you're seeing, like Rubio and Hawley get a little sort of hint at these days. Like unrestrained capitalism is totally toxic to any parochial culture.

And it's true also of empiricism. Like, if you follow that string, any parochial belief or superstition you have is going to eventually go down. I can understand why some people are just like, "No, I'm not going to take step one. I'm not going to take step one down that road because I see where it goes."

Matt Sheffield

There is perhaps some positive, though, in terms of focusing on educational initiatives that if you look at younger Republicans in office at the national level, obviously a lot of them are pro QAnon and whatnot, but there actually are some of them, like Matt Gaetz even, who actually believe that climate change is real, believe it or not. And their ideas of how to respond to that don't necessarily make sense, but they are different and this is something that more conventional older Republicans regard them with suspicion because of that. I don't know if you've seen Gaetz talk about climate change at all, have you?

David Roberts

Yes, I've been keenly following this sort of nascent Republican attempt to claim to have an answer to climate change. But from what I can tell, Gaetz's thinking and the thinking of that whole caucus is almost purely 100% political i.e. it's not good for Republicans anymore for the division to be Democrats want to do something about this and Republicans don't. That has come to be viewed unfavorably. So they need to pull yet another scam on the mainstream media. They need to offer up something that looks like another side so that they can change the story from Dems want to do something Republicans don't to Dems and Republicans disagree on exactly what should be done about climate change. Which is the kind of story that they can ride forever, like they can delay climate action forever under cover of that story. Pure denialism has come to be kind of a PR disaster. But the two side story, as they're well aware, you can get away with that infinitely.

Matt Sheffield

Yeah, well, is that progress, though, do you think?

David Roberts

I almost think I go back and forth on this, but I almost would have told you 10 or 15 years ago, I mean, I was saying this a long time ago, that denialism is stupid. They caught the denialism tiger by the tail and suffered for it. They should have pivoted to b******t faux solutions a long time ago because that would have served to — they only became the bad guy in this debate because of the denialism. If they could have just smoothed it out with both sides nonsense from a much earlier point, they could have gotten away with delaying substantial action forever without as much political flak.

I think this was always the smart pivot on their part. They should have done it a long time ago. I don't know if it's progress because once again, what media that people read or see on cable news is going to tell the American people these solutions that they are putting forward are horseshit — they will not do anything and they will not solve the problem, this is not a good faith policy proposal. Who will say that that's the truth? But who will say that such that any of the sort of casually interested Americans will ever hear that?

Matt Sheffield

That's the sort of thing that we need people to say on these cable news shows and whatnot where they routinely create these false equivalences or set up these panels. And a lot of times the guests may not even know very much about the topic that they're being asked to talk about. And so I've seen many times where you have some far-right activist who's got a complete set of answers just that they don't make sense logically or with the facts, but they at least are short enough to be able to fit into the sound bites. And these debate segments, they're not accomplishing anything and in fact, I'd say they're harmful.

David Roberts

It gets back to the performance. As I was saying earlier, who wins those is who's the most sort of charismatic shouter. And so to get back to incentives, that whole ecosystem, the incentives in that genre are for bullshitters.

Matt Sheffield

Yeah, well, and then I guess the other sort of unfortunate dynamic is that if you look at the — and I stopped watching them a long time ago — but the political Sunday morning shows where they've got this fetish for, this obsession with trying to find the reasonable Republican. They're continually putting Chris Christie on the air, or they've been trying to turn Asa Hutchinson from Arkansas lately, but they don't know how to talk to them. And so while they might be not a raving anti-vax lunatic, they're perfectly willing to enable the raving anti-vax lunatics. And these people like Chuck Todd and these other hosts, they have no idea how to speak to them.

They seem to think that their only mechanism is seemingly trying to attack people for hypocrisy and that's it. Or trying to get just asking the same dumb question, well, was the election stolen? What do you gain by asking that question every time? If you know what they're going to say, then don't invite them on the program because you are not going to persuade them of anything.

David Roberts

The only thing that should be asked is what would it — like, this wasn't enough, this wasn't enough, this wasn't enough. What would be enough for Trump and his base to do? Is there something they could do that you would decry or denounce? Just in theory, let's try to set a bar beforehand this time, right. Let's set a few markers in the sand beforehand this time, so that when all these collaborators travel past them, at least they're on record saying they wouldn't.

Matt Sheffield

Yeah. Instead of asking about 2020, you should ask them, is overriding the votes of a state wrong? Having a state legislator override the vote of the voters wrong? That's what they need to be asking.

David Roberts

Yes. Or if you're a member of the House of Representatives, would you vote to take the decision out of the hands of a state and just give the electors to Trump, which of course the House of Representatives absolutely can lawfully do and we have every reason to expect will do in 2024.

Matt Sheffield

Yeah. And then at the same time, while they could do better in terms of how they speak to far-right people and their enablers, the press hasn't really communicated the urgency of the upcoming 2022 and 2024 election. And that was a huge thing with this whole critical race theory panic. Is that just like the Climategate emails or just like the Hillary Clinton emails that — they're designed to sort of make everyone else throw their hands up and just be disgusted or confused and then also rev up the raving lunacy base. And so if you look at polling of Democratic voters and independents or moderates, they're very disengaged right now and that's by design on the part of the radical right.

David Roberts

I keep reading about the Republicans looking for more Youngkins right, just sort of like how to be —

Anna Tarkov

Respectable Trump

David Roberts

yes, how to be a Trump in the sheets but then sort of a moderate in the streets. But the problem is that takes like and I guarantee you here's a prediction, the next Youngkin, whoever it is, part of how they will attempt to signal their moderation to the middle, to the media, will be to say reasonable sounding things about climate. That will be one of the sort of flags that they can wave at the middle while winking at the base. The next Youngkin will be, quote unquote, good on climate. That's my prediction.

Anna Tarkov

Yeah. And I think that it's important to note that not only does it not fill me with hope that people like Matt Gaetz believe the climate change is real, and I think the reason for that is very important to remember that they're quite organized, worldwide, extreme right fascist movement. And we are going to have, and already are having climate refugees from the Global South. And I think that believing — I read this article once where it was like what happens when the right starts to believe in climate change? And a lot of the things are quite bad.

David Roberts

It's going to be super ugly and that's coming soon too. I don't think that's very far away. I mean, if you think about it, if you try to put yourself in the mind of a reactionary and you find out that there's this global problem, the way to solve it is either to sort of cooperate with people across the world in a sort of global governance where you make present day sacrifices for future generations. Which doesn't sound like them. Or you could just build walls, pull up your borders, hoard the remaining oil and natural gas under the ground and try to basically lifeboat it.

And that will be the conservative response to climate change. It'll be what they call ecofascism, it'll be border restrictions and it will be marginalized communities being forced to again pay the price for it.

Anna Tarkov

Exactly. There's a book what is it called, Tropic of Chaos? I have not read it yet. Yeah, it was recommended to me by a journalist friend who said that this is already — we're seeing this type of thing across the world already, where there are all these opportunists who are taking advantage of already, these, again, disadvantaged and mostly communities of color all across the world. And it's only going to get worse, as you say. And already again, we are seeing that already in the US. It's not an accident that we've already had this type of rhetoric about walls and locking countries down to immigration and that sort of thing.

David Roberts

Look at how COVID played out too. It's a perfect — Look if you are just assessing COVID logically, empirically, you immediately come to the need for communal activity, right? You have to act together, you have to make sacrifices for one another like you have to act with solidarity. That's the only way to solve it. But is that how people reacted? Like, was that people's natural instinctive reaction? Basically, when people get stressed out and uncertain and anxious, they don't get more progressive. That doesn't make them into cosmopolitans. The more stressed and anxious and uncertain and frightened people get, the more small c conservative they get and the more open they are to those kinds of arguments. That's what I fear.

Anna Tarkov

It has gone both ways, I would say. Of course, I'd say definitely much more on the side of the people who are, as you were talking about. But there was a moment I don't know if we're past it. I really hope we're not past it. But in the spaces I'm in and I know a lot of organizers and a lot of people who are really on the front lines of working for various types of social change, including climate change. And I think that we have seen the other side of the coin, so to speak, where people have pulled together in a lot of places.

There have been all these flourishing at one point of mutual aid efforts and all these types of things and that sort of thing. Unfortunately, it's an open question whether it's going to persist or not. As we've been saying, there's a lot of people who are very apathetic right now, especially people who are more moderate or less politically engaged, whatever you want to call it. I want to just again bring in something you were saying before too, about how unfortunately the march of capitalism that must ever continue is a big hindrance to all of this. Because people who are, I have a friend who calls it "s**t life syndrome," is her term for people who — because in our society, it is so hard for many people that — it is so hard for them just to make it to put food on the table, to put a roof over their heads, to pay for things that you don't have time to participate fully in democracy and you have no inclination to do so when you are trying to figure out how you're going to pay your rent or etc.

David Roberts

Right, and if politics does nothing for you, you're much more likely to. When someone comes along and says, "Hey, f**k all these people, I'm going to blow it up," you're like, "Yeah, whatever."

Anna Tarkov

Yeah, that sounds good. And I don't do anything for me because why would I? They've never done anything for me and they've not helped me.

Matt Sheffield

Michael Moore in 2016, he predicted that Donald Trump was going to win on the idea that a lot of people just feel like they have no control over their lives and they just want to blow the system up.

David Roberts

Well, that's one of the many frustrating self-reinforcing cycles that it's so easy for conservatives to launch. Right? Like they can make you feel anxious and then you become more conservative and then they pass crappy policy that makes you even more anxious. It seems like everything they start ends up working to their favor and it's so difficult to start the opposite kind of — it's so difficult to start a self-reinforcing positive cycle where people build on something together and it's reaffirmed and they benefit from it and so they have more trust and so they build more together.

It's very hard to get that kind of thing going, especially when you have basically half the media and one half of your entire society trying its best to make everyone feel shitty and anxious.

Anna Tarkov

Yeah, absolutely. And I think that there's a lot of at least I'd see some possible promise or a good idea in the sense that there are people that talk about for example, everyone has like a different lens that they view a lot of these issues from where people, of course, will look at multiple viewpoints. But a lot of time people have one that they focus in on more than others, depending on the person, the commentator, the journalist, whoever. And I do think that there's a lot of validity to the types of people that say that one of the ways to get out of a lot of these problems is that we need to have a culture of accountability for people in positions of power which we have not had for I don't know how long.

David Roberts

That is the central characteristic of American public life from the time I have been old enough to be aware of it is: Shitty people doing shitty things and facing zero accountability. I mean, over and over and over and over and over again. I can't imagine, like, people born after me, younger people, have never literally never seen anything but that in American public life of just like the shittier you are, the more you benefit, the more you get ahead. And that's just incredibly toxic for trust, like I said, for social trust.

Anna Tarkov

Yeah. And the troublesome thing is that not only some people respond to that with, of course, apathy, as we've said. They look around and they say, "Well, nobody faces consequences. There's nothing I can do. Certainly my vote doesn't count as much as someone who can hire wealthy lobbyists, etc. Why bother?" Which I can understand how people can get to that point very easily. And then the other thing is that there are people who then they valorize and want to emulate these types of people because getting rich, etc.

David Roberts

F**k. Yeah. Well, and what else is whiteness but the promise to middle and lower class people that they can get a little taste of that, a little taste of what it's like to be on top and to not be accountable and to be able to do whatever you want and no one can stop you. Whiteness is just like you can have this version of it. Yes, exactly.

Anna Tarkov

That's right. And that's why people hold on to that. Above — people are always so mystified why these people are voting against their economic self-interest. Well, it's not that hard to figure out, really.

Matt Sheffield

Yeah. And then also they have other interests as well. So if you feel like you can never exist in the market, you just resolve that well, yeah, I'll just always be whatever my current job is. Then you can seek different incentives. So maintaining white supremacy or Christian supremacy, those can become things that are valuable to you and will provide a psychic fulfillment.

David Roberts

The thing about the reactionary mind is based in hierarchy. Everything's about hierarchy. Every relationship is one of dominance and submission. So in every relationship, you're either on top or on the bottom. So all whiteness is, and to a certain extent maleness too, right, is a guarantee that no matter how low you are in society or in the economy, you're still above black people, you're still above your wife and kids, you still are the king of a little kingdom of your own. And that's in your interests. I mean, they're not wrong about that being in their interest.

Matt Sheffield

It's true. But just going back to the climate topic here for a bit. So, I think one of the developments there have been a number of recent developments in terms of bringing the costs of renewable energy, particularly solar, down, and China has really doubled down on a lot of manufacture of that and trying to deploy it. Do you think that those developments might move towards some more positive outcomes for the environment?

David Roberts

Yes, yes. I think what we're going to see is China responding somewhat rationally to economic incentives, which just mean everybody looks at sort of like, what's China's latest proclamation? And we judge them by that. But if you look over the last ten or 15 or 20, 30 years, their level of ambition on clean energy and on climate just keeps going up and up and up. It's never as fast as people want, but it's only moving in one direction. And that's because all the prices for clean energy are moving in one direction. And it's suddenly known whoever gets there first in terms of the materials and the manufacturing of these components of a clean energy future is going to economically benefit. China is racing — this whole thing in the conservative circles are like, "China's not doing anything. Why should we?"

It's so dumb. China is investing trillions of dollars to try to capture these markets. These markets and solar panels and wind turbines and everything. Like, China's going as fast as it thinks it can, literally. And while still maintaining social stability, it's racing.

Matt Sheffield

And to understand that this is infrastructure, manufacturing, supply chain. Like, again, that's their supposed obsession with that now. But the reality is if you actually care about supply chain issues, then you need to be militating for massive investments in green energy.

Yes, which is what Democrats are trying to f*****g do with the Build Back Better bill as we speak, there are literally provisions in that bill specifically designed to stand up domestic supply chains for EVs and turbines and solar panels. And it's going to dump billions of dollars in there. And then someday those facilities are going to benefit red states, and there are going to be red governors taking credit for them. You'll see that in a few years.

Yeah. Well, ultimately it's possible that some right-wing billionaire might find the light might finally go off in his head, "Oh, I can make a ton of money off of green energy." And in fact, there was somebody, Boone Pickens, who had invested lots and lots of money in wind and natural gas, but then he died. And nobody kind of stepped into that space after he was deceased.

David Roberts

Or if you're a right-winger, you can take some comfort in the fact that it seems to be in America, if you become a billionaire, you become a right-winger sort of automatically, which is what happened to Elon Musk, you know, who came in talking about saving humanity from climate change and now has become a f*****g deficit scold. So don't worry. Right-wingers like money brings people in your direction.

Anna Tarkov

I mean, I strongly believe that someone can't be a billionaire without being some sort of an a*****e. But structurally, in order to amass billions of dollars, I don't think that it's possible to do that while being a completely ethical and moral person. It's just not —

The real chicken and egg question. They seem to both, like — they get grosser the richer they get and the richer they get, the more it makes them gross. Who knows where it starts.

Matt Sheffield

All right, well, this has been a great discussion. We're going to open it up in just a little bit here to audience questions. If anybody has a question, feel free to use the raise your hand option as we get toward the end here. So I'm just going to go back and I'll put a link in the show notes to the piece that and I mentioned it earlier on Twitter, but I'll mention it again after we're done here. So David wrote a piece in 2017 about Donald Trump and tribal epistemology and just kind of closing the loop a little bit on some of what you were saying that in this essay.

I'm curious what you think of it now that you were talking about the problem of disinformation to some degree at the time, you were talking about has to be solved on the demand side. But you did say, and I'll quote from you because I'm sure you don't have it memorized, you said, "If it is solved, it will not be, in my view, on the demand side," you said, "but rather to do it to change the incentives of disinformation." What do you mean by changing the incentives to produce disinformation? What does that mean?

David Roberts

Well, just to put in the most basic possible terms, you should feel like it is a risk to lie about something in public. You should feel like if you are exposed as lying in public, whether you're in the media, whether you're a politician or whatever, you will receive disapprobation for that social disapprobation. Your reputation will be hurt, it will affect your subsequent life opportunities. It feels really dumb and simple to say that, but we've somehow constructed a system now where there is zero downside for lying. There's literally nothing that happens to you. Your lie might not get believed, it might not work, but you don't ever suffer for it.

This is what Trump demonstrated. Just make up one thing after another. Some of them will hit, some of them won't, but why not just keep trying? You can do some of that with economic incentives. You can do some of that, I think, with government regulation. But ultimately that kind of has to be like a social thing. Like you need to just restore respect for truth as a social norm, as a shared social baseline.

Matt Sheffield

How do you do that, though?

David Roberts

F**k if I know, I was worried you might ask.

Matt Sheffield

I will quote from the last headline, sub headline in your piece. Your headline was "The answer is: ha ha, just kidding."

David Roberts

Right? Because I don't know the answer. I mean, if you read my sort of gloomy outlook, I try to think about is there historical precedent for a culture, a society or culture that has become this cleaved in two with one side against another inhabiting different realities, wanting different having different visions of the good and of a good society and just having different beliefs about what is real and what isn't. Like what exists and what doesn't healing itself in some way other than collapse and violence.

Anna Tarkov

That's a very a good question.

David Roberts

Never mind, like, an unlikely answer. I don't even have a candidate answer at all. I don't even know what it would look like. I don't know how you would go about doing that. It looks very gloomy to me, especially in light of social media, et cetera, et cetera, because if you had your hand on, like I said before, if you had your hand on the supply, if you had some effect over what could get into the public square, then at least you'd have a place to focus your efforts. But nobody's got their hand on that anymore.

Everything's flooding in. There's no way to keep anything out.

Anna Tarkov

Yeah, again, like I said before, I think it has to be a multifaceted approach, right? There's no, like, silver bullet, sadly. If we knew what it was, someone would have done it by now. But what I mean by a multifaceted approach, it's like you're saying, I think there are a lot of different factors, a lot of different things that can be done and that haven't yet been done or tried, or at least not — for example, I mean, there are groups that advocate for tougher regulation by the FCC, for example, in terms of somebody not being able to buy up 500 radio stations and TV stations and etc., and broadcast the same message on all of them, that's like a pretty big thing that could potentially be done.

That was, again, it requires the will. It requires somebody to take the lead on actually doing something like that. As far as on the individual population level, where, as you said, I'm somewhat pessimistic in the sense that I don't think we're going to solve it either. We can teach people critical thinking, we can do this, we can do that, we can try to have people that are trusted, that check facts, etc., but I don't think we're going to ever get back to a point where we once were. But I think that on the political side of things that then what has to happen is that there has to be a recognition of the fact that there are these — as you said, there are people who live in these alternate realities.

And maybe the only thing we can realistically do is to keep people who are not living in the real reality out of power as much as humanly possible.

David Roberts

Well, you're getting at the biggest central challenge here, which is in practice, anything that attempted to restore accuracy or that tried to enforce accuracy would in practice, mostly be aimed at conservatives. In practice would mostly be shutting down conservative voices or blocking conservatives from being on Twitter or whatever. Because it's conservatives that are doing most of the lying and it's no coincidence. So it's like the fear of being partisan, the fear of seeming like you're on one side or the other, has paralyzed every institution that could do anything about it to the point of uselessness. And I don't know the way out of that.

You just saw them run the whole scam on Facebook again, just like they did on mainstream media, like browbeating Facebook, claiming to be discriminated against, demanding to be represented on any sort of council or panel or whatever, and they've absolutely run the scam on Facebook and now are allowed to say whatever they want on Facebook. And Facebook has put hardcore right-wing propagandists on their sort of truth committee or whatever it was. What institution can escape that bind?

Matt Sheffield

Yeah, although, I mean, to be fair to the other social network, Facebook from the very beginning was proto-fascist with Peter Thiel on the board.

David Roberts

Yeah, I don't think they had very far to travel.

Anna Tarkov

Exactly.

Matt Sheffield

Well, I mean, no, you're right, a lot of this it has to be a combination effort. And this is something because the disinformation economy is very distributed. It can't be attacked in a head-on fashion and successfully. And I would say so before I started Flux, I worked at the Hill doing polling for them. And one of the things that we always polled on was Donald Trump's approval rating. And it was very different from other presidents in that he had this strong floor of support that seemed very consistent, but to a large degree, that floor of support —

we asked people, do you strongly approve somewhat disapprove or strongly disapprove of Trump? And there definitely were a substantial number of people who strongly approved of Trump, but there also were for a long time, people who only somewhat approved of him. And those people figuring out what makes them do what they do and what motivates them may be the key to overcoming a lot of the social impasses that we have. And that's why I mentioned progressive Christianity.

Anna Tarkov

Well, on the one hand, yes. And on the other hand, isn't it partially a pandering to those people that has caused the media to take this approach where we have to prove that we're not partisan?

Matt Sheffield

Yeah. Understanding and — understanding them, but not pandering to them. Yes, good point there.

David Roberts

To again and again, if you look at the sort of academic research on public opinion, and what you find over and over again is that people basically take their cues from elites, they basically take their cues from people they trust that are in leadership positions in what they consider their tribe. And that's sort of one of the most basic features of public opinion. It's one of the most basic features of human thinking. Which leads me again and again to the conclusion that there's just no way to solve this from outside the conservative movement. It's got to reform itself from within somehow, because it's completely sealed everyone else out.

Like, what else can anybody do? No one else is trusted inside it. And when will that happen? And what reason would they have to reform? They're winning. It's working. They change what they're doing.

Matt Sheffield

That's a great point. But ultimately they are damaging the things that they suppose that they're trying to protect. So, like, for instance, if you look at belief in Christianity in the United States, it's gone down as right-wing Christianity came to the fore on the Republican Party. Belief in the Bible has gone down. And even like Orthodox Judaism is losing members now compared to Reform or Conservative or actually Conservatives lost as well. Reform is the only type of Judaism that's growing in. And that's also true with regard to Christianity is that there are a lot of people out there, these fundamentalist right-wing Christianity sects, they're losing members as well.

So like Jehovah's Witnesses or Mormons or Southern Baptists, they're all losing members in western countries. I think that understanding — that's why I said understanding what motivates me and then trying to have the people who are concerned, rather than leaving and becoming Democrats, just try to stay and fight for reason within their own party. And that's a hard ask, I understand.

David Roberts

It is. I mean, if you look at the dynamics of fundamentalist movements or fascist movements, they all have a kind of arc, right? They all start with a broad appeal, usually as a backlash against some regime or elite or some bloated, whatever, and then it's just the mentality. They have to get more and more extreme, build clearer and clearer walls around them, and they shrink, right? I mean, this is what happens. They shrink and get more extreme and shrink and get more extreme and then end up imploding and bringing some substantial chunk of society down with them.

That's sort of the arc I think you would expect this to have is more and more people get shut out, you know, like you see, like Liz Cheney, what happened to Liz Cheney. Like more and more people will get sort of declared apostates and booted until the thing shrinks down, until it can't really but that will be an ugly, ugly, ugly process. And maybe you could reverse it. Maybe Republicans of goodwill could throw themselves on the tracks and try to stop that process from happening. But I don't have a lot of hope.

Anna Tarkov

I often come back to the fact that while you can't necessarily get people to think critically, I think that it's more achievable to get people to work — deep canvassing, have you heard of that? Where you go and you talk to people not about a specific issue or a specific candidate or a specific policy, but you try to reframe their thinking about various things. For example, I know of, and this has been empirically studied and it seems to work. So it's something that unfortunately, I don't think is employed as often because a political campaign isn't going to; they're going to go and talk about their candidate.

A political party typically is not going to engage in that sort of thing either because they want their candidates to win, et cetera, or to promote their policies or whatever the case may be, or their brand. This is what Democrats stand for. This is what Republicans stand for. And so I think things like that show a lot of promise. It's just a matter of them being employed more.

David Roberts

Well, and think about it when you leave that house. I believe that this is what I mean by sort of high touch intensive interaction or intervention. I believe if you can get in the house with people and talk with them over time and establish a human connection, you can invoke different frames. You can get them to think about things in a different way.

Anna Tarkov

Exactly.

David Roberts

But then you leave the house and you're gone. And Fox is still there, and Fox is there all the time, 24 hours a day, day and night, leading them back the other direction. So we can't go deep canvas everybody. We've got to get a voice of reason inside the house.

Anna Tarkov

You have to work all the different sides.

David Roberts

Yes.

Anna Tarkov

Matt, do we want to do questions? Let's do it.

Matt Sheffield

All right. We're going to open it up to the audience here real quick.

Anna Tarkov

If you haven't used spaces before, you have to request.

Matt Sheffield

Yeah, okay. And actually, it looks like we have a request here. I mentioned this at the beginning, but if you weren't there at the beginning, this is a recorded Twitter space. So if you don't want your voice to be recorded, then you may not want to ask your question. But I did want to disclose that to everybody. Henry Elsewhere real quick. I have added you as a speaker. Go ahead.

Henry Elsewhere

Hey, how's it going? I'm curious, have you seen I believe it was in China, this kind of like, might actually be the carbon capture technology we're looking for. I just want to know if you'd seen it and if you had any thoughts on it. I heard there's a bunch of VCs that are super stoked on it because they're like "Oh, we only need like a 25 x 25 miles area with these carbon capture plants set up and they basically turn it into fertilizer." I don't know if you're familiar with this or not, but kind of interesting if it works.

David Roberts

Yeah, I can say a few things. I don't know what specific technology you're talking about, but this is a super active area of research and there are a bunch of different interesting directions people are pursuing. There's mineralization, which might be what you're talking about, where you absorb the carbon into minerals, which basically render it stable and then just throw them down on the ocean floor or bury them or mix them in with fertilizer because they're a good fertilizer. There's a bunch of different carbon capture machines. All I would say is that carbon capture is going to be a marginal contributor.

Even if you take the sort of International Energy Agency as gospel, it predicts a lot of carbon capture, but still, carbon capture is going to be dwarfed by solar and wind and batteries and all the normal stuff. So I feel like the tech community and the VC community have gotten themselves sort of geeked up in kind of a Star Trek way about this because they love the idea of advanced super technology that no one's invented yet and can magically solve things. But the fact is, we have the stuff we mostly need and it's mostly political and social resistance that's stopping it. And it would be nice if some of those tech and VC people got in the arena and advocated for policies that got the first 80% of reductions done before we start worrying about these technologies, we need to do the last 20%. That's what I would say generally about carbon capture.

Matt Sheffield

Okay. All right, thanks for that. All right, Nelson looks like he got his Internet connection resolved. So go ahead, Nelson.

Nelson

Yeah, sorry about that. We were talking earlier about one way for people to become more interested in the truth or more interested in the left and its policies is for the truth to help them. For the left and its policies to help them, right. And it seems to me that there's a lot of things like the Green New Deal, et cetera, that have the potential to directly aid people in their lives. But I think a problem is taking credit for it, right. If it is not reported on as actually helping the people's lives, or if the effects are downplayed or accredited to Republicans, for instance, then it seems to me that you will not get the desired effect of people becoming invested in the truth or progressive policies.

So I guess I was wondering if you had any thoughts on how to, supposing that we do succeed in improving people's lives, getting credit for that and using that to move progressive policies forward further, right? It seems like, can we get more progressive media? Can we yank the current media, give more credit where it's due? What do we do?

David Roberts

Yeah, that's a fantastic question, which I could go on about at length, but I'll try to be concise. First, I would just say, didn't the poll just come out not very long ago that a substantial number of people who got the childcare tax credit checks think they came from Trump? Something like 30 ish 40 ish percent of people in the country? So you're right that there is no this sort of naive version of this notion that Dems have that like, oh, if we change material circumstances in a positive way, it will redound to our political benefit.

That is naive because as you are sort of indicating here, even people's experience of their direct own lives and circumstances is mediated in some sense. Like they don't bring meaning to these things inherently. They find out from the voices and media around them what these things mean, what's the context for them, like who's responsible for them, all these kind of questions. So there's nothing unmediated. You can't just change material circumstances and expect that to do the political work for you. I think Obama found that out, he lowered most people's taxes, and yet to this day, most people believe he raised their taxes.

So, I would say two things. One is, when you think about interventions that can improve people's material circumstances, think not only in economic terms like Obama did, but also in social terms. What is a change in their circumstances that's so big and obvious that they can't miss it? You know what? And Trump grasped this in his little lizard brain, which is why he held up the checks until he could sign them. Do you guys remember that? He didn't send out relief checks until he could sign, but he got that. So, you need to do things, one that are big and dumb and clear and unambiguous enough that they're easy — if you do talk about them, you can cut through the fog a little bit and just make it clear.

And things, I think, like EV tax credits. If we're going to give people $3,500 back on the purchase of an EV, that $3,500 check should come with, like, Joe Biden's smiling face on it saying, "Thanks to the Build Back Better Act, here is your $3,500." That kind of thing. Like, Dems need to think more crudely almost about public policy and quit this technocratic fiddling with tax write-offs and tax deductions and capped tested tax benefits, all this s**t. No one knows. No one ever finds out about any of that stuff, even if it does help. So, do some big, dumb things is step number one.

And then step number two is just talking about it a lot. And that involves two things. One, some message discipline on the left. Which, how do you do that? I don't know. Two, it involves what is the information infrastructure that gets those messages to the ears and eyes of voters? And that is the biggest question in my mind facing the left today, is that they don't have one of those, right? You have a right-wing media dedicated 24 hours a day, all year long to making them look like s**t no matter what they do. And then you have a mainstream media who, as we were discussing earlier, views its role as, quote, unquote, adversarial, hold people accountable, which in their translation means just writing negative stories over and over and over again.

So when you have a Democrat in office, the entire media landscape is dedicated to writing negative stories about them and making them look bad. And that's why that explains so much of what we see around us now. So, what is the left's machine to push back against that? Is it a cable channel? Is it a radio station? Should we send hip-looking young people out on TikTok to do — I'm half joking, but I saw a handsome young man on TikTok the other day with an incredibly articulate little presentation about zoning, about upzoning and its climate benefits. I was like, s**t, yes. If they're out there watching TikTok. Let's send some people onto TikTok. I don't care where it is. But Dems have got to stop relying on the mainstream media to carry their messages to voters. It just doesn't work. It's a game of telephone, but that never reaches the voters. So, I wish I had a better answer on the latter half of that question because it is everything. That's everything. How to build that machine, but I don't really know.

Matt Sheffield

Well, I think no, that's a great point, David. And that's actually one of the things that we're trying to do with Flux is to A, get people on the political left aware that this needs to happen and then B, build it up to whatever degree that we can. And the reality is that it shouldn't be one thing.

David Roberts

Right.

Matt Sheffield

Progressive philanthropy has this obsession with, well, we need to have only just one thing. That's just this massive thing. And the reality is that's not what you're up against and that's not what you should do.

David Roberts

Guerrilla warfare that's out on the streets, right? Corner to corner in all the places.

Matt Sheffield

Yeah. You need to be helping people, help you get the word out. Progressive philanthropy, there's a lot of problems with it.

David Roberts

If I had to trace the problem to one factor above all, it's our shitty billionaires. Right-wing billionaires are legendarily patient with their capital and generous and will just like — if you want to get on that gravy train, you can and live on it for the rest of your life just doing nothing but being a hack, going out on TV and saying the message over and over and over and over or writing it over and over and over again. And the left's billionaires are terrible. Terrible. They do these one-off campaigns. They do these deliverables.

Matt Sheffield

Yeah. Or they make for-profit investments in media. I mean, if you look at so many left-of-center media outlets in the United States, they're for-profit, and that makes no sense at all. If you actually believe in your ideas, you can't put pressure on them to be commercially viable. That's just —

David Roberts

And this is a good way of framing this that I ask people a lot of times. So the public has this mistaken belief that the federal budget is like your kitchen table budget. Right. This is long-standing —

Anna Tarkov

Huge problem.

David Roberts

Yes, it's a huge problem, and it's been a problem forever because it really makes the public fundamentally misunderstand what the federal government does, like, what the federal government is for. It's a very terrible misunderstanding that hurts progressive policy. But anytime you bring that up and I've brought it up to numerous Democratic politicians and sort of like pollsters and advisors and whatever, and they all say the same thing, which is, "Oh, well, that's very old and deeply rooted and we're in the middle of a campaign and we don't have time to re-educate people about the basics like that. We just have to work around their misunderstanding. We have to do the best we can do in light of their misunderstanding" and that's true on a bunch of different issues. And so then I come to the question whose job is it to change the public's view about that like that and many other things but just choose that? Whose f*****g job is that? Is it think tanks? Is it some kind of media? Is it some kind of paid PR? I don't know what it is but, like —

Matt Sheffield

It's certainly not going to happen by itself.

David Roberts

Yeah, it's not going to happen by itself. And the right has numerous organs devoted full time to convincing people that government sucks and it can't do anything right. Who does the left have devoted to convincing people that government can work and that it's responsible for most of the good things we have in our life in America and etc., etc. Who's out there educating them on basic true facts about the world and no one can give me an answer.

Matt Sheffield

Yeah, that's a know we try to explore a lot at Flux. So for people who are not following us on Twitter, I invite you to do that. And flux.community is our website address as well. And yeah, right now we don't have anybody raising their we actually do we have a profile name here so go ahead and you can take your turn unmute yourself.

Diana

Hi. This is actually Diana. Thank you. I just want to say thank you. Your conversation here has been awesome and I really appreciate learning so much from you guys. I'm trying to be one of those people that is having those one-on-ones with people in my community a little bit. I have an EV and I know it's not perfect for the environment of course, but it's progress. However, from my neighbors, I've had comments I really didn't expect things like, "Hey, it'll take too much for the grid to handle and we can't have everybody driving an EV."

And comments like the debate about the post-use pollution of the vehicle and the battery and then they go to I say, "Well it's better than the pollution." So then they turn around and talk about the mining process for the battery and it seems like I just can't win. So I'm just wondering somehow they win the argument. I don't know where to go with it. And I was wondering if people are hearing that and it's been the same different people, but it's always the same exact lines. Are they getting this from somebody or are they all coming up with that?

David Roberts

The thing, they're all getting it from the same that's why they all sound the same is because they're all getting it from the same places. All these same arguments. Like I can mark as someone who is, let's say, too online, extremely online and involved in these particular subjects, I can sort of tell when a new talking point goes out. A talking point like "The grid can't handle all the EVs at once." That was nowhere, and then all of a sudden it was everywhere. I don't know the mechanism like what Alec or what think tank guy dreamed it up or how these things start, but clearly the word went out and I was getting Twitter randos yelling at me, using almost identical language one to the next.

So the answer to are they all getting in the same place? Is yes. And the other thing is, I can tell you from a history of arguing about climate change in very similar ways, with very similar people who were getting their information from very similar outlets, is that there is no winning, there is no end to it. Because they weren't arguing against climate change, because they had any genuine spontaneous feelings or thoughts about climate change. They just knew it was a lib thing. They knew — and you're supposed to own libs, and people like us, conservatives, don't believe that b******t.

And so they would try this argument and you shoot it down and they try that argument and you shoot it down, and then they'd go back to the first argument and you're like, wait, I shot that down. And then they drift off to some third argument and eventually you realize — in my case it took like ten friggin years — eventually you realize this is not a good faith exchange. We are not on a journey together to try to find the truth together. That's not what's happening here. They view their jobs as pissing me off and wasting my time.

Them changing their mind based on evidence is not in the cards. It is not a possible outcome here. And so a lot of times you just have to choose not to engage or disengage. I don't know exactly if there's a rule to tell the difference between what's good faith and what's not, but like a lot of these, you're going to run into a lot of this about electric cars. Now that they're threatened by electric cars, the coming global growth of electric vehicles is the number one thing that is going to diminish oil demand in the near term and is going to f**k the industry all up.

They're officially scared now, so you're seeing these Anti-EV arguments roll out and the fact is, yes, if every car converted to EV tomorrow, it would overwhelm the grid. Luckily, that's not going to happen and it's impossible. What's actually going to happen is the grids are going to be getting greener and being bulked up while electrification is happening. They're going to proceed in parallel and nobody is going to — no grid operator, like there's no forecast for the sale of EVs that has them rising so fast that they overwhelm grids in a way that we can't anticipate and deal with.

So that's just like disingenuous. It's disingenuous. It's just one of these made up arguments that's made to waste time. And it's the same with you here. Like, oh, you're just charging off the grid and the grid is coal. So really you're just emitting just as much elsewhere. Well, first of all, no, it's not just as much. Even on a coal intensive grid, an EV is better by pollution in pollution terms. And as I said, we're greening the grid as we speak. The US grid is getting cleaner and cleaner and cleaner, which means if you buy an EV and you're charging off a grid that's getting cleaner, in environmental terms, your EV is getting cleaner every day.

Right. Like an internal combustion engine you buy is as dirty as it is forever. But an EV literally gets cleaner every day as the grid gets cleaner. So it rises with the grid. There are answers to these things if you go out and look for them. I'm just skeptical about whether the kinds of people you're interacting with are ever going to care if you can shoot down their latest —

Anna Tarkov

Yeah, I want to underscore that for anyone else listening because this is a common theme that comes up not just in talking about climate, but every other progressive issue, right. Is where people believe that they can argue on the facts and give people statistics and studies and information that they view as empirically sound or scientific and that this is going to change their mind. Unfortunately, that's not how human psychology works. That's not how people's political beliefs are formed or how they work typically.

David Roberts

There's a great fact I like to share, which is that several studies and surveys now have found the same thing, which is that the most hardcore climate deniers, like old school "climate is not happening deniers" are the ones who know the most about climate science. They're not dumb, they're not ignorant like that. I think that's really important to understand. They often know more about climate science than your sort of average person off the street who just accepts what the scientists tell them, you know what I mean? They learn more about it in order to debunk it.

Right. It's not a matter of ignorance. It's all about ideology and motivation.

Anna Tarkov

Yeah. And that's why you have to parse whether someone is talking to you in good faith or not. And it can be hard to do it's easier in person than online, for sure, I will say.

Matt Sheffield

But it definitely is true. It definitely is true that some people are sincere in their question asking. As somebody who was a conservative for most of my life. People, I was able to change my mind so I can say that. All right, well, so we're going to do — give people two more chances to speak. So Gene, we tried to bring you in earlier but I don't know if you were hearing us or not. So we're going to let you have a chance and then if you're not able to speak, then we'll move to Kent.

Gene

I actually hit that by mistake. Sorry.

Matt Sheffield

Okay. All right. I'll remove you from the speaker then. Okay.

All right, so Kent, you can go ahead then. This is the last question here.

Kent

Okay. Yeah, there's a point here that — I live in a rural area. I'm a blue-collar infrastructure worker, retired. I worked on dams and all kinds of projects. But anyway, there's a point here where we need to decide, are we going to save the environment and the planet, or are we going to change the minds of the people that are fighting us? And I live here, and you ain't going to change these people's minds until they realize that there's money to be made and even the small-time farmers — I just sent a link to a couple of you about Sherman County, Oregon.

It went for Trump by 52 points, went from the poorest county in Oregon to one of the richest in less than 20 years by embracing wind energy. And the turbines are on farmers' land, and there's one farmer up there that gets $82,500 a year off her wind generators, which provides her money for next season's seed and maybe a new tractor that needs to be replaced that kind of thing. Dead Trumpers. But there's a point where if what we need to do, like here in Oregon, I can't put solar panels up. I've got five acres. I can't put up any more solar panels than I use for electricity.

So I can't actually produce electricity and get a wholesale price for it of whatever excess I make. And that would at least add to the grid. And the people that are fighting this really embrace that kind of thing. And so it's just a point where we got to decide, how are we going to do this? I mean, there's a big black cloud out there that we're charging towards, and we're all preaching to the choir, and that includes me. And so when I go out and I'm talking to my friends around here, they used to tell me that the Green New Deal wouldn't let them grow their cows.

They couldn't make hay. They couldn't drive their trucks to go get their cows. Beef was going to be outlawed. I mean, it was just insane. So I carry a couple of copies of the Green New Deal in my pickup, and I've got them all highlighted and marked up with all the pertinent things. It's only 14 pages. I'm sure everybody here has read it. And I go through it with them and say, look, here's what it says. There's a lot of good points in here. And then I talk to them about Sherman County. They just put in a large, huge, about a square mile solar farm here.

I can see it from my front yard. And people at first fought it and fought it, and now they're going, wow, that's pretty cool. There are some good things happening out there. It isn't all doom and gloom. We stopped the Pembina gas pipeline that was supposed to go through Oregon from Malin all the way to Coos Bay. They've completely abandoned that project. So that was just the people here. And you know what? It was all Republicans who stopped it because it was going to go through their land. It was a NIMBY thing. I know it seems really hard and it seems like all of these things are immovable, including us, but there is a way to get around this, maybe just at least as part of the energy part of it.

It's kind of like Tom Sawyer when he talked. We've all read that when he talked to all of his neighborhood friends to paint his aunt's fence instead of him because it was so much fun.

Matt Sheffield

That's a great point, Kent. Let's give David a chance.

Kent

Sure, not a problem. I just wanted to say there are some things out there that are happening that aren't just bad.

Matt Sheffield

Yeah, no, thanks. Thanks for that.

It's a really great question and a bunch of good points. Here's one thing I would say. If you can try to project yourself back to before you heard anything about the Green New Deal and empty your mind about it and think about what was the spirit of the Green New Deal as offered by the people who came up with it. And I mean in the contemporary context, the sort of contemporary left that came up with it, the whole point and motivation behind it, well, part of the motivation behind it is we got to address climate change.

David Roberts

That's one thing. But the other thing is this transition is going to happen because of economics. And we specifically want to make sure that we don't discard communities, particular communities or that particular communities don't get ground up in the wheels while we're changing as has happened during previous energy transitions. So specifically we have all this stuff in here for farmers, like all this stuff in here for agriculture, all this stuff in here to transition and help coal workers and natural gas workers that are left behind. One of the whole motivating spirits of the Green New Deal was a rural, friendly, working-class, friendly transition.

That was the damn point. And of course, if you could get out to those rural people and the farmers and the ranchers and get them away from Fox and talk to them for a while and show them what's in it, you could talk them around to that. But the fact is, after the Green New Deal — and I wrote about this study — after the Green New Deal was introduced by AOC and her cohort, in the following six months, Fox mentioned the Green New Deal more than all the other networks combined, like twice as much as the other three big cable networks combined. Why?

Because they recognized it had potential symbolic potential. Like they recognized you could make it into a symbol of something different than previous environmentalism, something more worker-friendly, more justice-oriented than previous transitions. They recognized the threat and they went right after it to destroy it. They very deliberately mounted a campaign to lie to their listeners about it and tell them it bans beef and bans — yes, they on purpose killed it. And I come back to the question I come back to over and over, which I've come back to a bunch on this call. Whose job is it to mount a similarly comprehensive, loud, repetitive, ubiquitous campaign on behalf of the Green New Deal, to support it, to lend it positive, symbolic connotations and —

Matt Sheffield

On non-ideological grounds?

David Roberts

Yes. So the left isn't unified to do it. We don't have a machine on Fox or talk radio. So what AOC does is give a press conference to the friggin mainstream media and then just is dependent on them to convey it to their listeners, which they don't. So naturally now public opinion is against the Green New Deal because one side went after it and one side didn't support it. And that's true for everything. There's nothing that's intrinsically going to appeal to farmers or rural people. It's all got to be somehow delivered to them and conveyed to them.

And the only people they listen to are Fox and right-wing radio who's lying to them actively about it. So basically, all problems on the left and all problems in the climate, left too, come back to this. Like we just don't have any control over the information atmosphere. And Fox can pollute anything it wants. It can turn those rural people against anything it wants. Right now, just as a funny example, Democrats are saying let's bulk up the IRS enforcement a little bit so that we can make rich people pay the taxes they owe. You would think that would be the most obvious, non-controversial, you're like, who could be against that?

Literally, who could be against that? And somehow right-wing media has got such a lock on their audience that they've figured out a way to convince these poor people that giving the IRS more enforcement power is just going to somehow hurt them. Even people who don't pay tax because they're so poor now believe they're against IRS reform. Which just goes to show there's nothing so obviously good that Fox can't pollute it.

Anna Tarkov

Well, David, the IRS is the government. The government's bad.

David Roberts

And why is that? Because they've spent 40 years saying that half their messages are already baked in. Everyone's already pre-convinced. I mean, I remember when the cap and trade bill came out in 2009 and the pro-climate people are like, well you see, there's these permits and then you trade the permits and then you can trade them in for an auctioned value. And then the right comes in with Fox and says "tax". Boom. Debate was over. Bill was dead because they had already everybody on their side already knows what a tax is, right? They know exactly how to fight that.

They know exactly how to think about it. They know exactly what they're doing with that.

Matt Sheffield

I'm sorry. They also have made the infrastructure. In real estate the number one rule of real estate, commercial real estate, is location, location, location. But the number one rule of persuasion is presence, presence, presence, presence. If you are there and if you're there, you don't even have to have good arguments, just the fact that you exist and are there and people can see that you're there on the cable. Like a ton of people came to watch Fox News just because they were flipping the TV. They didn't, you know, actively seek it out. They had never even heard of.

So, you know, just being out there all the time and that's something positive that we can think of as well as we come to the end here. That being out there on the regular, it is persuasive. If people encounter — some people will never change their minds, but other people, if they encounter ideas enough in enough different places from different people, eventually they can rub off in some fashion. And that's something that happened in a good way with the fight for same-sex marriage. And generally speaking, there's been a greater acceptance for LGBT rights and existence. So good things can still happen even in a system in which the deck is stacked.

David Roberts

Yeah, I mean, the thing is, the left does have enormous cultural power. The right is not wrong about that. They're not wrong when they freak out that the left owns Hollywood, et cetera, et cetera, et cetera. So if everyone on the left decides at once, like they seem to about gay marriage, then that will seep through culture, right? It'll come out through sitcoms, you know what I mean? Like in movies, it becomes ambient in culture. If the left really is gripped by something, it can make it ambient in culture and change minds about it. The question is just like, how do you do that on purpose?

How do you herd those cats on purpose? And no one knows?

Matt Sheffield

Yeah, well, it begins with enough people having the will to do it. And that only begins by conversations like this and writings like everybody here today that getting people to understand that this has to be done and we have to move toward a more change-oriented politics. Really, I appreciate you joining us today, David. And just to recap for everybody, so the conversation today, this was a recorded Twitter space. So patrons of David's and patrons of Flux, it will be available to you after this is over if you weren't able to make it. So I encourage you to subscribe to David's site or to join Flux on Patreon.

And David, did you have any concluding remarks you wanted to say?

David Roberts

No, other than everyone should subscribe to Volts.

Matt Sheffield

And your website address is impossible to forget. So go ahead.

David Roberts

Is volts.wtf.

Matt Sheffield

Yeah, you can't forget that one. That will be seared into everyone's mind today, hopefully. All right, David. Well, thanks for being here, everyone, and we'll see you next Tuesday at 03:00 P.M. Pacific, 06:00 P.M. Eastern Time. So thanks, everyone.

David Roberts

All right. Thank you, bye.

Matt Sheffield

Bye.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf so that I can continue doing this work. Thank you so much, and I'll see you next time.

In this episode, Australian comedian Dan Ilic hosts me on The Greatest Moral Podcast Of Our Generation.

(PDF transcript)

(Active transcript)

Text transcript:

David Roberts

While I was down under in Australia, I appeared on a show called A Rational Fear, a pod about climate change which is, I’m told, the winner of Australia’s Best Comedy Podcast.

More specifically, I appeared on a spinoff show they’re doing called [ahem] The Greatest Moral Podcast Of Our Generation, a series of interviews with climate types hosted by comedian and journalist Dan Ilic.

It was short, and fun, so I figured, why not share it with the Volts audience? Enjoy, and do check out A Rational Fear some time — it’s quite delightful.

Dan Ilic

I'm recording this on the land of the Gadigal people of the Eora Nation, and I encourage you all to think about whose land you're on and the wealth of the life that you enjoy on that land and why you enjoy it. As we head into this referendum month, I think it's all upon us all to kind of think about listening more. And if you don't know what the Voice Referendum is all about, go and find out. Let's try listening.

David Roberts

Despite global warming, A Rational Fear is adding a little more hot air with long form discussions with climate leaders, good and bad.

Intro

This is coal, don't be afraid. The — heat waves and drought — Greatest — mass extinction — Moral — we're facing a manmade disaster — Podcast — they're the climate criminals — of Our Generation. All of this with the global warming and that a lot of it's a hoax. The Greatest Moral Podcast of Our Generation. GMPOOG for short.

Dan Ilic

Every now and then, the A Rational Fear podcast turns green. We talk to someone who is super interested and who lives and breathes climate on a podcast I like to call The Greatest Moral Podcast of Our Generation, or GMPOOG for short. And I'm excited for you all to meet our next GMPOOG guest. Since about 2015, I have been following his writing on Vox.com and the Grist, but in more recent years, I've been listening to his podcast and reading along with his newsletter. It is Volts, or rather the presenter and the writer of Volts podcast, David Roberts. Welcome to A Rational Fear.

David Roberts

So glad to be here.

Dan Ilic

Or welcome to The Greatest Moral Podcast of Our Generation.

David Roberts

Yeah, I'm not sure I can keep that acronym in my head.

Dan Ilic

Well, the first guest on The Greatest Moral Podcast of Our Generation was former Prime Minister Kevin Rudd, who coined the phrase that climate change was the greatest moral problem of our generation. So that's why we called GMPOOG, GMPOOG. You are one of the foremost experts when it comes to climate and energy. I love Volts. I devour it, I listen as often as I can. And for such a complex and often combative topic, quite frankly, your voice is so calming and reassuring.

David Roberts

Thank you.

Dan Ilic

I mean, you could sell anything, which is why you're here today. To sell us on small modular nuclear reactors.

David Roberts

Exactly. And carbon capture and sequestration. That's my thing.

Dan Ilic

Well, it's such a sprawling conversation I'd love to have with you. Let's start there. We do hear a lot from a very small subsection of our politics all about small modular nuclear reactors. In fact, Barnaby Joyce, who at one time was a leader of a party in this country, said, "People aren't talking about the cost of living down at the supermarket. They're talking about small modular nuclear reactors."

David Roberts

Are they?

Dan Ilic

So I want to ask you, David Roberts, is anybody talking about small modular nuclear reactors?

David Roberts

I mean, yes, people are talking and talking and talking about them. The more relevant question is anyone building small modular nuclear reactors? And the answer to that is a big no. So I think they play more of a rhetorical role than an actual physical role in the energy system.

Dan Ilic

Why is there this energy, for better, no pun intended there, around small modular nuclear reactors? Why is this conversation happening now? Why is there a big drumbeat happening not only in Australia but other countries for it when there are no working models anywhere in the world?

David Roberts

There's two answers to that a cynical answer and a less cynical answer. The cynical answer is if you need something to say about climate policy and the other party has already claimed renewable energy, you need something to talk about, right? You need a climate policy and there's nothing left to grab but nuclear. And you want to claim to have a policy, but in practical terms, delay any actual real solutions. That's the cynical answer. The less cynical answer is renewable energy is variable. It comes and goes with the weather. So you need what's called firming. You need sources that can firm up renewable energy i.e. that you can turn on and off at will. And right now gas is serving that role. And so in a decarbonized system, you need something else to serve that role. So exactly what will serve that firming role, we don't completely know yet. Could be batteries, could be geothermal, could be hydro or small hydro, or it could be SMRs, if they ever come along. There is a role for that kind of thing in the energy system.

Dan Ilic

I'm excited to have you here because you're in the country. It's great to see you face to face because first and foremost, I'm a super fan. But two, we're at a really weird spot right now in Australian politics and global politics when it comes to climate. We're about a year on from the Inflation Reduction Act. We had Rich Duke on this podcast about a year ago when it got announced. How has the IRA been and where is it still lacking?

David Roberts

The headline news is that there have been, I think, around $70 billion of announced new manufacturing facilities and industrial facilities announced in the wake of IRA. So it has unquestionably sparked a huge flood of new investment.

Dan Ilic

Is this because the IRA is like — one of the core tenants is all kind of transport need to be built in America in order to get this government money?

David Roberts

Yes, there's a lot of the buy domestic sort of provisions in it, so everybody's coming to the US. So they can claim that. So that's part of it. And also, I think estimates of US economic growth have been revised upward a couple of times in the wake of IRA. So it has absolutely sparked growth, sparked a huge wave of investment. But in the larger picture, there are still big chunks of IRA that are where the implementation is being hashed out. So we really don't know yet. It really has not come into — all the subsidies for household stuff, demand side stuff, household stuff, your heat pumps, et cetera.

They were just announced. The structure of those tax credits was just — sort of came out last week, so it's too early to tell with those. And things like the green hydrogen subsidies, which are billions and billions and billions of dollars. The US Treasury Department is still beavering away trying to put those together, figure out how they work, figure out the requirements for those. So a lot of the bill hasn't even come into effect yet, so it'll be a couple of years before we really know what happens in the week. But it's clear it's sparking growth and investment.

Dan Ilic

Hey, this is a very tough question for you. If Trump gets in —

David Roberts

Oh, God. Everybody keeps asking me this. Everybody keeps asking.

Dan Ilic

what will happen to the IRA?

David Roberts

Everybody asks me this, and I get the strong sense that they want me to say something other than the obvious answer. But I'm afraid I have only the obvious answer, which is that it would be totally apocalyptic. Not only, I mean, for everything, but like the Heritage Foundation, the sort of right-wing think tank for some definition of think.

Dan Ilic

Yeah, I love these words. Like the Heritage Foundation. And generally, the Conservatives, they don't want to conserve anything and they're not interested in the heritage of anything.

David Roberts

I know, but they've already put together a plan, a very concrete plan, to roll it all back. So their intentions are clear. So it would get nuked, basically, is the short answer.

Dan Ilic

Okay, you're in Australia, I understand it, to do some side events around the ALP conference later this week. How have you been soaking up Australia and Australian culture and Australian politics to get kind of a grasp on where we are with climate policy?

David Roberts

Yeah, well, I spent a couple of days in Canberra talking to politicians, and I've been talking to philanthropists and activists and business people have been talking, talking. That's why my voice is so scratchy. My strong sense is that I am here pushing on an open door. The question of whether something big needs to happen is settled, and what remains to be seen are the details. So it really seems like an inflection point.

Dan Ilic

I mean, this is not strictly energy — well, it is, but it isn't — but when it comes to our own scope 3 emissions in Australia and our own emissions targets in Australia, our government keeps signing off on new gas projects and new coal mines, as does America. Where do you see similarities in this kind of talk versus action disconnect between our two countries?

David Roberts

Well, I think what's happening is and you see this in virtually every fossil fuel producing country, which is they are trying to say: Yes, let's reduce our domestic emissions. Let's decarbonize ourselves, but then let's go on exporting fossil fuels to everybody else. And of course, everyone can't do that, right? The trickier argument is trying to give Australian policymakers some sense of what could replace and improve on their export economy that they now depend on. I mean, Australia completely depends on fossil fuel and iron ore exports at the moment. So the question is, what role could Australia play in a clean economy and still maintain its sort of healthy exports?

And that has a lot to do with, I'm sure you've heard these discussions, critical minerals processing. Critical minerals processing iron ore to make it green so that people can make green steel. I mean, the world needs these clean materials and Australia is awash in them.

Dan Ilic

Well, whose mouth has been chewing your ear off about that?

David Roberts

Everyone.

Dan Ilic

Who's lobbying you to tell these lies? Not these lies, not these lies. these liens.

David Roberts

Everyone. Because that's the big question for Australia, is what, if anything, can replace, or at least diversify? I mean, Harvard issues this list every year of countries by economic complexity. And I think Australia is like 70 something right down near Nigeria. It is really 100% —

Dan Ilic

It's because we have two major exports: Rocks and Hemsworths. There are two major exports.

David Roberts

And you're out of Hemsworth.

Dan Ilic

I think we found a renewable source. It's okay. It just takes a while to regenerate.

David Roberts

I assume they'll be producing new Hemsworths shortly. Yeah, that's on everyone's mind. One of the big features of IRA is the US, and a large pool of global capital is going to be looking around for sources of these materials that aren't China, basically. That are friendly sources of these materials. And Australia is on the front of the line for that. So it's a huge opportunity for Australia.

Dan Ilic

When it comes to our unique political landscape. Have you gotten across that? What do you find most interesting about that?

David Roberts

Oh, my goodness, so many things. Let's say I'm extremely jealous of compulsory voting. I'm extremely jealous of ranked choice voting.

Dan Ilic

Yes.

David Roberts

I'm extremely jealous of having an independent nonpartisan commission that does districting rather than partisan gerrymandering.

Dan Ilic

Okay, David, you're talking to an Australian audience who takes all this for granted. What we think is so weird is like, what? Like, you wait for CNN to call the election? You let some Republicans and Democrats decide who won in that particular city.

David Roberts

Don't remind me. And you know what else I find super, super fascinating, which absolutely could not exist in America's dysfunctional system is the sort of rise of the Teals, the sort of independents, the sort of what, I guess back home we would call moderate Republicans, which is pretty much an extinct species back home because we have such a binary system. But here you have room for a little variety, a little complexity. It's much more interesting than America's extremely boring: Left v right, red v blue. Everything is polarized. One or the other. It's mind deadening. So it's just interesting to have some complexity.

Dan Ilic

I've spent a lot of time in America, I've worked a lot in America. When I explained to people that Australians aren't really polarized by political party because of compulsory voting, because everyone has to vote, no one has to pick a team. And what we essentially do as a population is stand back with our arms folded and go, "All right, impress me."

David Roberts

Yes. Political parties don't go out picking and choosing their voters. Right? They don't win by choosing voters. Everybody votes.

Dan Ilic

Oh, my God. Gerrymandering is a whole other thing.

David Roberts

I mean, the US political system is dysfunctional in so many ways. I could go on and on.

Dan Ilic

What about the room itself? What about you were in Canberra who struck you as an interesting character, talking to them? I assume you would have been protected from the crazy ones.

David Roberts

Yeah, I was not forced to deal with any of the crazies. I did a little roundtable thing with Chris Bowen, the energy minister, and he was nodding along and seemed very on board and said something that I thought was striking, which is that the US IRA is probably the most significant climate event, even more so than the Paris Climate Agreement, which I thought was quite dramatic and I think defensible.

Dan Ilic

Do you think that was a fair comment?

David Roberts

Yeah. I mean, the US still, despite its dysfunctions, has enormous soft power, it has enormous influence over people and just the sheer amount of money it's spending now, like the other developed countries, simply cannot afford to sit on their hands at this point. I think the message of the IRA, which I've been saying over and over again to everyone who will listen while I'm here, is that the era of free trade, free market neoliberalism is over. It is over. And the Biden administration is explicit that it's over. There's a new economy, global economy, taking shape around clean energy, around semiconductors, around all these things.

And the US is taking active measures to shape its place in that economy, and other countries need to do the same.

Dan Ilic

So, what do you see in 15 years? How will the economy be different in 15 years' time? I mean, I'm asking you because 15 years ago, you were writing about climate —

David Roberts

I know, don't remind me.

Dan Ilic

and energy. Someone who's had their eye on this game for so long. In 15 years, what do you see? Every country, it seems — here's my understanding, watching other countries talk about climate from their perspective, they're all saying that they are going to transition to become a renewable energy superpower. It's not a slogan that we just have in Australia from progressive climate people. You hear that, I see and read that in other countries everywhere around the world. It's like a disease that's kind of caught this meme that everyone thinks they're going to be, but everyone can't be an energy exporter.

What does it look like for you in 15 years? Where do you see the board?

David Roberts

Well, the problem answering that question is that in the US, now, with every election, the entire fate of the free world is on the line. Literally —

Dan Ilic

No pressure.

David Roberts

literally, if Trump and the Republicans win in 2024, it could be the end of democracy in the US. It could be that we double down on fossil fuel. It could be that we choose a sort of Russia style, sort of like as long as there are fossil fuels being used anywhere in the world, we're going to be the producer of them. Or we could have a green utopia down the other route.

It's so hard to predict, but I mean, I think you can see a few things like EVs are going to dominate. I think heat pumps are going to dominate, electrification is going to take over. Renewable energy is going to be even cheaper than anybody now predicts, which is what has happened at every stage of renewable energy growth. It's always cheaper than anyone says it was going to be. Because the beauty of renewable energy, which is not true of fossil fuel energy, is that the more you do it, the more you build of it, the cheaper it gets, on and on to eternity.

So it's going to be much cheaper and that's going to change. And the question is, once countries can domestically generate their own energy, once fossil fuel importers are able to generate most of their own energy and no longer depend on fossil fuel exporters, how is that going to change geopolitics? I mean, who knows? But it's definitely going to shake up the world order, right, in ways that I think are incredibly difficult to predict.

Dan Ilic

Oh, yeah, of course. Like Japan currently is one of the biggest importers of fossil fuels, so they can run their economy.

David Roberts

Well, I mean, it's a relatively small handful of countries that are fossil fuel exporters, so most countries are going to benefit from this. Most countries are going to be better off when they're generating their own energy. It's only the exporters that really have anything to lose here.

Dan Ilic

I hear what you're saying, we're going to have to find a new source of Hemsworth.

David Roberts

Renewable Hemsworths.

Dan Ilic

It's interesting. I think it was your podcast, you had somebody on talking about batteries within appliances. I remember that's —

David Roberts

A geeky one.

Dan Ilic

yeah, forgive me, David, I'm very excited to talk to you, but most of the time I listen to you it's in the shower —

David Roberts

More than I wanted to know.

Dan Ilic

because it's a great place to listen to podcasts. And I think there's something really interesting with stovetops and water heaters and all these large appliances that need power at nighttime to have batteries within them, to run them. That was all this kind of interesting innovation. Who's going to be making those next lots of appliances, do you think?

David Roberts

It's a good question. Right, because what you generally big established — I mean, this is true, I think it's sort of a truism of business scholarship, which is that big established incumbents are not generally particularly innovative. So it's probably going to be a bunch of little startups to begin with. And the question is, once — one of the most fascinating things I see happening at the household level is that eventually all these appliances and all these households are going to be connected digitally. All the appliances are going to be talking to one another, they're going to be talking to the house, they're going to be talking to the neighborhood, they're going to be talking to the grid.

So what happens in terms of emergent effects? Once you have literally hundreds of thousands of basically small scale, energy producing, energy consuming, energy storing devices distributed around the grid, talking to one another and coordinating, I think that's going to open up whole new markets, whole new vistas, whole new things that we can't even really guess at yet, what that's going to look like.

Dan Ilic

We're going to see startups. I guess a great parallel would be the Teslas and the Rivians of the kitchen world. And then the GEs will come along.

David Roberts

Yeah. You're going to see a lot of startups, most of whom will end up carcasses on the side of the road. As with any new market, as with any sort of emerging market, there's going to be one or two Googles at the end of the line, but most of them are going to die along the way. But in the process, we'll be innovating.

Dan Ilic

Yeah. I want to know a bit more about you. You don't give a lot away about you as a person on your podcast. It's strictly for the nerds, but how did you —

David Roberts

I'm very boring.

Dan Ilic

Well, I want to know a little bit about you. How did you come to this subject? How did you come to energy and climate? What was the catalyst for you?

David Roberts

100% random chance. I went to grad school for philosophy for a good while, got along far enough in that to get a good look at academia, recoiled in horror, dropped out and moved to Seattle, was unemployed, bouncing around crappy tech jobs for a while. And literally the first time I ever went to Craigslist, I don't know if you guys have used this, was I think early in Craigslist, the first time I ever went there, there's just a little ad for an editorial assistant at a small web publication called Grist, which was devoted to the environment. And to that point, I had no journalistic experience.

I had no particular experience in the environment or interest in the environment. So I wrote this long overwrought cover letter begging for the job because I didn't want to get stuck in tech jobs, wormed my way into Grist and just over the years, wormed my way over into writing. So 100% self-taught in terms of journalism and in terms of climate stuff.

Dan Ilic

I mean, you say this sometimes in your podcast, how you're just a guy trying to learn about stuff. And you're not an expert. At what point has that tipped over and you've become an expert? At what point does that shtick no longer count?

David Roberts

I will never feel comfortable. I talk to too many genuine experts to claim to be one. I've seen genuine expertise up close, and I know that's not what I have. I think I'm a better than average educated generalist, let's say.

Dan Ilic

Who has an obsession with climate.

David Roberts

Who's obsessed. And I loved what I found when I started at Grist and I was like, well, I got to find something in this area that really interests me. And then I gravitated to climate and clean energy because much like what attracted me to philosophy, it's just these big systems and systems within systems and how do they all hang together and how do you think about them and conceptualize their relationships? And it's just really intellectually, endlessly fruitful and interesting.

Dan Ilic

It's such a hard time right now with what's happening in the global north with climate. Seeing your home country in flames is terrible, like we were on fire three years ago, which radicalized me. That moment was a moment where I was like, well, when am I doing this comedy podcast for? Let's really lock in and do more on climate. How are you coping with kind of this time we live in after covering it for so long?

David Roberts

My great anxiety is — there's sort of two stories you can tell one story which I think climate people have kind of been telling themselves for a long time, which is, enough of this stuff happens, enough disasters pop up, it's going to change people's mind and radicalize people, and they'll come around and then we'll all start acting. The other story is the more disasters there are, the more stress there is. The more anxiety there is, the more dislocation there is. And people generally do not respond to anxiety and dislocation with rational, forward-looking reason. They generally, stress and anxiety make people more small c conservatives.

So my great fear is that all these disasters are going to have people drawing in and putting walls up rather than throwing themselves more into international cooperation. I worry a lot.

You're here to do side, as I mentioned, to do side projects around the ALP conference. Do you have any kind of — I know it's weird to ask someone who's kind of outside of the political sphere do you have any notion of how you might be received from ALP people or how you might be received within the decision makers in labor themselves?

I mean, I think there is widespread fascination about the IRA, about the Inflation Reduction Act, widespread interest in it, how it came about, what effects it's having, what political effects it's having. Because the big dynamic right now is my feeling is liberal knows it needs to do something, but it has a little PTSD about the grubby history of climate policy here in the country. It's had a lot of backlashes.

Dan Ilic

You're talking about the Liberal Party, not liberals.

David Roberts

Well, I mean, Labor has, I think, suffered backlashes in the past due to climate policy, or at least it perceives. So it has a little bit of that hesitancy. So the question is just can it screw up its courage to go big? And sort of that's why I think it's fascinated by IRA, because the US has also had a lot of history with climate policy and the US somehow managed to go big. So that's I think at the very least, their ears are open.

Dan Ilic

So you're thinking IRA might see some kind of big ATM cash injection in Australia? Like you think that the government in Australia might do something as bold as IRA?

David Roberts

Maybe, if it can overcome its reticence about big spending. Right. Because the hangover of neoliberalism, the hangover of treating the national budget like a household budget, all that nonsense, things needing to be revenue neutral, terror of deficits, all this kind of like neoliberal hangover, there's still some of that around. So it's a little question of which way they fall —

Dan Ilic

Spoken like an American.

David Roberts

Yeah, but I think at the very least they're open in a way, at least from what I've heard, that they have not been in a long time.

Dan Ilic

It seems so counterintuitive that they are not more aggressive on climate and energy, clean energy. Because the Teals, as you mentioned before, when they got elected, they got so many seats, they're only one seat away from disrupting Labour's majority. And I don't know if Labor can see that, but that movement was not just about anti the coalition, it was about pro climate, pro green energy. And I don't know if they can see that. I think they just see these Teal seats as a threat to liberal seats. But what they're actually threatening is the notion that if you don't act on climate, those Teals are going to take your seats.

David Roberts

Right, well, is the risk going too big or is the risk not going big enough? And I think that's really up in the air right now. I think there's a real — they're very torn about that right now.

Dan Ilic

Right.

David Roberts

That's part of why I'm here is to nudge them in the one direction.

Dan Ilic

So who's paying the bills? Who's bringing you out here? Is it a big Teal?

David Roberts

It's the big electrical union. Because another feature of IRA that's new for America is the unions are on board. Now the unions are pulling in the right direction. It's the same here, because unlike previous iterations of climate policy, IRA is all about jobs, good jobs. A lot of these tax credits are conditioned on prevailing wages and using apprentices. And so it's a very pro union, pro good, well-paying job environment. And it's good to have the environmental justice community and the unions and the centrists, all the factions of the left are aligned for once, which is not the normal state of affairs.

Dan Ilic

Let's quickly ask you this. So I saw two nights ago, you're at the MCG watching AFL. What did you think?

David Roberts

I saw the Roos fall to the Bombers and I tweeted out, I said, I'm here at the AFL game and I'm rooting for the Bombers. And was quickly informed by a number of Australians that I might want to use different nomenclature.

Dan Ilic

Yes, rooting means f*****g.

David Roberts

It turns out I'm barracking for the Bombers. Excuse me.

Dan Ilic

That's great. Well, thank you so much for hanging out with me on The Greatest Moral Podcast of Our Generation. It's a real thrill to meet you, and I'm a big fanboy. So hopefully many of our listeners can jump over to the show notes and click the link and go listen to your podcast as well.

David Roberts

Thanks so much. I really appreciate it.

Dan Ilic

Hey, no worries.