Zach Dell

And you have to go through a qualification process to do that.

And you have to build a bunch of systems.

You have to directly connect to ERCOT's communication systems.

And we're going through that process now.

But the way to think about base as a grid asset is a distributed fleet of storage.

It is a utility scale battery farm that is chopped up into thousands of pieces and deployed behind the meter at the home because two reasons.

One, we think that this distributed architecture allows us to deploy storage at a lower cost, much faster.

So literally on a dollar per kilowatt hour basis, we think we can get a battery landed on the grid significantly cheaper and faster than utility scale battery.

And then two, we think we can generate more value on a dollar per kilowatt hour basis from that battery because we also have the added revenue stream of selling that homeowner retail power, making a margin on it, and then charging them for that resiliency, that $16 a month that we discussed.

So as an asset, what we're developing is a cashflow machine.

You deploy this asset in the ground at lower dollar per kilowatt hour than a utility scale battery, and you generate a higher dollar per kilowatt hour off that battery than a utility scale battery.

There's two ways this happens.

One is by bilateral agreements.

So you can think of power purchase agreements as bilateral agreements.

I agree to sell Patrick a block of power, a megawatt, 10 megawatts, 50 megawatts, whatever it might be, on August 7th from 3 p.m.

to 5 p.m.

for X dollars per megawatt.

And we have an agreement.

That's like a bilateral trade.

The second way is in the spot markets, the day ahead market and the real-time market.