Zach Dell

Transformer shortages have been well-documented.

It's partially a regulatory political problem.

And it's partially just like a blocking and tackling trucks and crews and poles and wires execution problem.

And then there's also some financial shenanigans going on where developers will submit multiple applications into the queue and only be serious about a number of them.

They wait to see which one gets through fastest and that's the project that they actually fund.

And so there's a lot of people that have done good work to like study the queue and see how much of it is actually real, especially in Texas, somewhere on the order of like 25% or 20% of the projects that are actually in the interconnection queue end up getting through.

Really what we need is more capacity to meet that demand.

Right now, that capacity development is stunted by this interconnection queue problem and just the cost and time it takes to go build a big utility scale, solar farm, wind farm, gas plant, et cetera.

And that's really a big part of our mission at base is to deploy flexible capacity to the grid faster and more efficiently with our distributed architectures.

We think of ourselves as an energy technology company, but really what we are is a battery developer and asset owner.

So we design, develop, install, own, and operate battery storage in Texas.

So if you live in the deregulated part of the state where you can choose your electric provider, you can sign up with BASE and we become your power company.

We install our battery on your home and you pay $500 upfront, $16 a month.

And when the grid's up and running, we use that battery to support the power grid.

And when the grid goes down, you get that battery to back up your home.

Now, we're also able to save people on the order of 10 to 20% a month on power, primarily because our main business is owning and operating this battery storage and using it as a good resource.

We're not focused on making as high a possible gross margin on the retail power.

We're focused on deploying as many batteries as we can.

And so if the other retailers in the market are trying to make 20%, 30% gross margins, we're perfectly happy making a 10% or 15% gross margin on retail power and generating most of our contribution margin through the battery that's installed in the home.

The other way to think about it is that we use some of the income that we generated off the battery to buy down that rate for the homeowner.