Crossover with Volts: Data Centers Could Win Over Neighbors for Pennies. They'd Rather Fight

I'm just trying to understand where you channel all of this enthusiasm, anger, conversation. I mean, we generally operate in this niche. I mean, you don't find it boring and I don't find it boring, but other people find it boring. But it is broken through, right? To the point where there's a lot of our friends who generally find us boring, like who are now interested in these topics when they call us up. I always joke. I used to, you know, I spent like the first 15 years of my career going, I wish more people would talk about this stuff. And now I'm like, oh God, what was I thinking? Energy isn't just an industry. It's how the world works. I'm Jigar Shah, a clean energy entrepreneur. And I'm Jamie Nolan, a clean energy communications executive. And this is Energy Empire. Hello, Jigger in Deep Creek Lake, where I will be joining you in real life next week. I am very excited about this. Oh, my gosh. It's been amazing. I changed my primary care doctor to Deep Creek Lake. She's amazing. She has now set up blood work for me. She's like, here's a bunch of other tests you should take. I just called the hospital. They're like, oh, yeah, we can get you in tomorrow. I was like, that's right. That's what I love about Garrett County. I think it's brilliant. it. I'm going to be like super tuned up, like, you know, a paragon of healthiness by the time I get back to DC. Well, I'm going to be there with my in-laws and my husband has five older brothers. And so it's all of his brothers and their spouses and all of our children staying in a single house. So it's like 22, 23 people. And I love them. I actually really like all of my in-laws. But that being said, it's very people-y. It's a lot. It's a lot. It's a lot. It's a lot of children. It's a lot of noise. So I am very selfishly excited that you are going to be there the same week. So I can just pop on over to yours occasionally. My wife always has the wine fridge stocked. So you'll be all set. It's going to be so fun. We're going to get it all set up for a recording. It's going to be on location from D Creek Lake, Maryland. Oh, yeah. Yeah. No, I mean, my sense is we're going to record and you're going to have to be in one room. I'll have to be in another room, but we'll figure it out. Check back next week and see if we have, without our executive producer, Simon, figured out how to set up the tech in one room. That would be a miracle. Oh, that would be amazing. That would be really fun. Okay, so for today's episode, we are doing a joint episode with the Volts podcast. I'm super excited that Dave Roberts is the guest. I actually am not co-hosting this episode, but I listened into the whole recording and it was really fun. Yeah, we have Arnab Paul, our friend of the pod and the head of Deploy Action, where I am a board chair. And Jamie, you're also an extraordinary part of that team. and yeah I mean it's it's it's gonna be a great episode you know I love Dave but he is such a glass half empty person like he's like one of the most like knowledgeable people in our space but every time I talk to him I need to drink like heavy liquor I feel he's very gruff and it's kind of like part of his personal brand. Right. And I have to say, like, he was joking about how he does not have a face for video. And I disagree. He's super handsome. And he should do every episode on video. I thought he looked great. And he yeah, his his face and his voice don't necessarily match because he he is a little bit ho hum. Sometimes you're right. I think his take on these things is super insightful. I think he's been a real sociologist type person when he thinks about the electorate and voters and how they think about this thing. And I think that right now we are heading into an election season where data centers, utilities, they're all on the block. And in a way that's really weird, right? Because I've been in this industry for a long time and everyone was always very articulate about how powerful politically the electric utility industry is. But they've got a new head of the Edison Electric Institute in DC, which I think they haven't been a powerful trade association in some time. I think a lot of the electric utilities have literally let themselves go a little bit. I think they used to be, well, we can raise rates a little bit more than they expected, but not that much more. And now they're like, 9% a year, you get 9% rate increases and you get 9% rate increases. And it's always someone else's fault. And I feel like there's a real reckoning coming, and I think it's going to be fun to talk about it with Dave. Absolutely. I mean, I think no other podcaster, certainly, in our space gets more in-depth in these issues. And Dave will pull off a two-hour episode, and somehow it's the most compelling conversation. The depth of knowledge that he has on so many issues I think is really extraordinary. He really does dig in. regarding utilities. I mean, the solar industry has been raising the alarm about the broken utility model in this country for decades. I think that finally, now that we're in this period of load growth and the utility industry is scrambling and obviously failing to meet the moment, people are suddenly listening. And so I really do hope that we can start to reconsider how these business models work and how these entities earn money and like earn profit because otherwise we're in for a world of hurt and not everybody can afford to just like pop a solar array on their roof like you know some of us should just opt out of their utility bills like they're facing these very extraordinary utility rate increases and it will affect the most vulnerable people among us the most and so um personally i'm ready to hear dave rail about it let's get let's get into it Well, without further ado, Dave Roberts. Energy Empire is powered by Octopus Energy. Natasha, I'll give you a number. Three million electric vehicles in American driveways parked 22 hours a day. Why does that keep you up at night? Because we paid for it. Billions of dollars on batteries on wheels, and the grid treats them like they don't exist. That's not a fleet. That's a stranded asset. Plenty of assets, Sid Eidle. My lawnmower is stranded too. Yes, but your lawnmower can't power your house. Those cars charge at the worst hours because nobody's coordinating them. Fix the coordination and their capacity. Already built, already connected, and already in the garage. No new plants, no new wires. Right. The power plant's already built. Someone just has to turn it on. That's what we do. Thanks. Natasha Crow, Vice President of Marketing and Comms at Octopus Energy North America. Link is in the show notes. Dave, how are you? Good. Good, Jigar. Good to talk to you. Good to talk with you. I feel like the episode that we did together on doing data centers The dumb way has set off a fire chain of comments, and now we're back. I got a lot of feedback about that episode. A lot of people really liked it. Oh, that's good. You didn't get a lot of negative feedback? No, no, no. People are so desperate just to hear someone who knows something about this, and people are in a fog. So I think it was very helpful. Well, I wanted to bring in Arnaud Paul into this conversation. He runs Deploy Action and was really the energy behind getting the grid utilization stuff passed in Virginia and getting some of the other things done in California. And so like he's sort of on the ground working with politicians, but also working with legislators who are trying to pass some of this stuff. Because I feel like some of this is just one-on-one stuff, which we covered last time. But now we're moving into like polling data and like governors who are inundated with hate mail. Public opinion, which involves a large measure of animal spirits, let's say. Well, let's start by like, where is your head at in how essential it is that we win the AI race and that AI is going to change our lives forever? Because ultimately, all of this comes down to the fact that I think people believe that this is a technology of the future that we need to own, right? Yes, but I, like I think much of the public, have not really been persuaded of that, mostly because there don't seem to have been many attempts to persuade as opposed to bang me over the head with a mallet about it. If you ask me, the proximity of cheap, boundless energy says much more about humanity's bright future than AI. I think that's the revolution that's exciting. That's the revolution I'm excited about. It's bizarre to me that it's been shunted to some sort of asterisk after AI. I'm much more interested in the energy revolution. And about AI, I just don't know. I think like most people, I just don't know. I know that it looks ridiculous to me that every corporate CEO, every university president, every sort of wealthy elite is trying to force this down people's throats beneath them. I mean, I'm as irritated at that as anybody else. But as to the long-term effects, I have no idea. And I don't really think anybody else does either. Whereas I know boundless cheap energy is going to be a very good thing. Yeah. So Dave, I think the two are, I think you agree with us, are very related in that people's unknown of AI is, I think, causing their inability to wonder at this energy future that you're talking about. And I think we're seeing that play out with all these data center moratoriums. We're seeing them across, there's 120 of them across 38 states. There's 75 projects that's worth $130 billion. You're seeing national legislation from Senator Bernie Sanders and Congresswoman Alexandria Ocasio-Cortez with a federal moratorium. And you've covered this energy transition for almost 20 years. I think we all agree that the data center revolution could be a part of the next big energy transition. So has any build out in that time generated this kind of organized opposition this fast? Because two years ago, no one was really talking about this. I think you can't understate the spectacular incompetence of the communications and the way this has been rolled out. I mean, I think if hyperscalers had said from the beginning, the AI revolution and decarbonization go together, are part of the same revolution, and we're willing to pay the extra money and take the extra time to ensure that building out these giant data centers is going to strengthen the grid and fund a lot of clean energy. I think they could have harnessed a lot of goodwill, but instead they're in the paper saying, you have to do our thing and to do it, you have to abandon your climate goals. I mean, it said, I read that explicitly in a UK paper the other day, the data center industry is saying to the UK government, you got to abandon your climate goals because we have to do our thing fast and we're not patient enough and we don't care enough and we're not going to spend enough to do it in a clean way. I think it could have been and still could be, if done right, part of the same broad push for an abundant, clean future. But they just have completely botched the PR aspects of this. And it doesn't help that like Elon Musk is out there buying turbines on truck beds and saying, screw you to the locals and, you know, polluting the air, et cetera, et cetera, out of just this unbelievable arrogance about AI that the public is not bought into. I mean, they have no one to blame but themselves for this backlash. I think that is obvious, and it has been a pattern that's repeated itself since Bill Gates stepped in it in the late 90s, right? They wait until they do it all wrong, and then they're like, oh, what's all this backlash? We should pay people to help us with this. I mean, I was interested. There was one Nevada hearing, which I thought capsulated it really well, where they basically compared the AI data centers to the 19th century gold rush, and they basically stood at the precipice of the new Wild West, right? And it does feel like that. I mean, that is what you're talking about with Elon Musk in Memphis, right, with unregulated gas turbines. But it's also the folks in Loudoun County and Virginia where when there is a, you know, the vast majority of diesel generators are only permitted to 100 hours a year worth of runtime. the diesel generators for Loudoun County are permitted for 800 hours a year at runtime. And they run the entire month of August such that anybody with any sort of underlying asthma conditions can't breathe in Northern Virginia. Like it does feel like at some point they are coming at this saying we are going to make so much money that we really just don't care about your well-being at all. And I would add, I mean, I think a huge piece of this, and this is what I think is the central problem for our side, which is full of technocrats, is there is a large element of just sort of animal spirit to this. people feel like rich, powerful people are running rampant. They don't have to follow any rules. They don't face any accountability. This feels like they're betting our future. It might work out. It might not, but none of them will be hurt by it if it doesn't work out. Just another classic example of like, they're not going to pick up the pieces if this all falls apart, or if the demand doesn't show up or if a bunch of empty warehouses get built, they're not going to be hurt. There's a lot. There's a huge element of this of just people feel like the wealthy and the rich and the powerful are just out of control. Accountability is dead. And this is something they can grab onto and control. This is the only piece of that that they have any control over. So they're grabbing onto it and blocking it. I don't, I mean, I think a lot of it is not any sort of rational calculation or empirical calculation of the effects or, you know, calculations about decarbonization or anything else. It's just like, this is a place where I can throw myself in the gears and stop the wealthy elite from just rolling over us. So, and again, like that's their fault that people feel that way. And look, so I a hundred percent agree with that. And I think right now people feel like they can't control the political system. Their vote may not matter as much as it did in the past. So their ability to block projects at the local level is their version of a vote. But you guys were talking about this being a communications issue. Like, yeah, probably. But I really think it's just a trust issue. And I think no matter what the tech industry said, like even if they came out and said, we're going to help everyone, we're going to build schools, we're going to build this 100% clean, and we're going to bring down your bills, which is what I think we all would want to advocate for. I think the vast majority of the public would be like, yeah, I'll believe it when I see it. Yeah, I trace everything. I mean, anybody who's followed me for any time online knows I trace everything back to low social trust. This is sort of, you know, you talk to social scientists, they say you want to do anything good collectively. You have to have social trust. The less you have, the less you can do. And it is coupled with our diseased and degraded information environment. So nobody feels like they can get a straight story. Everybody feels like everybody's talking their own game. Nobody knows what's really going on. So like, this is just something concrete. It's something that they can grab onto and not feel like the world is this impenetrable chaos controlled by forces out of there you know beyond them And the trust issue I think is backed up by the numbers So only 8 of data center opponents actually live near one And 70 of Americans opposed to a data center near them which is what Gallup chose And the Searchlight Institute found that 54 would oppose one within five miles I guess what we're trying to figure out here is like, I think our technocratic industry is like, well, here's how we figure out a way to do this without emissions. And here's how we bring people in. Like, are we solving for the right problem or should we be solving for something else? Well, I mean, maybe Jigar has a different perspective, but I think they're trying to solve those problems because those are the kind of problems they know how to solve. Like, and this goes beyond data centers. This is a larger social and political problem is how do you solve the degraded information environment? How do you solve low social trust? How do you get your hands around these animal spirits? This vague, free-floating miasma of discontent and anger. I don't know how to solve that. The tech guys don't know how to solve that. Like, you know what I mean? Like, it seems like solving that requires many, many years, many fundamental reforms that don't seem anywhere in evidence. This is not a technocratic problem that you can just solve with a few switches or paying a little extra for this or that. This is a bigger problem in our politics. So, you know, they kind of are trying to solve what they know how to solve. Yeah, I mean, I do think that part of the problem with this, I think, as you know, is that we sit here today in 2026 and we don't have universal health care. Right. We were promised that Obamacare was going to work as somebody who was on like, you know, the exchanges for a while. Like that sucks. It sucks even more now. Right. Right. And so, you know, like things. What did you call it in your podcast? The unshittification sort of of everything, right? Yes. And so and so so anybody who loses their job risks ruin. And here comes an industry comes along saying, hey, we're going to destroy all your jobs. Let us build these data centers so we can do it. What did they expect to happen from that? No, I mean, exactly what happened. But I think that when you're a governor, I mean, every governor I've ever met believes that they are the person who's in charge of economic development for their state. Right. So they want these data centers. I mean, they could say whatever they want to say. Right. Governor Abbott's up there talking tough to data centers now and et cetera. But like in general, they're the economic development person for their state. So they want it in the state. Right. And I think my sense is this is not dissimilar to fracking where everyone's going to hate stuff, but we're still going to get whatever it is, 15 gigawatts of new data centers that get built every year. It just won't be in that neighborhood that killed it. It'll be in some other neighborhood that didn't kill it, right? So part of what I'm concerned about in this moment is that the data shows that because we have low social trust, that people will just take free stuff. They're like, we'll support your project if we get a battery in our basement, right? The battery that I could touch and feel and have the title to, right? Like that you can't take away when you go bankrupt, right? And so part of what I'm trying to understand is how do we take this moment and actually, you know, create a third way, right? Because there's going to be a group of people who are always going to believe that data servers are causing cancer and, you know, and I should wear tinfoil, right? Then there's a group of people who legitimately are like, the electric utility really is setting this up to screw me, right? They're getting an economic development rate. I have a much higher price, et cetera. And oh, by the way, they've banned my ability to get data out of my smart meter. I can't seem to do net metering anymore. I can't even take advantage of the solutions that might save me money, right? That we've all worked so hard to get the cost down by 97% of, right? And so is there a moment in here where you take this and leverage it to get all this other stuff unstuck, right? Permitting reform, not federal permitting reform. I mean like state and local permitting reform so we can match like Australia in terms of like solar installations. I mean, I think you have to – the only way forward I see for the data center industry particularly is very concretely at the local level. The wild thing is the amount of money involved in these big data centers, you can make them, you can plant bioswales around them. You can help the environment. You can dump money into the community. You can build schools. You can put batteries in people's basements and solar panels on their roofs. You can concretely reduce their energy bills. You can make their community richer. you can make their environment cleaner and it amounts to a rounding error on the amount of money involved in these things you can do all that stuff for trivial amounts of money it's insane to me that they're not already doing this they should have people lining up begging for data centers because i want schools i want cheaper electricity rates i want battery i want micro grids like i want these things too they could do all that with so little money the amount of money they're losing by having these things blocked dwarfs what it would take to just do it the right way. It's just these tech guys are so arrogant and they're so high on their own supply that they just won't do it the right way. So that's, I mean, there is a moment, but they have to be willing to do it. And, you know, as you know, utilities have to be willing to work with them and do it the right way. Like one of the things I'm worried about, Chigar, is I want, like on one hand, I'm sort of mixed feelings about this. I'd love to hear your thoughts. On one hand, I'm all for milking these jerks for all the public money we can get out of them. They have money coming out of their wazoo. Let's get as much of it as we can for public benefit. I'm all for that. But I'm a little leery about establishing a precedent where large industrial customers, everyone has a bespoke rate, everyone is paying super high rates, everyone, et cetera, et cetera, because there's a lot of other large industrial customers coming along behind. We want to electrify industry. We don't want to establish a precedent where every large industrial customer on the grid faces this cripplingly high bill that not all of them are going to be able to pay. So there's a fine line there, getting public benefit without establishing poor precedence, I think. But Dave, there's precedence of this, what you're just saying in other industries. I'm going to take the real estate industry as a good example because I think there's some overlap. You know, when a big housing developer wants to build like a thousand home project or a 5,000 home project or expand a city, like they often build schools as a part of the process, right? They often pick up the tab on some of the roads, and that's sort of how they get this approved. Is there a pathway for these data center companies to still do that? Or do you think the opposition is so strong that it doesn't matter anymore? I think they can do that if they go in early and they're patient and they're earnest and serious about community engagement and they're willing to spend the time. But this is – I think there's another side to that precedent. Like just in Seattle right now, there's this fight about these fees that are charged to developers that are that are the money is used for affordable housing. Right. And that sounds on paper. Great. You got these rich developers coming in. We're going to milk them for a little money for affordable development. But the practical effect of that is it's slowing down building and we desperately need to build more housing. And just building more housing, period, full stop, is better for people who need housing, even on the low end of the scale, than bespoke, one-off, affordable housing projects. So this is exactly my point. I don't want to establish a precedent which inadvertently slows the electrification of industry, basically. That's my worry. Well, I mean, I think that on your tariff issue, I don't know that I have a problem with 30 and 40 megawatt data centers. I really have a problem with 1,000 megawatt data centers. Yes. So creating a set of rules for things that are above 100 megawatts, I'm fine with because I feel like everything else that you're talking about is sub 100 megawatts. And so I'm not overly worried about industrial manufacturing and lithium processing and all the other stuff that we're talking about there. I think what I'm more concerned about is that you've got all these governors in the crosshairs right now. They're all basically forced to be anti-data center and anti-utility, I think, to run for governor and win this fall. Is that your sense too? yes i mean it's there's just nothing easier than identifying a big corporate villain and bashing on them right i mean that is that is politics at the easiest setting right and so under pressure people are gonna default to that so this is what i mean this gets back to something you and i have been talking about for for i guess years now jigger which is there is a win, win, win here. Like the utilities can say to their customers, we let this data center come attached to our grid, but we got a bunch of money out of them to pay for you to have solar panels on your roof and batteries in your basement. And we got them to help fund a transmission line. We milked them. And then the data centers can say, hey, we made your community better. And then the politicians can say, hey, we forced the utilities to milk the data centers. Like everybody can say. No, but Dave, what they'd rather say instead is they got the data centers to pay for all of the upgrades to transmission systems, which will reduce your bill by 0.1 cents per kilowatt hour. And here's a bunch of fancy math that I'm showing that shows that the 10% rate increase I'm charging you was for someone else's mistake, not the data center. And oh, by the way, I still hate the fact that you're putting a battery in your garage and a solar panel on your roof. Like in that world where they still hate the fact that you're taking advantage of your power independence in any way, shape or form. Is it not good practice to hate the utility company? I mean, you're not going to get any resistance from me for hating on utility companies, Jigar. I'm about to record a whole podcast in a week or two about why they won't do this stuff. but they are between a rock and a hard place now. Like they need an out somehow, right? They need some way out of this. And even if they don't believe in the broad promise of distributed energy like we do, or even if they don't believe in the scale of distributed capacity could make a difference like we do, even if they think it's just little trinkets on a Christmas tree, they need a PR win. Like, how do they not get that by now? They need something concrete to show people. So, look, I think you're right on the PR win. But the reason why I brought up the housing example is because I think that's a place where public sentiment shifted over time. And I think the underlying causes was just pricing, right? So if you look at the old guard left, and California is the best example, like the NIMBY environmentalist movement, which has sort of held guard to make sure there isn't development across the coastline in California. There isn't development even in the suburbs. They've lost those battles to a new movement of folks that are saying, hey, we need to build more housing to break down costs. I don't know if I'm calling that fight over yet. No, but – They're still fighting. Compared to where it was 20 years ago, it's a completely different ballgame. And there is a parallel here where if you actually can convince people of the actual real math, not the math that Jigger's saying, that like, hey, this new load growth will actually reduce costs if we hold utilities accountable in that process. Like there is a real sort of hunger for like costs need to come down across the board. And if you can actually bring down someone's utility costs by 20 or 30%, which is what I think some of this demand side work can actually do, I don't think people are going to care. They're going to be like, yeah, my bills went down. That's the most important thing. But I think to Jigger's point, you can't do that unless utilities cooperate. Like you can, in theory, do that, but they have to cooperate. They have to be involved in that. You can't do it over them or past them or through them. They are the gatekeepers. They have to be enthusiastic participants in that. And they're being, we're having to drag them every step. I mean, most of them, not all utilities, et cetera, et cetera. But like, I mean, I would say the vast majority. I mean, you know, municipal utilities, rural electric co-ops, they seem okay with the bargain, right? Because they're saying, we report to the city council. We report to the Kiwanis Club. So like, we'll like sort of do that, right? where the investor-owned utilities always have some sort of like, they always have a private jet that they're taking to the thing, by the way. And then they take the private jet in, and then they cry about the fact that like, our stuff is so old. You wouldn't imagine how old our stuff is. We need to upgrade it all. And I was like, but you were investing $20 billion a year in 2003. You're now investing $200 billion this year. At what point do I not believe that you're spending money on repairing old stuff, but instead, I just think I'm paying for your corporate jet? Well, as you know, the biggest line item of rising costs right now is distribution spending. I just recorded a pod about how distribution spending is done and determined. And I don't know if a lot of people know this, but like if you're a vertically integrated utility, you want to do spend on generation or transmission. You have to do a bunch of modeling, a bunch of projections. You come under intense regulatory scrutiny about whether you're optimizing that spending. And distribution spending is just a black box. They just call it all mandatory. They just say we have to do this. And if you open that black box and look inside, lots of times they're not even tracking the age of their stuff. They're just replacing it on a schedule. That is where they can are doing all the gold plated spending and they're not even getting the regulatory scrutiny about that. So, I mean, I'm all for exposing them to the light and putting them under tons more discipline. But to do that, you need legislatures and you need regulators on board, too. Like, you know, anything you blame utilities for, there's some refracted blame for the regulators for letting them get away with it and legislators, too. But Dave, so I agree with all that, but there's a bias even amongst the people that want to hold utilities accountable. And I've seen this from energy efficiency from decades ago where everyone thinks every solution is supply side, meaning, oh, we have to build geothermal. The answer is nuclear. The answer is solar. Nobody wants the answer to be efficiency. And all the states that put in energy efficiency measures over the last 40 years, while even if their KWA traits are higher, their overall bills are lower, it has worked. And there is a similar thing we can do with the distribution system. But why is that bias still there? Why are there people who don't believe that utilizing more of the distribution system, putting batteries in isn't actually a real solution? I mean, this is something I started pounding the table about when I wrote for Grist in like 2012, which is once you look into utility regulation, you find this very basic incentive, which is the more they spend, the more they make. The way they make money is by spending money. And energy efficiency, if you do it right, means they need to spend less money. And that is true of virtually every distribution system bit of spending. All these batteries and solar panels and microgrids, they all are substitutes for a bunch of gold-plated spending on infrastructure. So that very basic perverse incentive is at the core of utility regulation of investor utility regulation in this country And we just keep talking around it And you know efficiency programs are a great example Like you know like a utility will do the amount of efficiency that they are required to do by law and by regulation and not one micron more because every bit they do means they get to spend less money. So you're not going to get utilities enthusiastic about efficiency, pursuing it earnestly and in good faith and with some passion, unless it's a municipal utility, unless it's a utility that is just incentivized to reduce costs for its customers. Every investor-owned utility is going to fight that. They're going to fight distribution side spending. They're going to fight all of it. And I don't, I mean, you know, I've banged my head on this a million times. I don't know what to do about it. Like, there are ways around it. You can do performance-based regulation. You can nibble around the edges of it. You can do kludges to get around it. You can do mandates to force them to do it. But ultimately, I feel like if we're going to electrify everything and the whole economy is going to be on the grid and we desperately need to optimize, not just for utility costs, but for macroeconomic reasons. If the whole economy is on the grid, we're talking about the macro economy now. Like, I don't know how we get there with that incentive in place. Like, that's just the elephant in the room that I feel like we have to deal with sooner or later. But I think there's another answer to that question, which is that part of the thing that bothers me, and I wrote about this with Raj Panu back in 2015, is that there is a distinct desire on the part, particularly by the right, but it could be by other people as well, to believe that what we're pushing is feminine in nature. Right? Have you heard about this? You know how there's masculine energy and feminine energy? Petro-masculinity? Yes. I'm very familiar. As if solar panels are like sunflowers blowing in the wind. They're not hard, real, manly. You're telling me I have to wait on the weather? I can't just force my way? I can't just force it to do what I want when I want? Yes, that is a huge piece of it. Right. But the latest version of that is the EIA has now come out with this data showing that we have tripled the amount of natural gas that they were predicting a year and a half ago getting installed, right? And when you talk to people like Duke Energy, Duke Energy will say that's the only way to run a grid is building CCGTs that happen to be three times more expensive today than they were two years ago. It's firm. It's firm like a muscle. Jigar. But I mean, I guess what I'm trying to understand is that like, I get the fact that the governors were checked out for 40 years. They were like, we have a public service commission. We have this, we have that. I don't need to know anything about this. Now it's a number two political issue. They have to know something about it. I mean, hell, even Abigail Spanberger was on an entire episode of Politico for their energy podcast, talking about her energy agenda for like 26 minutes. No governor ever did that before. It does feel like in this moment, they have to actually make some big decisions on these things. If you're currently in a place where you're spending all of your available energy just being anti-data centers, what else could you use that passion and energy for in this moment to help these governors get a handle on this? I mean, I wish I knew. I have listened to people explain to me why capacity that you get out of your already existing grid is somehow inferior or less firm or less manly than new capacity you build with a power plant. Or people explain to me why solar plus batteries plus a big interconnected grid is not firm in the right way, not as firm, not quite as tumescent as a big, you know, nuclear power plant. And I don't know why. I don't know why they think that way. And that attitude is sifting up into the political, I can tell you, into the political class. They all are being convinced all over again that renewable energy is weak and inconstant and unreliable. So I don't know how you get around that other than just showing them. I mean, at the very basic level, this is what I did a podcast with Steve McBee about this, about just the clean electrification industry's inability to speak up on its own behalf and to articulate its own case and to get good information to lawmakers. Like a lot of the legislators, like a lot, even like senators who are in charge of energy committees don't really understand the revolution that is underway across the world in clean electrification. They think it is a nice little extra. So part of it is just the industry getting a little swagger, getting a little confidence and not having its main vehicle for lobbying and communication be half composed of gas. You know, that might help too if it had its own voice. I think that's exactly right. I mean, I certainly think that Chip Roy saw a little swagger. yeah also i mean finally somebody got whacked on the nose i mean you can you can debate about the practical you know the pragmatic outcome of that whether i don't think you can debate it at all i think that i think when you promote stupid ass shit you should lose your job like i think that's i think that's pretty clear we need we need two or three of those i think we're gonna have two or three to really get the full effect like they need to see that it's a real steady thing Yeah, I think we'll get two or three of those this cycle alone. I think in general, one of the things that's happening right now, like at least on the ground where I'm operating, is that almost everybody in a decision-making role in Texas understands how powerful solar and battery storage are and that their grid has been saved by solar and battery storage. And I would suggest to you that almost nobody understands it outside of talking points in the PJM. Like every governor is using the right talking points. But if you ask them what's being said in a closed door room, I think they'd rather have more natural gas plants built than 10,000 megawatts of battery storage. We're at roughly 19% of the peak in Texas being battery storage. it's 0.2% of the peak in PJM being battery storage. Yes. And they, and they, you know, politics, the higher you are, the more risk averse you tend to be. And because this is the information environment they're surrounded by to really commit to solar and batteries, to really commit to distributed capacity would be a huge gamble for them. They, I mean, I think they feel that way. It'd be a huge risk, a huge, they would be going out on a limb, whereas gas plants, they understand, and they are surrounded by gas lobbyists. And now you have clean energy industry groups telling them that gas is firm, and that you need firm gas. And then if you build renewables, you just have to build gas back up anyway. Like that's what they're hearing all around them. So like, it's, it's, I don't think you can never look to like politicians for bravery, you know, like we need to surround them with better information and the industry has got to do that for itself. What's your take or nap? I got to jump in on this energy efficiency and solar is feminine piece because I got a bunch of friends that drive Rivian R2s at Ford lightning F one 50s. And I know some farmers in Pennsylvania that lease their land for solar panels that would disagree. I would say renewables are gender fluid Jigger Pardon me for Bringing the woke perspective here But There's nothing wrong with feminine energy Like look around At what masculine energy is doing In the world and in the country right now Don't you think we could use a little bit more feminine energy Like I don't want to Try to claim that like EVs are tough too And they can tow just as much You know I don't want to like compete on that ground Like it's a dumb, regressive, you know, dipshitty way to approach this whole subject anyway. Like you tell me it's feminine. That's fine. I was like, oh, so it's more practical and more like results focused. Great. Yeah. No, look, I agree with that. I just think it could be different things to different people. I don't want to, I don't want to box. I don't want to box this into one, to one stereotype. I'll take gender fluid. Oh my God. All right. So let's move on to the next phase, right? Which is that on May 4th, the NERC, the North American Electric Reliability Corporation, issued a level three essential actions alert. Its highest severity and one it rarely uses after multiple incidents where more than a gigawatt of data center load dropped off the grid in seconds. Fast enough to threaten frequency stability across whole interconnections, right? And so at some point, right, like, I guess what I'm trying to understand is, are they trying to move fast and break things? I mean, this is yet another example of a problem that is 100% foreseeable and 100% solvable with a trivial amount of money. Like, they all could have just put more batteries in. You know what I mean? This is the Volt slogan. Everything is batteries. I mean, they could have just put more batteries in. They could have had more buffer. They could have avoided this ever happening, but they just are arrogant and they don't care. And they just think that because they can wave AI around, everybody has to defer. Everybody has to get out of their way. Everybody has to accommodate to them. Like that is such a solvable problem. I did a whole podcast on it and I can summarize the whole podcast. in one word, just do more batteries, you know? But they didn't. Like, it's wild. I think we talked about this a little bit, but, you know, there's a consensus forming around groups like the Searchlight Institute and the Breakthrough Institute, and we've seen a paper published in March proposing an American grid infrastructure fund where hyperscalers pay into a dedicated fund in exchange for faster connections, and then that money would flow from utilities for large-scale transmission and generation. Now, you said this crowd treats distributed capacity as a marginal efficiency play, and this is sort of what we've been talking about, about how it's really undervalued and not looked at. So make the affirmative case for distributed capacity as serious supply. Well, I almost don't. I mean, like capacity is capacity. I don't know how else to put it. You flip the switch and something comes on or it doesn't. You don't know if that capacity is coming from distributed energy or VPP or a new power plant. It's either there or it's not. And this is very frustrating because this is just yet another example in the energy world where the obvious answer is both and. And I think really, if you got any of these people in a room and could talk to them, you could get everybody to that page very quickly. yes, it's both and. Yes, obviously we need to maximize distributed capacity because we're under an incredible time crunch and we've got gigawatts and gigawatts of spare capacity laying around. So of course you want to exploit it. Like what is the argument against exploiting it? Like it's just mind boggling to me. So of course you want to do that. And then of course it is also true that behind data centers are coming the electrification of transportation and industry and heating and cooling and the rest of the economy. And so, of course, we're going to have to 2x or 3x our grid. Like how big it'll have to get, I think we can disagree on. I think I have a lot more faith in distributed capacity than they do. I think these projections for how much more heavy infrastructure will need are overblown, but I know we're going to need a lot. So like, of course we want to do both. I don't know why we always end up in this. Like, it's hard for me not to see that as a species of those people's fanatical obsession with lecturing the left, with lecturing hippies, with somehow saying that the existing groups or the existing movement is doing it wrong. Like for some reason, that is the only way they know how to frame anything. And I get it because that framing gets you attention in DC. That framing gets, then you can get a bunch of conservatives who say, oh, you're bashing the left. I'll come amplify you. I don't know why these people don't notice that the right comes along and amplifies their criticisms of the left. But then when it comes to their solutions, the right vanishes. They get used over and over again to bash the left. I don't know why we can't all just have a little solidarity. We need it all. The nuanced problem that I have with this entire line of thinking is that you have to assume that the current structure of electric utilities and the regulators is competent. And so you basically have to assume that this money will go into a common pool and be competently spent by the people we've just been bashing. And so I would much prefer that money go into a battery in my garage than to go to these people. Right. And so like I think one of the big challenges that we have in this moment is that, you know, we do clearly have the technology today that we didn't have 15 years ago when RMI put out that report around. what is it, what, unplugging from the grid or whatever it was called. Like we have the technology today for me to meet 92% of my electricity needs under a NEM 3.0 structure where I don't get paid anything to export into the grid, right, where I just put solar panels on my roof and battery storage, and I just make sure my battery is empty at 10 a.m. every day, and I fill it up with cheap solar power and then run my house on the battery. that whole construct is like 12, 13 cents a kilowatt hour. And so you're like, you're charging me 19. I could just do 92% of what I do for like 12 to 13 cents a kilowatt hour. Right. And so like, I think that it is shocking to me that having worked for 20 years to get the cost of solar down by 97% and to get Wall Street to love doing securitizations and bonds and all this other stuff for solar power, that we're still trying to figure out how these solutions are marginal. But Chigar, I think it's easy to throw around the term competence. I think there's plenty of competent people at the utilities. There's plenty of competent regulators. Their job is to do what the laws tell them to do. And if the laws allow them to rent-seek, they'll rent-seek. That's what they're supposed to do. Let me give you a good example of this going back to California. You know how the rate structure is in California. Generation rates have not gone up. They've been flat for decades in California now, or at least the last decade or so. That's because it's decoupled and they can't make money off of it, right? It's our job to change the rules. So if we do do this and we work together with the data centers, the hyperscalers, we have to change the rules so that the utilities are either incentivized or required to use more of their grid and to do what we're talking about. That is on us and not just the three of us here, on all of us. Well, it's kind of on you. I mean, it's kind of on deploy action. I'll say amen to that. And I wanted to add one other thing in this discussion. There is a ton of focus now from these same people about permitting reform, about making it easier to build, about removing barriers to building. And again, like in principle, I agree. All that stuff is true. But it's interesting to me that it's always the solutions on that score that get amplified and that get taken up and that are quote unquote bipartisan are all about cutting this and cutting that, cutting this, deregulating this, deregulating that cutting this regulation cutting that regulation The other side of that even if you read the original Abundance book the other side of that is fully staffing the relevant agencies and regulatory agencies and overseeing agencies and government agencies and all these regulatory and governing bodies, fully staffing them and funding them. That's another way to speed things up, is by spending money on state capacity, is by spending money on government capacity, on creating fully funded, robust, competent government. And for some reason, that side of things, even though it's like half the abundance pitch, constantly falls out of this discussion. And we're always left with the slash this and slash that. So like, I would like to fund, And to Jigar's point about, I'd like to have competent people in charge of this, you can create competent federal agencies, but they need funding and they need staff. And so if you're making common cause with people whose mission in life is to slash government and to slash money for government and to funnel tax cuts to rich people, then maybe you should look in the mirror and think about whether it's in your best long-term interests to form common cause with these people. Maybe you should couple your calls for greater speed with calls for greater state capacity. I just wanted to make that point. And look, I think that point, that's the most under talked about point in this whole process. Like, let's just do some simple math, right? A utility executive makes between half a million and a million dollars a year. The regulator at the Public Utilities Commission is making $150,000. I don't know which utility CEO you're talking about. That's LAWP. Yeah, I said executive. I said executive. Utility CEO is making over $10 million. I understand that. But, you know, a director to VP level executive starts out at between half a million and a million dollars a year. But that's still five times as much as the regulators making. So, like, we're creating a system where the folks that are doing the regulating aren't going to be able to stick around long term. Right. And think about NEPA reviews, too. Like everybody wants to put these restrictions on NEPA or just put like NEPA review must be done in a year. But if you don't fully fund and staff the agencies that are responsible for those reviews, all you're doing is saying we're not going to do those reviews, right? So why is fully funding and staffing the people involved in those reviews not part of this discussion? Why is that not as big a part of this discussion? All right. So as we get towards the end of this conversation, I want to make sure we talk a little bit about the midterms, because you've got 36 governors that are running for reelection or election this fall. This is clearly going to be an issue, right? You've got major Republican governors from Texas to Wyoming that have put out pretty harsh press releases saying that they are going to stand tough against those data centers, right? And so what I'm trying to understand is that if you're actually running a campaign this fall, right? We sort of know what Mikey Sherrill did last year, right? She really was talking about the rate freeze, right? Which, you know, I've got my cobbles with, but that's fine. I think it worked. I think Spanberger was just like, you know, I'm going to be more competent. And she passed a pretty comprehensive set of bills in Virginia that now she has to actually try to implement, which Dominion is going to try to thwart her at every move, I'm sure. And so I'm just trying to understand, again, like where you channel all of this enthusiasm, anger, conversation. I mean, we generally operate in this niche. niche. I mean, you don't find it boring and I don't find it boring, but other people find it boring. But it's broken through, right? To the point where there's a lot of our friends who generally find us boring, like who are now interested in these topics when they call us up. I always joke. I used to, you know, I spent like the first 15 years of my career going, I wish more people would talk about this stuff. And now I'm like, oh God, what was I thinking? So what's your sense of like, what should the pundits be talking about? What are their angles they should be talking about? What should they be, you know, like when they're pushing the governors who are running for office in an interview on topics like, you know, like when we're talking about data centers, like how should all of this be handled this fall? I mean, I stopped understanding politics at all about 10 years ago and haven't understood it since. So I'm probably the wrong person to ask. I mean, I'd like to think that a comprehensive package of competent, good policies that, I mean, you can take a whack at utilities. Like I think cutting back on utility ROE is a perfectly legitimate populist policy that also has merit. merit and like requiring data centers to pay into a fund that's used for community benefit or used for building out the grid or used for distributed capacity or all three is a populist policy that has merit. I just think there's a, you want governors with staffing and good information who can navigate this, who can make the populist gestures, who can respond to the populist energy, who can show, can demonstrate that they get it, they understand the anger, and they're responding to it without being pushed into dumb shit that's going to have long-term detriment. Like, that's the trick here. That's the line to walk. And I don't know any, you know, I don't know that there's a formula for that state to state. Like, you just have to think of what are ways where I can signal, I hear you, I understand the anger, I'm responding to the anger, but let's not do anything that's going to hobble us later. I don't even mind necessarily if you pass like a one year moratorium or a six month moratorium, something like that. Bite your tongue, Dave Roberts. Just get through the election. Just do a moratorium that lasts through the election. Then everybody will tune back out and you can like do competent policy. But as long as you know what you're doing, right, and you have some eye on the long term needs here in the long-term direction of things. It's just like, this is always the trick in U.S. government is the public is ill-informed. Most of the people yelling at you are ill-informed. You need in some way to respond to them in a way that shows that you hear them, but you need to respond in a way that doesn't inadvertently cripple your state or cripple the future grid or cripple the growth of the things we want to see grow. And I don't know that there's a formula for that. I just like, just be, be careful very carefully. That's the, that's my answer. Well, Arnav, we had Grant Holman and, you know, she gave us a little bit of a playbook. What's your playbook? Yeah. So I think my playbook is, is much simpler. I think there's all of, you know, from what I've learned, all of politics and I'm with Dave, I don't know how to predict things anymore. I don't think anyone does, but all of politics really comes down to two emotions, hope and fear. And in the absence of hope, fear always wins. And this is true all across the board. And it's like, you know, Donald Trump's president for a lot of reasons, I have no idea. But when there's no one else that's hopeful, the fearful candidate will win. And in our situation where candidates aren't at play, fear is winning because it's the fear of AI. It's the fear of data centers. It's the fear of the tech companies. And the only way to beat that is to offer genuine and hope, which is like, if I'm Governor Pritzker, if I'm Governor Shapiro, if I'm Governor Cheryl, if I'm incoming Governor Becerra, and yeah, I'm calling that one right now, Jigger, just so you know. You heard it here first. Yeah, I heard it here first. But I want to go- California's going to elect a Democrat? I want to go to the public and be like, this is our opportunity to cut you in on the next industrial revolution, right? This is our opportunity to bring you in, and here's how it's going to help you. And not only say that, it's like, I will make sure that we are not taken for a ride by these technology companies because I am competent at what I would do. And that's what I would say if I were a governor. And let me just render myself a cliche by saying, well, let's look at this MomDani guy. He struck an incredible balance of personal happiness and joyful warrior energy and hopeful energy. And he had a few headline policies that responded to that populist energy, not necessarily policies that technocrats love, like a rent freeze or whatever, or government grocery stores, like all the technocrats are lecturing him. But ultimately, those are pretty small ball policies, but they send the right signal. And then behind that, he's just governing competently. He's just governing as a competent technocrat. So that's the mix there. Get the right energy, a few high-profile policies that make people happy and think you're fighting for them, and then behind the scenes just do government well. It doesn't hurt that he figured out a way to get the Knicks to win the championship. That was a real coup. But, Dave, on the Mom Donnie point, you're right. I know we're getting to the end here, But they always ask him about Donald Trump, about anything. And his answer is simple. If it will help bring down costs for New Yorkers, I will work with him. That is the politics of hope. And everyone leans on the fact that, oh, he's a democratic socialist. That's not his draw. I know so many people in New York City that are not socialists at all that voted for him. No one knows what that means. No one knows what those words mean outside of political obsessive circles. Yep, yep. And it's like, that's the type of frame we have to take to this. It's not finding a different bad guy. It's being like, if it will help you, we will do it. It's like, you know, you ask Jigger, like, are we pro data center or anti data center? We're neither. We're if the data centers can help the public around it, we'll support it. If not, I don't know why we would support it. Right. That's right. Well, we are all I'm in and I've said this a million times and I'll just say I'll just say it one more time, but like we are all of us who want hope and competence all fighting against an information environment filled with fear and lies and misinformation and terrible dynamics at every level. And like sooner or later, somebody's got to think about how to address that problem. We can't just work around it. We can't just tip to around the results of it forever, sooner or later. Like somebody's got to engage with improving the information environment. I don't know who that is. Everybody can play their part, but like, that's got to be on the table. I think that's you and Jigger. Yeah, exactly. Well, with niche podcasts are the future. With that, Dave, I feel like every time we talk, I'm driven to drink and we'll need a whiskey at the end of five o'clock somewhere. But thanks for joining us and doing this with us. I do think this is a super important topic. And I do think that we do have the right people around the table. And I think a lot of the investment that you've made in informing people of the last few years has unearthed a lot of solutions that are ready for prime time. And so I think we actually have data centers that are willing to pay for people's trust. And I think solutions providers that can provide it. Here's hoping. Energy Empire is supported by S2G Investments. If you haven't checked out their podcast, I highly recommend it. They have a great recent episode on the long-term effects of the Iran war and the blockade of the Strait of Hormuz. In the episode, Sanjeev Krishnan, Franco Sullivan, and Bala Nagarajan make a compelling case that this disruption could be the most powerful accelerant for renewable energy in a generation. And in future episodes, they'll be exploring how those forces are reshaping our food systems and ocean intelligence. Sound interesting? Go find the S2G podcast and start with The Global Energy Order Has Changed. Now what? Well, I'm not going to lie, Jamie. I'm a little drunk. No, kidding. but like but he does drive you to drink he does like he's just like just throwing the towel i mean it's not gonna get better i was listening to every word and i will admit it was a little pessimistic at times between the pessimism you guys were laying it on so thick at some points that i was like oh let's bring let's uh let's elevate the bright side here a little bit between that and the feminine energy associated with solar power, I couldn't have been rolling my eyes further back in my head. I was like, man, if there was ever a moment that I wanted to be co-hosting, it was right now. Arnab, he represented my position well. He did end up saying something, but I wasn't going to let that stand. No, but what bothers me about it is not that feminine energy is bad and masculine energy is good or whatever it is. What bothers me about it is that like these are just electrons for the love of God. Why are we like assigning genders to electrons? Like, I just feel like the people putting solar panels on your roof are also getting sweaty and need a shower at the end of the day. Like, it's not like they're not putting steel in the ground. Like it's all hard work. Everyone's doing hard work. Everyone's like rising to the moment. It bothers me when people degrade, I think, because I think they mean it in a derogatory way, right? Like energy efficiency or solar or whatever as something that's less than a combined cycle gas turbine. It's so ridiculous. Like, like the concept of energy independence and producing your own power and like breaking free from the monopolistic utility industry in order to, like, you know, take charge of your own land and create what you need for your family. I can't think of anything that is more, first of all, American as an idea, but I just don't, yeah, I don't get it. And I just don't want to elevate that as a concept, even in our discussion, I think like giving oxygen to it at all bugs me. And so I am happy for this outro so that I can express that opinion. Well, we missed you during the interview, but I thought Arnav did a fantastic job. And I do think his instincts are really good on the political side. I mean, it's going to be an interesting several months because I do think that the natural gas industry is going to fail miserably to meeting the speed to power challenges until probably 2031, 2032. And that opens the door for all of these other solutions to show that they can actually rise to the occasion much faster. Absolutely. I mean, that is what is happening. They have no mechanism with which to meet the speed to power requirements of this moment. And the only technologies that can fill in the gap are solar and batteries. That's the only thing that can be deployed in 18 months. There's no way around it. Even if they're scaling up the manufacturing capacity for these combined cycle gas turbines, they are not going to appear out of thin air, but the solar and storage industry is ready. And that's why you're seeing these big deals with Intersect Power and Voltus for these technologies with these big hyperscalers, because that's what's ready to go. Love it. Love me some Dave Roberts. Love some Dave Roberts. Love seeing his face and convincing him to get on video for us. It was so nice. Also, just really fun to do a crossover with Volts. We love Volts. It's been a long-term stalwart in the energy podcasting space. So it's really a pleasure to have this partnership with them. Thank you to our sponsors, and thanks for listening as usual. You can find us on Spotify, Apple Podcasts, YouTube. If you're on YouTube, make sure you hit that subscribe button. That's how people find us. And please leave a comment or a review because it really does help other folks see and find the show.