Energy Policy in ERCOT with Caitlin Smith (VP of Policy & Corporate Comms @ Jupiter Power)

So I think that there is still a fundamental disagreement on, you know, some of the causes of Yuri and and some of the problems we have in the market right now. And and I would boil that down too. Is it something that can be solved with operational fixes? Was it just an operational problem, and I I don't say just to diminish it, but was it largely an operational problem, or was it this greater problem of we simply don't have enough generation online to meet load.

Hello, everybody, and welcome back to transmission.

Today's episode is with Caitlyn Smith, vice president of policy, and corporate communications at Jupyter Power. The conversation covers policy in Aircot, how decisions are made, and what it means for battery energy storage.

If you're enjoying the podcast, please hit subscribe so you never miss an episode. And with that, let's jump in.

Hello, Caitlin.

Hello.

Welcome to the podcast.

Thanks for having me.

We've been pretty excited about this one.

Uh-huh.

Thanks for driving all the way. Actually, being driven all the way from from Houston.

And an electric car.

So, Caitlin, if you listen to this, so Caitlin joins us from Jupyter Power, In a minute, I wanna ask you, Caitlin, a bit about your background and, a bit about due to power. But in a nutshell, due to power is the biggest owner of storage in, you know, caught in Texas, many gigawatts of of of things all over the place. Caitlin is an expert will be on an expert in ercot policy, and, is heavily involved in lots of the mechanics of how decisions get made. And so, we thought we'd get Caitlin on Alaska for some of the ins and outs about policy in Ercock.

What are some of the hot potatoes? I'm gonna dive into some of them in detail. But Caitlin first, do you wanna just talk about who you are and what you did before due to power?

Sure. So so

thanks for that great intro. I I think that is is, you know, if I can claim that to be correct, I will. I have been working as you said in Ercot kind of stakeholder policy and market design maybe about eleven years. I started in this area with what's called the market monitor to Ercot.

The the joke I make a lot is before Yuri, it used take me kind of ten minutes to explain what the market monitor was and what Ercot was and what the function was. And I I think now sincerely. A lot of people in Texas Snow. So that's a advisory role on market design as well as kind of, you know, looking for an investigating potential market manipulation in Ercot.

I did that for a couple of years. And since then, I've been in kind of various stakeholder roles, a lot of representing generation, in kind of Urcott market design and policy. During Yuri, I was working in a consulting role. And so I got a tremendous education then because just the amount of clients we had in different segments.

So generators, you know, financial, just trading parties, large load customers, and we had some municipal owned utilities as well, just the amount of questions and all these unprecedented situations I really learned a lot. The last two and a half years I have been with Jupiter Power, which is a developer and owner operator of utility scale standalone battery energy storage. As you said, if not the largest, one of the largest, fleets in Ercot, seven hundred and seventy five megawatt hours in operations, another two hundred megawatt hours in constructions in construction in Ercot. So that's over a gig that that is online or will be online this year.

And then a development pipeline across the country, more in Ercot, but but in other ISO as well. And I think that development pipeline is about eleven gigs.

Just taken all of my stats. I was gonna say I was gonna say some stats about Jupyter Power, but you've just done it all for me. So but you guys are big in batteries to put this into perspective one of the biggest biggest public listed funds in Europe in the run that owns battery assets is about the same size kind of a gigawatt ish under management. And lots more coming.

So huge, huge base of assets, lots of things to get right, and lots of assets to go and manage trade and be close to the market for. How how many people are involved? How big is this company? What?

I think about ninety. So Jupiter Power was founded in two thousand seventeen. That's sort of, I I say the the friends in a coffee shop phase. First, it influx of private equity backing in nineteen.

And that was NCAP. We went through a sale process in late twenty two. We are now backed by BlackRock. So we are kind of in, I would say, phase three of the company.

And so we we've been growing and growing quickly. We have about ninety people. We we are very proud of, as you mentioned, you know, that's a lot of energy storage, megawatts, to kind of own, operate trade around as a fleet. We we think we are kind of one of the first to have a big fleet of storage in Ercot and be really operating that as optimizing the portfolio and not just one asset.

So we have we are building out our our trading team. We have a really great head of trading. So we have a a trading team in Houston. Some really great settlement folks.

You know, everyone who you think would be in Houston with that background is in Houston. We are headquartered here in Austin. And our CEO and and legal and some of our corporate functions are here. And then we have a very large development team, mostly in Chicago.

And that's, you know, are are really great, like, young, entrepreneurs who are looking at all these opportunities across the country. So I think what makes us different is having that strong development arm, and then the strong, you know, asset management and trading arms as well.

One of the things that strikes me is you've gone down a vertically integrated route So you do the power trading and optimization in house. Mhmm. And one of the things that's one of the business models that's starting to emerge in in her car and California. Various places is the third party optimizer route. Mhmm. How how are you guys thinking about that? It's surely well, Of course, you guys are come to conclusion that it's best to do that in house.

Uh-huh.

Why do you why do you think that?

You know, I think that that is ingrained in how we started the company. You know, we we have intellectual property ourselves and and the dispatch optimization software and and forecasting that we do in house. And we look at third party, you know, tools to kind of benchmark. But I think that that was part of our business model to start with. Right? It was this idea of Here's this technology, and here's a unique way to dispatch it. I think that all of that is sort of ingrained in in the origins of Jupiter.

And so coming up to a gigaw in Texas. Mhmm. Where where else are you guys developing and building assets?

I think every market in in North America, Kyso, and MISO are kind of near near term after Arcot. And then when we're looking, you know, four to six years out, we do get very heavy into the northeast into to PJM, New York ISO, and New England as well.

And all backed by Black Rock?

Yes.

Okay. Just go go go then.

Go go go.

So in a previous episode, and we discussed it before we went live in quite some detail, we we had Brent on to talk about what goes on in the control room, Ercot.

Mhmm.

That was extremely well received, and we had lots of questions coming from it. And so this time, we're gonna go down a different angle, which is talking about policy at Ercot, and what our listeners need to know from energy storage perspective. So could you give an overview of how? And I know there's a very complicated diagram of this, which I've seen.

Which diagram? Is there a good diagram?

So the I'm interested in how decisions get made at Ercot and to do to do with Ercot. Yeah. So Okay. Say we think we we get together and we think, oh, actually, this rule is meaning that batteries won't get built because they're unfairly excluded from X or this rule unfairly, I don't know, reduces incentive to build gas plant here or whatever the argument is.

And we want to Yep. We wanna discuss that. How do we do that?

There's a lot of things happening in different places, which I I'm sure you know. So Ercot and and this became, a criticism, but I don't think it's necessarily so. Ercot is not under FERC.

So Ercot is sort of a stand alone market in Texas.

Because it is contained in Texas, it is under state law.

So not FERC, which is the I'll let you Federal Energy Regulatory Commission.

Right? And then because NERC is a corporation, I think, even though it's a non profit profit, it has corporation. So FERC FERC is, federal energy regulatory commission. So Ercot is not under FERC.

But they're we're self contained in Texas. So we're under state law. So you have Ercot, which is quasi governmental and a nonprofit that is member based nonprofit. It is under, jurisdiction of the Public Utility Commission.

Which is state agency in in Texas.

The commissioners at the Public Utility Commission are appointed by the governor, so they're not elected. They're appointed by the governor.

How many of them are there?

There are five. Preyuri, there were three.

And now you have five. The the purpose of making it more than three is if you only have three, two cannot talk to each other alone because then you are violating the Open Meetings Act. And because two would be a core amount of three. So during Yuri, two cannot talk to each other unless they called an open meeting and gave public notice and all of that.

So commissioners were not able to speak to each other during that emergency. And so that is why it is now five because now two can speak to each other because three is a quorum. And so the the public utility commissioners are appointed by the governor. The public utility commission is under state law.

State law is made by the Texas state legislature, which is by Cameron. There's a house in the senate, and and each has committee that kind of has jurisdiction over the public utility commission on the House side of State Affairs. On the Senate side, it is, business and commerce. I go into this level of detail just to say that the senate in Texas is led by the lieutenant governor.

And so you have both the governor and the lieutenant governor kind of with with some amount of ownership over what happens, which can, you know, you can get some interesting political viewpoint over over that, which I think is probably good. Right? Cause you get sort of everybody to the highest level of state government interested in in what's happening under a cop.

Just to get that kit.

So then and then there's five what words do you describe them?

The five humans at the top of the public utility commissioners?

Yeah. Commissioner, five commissioners. And the do they sit right at the top and they're they're on the board of Ecot?

Two of them are on board of Ecot.

Only two.

Only two.

But the the board reports to the utility commission. K.

And I believe I'd have to check. They they might be exoffic the physio members, so not not true voting members.

Yep. Okay.

So at Ercot, when you're talking about Ercot rules, you know, they are not really making policy. Right? So you would say, So for example, during Yuri, we were in state legislative session. So we got legislation, which turns into law. That has to be implemented through PUC administrative rules, and then that gets implemented through Orcot protocols.

You can also have Ercot protocols that go kind of bottom up that are ideas from Ercot staff or from stakeholders.

And there's always been sort of a robust stakeholder process there. And that is done. I'm a big fan of that. That's done sort of through compromise.

Right? It's it's each segment. So segment meaning, you know, different participation in the market. So you have you know, retailers, residential load generators, investor owned utilities, municipally owned utilities, cooperatives, gets the same amount of representation, and they kind of discuss things.

So they have that representation kind of represents their commercial viewpoint, but they also have the expertise. Right? These are the people who operate the wires or who operate the generators. And so you get a good compromise there.

Now those rules kind of the top of Ercot, as you alluded, is is a board that has changed since Yuri as well. And that used to be a stakeholder board or kind of a half and half a stakeholder board and half independent board. And now it's a fully independent board.

So there's been a lot of change since We need a diagram.

Yeah. Yeah. Yeah. This podcast.

We didn't even go down to the bottom bit, which is, yeah, the the bottom up decision making is the the diagram that I've seen, which looks incredible incredibly busy.

Is it the working group?

Yeah. The work the working groups and the subcommittees.

It's it's it's a lot for one a four page. But a lot's changed since Yuri. And so is all is it finished now? So Yuri happened, and all the changes happened, and is that it?

We do see these cyclical conversations. Right? So even if we were to say right now, yes, PCM or no PCM. I don't think anyone imagines that's the end of resource adequacy discussions. Right?

And I just think the nature of the market I know you said it was really complicated for being a free market, but it has to be because you have wind, solar, batteries, you know, all these technology types, all these different load customers I wasn't I wasn't that was just to be clear, anyway.

I I was not a diss.

No. No. No. I don't think the best thing. I'm just saying this is why you can't, like, rubber stamp it. It's the I always say it's not set it and forget it because if you set it and forget it, that is when you would have a catastrophe because things are gonna continue to change. Alright.

But just come back. You you mentioned something there. So we we we crossed into resource adequacy for a second. You said PCM and for our listeners, it's probably worth saying what that is.

It it is a construct that we have come up with since winter storm, Yuri. We sort of went on a a journey with resource adequacy is which is kind of the, you know, don't drink when we say it because you'll be on your, you know, fourth American pint and and third British Pine. We started with a proposal that was, load serving entity obligation, which was sort of a bilateral capacity market. And what I mean by that is, a capacity market as opposed to a energy market is is you buy the capacity ahead of time.

You kind of pay it to exist, you know, to to oversimplify. Right? It's not pay for performance. It's pay to exist.

So we were going to we were looking at this mechanism wherein each load would have to sort of contract for enough capacity to serve its load plus a little bit. We we contracted, we being the PUC who's who's not me, but, you know, collectively stakeholders, everybody interested in Ercot, we had a study done by e three to evaluate, you know, traditional capacity market, the LLC obligation, what would happen if we stayed with the energy only market, various things. And and what came out of that was a recommendation for something called the performance credit mechanism.

This is a a pretty new construct design. Understand it. I think we thought entirely new, but I believe there might be some markets that do something similar. So you would have a set amount of performance hours.

And then you would kind of retroactively look at those hours and the generators that performed then would get paid some credit amount for that, that performance.

So are we talking about time times of system stress?

We would find some way of defining the thirty, I think, was the number that was talked about, but I I think maybe the number even wouldn't be set in stone. You would pick ahead of time, some amount of hours and some way of defining what are the the highest stress times it could be, you know, pure highest amount of load or highest amount of net load, which means load that's not served by by wind or solar or, you know, highest amount of thermal outages. Anything like that, you would have it pre find and you'd have the numbers preset. And then after the year, you would go back and look at that those hours and identify who performed.

So Why are you laughing?

Well, we already did this, right, in in Great Britain.

You did this.

We had this thing called the triads. I wasn't really called the triads. It was called to NuOS, and I'm not gonna go into the details of why it was called that. But we went we we created it.

Mhmm. We did it. And then we've just taken it away, and it's taken fifteen years probably go around that cycle. And so we had three half hour periods, and it was, like, straight as the highest load period.

Mhmm.

And, you can always highest pure load.

Not that note. Period. Alright. So three half hours. And the payments were huge. They were, like, fifty, sixty thousand pounds of megawatt, depending on where you were.

Okay. So you could You could if you're dispatched, if you're if you're a gas unit or you are even DSR, you get paid a fortune for it. And then you recover the cost from everybody. You kind of democratize the cost.

Reason why I'm laughing though is because and another funny thing about the triad, it triads is there was always one they always used to say in the control room in National Grid. It was always the third Wednesday after Christmas. It was the tries were always between four and seven. That was usually one and a half five.

And go on.

Could they be so could you have an hour and a half in a row. No.

It has to be ten days of haul.

So I think that's something that we would have up for discussion too. I think some of the proposals would be, you know, it was Not the thirty highest of the year, but, you know, the one or two every month.

Well, thirty sounds a lot more sensible. Three is a bit crazy because you have so many people that do this thing called hunting triads. So you would run a unit just to try and find that load, but then you could it the margins got so tight that you could move the triad because there are so many units trying to move move it.

Well, so in Texas, we have four CP, which I I think Brand did discuss, which is the transmission costs are allocated. Based on the the four highest intervals.

I like it because it's kind of it's like playing poker. So, like, high stakes stuff, but Yeah. We just got rid of it because it all became a bit too costly and created behavior that we didn't really want. But it's funny how, you know, you can design this thing and I say we, great Britain.

I'm not there anymore. But I saw it come and saw it going. That's why I was smiling. Let's talk about some of the policy work that you've worked on to set the scene before we go down some rabbit holes.

So before we go do n minus one contingencies.

Before we do n minus one contingencies, if you're listening to this, a Caitlin was taking taking the mic out of our episode about Urcotte's control room because we're going into some data detail about some some aspects.

And we're not gonna go into that level of detail today on And this is where all the listeners will drop off.

You dwell the list. Like I say, where's the n minus one? Where's the n minus one? Okay, Caitlin. What sort of things have you been involved in with Acot? Over the years.

Policy changes, frameworks, decisions, you know, could you talk about some of those?

Sure. And I I might need you to kind of help me narrow it down. So when when I joined the independent market monitor, we were having sort of similar capacity market conversations. I I think one of the things that has surprised me post Yuri or even during Yuri is how many things do stay the same.

I think a lot of the policy, you know, for all the sedented situations we're in with that event and load growth. And and then the kind of changing resource mix we've seen since Yuri. I think some of the policy just discussions have stayed sort of the same. It's sort of cyclical.

And so so we've been talking about, you know, should we go to a capacity market? Do we have a resource adequacy problem for twelve years at least since two thousand eleven? And so I I was in some of those beginning discussions when we were talking about capacity markets then. And I would say that's kind of the the overarching thing that continually reoccurs.

You know? So ordC, we've talked about real time co optimization.

You know, we we've now, in the last couple of years, talked load serving entity obligations and and the performance credit mechanism. So it kind of on on the market side sort of always revolves and goes back to that resource adequacy conversation.

Okay. So there's there's lot the the one of the things we've we've discussed is that there are a lot of camps who have interests Mhmm. Who are expressing influence on on a call or at, in the access. Mhmm.

And lots of lots of competing interests and proposed solutions to the same sort of problem. Mhmm. And, have you noticed over the last ten years or so a change in stance or a lens which people are using to look at these problems. Is is Texas and ERCot as a whole, a, you know, radically pro renewables world now.

Yeah. Maybe you go on Twitter, you you can see every single side and, get lost in it.

How has that changed?

You know, on on the resource adequacy conversations, I think Stances have prob probably largely stayed the same.

You know, I just think blame resource.

I know.

Resource advocacy. Yeah. Is this my n y minus one contingency?

No. No.

Oh, we're gonna keep you about that.

So resource adequacy is this concept of, you know, exactly what it sounds like. Do you have enough resources? And so I think that there is still a fundamental disagreement on, on, you know, some of the causes of Yuri and and some of the problems we have in the market right now. And and I would boil that down too. Is it something that can be solved with operational fixes? Was it just an operational problem, and I I don't say just to diminish it. But was it largely an operational problem, or was it this greater problem of we simply don't have enough generation online to meet load.

I personally would say it was more of a operational issue, but we have seen this this kind of rebuttal of we don't have enough generation to meet load for a long time.

Generation.

Particularly thermal generation because that argument is coming from thermal resources who have found that with the influx of renewable resources, they can no longer maybe make the investment case to build as as many thermal resources as they did in the past. So there is this concern that maybe we don't have enough thermal resources to meet, you know, meet the needs of customers.

How many say thermal we're talking about combustion?

You know, I I think maybe we should say dispatchable.

Dispatchable.

But dispatchable, I would wanna put batteries in there. But I I think you would be talking about gas, coal, and nuclear, I think, as well, and and what you would call traditionally thermal. At least I would be in Texas.

Okay. So we've done resource adequacy.

We've done resource help.

We've But the reason why that was interesting, why the reason why that was interesting was was asking you how have how have things changed. So Yes. Okay. So on the whole, when you go if you're going to a dinner party and all aspects and interests of that have influenced at Ercot or within Ercot were there. Has the feeling of the dinner party changed over the last ten years? The menu's the same, probably.

But I think the menu's different.

The menu's different. Let's do that.

Well, the re the resource mix is is different, obviously. And I think the most notable thing, you know, probably even more so, I would say then the influx of renewables is the the change in load characteristics.

So it's not just a change in who you have supplying, but now you have a change in who's consuming. You know, I think I think the majority of of what I'm about is data centers, but, you know, you could potentially have hydrogen AI. So you have load that is consuming a lot more electricity. And also consuming it in a different way. Right? You know, a data center doesn't need or use electricity the way you or I do with with babies at home or the way a hospital does. It's totally different.

They have Unless it powers Disney plus, in which case.

Let's keep that thing on.

That's very true. So, you know, they they can ramp down quickly because of their technology. And, you know, at at certain times, right, because they unless it's Disney plus, they might not need to be online the way, you know, the the baby houses or the hospitals need to be online. I would I would say the biggest thing that has changed is some people's attitudes towards renewables.

And I would say the large load customers that you have in Texas, which I think are are traditionally you know, oil and gas supply side guys, I think have really started to be more renewable friendly. And I think you can see that reflected a little bit in policy, but also in in just the market. Right? You have these in in Texas, whether you think maybe it's less of a free market than than you as we also discussed. But because it is a market setup, really consumer choice, you know, drives what is happening in the market. And I think you have you have seen that consumer choice of some of these traditionally oil and gas consumers start to be more renewable friendly in the energy they're procuring to kind serve their businesses.

So now now let's talk about a hot topic for battery folks Okay. Which is, of course, answering services. Because batteries take part in a lot of ancillary services.

Okay.

And there's been quite a lot of change recently in Ercot. I'm gonna put you on a spot here. Could you do a quick whistle stop tour?

I can overview of what's what's happening with ancillary services in Ercot.

So we've got old ones and new ones. Okay. And hold on.

I'm answering your question for telling me about ancillary services in Ercot.

Your your absolute question. Could you could you just give us a quick overview of ancillary services?

Ancillary services.

Talking about n minus one.

Okay. Yes. So in in story services, you know, we we have a few. We have responsive reserve.

We have regulation, non spin. And so probably in two thousand fifteen, two thousand fourteen, two thousand fifteen, we started, we being stakeholders and started looking at sort of modernizing the suite of ancillary services because as you see the the grid changing, you know, maybe more possibility for those operational issues. You want a suite of ancillary services that matches that. So Ercot first had had a initiative that was called Fast.

It was Future and Story Service Task Force, I think.

And so that that Fast initiative, I believe, was very comprehensive and was accordingly going to be pretty costly to consumers.

And so that ultimately failed. We kind of went back and refined that. And so we we did this through an NPRR, revision request to the the Urcut protocols, and we came up with one new ancillary service and then kind of one subset to to responsive reserve, the the FFR, the fast frequency reserve, and then this new service or caught contingency reserve service.

So that was ECRs.

ECRs. That was approved well, well pre Yuri. So I I think that got a little bit confused. So that was in the works.

And then we we had Yuri, and there were some operational problems. And then we were looking post Yuri, and we were looking at the the solar ramp that was happening every day. And so we we kind of tried to speed up ECRS and also make it this this ramping product. And so we added the ECRS service last June, I believe.

There has been a lot of scrutiny around the cost of it and not just the cost of the service, but when you are kind of holding unit sound and reserve to be in that service. You are also making the cost of energy go up. And so there's been a lot of scrutiny around that.

I Just talk about that for a second. Yeah. Of course. What what what does that mean? Certainly. Sorry.

Yeah. We don't do scrutiny.

What do you do in the UK?

No, no, no, no, joking. It's it. No, we do. We get a lot. We get scrutinized.

You have an actual pint glass.

We have we have a yes. Yeah. Another sixteen ounce nonsense. So I understand the cost of the service in a dollar per hour term dollar per megawatt per hour term. Yep. But you're talking about a second order effect there, which is by holding the service, something else happens. What what what exactly does that mean?

So if you have so the the resources that would bit into this service, If they were not bidding into this service, they would be an energy. And so in addition to the cost of the service, you are pulling resources out. And so on the energy bucket, you were tightening the supply. And then that just goes back kind of to to basic economics. Right? If you have the same amount of demand, but less supply, the price is gonna go up.

So you could just That's what I love about Urcotte.

I think it is still a market to where If you just remember supply demand equals price, I think you can get, like, eighty percent of the way.

So you're solving a problem over. It's like whack a mole.

You're solving a problem over here, but then if that resources at a node, which is doing a good job of, you know, keeping normal prices, the mall comes up over here Yes.

But that's not necessarily a bad thing because you do you are now tinkering with the market, but you do want prices to reflect the situation you're in. So if you were saying when we really need the service ECRS is when we really need supply, You do want prices when you're in times of scarcity. You do want prices to reflect that because what what you're doing prices in our cut is not just telling resources. We need you online right now because it's scarce, but what you have to do with that price is also give them enough much enough money so that they can build in the future. And that's that resource adequacy conversation because we have an energy market and not a capacity market, you need that price to to say we need you now, but also we are gonna need you in the future. So you need to build to have enough to meet what the situations.

Two more questions to come, but one one more thing. What what the hot potato is in policy at the moment? What what's due to power really excited about? Or nervous about or fighting for or, you know, what what do you guys discuss? Up in Jup to power headquarters, what are you guys discussing from a policy perspective?

Outside of Texas, we are looking at, you know, incentives to to have more storage. Right? A lot of, you know, state in incentive programs, and what's the best way to structure those that that becomes a hot potato kind of amongst storage companies. So I think in other states, it's looking at best ways to have incentives. Is that straight procurement?

Is that some kind of credit mechanism? Is a number of megawatts? Do you need them in a location with certain characteristics.

So it's sort of incentivizing it in other states. In Ercot, You know, I think we spoke about the big one. I think it's ancillary services, the the participation in ancillary services, and particularly how how Ercot is going to procure those. If there's any rules that change to how storage or how other resources can provide and sorry services.

I know we're also looking at implementing you know, another new ancillary service as we started to get into. There's been a lot of scrutiny around the cost of UCRS. So is that going to change. I think those are kind of the the big policy items, you know.

We would be very curious to to see what happens with the performance credit mechanism. I think that's something on our mind. I think storage is certainly a big player in Ercot now. But it's sort of a new entrance. So I think a lot of the policy issues are still some things around making sure that There's technology neutral policy in place, not because people are trying to be not technology neutral, but just because some of these protocols or policies were written for storage was contemplated. So just kind of this this new market entrance stuff. There there's some of that still.

Square peg round hole kind of stuff.

Some of that kind of stuff, you know, there's some metering things we've had to dig into just because storage is a load and a generator. So it's just, you know, more difficult and challenging to to have some of these metering setups that a traditional generator might.

There's some there's there's not a great deal of colocated, storage in Texas compared to, say, California. Yeah. And I know some of that is policy driven. What's what do you think about that going forward? Do you think that's gonna change?

I don't know. You know, I I don't know if it's policy driven. May maybe because the setup of the it would be policy driven. I would say what you can see in storage is like a very good microcosm of the energy only market.

Right? Because energy only market, you want price signals to tell you when generation and supply should match and how they should match. And because storage can be both a load and a generator, it does exactly that. Right?

So when we look at Siding in Ercot, it's where you know, sometimes there's an excess of supply. So maybe more wind that we would charge on. But in the same place, there's sometimes an excess of demand so that we are needed. And so I think standalone storage is is really well suited for that.

Before the IRA, colocated storage in in order to get the ITC, you had to charge a certain amount from the the seller. ITC being investment tax credit.

So you could get a tax credit for colocated storage, but not stand alone storage, pre IRA. Which I should know the acronym for, but the inflation reduction act.

And the the the these tax credits are essentially subsidies on the They're essentially but kind of hold something different.

So, yes. So pre two years ago, you could get a subsidy for colocated solar and storage, but not for standalone storage. And so But in order to do so, you would have to charge from that solar, meaning you couldn't really take advantage of the Urcott market the way stand alone could. Right? Or you couldn't be the same benefit either, you know, to put it another way because you wouldn't be charging when there was excess wind or excess renewables just on the grid. You would be charging from your directly collocated solar. So, really, what you're doing was just having kind of a solar resource with maybe an extra hour or two of of storage after the sun sets.

I never really thought about that. Actually, the investment tax credit because it forces you to charge behind the meter.

Yes.

Actually prevents you from being available to provide the What is needed?

So what is actually needed for the grid.

So I think Urcada was a better model for standalone and probably still is, you know, that that ITC is available now.

But I think happy a hard moment in my brain. I tell you something.

Alright. So now the two the two five final final questions that we always have. Number one, is there anything you want to plug? So is there anything that you guys are doing, which is awesome, or a big announcement, or you wanna get out to the battery community, this is your chance. And then the second question is about what's your contrarian view, and I know you've got a few of those.

I have few of those. What I would like to plug is we we do have a project that we have in construction in Houston or however we decided to pronounce it It is a four hundred megawatt hour project. And so we we are very excited about that. That is four hundred megawatt hours of you know, firm dispatchable power in in Texas and not only in Texas, but in a a load center where where people need it.

We we think that is kind of innovated innovative and new, not just in Texas, but anywhere. I don't think there's that size storage in the city probably anywhere. You know, two hundred megawatts, four hundred megawatt hours. Is a very sizable project.

That's what you used to see, you know, the the gas turbines at when more of those were being built near load. So far in Ercot, you have seen more storage in West Texas where there is congestion due to transmission congestion. This is sort of you know, same theory but applied a different way. It's congestion due to load.

So we're very excited about this project, and we think, you know, it it answers some of the political calls. Right? It's firm dispatchable power in in Houston. Yeah.

Awesome. Well, we heard it here first. Thanks for sharing that. And the last one is what's he contrarian you.

Experian view. I thought a lot about this. So as a policy person, I don't know. I don't think this is, you know, maybe the company point of view.

I I've been a a policy person most of my career. I I don't think I have the distaste or discomfort for regulatory uncertainty that other people do, or maybe I see it differently. I think we'd talked about it a lot on on this podcast. Right?

My idea of every conversation is kind of cyclical. And I don't think I would have ever expect, you know, put put the grid away. We're done, set it and forget it. And so I would expect conversations to always be ongoing.

I don't think I would ever expect, like, this is it. This is certainty for the future forever.

Because I I don't know that that's always appropriate.

And I do think that, you know, the the beauty of the energy only market is there are cycles. Right? And and there are people who do better and worse, and it's kind of, you know, it's it's a free market business mindset. And I think that you have to have that especially when, you know, you're dependent on all sorts of business inputs. Right?

So the concern view is I'm okay with regulatory uncertainty. That's not a good contrarian view, but Oh, it's not your contrarian.

What? I that can't be that's not contrarian for your for the job you do.

I think everybody always wants regulatory service.

That's like me saying I like software businesses.

Any more concern fees? You told me you thought a lot about this.

I did think a lot about this. And that's what you're saying. Alright. What's your contrarian? Yeah. We're workshopping now.

I have lots of contrarian views, but no one ever asked me them on the podcast. Actually contrary to what you've been saying throughout this whole podcast and every time we've met One of the one of one of the contrarian views I've had is I'm actually a big I'm a big well, I I don't know whether this is contrarian or not. I'm still trying to figure it out. And I'm still as you as I explained to you before, I'm still trying to figure out all the different camps and and all that with Ercot, because it seems like as I said to you, if you go on Twitter, Ercot Twitter is, or or Energy Twitter, it can be quite polarizing.

It can be.

But what I'm finding is real life is way less polarizing.

When you go to events or happy hours or whatever, you feel like it just feels like everybody's, it's very, it's very different to what you think on Twitter. That's my contrarian view. But my contrarian view is I'm actually I think the Bitcoin minors can be a huge value add to the system and to the state And I think that's quite concerning because a lot of battery folks are very there seems to be like a battery versus Bitcoin mind argument happening.

No?

I think so.

I don't know.

I'll just judge that by your I have heard that, but then also your fax when I said it very I don't think there's a battery verse.

Not I don't I wouldn't say battery specific.

Not just a I think that there has been some skepticism around Bitcoin.

I I think there's a number of different issues with it that that people don't like, right, or that the people have a hard time with.

You know, I think For a wire's company, it's a new technical challenge, right, before Bitcoin mine.

You just didn't have a customer saying I want to interconnect.

I want all the power cable to fly watch.

Right?

Yeah.

And it's not even the amount of power. It's just first the the wires infrastructure to interconnect that amount of power, even before you're actually consuming it, that just didn't happen before. Right? You know, like, you're your Sam's Club or, you know, when you're talking about your industrials.

A few were a hundred or two megawatts, but but some of these Bitcoin mines come and they want to interconnect a gigawatt or two gigawatts. And so I think the interconnection infrastructure I think those folks weren't prepared for it. And then there's a lot of issues with that. You know, when we we spoke briefly about four CP, And so if you're a Bitcoin mind and you can fully avoid four c p, so you can shut down totally during during those hours, whereas we discussed, you know, you and me with babies at home can't turn our house off.

The hospitals can't turn off.

Right? And and thus because they can do so, they're not paying those transmission costs. I think there's a lot of scrutiny around, you know, what what they would say is non native load. Right? That load doesn't need to be and the area. I don't so I don't think there's battery specific.

The the reason why I said that is because we had an awesome episode with a Bitcoin Minona on a few weeks ago. Yeah.

The reason I had it Jamie.

We had Jamie on Jamey. Recently totally I like I I mean, they're out in West Texas, which is which is a little bit different actually. I think there is a locational element to this.

If you're There's a locational element But I think it could be very complimentary to the the batteries that are out there.

Right? I think I think that could be very complimentary.

Caitlyn, I wanna say a message. Thank you for coming on a podcast. Anything we talked about, I can't remember, we're gonna put some links in the show notes if that's worth doing.

Should we do a big diagram?

Should, yeah, we'll do a great diagram. We'll put down the show notes. And if you wanna find out more about Caitlyn or Duke Power, do check out the links below. And see you next time. Thank you, Caitlin.

Alright. Thank you.