Zach Dell

Now, Texas ended up carrying the torch

and deregulating their power grid entirely.

And so now what you have is Texas as this laboratory for energy innovation.

Now what we see is Texas is the leader in wind and solar and broadly energy technology in the country.

Now, it also happens to be in the middle of the Sun Belt, in the middle of the wind corridor.

And so geographically, it's a very good place for those assets.

But the competitive dynamics in that market have led to a bunch of innovation and technology.

That's a big reason why we're based here.

Let's start with the power bill.

So your power bill, and this obviously varies by geography, and I'm going to oversimplify here, but is roughly half the cost to generate the power and half the cost to move the power.

We talked about how there's a real-time system.

So you have to get power from where it's generated to where it's consumed in real time.

The cost of moving power across the transmission grid and the distribution grid has gone up really significantly in the last couple of decades, primarily because this infrastructure is really aging.

The way that this infrastructure is built out and upgraded in the regulated utility markets

is utilities will basically propose CapEx to their public utility commission, which then gets added into their rate base.

So if I'm a utility and I want to go build out infrastructure or transmission or distribution,

I say, hey, I want to go build X, PUC approves it, and then X gets added into my rate base, and that number is divided by the amount of rate payers or customers, and that is what you pay on a per kilowatt hour basis for electricity.

What you have is this incentive for the utilities to build, not to innovate.

Because they're actually incentivized not to innovate.

If they show up to the PUC with some kind of new technology that's unproven, which is kind of the definition of innovation, the PUC says, well, that's not a very good use of dollars, and that's too risky, and we're not going to approve that.