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A solar or wind farm in ERCOT can watch wholesale prices fall below zero, which makes a project hard to finance. Ever.green sells companies 5- to 10-year contracts for a project’s renewable energy certificates (RECs, credits for megawatt-hours of clean power), giving developers revenue they can take to the bank. A pending greenhouse gas protocol change would phase in hourly matching, counting clean power only in the hour and on the grid where a company uses it. Backers say that cuts double counting. Ever.green Chief Executive Cris Eugster says it would steer buyers away from long-term contracts on dirtier grids. We recorded an interview with him in October. On this week’s Energy Capital Podcast, Joshua Rhodes talks with Eugster, Ever.green’s co-founder and a former chief operating officer of CPS Energy, about how long-term contracts get clean projects built. The rest of the conversation: * Solar for schools: REC contracts at $25 to $35 each, against $2 to $3 on the spot market, lower the power bill for 15 Wayne County, W.V., schools enough to free up money for teachers. * How the deals work: Ever.green signs as the developer’s one counterparty and splits a project’s RECs among several companies, so no developer negotiates with five sets of corporate lawyers. “Contracted revenue is like gold,” Eugster says. * Keeping an old wind farm running: how REC revenue supports the repowered Ocotillo wind farm in Big Spring, Texas, while the owners sells power at merchant prices. * Proving the money mattered: Eugster says no one can prove a project wouldn’t have been built anyway, so Ever.green asks developers to attest its contract is material. * Gamers as buyers: how the platform SuperPower pooled player subscriptions behind the 110 MW Three W solar farm in Hill County, and Eugster’s hint that other industries will follow next year. * Who carries price risk: why Eugster says a fixed REC price lets corporate buyers back new projects without taking on the price swings of power purchase agreement. * Plus: the data center race and its emissions, CPS Energy’s 771 MW Save for Tomorrow Energy Plan efficiency program, ERCOT’s batch zero study, Eugster’s path from MIT and McKinsey to Houston City Hall, and nuclear. Chapters * 00:00 – Introduction and guest background * 01:44 – From MIT and McKinsey to Houston City Hall * 05:13 – CPS Energy’s STEP efficiency program * 07:22 – From NAES to founding Ever.green * 09:21 – Why clean energy needs to move faster * 11:06 – Why Texas builds energy faster * 12:31 – Turning RECs into project financing * 15:28 – Solar for schools and how the deals work * 20:32 – Gamers back a Texas solar farm * 24:29 – Keeping an old wind farm running * 26:26 – The 10 percent test for additionality * 29:16 – Hourly matching vs. backing dirtier grids * 32:44 – Data centers and the race for power * 37:16 – Nuclear and a growing market Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * Energy Capital (Podcast - LinkedIn - YouTube) * Texas Energy & Power (Website) * Cris Eugster (LinkedIn) * Ever.green (Website - LinkedIn) * Michael Leggett (LinkedIn) * SuperPower (Website) Company & Industry News * Three W Solar project comes online in Texas * Video gamers give 110-MW Texas solar project a financing boost * REC sales on WV school district’s solar project free up money for two teacher salaries * Clearway Partially Repowers 55 MW Wind Farm in West Texas Books, Articles & Filings Discussed * Ever.green - Additionality Methodology for High-Impact RECs * Ever.green - Hidden Risks of Hourly Matching * GHG Protocol - Public Consultations on Scope 2 and Electricity Sector Consequential Accounting * ERCOT - PUCT Approves ERCOT’s Batch Zero Process for Connecting Large Electricity Users * CPS Energy - STEP (Sustainable Tomorrow Energy Plan) Related Podcasts by Energy Capital * Why some large loads insist on paying their way * What batch zero settles and what it leaves open * Wind is keeping West Texas ranches solvent * Beyond the Tax Credit Cliff with Freedom Solar CEO Bret Biggart Transcript Joshua Rhodes: Hey everyone, and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Cris Eugster here, co-founder and CEO of Ever.green, to kinda talk about, you know, what they do in terms of renewable energy credits and setting up some really interesting deals when it comes to getting projects financed. Cris has a double E, is a double E all the way through from his undergrad at Texas A&M University, master’s and PhD at MIT, so be careful what you’re gonna ask him, or that same to myself. Then he spent roughly nine years at McKinsey & Company before most folks in Texas will know him as ending up as the COO of CPS Energy down in San Antonio. After that, he was the president and CEO of NAES Corp before becoming founder and CEO of Ever.green. And Ever.green is a market maker in high impact RECs, renewable energy credits, that enable capital flow to new clean energy projects. Cris Eugster, welcome to the Energy Capital Podcast. Cris Eugster: Hey, Josh. Great to be here. Thank you. Joshua Rhodes: Yeah, absolutely. So Cris, so we go way back actually. Like, I remember you from when I was a grad student at UT Austin, and you were at CPS kind of at that time. I actually wanted to start off saying, hey, thanks for taking the time to talk to grad students. ‘Cause like I know your job was busy when you were in San Antonio, but I really appreciate you putting in the time for that. And God, you never know, ‘cause now I’m the one on, interviewing you on a podcast, right? So you just never know how it’s gonna go. Cris Eugster: Yeah. You guys have put an amazing program in place up there at UT with the Webber Group and, you know, all the analytics that y’all have done in the ERCOT market, which is pretty dynamic. You know, it’s always been impressive and what little I can do, I really enjoyed it. Joshua Rhodes: Well, I appreciate it. It’s always helpful to have, like, kinda real world folks and conversations and things like that. So let’s start maybe a little bit, kind of before CPS, and then we’ll talk a little bit about your time at CPS, give a kinda little Texas, like, kinda bounding for this, and then we’ll move on. So your path into energy is pretty interesting. You studied... You’re a double E. You’re electrical engineering at A&M and MIT, just like I said, studying quantum transport in nanostructures, which we won’t talk about on this podcast, but sounds fun. Cris Eugster: Josh, I was curious kinda where Moore’s Law takes you. How small can you get? You know, it’s always a divide by two. It’s like, how small can you get? And so that was kind of part of the MIT work. When you get to some of those quantum dimensions you know, how do devices act, and how do you engineer that world? It’s, it was pretty exciting, but that’s behind me now. Joshua Rhodes: I mean, we’re getting there with, like, you know, silicon being printed on, like, extremely thin wafers for all kinds of technology and now compute and other types of stuff. So, I mean, it’s relevant, that’s for sure. But after that, you spent nine years at McKinsey. How did you find your way into the utility business? Like, what attracted you to challenges in the electricity sector? Cris Eugster: Yeah. You know, I’ve always been sort of big picture type of person. You know, I like strategy. I like kinda solving things that can make a difference in this world. I’m very mission-driven in kind of how I think about my career. And McKinsey was a really exciting place. I mean, you know, they were kind of tapping out of kind of MBA students, and they wanted to go after PhDs and retool them to be, you know, business consultants. You know, I went from a PhD program, which was a set course to become a professor someplace or work at one of the big kind of labs. But it was a pretty big pivot for me in my career to go into kind of business and management consulting, and McKinsey afforded that opportunity. They were kinda starting to attract PhDs and try to kinda retrain, retool them to make a differ… This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

In August, Gov. Greg Abbott ordered ERCOT to audit the data centers seeking to connect to the grid, pausing ERCOT’s batch zero study of the first cohort for a new process to connect large loads as a group. In September he told the Texas Commission on Environmental Quality to halt data center permits. Rep. Drew Darby, the San Angelo Republican who chairs the House Energy Resources Committee, wants harder terms for those projects: data centers pay their own way, show they have tenants and financing, and earn support from the towns that host them. His 2025 bill, House Bill 3970, offered a faster path to the grid for large loads that bring their own generation or agree to cut use on ERCOT’s call. He faults the delay and says “the worst thing we could do is throw batch zero out.” On this week’s Energy Capital Podcast, Joshua Rhodes talks with Darby about large loads and the infrastructure rural Texas carries for the rest of the state. The rest of the conversation: * Dove Creek and speculative load: Darby says Beacon Data Centers left Dove Creek residents without answers on water, power and noise. One project shopped to five towns, he says, becomes 5 gigawatts of demand on paper. * The data center tax break: The 2013 sales tax exemption for data center equipment was pegged at $14.6 million for 2014-2015. The Senate Finance Committee projects $3.3 billion for 2028-2029. Darby would rework it rather than repeal it. * The 765-kilovolt review clock: Darby backs the new transmission lines but wants to add at least three more months to the Texas Public Utility Comission’s 180-day review. On one line, he says, 1,400-plus landowners were added to the review process late with no extra time. * Produced water: Oil wells bring up two to five barrels of brine per barrel of oil. Darby puts injection at 50 to 75 cents a barrel and treatment for reuse at about three times that. He counts three permits pending at TCEQ to discharge treated water into the Pecos River basin. * Rural representation: By Darby’s count, 17 House members represent the two-thirds of Texas west of Interstate 35. Harris County alone has 25. * After November: Darby credits the 76–74 House of 2009 with getting its work done because members worked together. * Plus: grid-enhancing technologies and HB 5200, which passed the House 128–0 and never got a Senate hearing, and how Tom Green County got its panhandle. Chapters * 00:00 - Welcome and Tom Green County’s panhandle * 03:10 - Why data centers lost public support * 05:12 - Making data centers pay their way * 08:04 - What cities miss about rural Texas * 12:24 - Keeping data center hookups moving * 15:40 - Dove Creek and projects on paper * 20:04 - What data centers owe host towns * 22:11 - More time for landowners on power lines * 29:34 - Getting more from existing power lines * 32:00 - Oilfield wastewater as new water * 38:27 - How much oilfield water Texas could use * 40:23 - The election and working across the aisle Resources People & Organizations * Joshua Rhodes * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Energy Capital (Podcast - LinkedIn - YouTube) * Drew Darby Company & Industry News * KBTX - Abbott pauses data center permits pending water and power review * KERA - Texas lawmakers question billions in tax breaks for data centers * San Angelo LIVE! - Darby reacts to Dove Creek data center TCEQ permit application * Texas Tribune - Pressure mounts to allow treated oilfield waste in Texas rivers and on rangeland Books, Articles & Filings Discussed * Office of the Governor - Governor Abbott directs comprehensive data center audit * ERCOT - New batch connection process for large electricity users * Texas Legislature - HB 3970 (89R), expedited large-load interconnection * Texas Legislature - SB 6 (89R), bill analysis * Texas Legislature - HB 5200 (89R), grid-enhancing technologies * Texas Legislature - HB 49 (89R), produced water liability * Legislative Budget Board - HB 1223 (83R) data center sales tax exemption fiscal note * Rep. Drew Darby - Letter to TCEQ on Beacon Data Centers * Utility Dive - Texas regulators approve Permian Basin Reliability Plan Related Podcasts by Energy Capital * Solutions Over Theatrics with Texas House Energy Resources Chairman Drew Darby * Who Pays for the New Grid with Pablo Vegas * What the Sierra Club wants from the Texas grid * How Texas decides which data centers to connect * Why some large loads insist on paying their way T This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

House Bill 5200 would have had ERCOT evaluate grid-enhancing technologies (sensors, software and advanced conductors that raise an existing transmission line’s capacity). It passed the House 128-0 in 2025. The Senate never gave it a hearing. Its author, State Rep. Rafael Anchía (D-Dallas), says no senator would carry it, and he plans to refile it for the session that opens Jan. 12. Lawmakers return to a large-load queue topping 400 gigawatts, mostly data centers, and a data center freeze Gov. Greg Abbott ordered in August pending an audit. On this week’s Energy Capital Podcast, Joshua Rhodes talks with Anchía, who has represented House District 103 since 2005, about how a bill becomes Texas law and what the 2027 session holds for the grid. * How a Texas bill dies. About 1,200 of the 8,700 bills filed in 2025 reached the governor. Anchía calls the process “a mechanism designed to kill legislation” and tells advocates to build coalitions between sessions. * SB 6’s price of entry. The PUCT’s September rules under SB 6, the 2025 large-load interconnection law, requiring a $100,000 study fee and $50,000 per megawatt in security. * Predictable rules. Anchía, once skeptical of Texas’s competitive market, says it works when the rules stay predictable, and names what undercuts it: shifting tariffs, threats to re-regulate, and favoring one fuel over another. * Upgrades and new lines. He supports the 765-kilovolt lines the PUCT began approving in August. Utilities such as Oncor recover new-line costs more easily than upgrade costs, he says, so he wants grid-enhancing technologies made a condition of new builds. * Winter risk after Uri. Experts tell Anchía a severe winter storm worries them more than summer peaks. He wants proof the Railroad Commission’s 2022 gas weatherization rules hold through one. * The 2027 list. Anchía expects bills requiring data centers to disclose energy and water use and ending their taxpayer subsidies. He also wants a temporary fund, modeled on the old System Benefit Fund, for the Texans least able to absorb price shocks. * Plus: his two decades in the House, from deregulation through CREZ, his predictions for the Nov. 3 Texas House and statewide races, and what a change in control of Congress would mean for Texas energy. Abbott’s audit is still open, and its findings will reach a Legislature that Anchía expects to make targeted fixes to SB 6. Chapters * 00:00 – Meet Rep. Rafael Anchía * 00:58 – How a bill becomes law in Texas * 06:25 – When public input matters most * 08:33 – Why HB 5200 stalled in the Senate * 12:43 – 20 years of Texas energy policy * 16:46 – What still needs fixing after Winter Storm Uri * 19:18 – The data center rush and SB 6 * 22:27 – Why the governor paused data centers * 26:05 – Steady rules vs. picking winners * 30:29 – Bigger power lines and getting more from the grid * 35:01 – Rewarding utilities for doing more with less * 37:51 – Priorities for the 2027 session * 40:14 – Election predictions for Texas * 44:02 – If Congress flips: what it means for Texas energy This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

On this week’s Energy Capital Podcast, Joshua Rhodes talks with Ellis, now research director at MarketClear Utility Policy Research and an expert witness for consumer groups in rate cases. They discuss why the gap persists and how an auction could close it. Chapters 00:00 – Introducing Mark Ellis 00:57 – How utilities make money 07:08 – From Sempra insider to utility critic 12:53 – What makes a return fair 17:56 – The math behind a 6 percent return 22:39 – Lower returns and credit ratings 28:08 – Walking through a $10 billion project 33:15 – What utility stock prices reveal 36:49 – Why regulators keep returns high 42:12 – Letting investors bid: the MarketClear auction 45:11 – Who would invest, and how much 50:09 – How the utility business would change 54:12 – Why utilities resist non-wires alternatives This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

In ERCOT’s new interconnection process for large loads, a data center can connect sooner as a provisional controllable load resource. That is, ERCOT can curtail power above an agreed firm level. A study from Base Power and Piq Energy shows batteries near the transmission lines to a data center could stand in for most of that curtailment. In the study, 80 megawatts of batteries would clear every transmission constraint created by a 100 MW data center near Burleson, Texas, on Oncor’s system. A battery beside a strained line relieves it about one-for-one, while curtailing a more distant data center may relieve half as much. Any battery near the line has that edge. On this week’s Energy Capital Podcast, Joshua Rhodes talks with Chase Dowling, head of market operations for Austin battery company Base Power. The business model is Base Power retains ownership of the batteries it installs for retail customers, and homeowners subscribe to the service.Dowling puts the batteries’ reach at “80 percent, 85 percent of all of the constraints.” The rare failures that sever part of the system, he says, still need new transmission or generation. * The limits: the battery fleet needed grows faster than the load, and West Texas lacks enough homes for large fleets. No market yet pays batteries to act as transmission. * Who pays: Dowling proposes that a data center facing curtailment fund a battery fleet near its constraints, and the host homes get outage protection. * Utility fleets: for El Paso Electric and CoServ, Base builds co-branded fleets and hands control to the utility. It now installs in Chicago, in PJM. * Backup: Dowling says a portable generator can stretch a Base battery through a multi-day outage like Winter Storm Uri. Dowling says the challenge now is getting ERCOT to model these fleets at the transmission substation, where planners can see them. Chapters 00:00 – Chase Dowling and the new Base Power study01:01 – What Base Power has built since 202302:22 – Manufacturing home batteries as a grid resource05:10 – The homeowner value proposition07:50 – Base Core's generator port and extended backup11:43 – Deployment speed and what limits it14:43 – Regulated utilities and who controls the batteries16:28 – Lessons from Texas for PJM18:23 – Flexibility Without Curtailment: the paper's premise22:32 – Why location matters: 100 MW at Burleson Switch26:52 – How 80 MW of batteries hosts 100 MW of load28:47 – Bigger loads, the long tail, and the 80/20 rule35:13 – Batch Zero, curtailment risk, and who pays38:17 – Data center PR and how big this can get Resources People & Organizations * Joshua Rhodes (LinkedIn) * Energy Capital (Podcast - LinkedIn - YouTube) * Chase Dowling (LinkedIn) * Base Power Company (Website - LinkedIn - Base Core) Company & Industry News * Base Power raises another US$1 billion in Series D financing for US residential BESS * Base Power brings cheap batteries to residents in power-starved PJM * Base Power to launch 100-MW home battery network for Texas utility Books, Articles & Filings Discussed * Piq Energy and Base Power - Flexibility Without Curtailment * ERCOT - Aggregate Distributed Energy Resource (ADER) pilot project * ERCOT - Trending topic: new batch connection process for large electricity users * Texas Legislature - SB 6, 89th Legislature, enrolled bill text * El Paso Electric - El Paso Electric and Base Power install first home battery in El Paso as part of new reliability pilot program * Farhad Billimoria and Conleigh Byers - The value of compute load: what cloud markets reveal about the potential for flexible data centers Related Podcasts by Energy Capital * Creating a Distributed Battery Network with Zach Dell * How Load Flexibility Could Unlock Energy Abundance with Tyler Norris * What batch zero settles and what it leaves open * How Texas plans to serve infinite demand * How Data Centers Can Strengthen the Texas Grid with Camus Energy CEO Astrid Atkinson Related Posts by Texas Energy & Power * $6.5 billion in transmission projects, batch zero closure, and the questions that follow: Texas Grid Roundup #93 * Flexibility and Speed to Power, Reading & Podcast Picks, December 7, 2025 Transcript Joshua Rhodes: Hey everyone, and welcome back to another episode of the Energy Capital Podcast. I’m really excited to have Chase Dowling here from Base Power Company to talk about what the company’s been doing, as well as a new study they’ve put out looking at the impact of distributed energy resources on the ability to unlock firm load for places like large loads, data centers. But yeah, really excited to have Chase here to talk about it. Chase has a PhD in electrical and computer engineering from UW, University of Washington. In and around there, he also worked 10 years at the Pacific Northwest National Lab, ending as a senior applied scientist before switching over to machine learning at Tesla. Very recently, actually, as of recording this podcast, he’s a founding power systems engineer at Base Power Company. Chase, welcome to the Energy Capital Podcast. Chase Dowling: Thanks, Josh. Sorry for the mouthful. Yeah. Ten years at DOE and then a couple years at Tesla working mainly in energy. Joshua Rhodes: Yeah. Yeah. Well, energy’s kind of the thread that brings us all together these days, right? It’s like energy is AI, is transportation— Chase Dowling: Is everything. Joshua Rhodes: —is now politics too, which we won’t get into. So it’s been a while since Doug originally interviewed Zach about Base Power, and so, you know, a lot has happened since the last time we checked in. You know, you started as a pretty novel combination of retail electricity and batteries in Texas, but now you’re manufacturing your own hardware, working directly with utilities. Kind of before we get into kind of the specific study, what’s going on at Base right now? Like, what are y’all working on? Chase Dowling: Yeah, no, it feels like a while, but it’s crazy to say founded at the end of 2023 that we’re scaling up. We’ve got 600 MWh of batteries in the ground, and we’re just now speeding up. We’re installing all over Texas, and we’re now entering our first new markets outside of Texas, installing in Chicago and trying to get at the capacity problems in PJM. But the biggest changes maybe since you talked to Doug or since Doug talked to Zach was we’re installing in deregulated territory as a retailer, but now we have a lot of regulated utility partnerships as well, where we come in and help facilitate the construction of a large distributed peaking resource for these regulated utilities. But that’s the story since then, is that we’ve been scaling, growing, and installing resources faster. Joshua Rhodes: I mean, you’re manufacturing these units in Austin. I know you’re looking— you’re also building a new facility out by the airport, but, you know, you’re currently in the old, you know, Austin American-Statesman building. I actually took a tour of the place, I wanna say, like 7 months ago, and you had, like, you know, half of a line going. But I was there last week. I mean, you had multiple lines going, robots following magnetic tape all around, and lots of folks putting stuff together. Tell me about the manufacturing process and kind of what you’re doing, you know, here in Austin. Chase Dowling: Yeah. So this is a big piece of being a vertically integrated designer, manufacturer, developer, and operator of an energy resource and how we build our kind of like technological advantage that we’re providing to the grid. And so manufacturing is like a key piece to the advantage here. If you look at distributed resources, and this is what we do as a company, we go and we install batteries on homes, residential batteries on homes, and we can talk more about like how this model works or what the value proposition to the homeowner is. But we’re manufacturing these home batteries to be a grid resource first. If you go out on the market today and you look at, like, what are your options, you could buy a battery from Enphase, you could buy a Powerwall. These are very modular, very f… This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

The PUCT approved the southernmost of three 765 kV paths into the Permian on September 13. It has not approved the center path: administrative law judges recommended denying it in August, and chairman Thomas Gleeson sent it back asking what the lines are needed for and what they would save customers. Michael Webber’s answer is that Texas has run this experiment. CREZ, the Competitive Renewable Energy Zone program finished around 2014, was primarily 345 kV and lowered costs, cut emissions and improved reliability. His case for 765 kV is right of way: more capacity per corridor means fewer corridors, and corridors are what landowners object to. The same answer runs through most of what is moving on the grid. On this week’s Energy Capital Podcast, Joshua Rhodes talks with Webber, a professor at the University of Texas at Austin. * The case for AI: Anthropic, OpenAI and xAI leaders called for a global slowdown in September. Webber says nobody has explained what the technology is for. “The case has not been made strongly.” * Who is resisting, and why: degrowth politics on right and left, a youth movement against data centers, and law firms pushing associates toward AI while the partners who would have trained them work remote. Webber reads the water-and-noise objections as displaced anxiety about AI. * Where the gas goes: a bigger grid lets Texas sell gas at $8 to $15 rather than burn it at $3, and lets Houston draw West Texas solar instead of adding gas plants to its airshed. * Hormuz: about 20 percent of world oil moves through the strait, plus fertilizer and chip inputs. US diesel averaged $6.06 a gallon on September 11. Texas will be fine, Webber says; Bangladesh and Pakistan will not. * Affordability in November: electricity bills creep up through distribution costs, transformers and wildfire hardening, while fuel prices move by the day. Webber expects an anti-incumbent mood. * Scarcity and abundance: US electricity demand was flat for 20 years and is growing again. Webber wants data centers treated as a way through scarcity, not its cause. * Plus: why the headline numbers frightened everyone inside six months, what the next six months hold, and why the grid needs helicopter pilots. Chapters * 00:00 – Introduction * 01:03 – Where Texas is building fast, and where it is not * 02:19 – Why the data center mood flipped * 05:18 – The AI slowdown letter * 08:45 – Why younger workers are pushing back on AI * 12:32 – Junior lawyers, junior engineers, and mastering the fundamentals * 16:42 – Whether energy for AI is a social good * 19:26 – The case the hyperscalers have not made * 21:51 – The argument for 765 kV * 26:34 – West Texas solar and Houston's peak * 28:54 – Hormuz, molecules, and what Texas exports * 33:00 – Affordability heading into November * 39:05 – Scarcity, abundance, and a drama-free summer * 42:02 – What the next six months hold Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Energy Capital (LinkedIn - YouTube) * Michael Webber (Website - LinkedIn - X) * LBJ School of Public Affairs (Faculty page) * Walker Department of Mechanical Engineering (Faculty page) * Kay Bailey Hutchison Energy Center (Website) Company & Industry News * Regulators approve controversial southern 765-kV transmission line * Texas grid expansion splinters conservatives as data center backlash grows * Facing an estimated 474 GW of interconnection requests, Texas hits pause on data centers * The AI industry faces a bipartisan grassroots fight Books, Articles & Filings Discussed * Economic impacts of 765kV transmission development in support of Texas and Houston-area reliability * ERCOT - Trending topic: 345-kV and Texas 765-kV strategic transmission expansion * ERCOT - Reliability plan for the Permian Basin region * PUCT - Approval of the first extra high voltage transmission lines in the ERCOT region * Judges recommend regulators reject proposed 765-kV line * Top regulator recommends remanding transmission project to administrative law judges * Costs and emissions reductions from the Competitive Renewable Energy Zones wind transmission project in Texas * Anthropic, OpenAI CEOs call for slowdown in AI development * Using AI, mathematicians find hidden glitches in fluid equations * EIA - Strait of Hormuz is chokepoint for 20% of world’s oil Related Podcasts by Energy Capital * Build Fast or Fall Behind with Michael Webber * Texas competes on everything except transmission * Inside the PUC’s Cost-Allocation Overhaul with PUC Chairman Gleeson * What the Sierra Club wants from the Texas grid * Texas Got Tested, Grid Stayed Upright Related Posts by Texas Energy & Power * Data centers say they pay their way; Texas will hold them to it * More Generation, More Transmission, More Load, More Challenges: Texas Grid Roundup #90 * A Tale of Three Performance Reviews: Texas Grid Roundup #94 Transcript Joshua Rhodes: Hey everyone, and welcome back to another edition of the Energy Capital Podcast. I’m really excited to have Michael Webber back. I think we’re probably gonna get on some kinda six-month rotation with him just to kinda talk about all things energy in Texas, ‘cause there is never a shortage of things to talk about related to those. But for those who may have not seen the first episode that we’ve had about six months ago, we’ll put that in the show notes. But Michael’s a professor at the University of Texas at Austin, where he’s a Sid Richardson Chair at the LBJ School of Public Affairs, as well as the Cockrell Family’s Chair in Mechanical Engineering in the Engineering Department. He’s also the former CTO at Energy Impact Partners, a former Chief Science and Technology Officer at ENGIE in Paris, and the founding partner of IdeaSmiths. Since then, has been— is now running an energy opinion column regular every couple weeks for the Houston Chronicle. His work sits at the intersection of energy, engineering, policy, and commercialization. Michael Webber, welcome back to the Energy Capital Podcast. Michael Webber: Thank you. It’s always fun to have a chance for a conversation with you. Joshua Rhodes: For sure. So about six months ago, you know, one of the big themes in the podcast when we were talking was that Texas needed to build faster or kinda fall behind, or one of your big things was Texas needed to build fast or fall behind. So looking back since then, do you think we’re building fast enough? Or are we falling behind? Challenges changed? What’s really changed in the last six months? Michael Webber: We are building quickly on some things. We’re building new power plants, especially solar and some power capacity like batteries and a little bit of wind and gas. So we’re doing a good job building new sources of power. Doing a pretty good job building load, new factories, gigafactories, advanced factories or data centers. So that’s a good news story in terms of our ability to keep up with things. We are not as fast today at building transmission, although we have been fast in relatively recent history, so I’m optimistic we can do that again. And we’ve had issues building gas pipelines and sometimes water facilities we’ve been slow at. So there are places where we have a lot of success on the power side, some success on the gas infrastructure side, but also some shortages on transmission and other things. So it’s like we got a mixed record, but still pretty good. We’re better at it still than anywhere else in the United States and almost as good as anywhere in the world. Joshua Rhodes: Absolutely. Are there two or three developments in the past six months that have maybe has challenged your view the way Texas is headed? You have any idea what they’d be? Michael Webber: Yeah. The two big political things that have emerged that I see is sort of a anti-development or degrowth movement on the right and the left politically around data centers and transmission. So we’re seeing non-traditional political bedfellows in opposition to getting some things done, so that feels relatively new, especially the flipped opinion on data centers. That’s gone from very exciting t… This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Rayburn Electric Cooperative broke ground in June on a 570 MW gas plant in Sherman, backed by a $411 million Texas Energy Fund loan at 3 percent, the fund’s seventh generation loan and first to a cooperative. Rayburn is also putting batteries in members’ houses. Both run on the same logic: Rayburn generates the power and owns the transmission, so it earns on both. An independent power producer earns on energy alone. On this week’s Energy Capital Podcast, Matt Boms talks with Christian Nagel, senior director of power supply and production at Rayburn. * Home batteries as a transmission asset. Texas allocates transmission costs on four summer peaks, so discharging batteries then cuts Rayburn’s bill, worth more, Nagel says, than the energy. * Telling real load from speculative. Rayburn screened data centers with its own questionnaire before ERCOT standardized one. Abbott’s audit has since pushed ERCOT’s Batch Zero study past April 2027. * Plus: the 12CP fight and what comes after gas. Whether Rayburn is a model or a special case turns on rules the PUCT has not written. Chapters 00:00 – Introduction 01:36 – Wind development and the landowner conversation 06:02 – The video that went viral 08:17 – Using your service to open doors 10:23 – The Atlantic Council years 12:19 – Her graduate research on energy and national security 14:44 – From Annapolis to flying Growlers 19:54 – Grounded, and the move to cryptologic warfare 23:59 – Why veterans run down their own service 30:08 – Advice for veterans trying to get into energy 32:56 – How to plug into Project Vanguard 34:49 – Closing thoughts This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Last month the Public Utility Commission of Texas held public hearings on plans to build giant 765 kilovolt transmission lines. The controversial plan drew complaints from influential voices, including Senate Business and Commerce Chairman Charles Schwertner, who asked commissioners to deny the pending applications for the lines in a letter. Cyrus Reed sat through the roughly 15 hours of testimony, and we recorded with him the morning Schwertner’s thoughts came out. On this week’s Energy Capital Podcast, Joshua Rhodes talks with Reed, legislative and conservation director of the Sierra Club’s Lone Star Chapter, about what it means to run an environmental group in a state with no renewable mandate, and about nearly everything happening on the Texas grid this summer. Chapters: 00:00 – Introduction and guest background 00:46 – What it means to be an environmental group in Texas 02:50 – How property rights and an energy-only market built out renewables 06:54 – The Lone Star Chapter's platform for the 90th Legislature 08:48 – County authority, HB 40, and codes instead of bans 10:46 – How load growth, 765 kV, and data centers got tangled together 15:43 – ERCOT versus SPP, and who carries the risk 17:11 – Schwertner's letter and what the PUCT could actually do 20:47 – How a CCN works, and the 180-day clock 23:07 – A bigger grid and more oil and gas extraction 25:37 – What a fairer routing process would look like 29:18 – Batch Zero, the large load queue, and the disclosure problem 33:19 – Mitigation fees and community benefit agreements 36:02 – Behind-the-meter gas and the minor source permit threshold 38:33 – The Green Tea Coalition, unlikely allies, and the 2027 platform This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Wind, solar, and storage are the only new categories of generation to reach the US power system at scale in fifty years. Craig Gordon thinks his company is adding one. Mainspring Energy’s linear generator drives magnets through copper coils rather than burning fuel in a flame, switches between natural gas, biogas, propane, and hydrogen under load, and ramps from minimum to full output in 25 seconds. The same modular unit is going into a municipal utility’s fleet in Utah, an islanded truck depot in Los Angeles, dairy digesters in California, and data centers. It is still a gas-fired resource. The flameless reaction suppresses NOx rather than carbon, and the carbon case rests on burning less fuel per megawatt hour than the engines and turbines it displaces. In ERCOT it arrives at a useful moment. Large load requests run into the hundreds of gigawatts, most of them data centers, against a small fraction approved to energize. The Batch Zero process approved in June will sort which projects get firm grid capacity, and generation on a customer’s own site never enters it. Gordon does not treat that as a substitute for building the grid, and says the answer is both. On this week’s Energy Capital Podcast, Matt Boms talks with Craig Gordon, head of business development for Mainspring, who heads global policy and regulatory affairs at Mainspring after 12 years at Invenergy. The conversation covers: * How a linear generator works, magnets driven through copper coils 13 times a second, with no flame, water, or oil. * Where the units are going, a 48 MW project for a Utah municipal utility and a Los Angeles depot charging 96 electric trucks with no grid connection. * What it burns, natural gas today, with dairy and landfill biogas running in California at small scale and hydrogen far off at current production costs. * Running alongside solar and batteries, covering the hours renewables do not, and how it compares with engines, turbines, and fuel cells. How much of ERCOT’s queued load ends up served on site rather than through the grid will shape what Texas has to build. Chapters: 00:00 – Introduction and Guest Background 00:40 – From Ameren to Invenergy to Mainspring 03:43 – What Mainspring Builds and Why It Matters 06:19 – How a Linear Generator Works 08:39 – Why Customers Are Generating Power Locally 11:02 – Data Centers, DERs, and Grid Investment 12:16 – Ramping and Efficiency vs Engines, Turbines, and Fuel Cells 14:27 – UMPA's 48 MW Project and the Prologis Microgrid 17:28 – Maintenance, O&M Hubs, and Field Lessons 18:39 – Fuel Flexibility, Biogas, and Hydrogen 20:36 – Scaling to Hundreds of Megawatts, and Islanded vs Grid-Parallel 25:37 – ERCOT's Cluster Study and the Interconnection Queue 29:21 – Policy Barriers, Air Permits, and Behind-the-Meter Value 33:57 – Linear Generators in 10 Years This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

About 6 million electric vehicles are on American roads, and roughly 1 million of them can already export power back to the grid. A typical one sits parked about 95 percent of the day, plugged in for 12 to 14 hours while needing 2 to 3 hours of charge. Texas still meets most of that capacity as load. That works out to roughly 10 gigawatts of export capacity. In ERCOT the value of tapping it splits three ways, because transmission and distribution utilities own the wires, competitive retailers sell the electricity, and generators sell the power. A TXU Energy customer in Oncor territory can collect free overnight charging from the retailer and a separate rebate from the utility, with nothing combining the two. On this episode of the Energy Capital Podcast, Matt Boms talks with Joseph Vellone, chief executive of ChargeScape, the vehicle-grid venture owned by BMW, Ford, Honda, and Nissan, about what it takes to move a parked car from load to capacity. The core argument: the hardware is arriving on its own, and what holds the resource back is incentive design and interconnection policy. For years EVs have been cast as a threat to grid stability. Vellone calls that a misconception and points to record adoption without failure: “we haven’t brought the power grid down.” During the episode, Boms and Vellone work through: * Split incentives in ERCOT, why a deregulated market gives the wires company, the retailer, and the generator each a reason to pay an EV driver and none of them a reason to coordinate. * Grid-parallel interconnection, the argument that a vehicle backing up a home without exporting to the grid should not need an interconnection agreement. * V1G, V2H, and V2G, the three tiers of vehicle-grid integration, what each requires in hardware, and which are running commercially today. * The lease-return wave, Cox Automotive’s forecast of 300,000 EVs coming off lease in 2026 to second owners more price-sensitive than the first. How the Public Utility Commission draws the line between grid-parallel operation and export will shape how much of that parked capacity ERCOT can call on. Chapters 00:00 – Introduction: Joseph Vellone and ChargeScape 02:34 – Why competing automakers built a shared platform 05:49 – When an EV becomes a grid resource 07:35 – V1G, V2H, and V2G in plain English 10:48 – Six million EVs and 10 gigawatts of export capacity 12:07 – The consumer progression to bidirectional charging 15:57 – Texas incentives and what moves customer behavior 18:07 – The changing profile of the American EV driver 21:04 – Policy barriers: unstacked value and interconnection queues 24:58 – Splitting EV value across ERCOT wires, retail, and generation 28:00 – Grid-parallel interconnection at the PUCT 30:05 – Scaling from pilots to full market participation 32:50 – Secondhand EVs, multifamily, and fleets 37:15 – Why record EV adoption has not strained the grid Resources People & Organizations * Matt Boms (LinkedIn) * Texas Advanced Energy Business Alliance (Website - LinkedIn) * Joseph Vellone, CEO of ChargeScape, previously North America head at ev.energy and a consultant at Boston Consulting Group (LinkedIn) * ChargeScape (Website) * Energy Capital (Podcast - LinkedIn - Apple Podcasts - Spotify) Company & Industry News * BMW, Ford and Honda Agree to Create ChargeScape, the 2023 agreement forming the joint venture, built on the Open Vehicle-Grid Integration Platform * ChargeScape Welcomes Nissan to Its Alliance of Automakers, making Nissan an equal 25 percent investor alongside BMW, Ford, and Honda * PUCT Project No. 54233, Technical Requirements and Interconnection Processes for Distributed Energy Resources, the rulemaking covering new 16 TAC 25.210, amendments to 25.211, and the repeal and replacement of 25.212 * Vehicle-Grid Integration Council comments in Project No. 54233, addressing grid-parallel bidirectional charging and the V2G DC and V2G AC configurations This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Cattle prices swing, goat prices swing, and the drought comes whether or not the ranch can afford it. For a fifth-generation West Texas operation, the search for income that holds steady through all of it comes from an unexpected source: the wind. A wind lease pays the same in a dry year as a wet one, creating a floor under an operation otherwise exposed to weather and commodity prices. When neighbors saw the turbines going up, the reaction was not opposition. It was a question about how to get their own. On this week’s Energy Capital Podcast, Joshua Rhodes talks with John E. Davis, a fifth-generation rancher and former Texas state representative who chaired the House Economic and Small Business Development Committee. They talk about the seven turbines Davis hosts from the Cactus Flats project in Concho County. Davis, a conservative Republican, argues that a landowner’s right to host wind or solar is the conservative position, and the politics of renewables have drifted from the economics that drive rural Texas. Davis says the income is what allows the ranch to keep producing food and fiber, and he calls it “a lifeline for us.” In the episode, Rhodes and Davis get into: * The property rights argument, why Davis reads hosting wind or solar as a conservative right, not a Green New Deal one. * Behind-the-meter power and local storage, how rural West Texas could host data centers that bring their own generation, with batteries as community backup when the grid goes down. * The Queensland parallel, what a trip to rural Australia showed him about moving power from where it’s generated to where people live How Texas resolves the gap between the power it wants and the wind it is slowing will shape what rural landowners can build and what keeps their ranches running. Timestamps * 00:00 – Introduction * 02:48 – How Wind Came to the Ranch * 06:20 – The Jane Davis Check * 08:35 – Running Sheep and Goats Under the Turbines * 09:43 – What Landowners Should Know Going In * 11:44 – What Changed After the Build * 13:31 – Sheep Royalty and the Committee Chair * 14:39 – Neighbors, Suburbia, and the Politics * 16:13 – The Queensland Parallel * 21:23 – Data Centers, Behind-the-Meter Power, and Storage * 24:37 – A Recovering Politician's Views * 27:09 – The AI Race and Stopping Wind * 31:12 – The Elon Musk Story * 36:05 – The Menard Station Buildout Resources People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website) * IdeaSmiths (Website) * John E. Davis, fifth-generation rancher and former Texas State Representative (HD-129), former chair of the House Economic and Small Business Development Committee * Joe Straus, former Speaker of the Texas House (Texas Legislature) * Energy Capital (LinkedIn - Spotify - Apple Podcasts) Company & Industry News * Cactus Flats Wind Facility, the 148 MW, 43-turbine project in Concho County where Davis hosts turbines. Developed and built by RES, sold to Southern Power (a Southern Company subsidiary) in 2017 (RES - Southern Power) * Johanna Wilhelm, the “Sheep Queen of Texas” and Davis’s great-great-grandmother, who ran a large Menard County sheep operation (Heritage Park San Angelo) * SpaceX, whose founder Elon Musk visited Davis’s committee during a 2013 SpaceX incentives bill (SpaceX) * The Menard station, Davis’s two-acre development on a former Exxon site (EV charging, a beer garden with Wagyu franks, a farm stand, and a book exchange), funded with wind income This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Some of the largest electricity buyers in the world have a message for Texas: charge us. The Texas Energy Buyers Alliance was the first organization to propose that large loads pay transmission charges tied to their approved capacity. The idea is to protect other customers as the grid builds out. The scale explains why. ERCOT estimates up to 110 gigawatts of new large loads could seek to connect over the next five years, more than double today’s system peak of about 86 gigawatts. Before any of that generation arrives, about $37 billion in transmission costs are already baked into the system, pushing rates up roughly 3.5 percent a year for every customer. The open question is how much of the new bill supports the new demand. On this episode of the Energy Capital Podcast, Matt Boms talks with Bryn Baker, senior director of policy for organized markets for the Corporate Energy Buyers Association and leader of the Texas Energy Buyers Alliance, the state chapter representing large energy buyers. Baker walks through TEBA’s proposal: charge minimum demand charges on large loads at levels that studies suggest would leave other customers’ rates neutral or lower. Chapters: 00:00 Introduction and who TEBA represents 02:47 The corporate buyer market and Texas' share 04:13 Why Texas beats PJM for large loads 06:45 What data centers offer the average ratepayer 10:02 The batch process and batch zero 12:25 Grading the compromise and the qualification problem 15:33 Transmission planning and the case for 765 kV 19:13 4CP vs 12CP and who pays for the wires 23:05 Energy attribute certificates: the sleeper story 26:54 EACs and unlocking demand flexibility 28:19 The EAC program: process, timeline, and what's novel 30:10 What makes Baker optimistic 32:13 The real mood in the market 35:16 Renewables, batteries, and keeping costs down 37:09 Rethinking economic transmission planning This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Texas built a competitive retail electricity market: consumers choose among roughly a hundred providers, and generators build power plants at their own risk with no guaranteed return. Transmission, the high-voltage lines that move power from where it is made to where it is used, runs on a different model. One utility builds each line and recovers every cost from ratepayers, plus a return, on time and on budget or not, and faces no competition. ERCOT’s latest reserve-margin forecast goes negative in 2029 and 2030. To close that gap, ERCOT and the PUC have directed utilities to build a high-voltage backbone from West Texas to the I-35 corridor, which Smitherman puts at $33 billion, rising toward $40 to $50 billion by completion. Under the monopoly model, that cost lands on ratepayers. On this week’s Energy Capital Podcast, Joshua Rhodes talks with Barry Smitherman, the only person to have chaired both the Public Utility Commission and the Railroad Commission of Texas and now chairman of Texans for Affordable Transmission, about bidding transmission out to non-incumbents under cost and timeline caps. He sat on both commissions during the CREZ buildout, Texas’s early-2000s program that moved West Texas wind to market, and saw competitive transmission work firsthand. 00:00 - Introduction & Texas Energy Landscape 05:31 - Permian Basin Load Growth and the 765 KV Lines 12:11 - Data Center Demand: Real vs. Speculative 14:09 - Texas Energy Fund and the Energy-Only Market 21:28 - How Texas Transmission Gets Built Today 23:13 - The Case for Competitive Transmission 31:46 - The Eastern Backbone and Cost Accountability 33:54 - Private Lines and Large Load Options 43:04 - Repealing SB 1938: The Path Inside ERCOT 44:34 - Getting Transmission Right: Future Tech and Landowners This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

Batch zero stops being theoretical on July 11. That is the day ERCOT’s rule for connecting large new customers takes effect. The new policy replaces a process that involved studying each giant load independently, then ordering restudies when new giant loads joined the queue, leaving projects stuck in a serial loop. Two prior episodes of this show traced how the new rule was designed. This one asks the people who connect the load what to fix before the next round. Already projects are sitting in the interconnection queue as new regulatory deadlines loom. ERCOT figures show more than 445 gigawatts of large loads in the process, and the rule sorts them into base load, studied load, and excluded load. Developers have until July 10 and July 24 to meet certain filing deadlines, and the full batch study is targeted for early April. The policy also shifts more of the analysis from individual utilities onto ERCOT. CenterPoint has been connecting large loads in Houston for decades. That experience drives a question the design phase mostly deferred: does a 75-megawatt cutoff for loads to participate in the program fit the manufacturing and industrial loads that move at the speed of business? On this episode of the Energy Capital Podcast, Joshua Rhodes talks with Caitlin Smith, chair of ERCOT’s Technical Advisory Committee and senior vice president at Jupiter Power, and Jason Ryan, executive vice president of regulatory services and government affairs at CenterPoint Energy. Smith walks through how stakeholders developed the rules on a compressed timeline. Ryan presses the forward question of whether the 75-megawatt threshold and an annual batch process fit the loads Houston routinely connects. Ryan’s concern is timing. When the batch becomes “the long pole in the tent,” he says, developers with real projects start to walk. The conversation works through: * WL-PUN and PCLR, the withdrawal-limited private-use-network and provisional controllable-load resource programs ERCOT is repurposing to fit more load onto the current grid. * The 75-megawatt cutoff, why Ryan questions whether mid-sized manufacturing loads belong in the batch at all, and the risk of projects sizing themselves at 74.9 to stay out. * Non-firm service and reliability, how a load that agrees to curtail differs from the century-old obligation to serve, and what testing CenterPoint needs before it trusts the switch. * What is permanent versus triage, which parts of batch zero survive into batch one and beyond as the Texas Legislature returns next year. New to the batch zero mini-series? Start with Eric Goff on how batch zero took shape and Tiffany Wu on the mechanics. How ERCOT sets the threshold and batch cadence will determine which loads get power on their own timeline and which wait for the next cycle. Timestamps: * 00:00 - Introductions: Caitlin Smith and Jason Ryan * 02:43 - What Batch Zero is and why ERCOT needs it now * 05:14 - Houston's diverse large loads, not just data centers * 08:13 - Timeline: the July 11 effective date and key deadlines * 10:44 - Base load, studied load, excluded load: winners and losers * 12:55 - Inside TAC: compromises, new stakeholders, and fairness * 16:10 - Does the queue mean a transmission build-out? * 19:01 - The real number: CenterPoint's 40 to 50 GW prediction * 23:18 - New constructs: WL-PUN and PCLR explained * 28:13 - Non-firm service, reliability, and trusting curtailment * 32:01 - Tracking success: what is permanent versus triage * 36:07 - The 75-megawatt threshold and how often to run a batch * 43:38 - Data centers, the final timeline, and what comes next Resources: People & Organizations * Joshua Rhodes (LinkedIn) * Webber Energy Group (Website - LinkedIn) * IdeaSmiths (Website - LinkedIn) * Caitlin Smith (LinkedIn) * Jupiter Power (Website - LinkedIn) * Jason Ryan (LinkedIn) * CenterPoint Energy (Website - LinkedIn) * ERCOT (Large Load Integration) Company & Industry News * ERCOT Again Revising Large Load Interconnection Process Books & Articles Discussed * Texas Senate Bill 6, 89th Legislature * PGRR145, Batch Zero Process for Large Load Interconnections Related Podcasts by Energy Capital * Batch Zero, Explained with Tiffany Wu * How Texas plans to serve ‘infinite demand’ * Open Season vs. Batch Zero with Travis Kavulla Transcript: Joshua Rhodes: Hey everyone, and welcome to another episode of the Energy Capital Podcast. I’m really excited today to have not one but two guests to talk about kind of what’s going on in the ERCOT Batch Zero process and kind of how that may continue to play out. So today on the podcast, we’ve got Caitlin Smith. Caitlin has a BA in econ from University of Texas and a JD Law from Penn State. She’s a policy consultant for CLEAResult for going on counsel at Jewell & Associates. She’s a vice president of AB Power Advisors and is currently the Senior Vice President for Federal and Regulatory Affairs at Jupiter Power, one of the largest pure play energy storage companies in the US. But she also is the current chair of ERCOT’s Technical Advisory Committee, the highest committee comprised of stakeholders, which makes recommendations to the ERCOT board. And that’s going to really come in handy today as we talk about one of the biggest policy shifts that’s working its way through the system. We also have Jason Ryan. Jason Ryan has his Bachelor’s of Business Administration and JD from the University of Texas. He was a Global Projects Associate at Baker Botts, managing partner at Ryan Glover LLP. And he’s also the information dominance warfare officer for the US Navy, which I kind of just want to stop and talk about that. If you can, you may not be able to talk about that. But now he’s the executive vice president of regulatory services and government affairs at CenterPoint Energy. Caitlin and Jason, welcome to the Energy Capital Podcast. Jason Ryan: Thank you for having us. Caitlin Smith: Thanks, Josh. Joshua Rhodes: I’m really excited. So I’ve got two lawyers and two government affairs folks here today. So we’ll see how bad I do at managing this. Great. It’s gonna go great. But I know we’re under a bit of a time crunch, so we’ll get started because Caitlin, you’ve got a date for Elmo’s Got Moves. Is that right? Elmo’s Got The Moves. Okay. Caitlin Smith: Almost got the moves. Almost got the moves. I’m seeing it tonight. I don’t know when this will air, but it’s in Austin Friday in San Antonio Sunday. Joshua Rhodes: That’s some free advertisement there for almost got moves. But anyway, so we’ll go ahead and get started. And so the arc of this podcast is really I want to kind of catch up with what’s going on with the batch zero process. We’ve done two episodes, which we’ll link in the show notes, one with Eric Goff and one with Tiffany Wu, where we kind of looked at the overall kind of structure of the batch zero process and then with Tiffany got into kind of some of the details. But one of the things that it really was brought out, at least for my knowledge, during those podcasts, was We really had a framework for how things were going, but we hadn’t filled in all the details. And so I was just curious, Caitlin, if you could kind of refresh us on what batch zero is, where it stands, and why do we need it right now? Caitlin Smith: Sure. And the impetus for me coming on, or one of them was Eric Goff said that the demand for load is infinite. I don’t believe it’s infinite. So I wanted to come on and correct. But maybe Jason thinks it’s infinite. So we could debate that. So batch zero, previously in ERCOT, there was not a uniform process for load interconnect. You know, before, I don’t know, six, seven years ago, nobody was really thinking about. Connecting these large loads when I was consulting, you know, we would have a call about a gigawatt hydrogen load or something that wanted to come online. This was starting in 2020. ERCOT hadn’t really heard about it or contemplated it at that point. So in the last five or six years, we had a major change to the system, which was ERCOT was actually seeing these applications for very large loads to conne… This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.texasenergyandpower.com/subscribe

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