Zach Dell

What you have is this incentive to build, where you're earning a rate of return, a regulated rate of return, return on equity on the CapEx that you deploy.

The more CapEx you deploy, the more return you generate for the shareholders.

And so you've just seen this massive growth in rate basis, but conversely in electricity prices due to this incentive structure.

In terms of where the profit pool sit, on the regulated utility side, you have this return on equity concept and rate-based concept.

And then you have the IPPs and the generators.

And these are really a function of the deregulated

parts of the market, but also you have IPPs in regulated parts of the market that are able to sell power to the generators.

And this is a supply-demand game.

You build a gas plant, you build a solar farm, you build a wind farm, and you're bidding that capacity into the wholesale markets.

There's really two parts of the wholesale market.

There's the real-time spot market, and then there's the day-ahead market.

There's a futures market.

And the objective for an energy developer is to generate power at the lowest cost possible.

Electron is electron.

There's no special electrons.

So my electron and your electron are priced in the same way.

It's a cost game.

When you talk about different forms of energy generation, wind, solar, natural gas, coal, nuclear, geothermal, hydroelectric, et cetera, really what it comes down to is cost.

And here in the industry, it's referred to as levelized cost of energy, LCOE.

That is the core metric.