Catalyst with Shayle Kann – Episode Summary: "Fresh Intel from State Utility Regulatory Filings"
Release Date: July 3, 2025
In the latest episode of Catalyst with Shayle Kann, hosted by Latitude Media, investor Shayle Kann delves deep into the intricate world of state utility regulatory filings. Joined by Nat Bullard, co-founder of Halcyon, the duo unpacks the complexities and hidden insights buried within these extensive documents. This episode sheds light on the challenges utilities face in managing large loads, the burgeoning data center boom, retail electricity rate hikes, and the rising costs of natural gas infrastructure. Below is a comprehensive summary capturing the key discussions, insights, and conclusions from their engaging conversation.
1. Exploring State Utility Regulatory Filings
Shayle Khan introduces the episode by sharing his background with the California Public Utilities Commission (CPUC). He emphasizes the wealth of data available in public utility filings but highlights the frustration caused by redactions, often obscuring critical information like the costs of gas plants or data center load demands.
Nat Bullard [00:11]: "What tends to happen with a lot of this stuff is redaction for essentially the equivalent of trade secret reasons. ... it tends to be very frustrating when you'll have pages and pages of text and then blacked out is the one number that says how much this gas plant is going to cost."
Nat Bullard explains how Halcyon utilizes Large Language Models (LLMs) to extract valuable insights from these filings, turning cumbersome PDFs into actionable data through their information tools and newsletters.
2. Large Load Interconnection Challenges
The conversation shifts to large load interconnections, focusing on the surge in data center developments and their significant impact on utility grids.
Pennsylvania’s En Banc Hearing
Pennsylvania is spotlighted for its unprecedented en banc hearing concerning large data center interconnections. This is a rare occurrence where all members of the Public Utilities Commission convene simultaneously, indicating the magnitude of the issue.
Nat Bullard [05:32]: "This is the first time that I'd ever seen one of these things ... and they're putting together some eye-popping numbers ... Duquesne Light ... four projects ... could add 40% to their demand."
Shayle underscores the historical significance, comparing it to the electrification era, and discusses the potential long-term changes in load and demand patterns.
Impact on Utilities and Other Large Loads
The discussion highlights how utilities like Duquesne Light and Rappahannock Electric Cooperative are grappling with substantial increases in demand due to data centers. Nat raises concerns about how utilities plan for such explosive growth, questioning the financial and infrastructural sustainability.
Nat Bullard [09:03]: "They're saying ... we need to come up with a different regulatory construct ... How are we going to get this paid for ... What if they don't show up?"
3. Data Centers vs. Other Industrial Loads
Shayle connects the growth of data centers to broader industrial electrification efforts, emphasizing the competition for limited interconnection resources.
Shel Khan [17:23]: "If you believe that there are limited resources ... anything that is not a data center is currently battling against data centers to try to find a site."
Nat elaborates on the economic dynamics, noting that data centers are uniquely positioned to absorb higher electricity costs compared to other industries like steel manufacturing, which could face significant cost increases.
Nat Bullard [18:38]: "If you jack the price of electricity 30% ... it will materially impact the cost of the steel that is being made. ... unique willingness to pay from one class of customer."
4. Retail Electricity Rate Increases
The episode delves into rising retail electricity rates, with specific examples from Vermont and Mississippi, highlighting the socio-economic repercussions.
Case Studies: Vermont and Mississippi
-
Vermont: The Village of Ludlow Electric Light Department proposes a 21.5% rate increase effective July 1st, facing pushback from the Department of Public Service.
Nat Bullard [23:17]: "The village of Ludlow Electric Light department says I need 21.5% increase now ... inherently regressive ... hit people on fixed incomes and lower incomes higher."
-
Mississippi: Great River Utility Operating Company plans to eliminate tiered sewer rates, moving to a single, higher flat rate, adversely affecting low-tier rate payers.
Nat Bullard [25:26]: "Great River Utility operating company ... eliminating all rate tiers ... massive impact ... jumping up to one fixed higher tier."
Concerns Over Future Rate Hikes
Shayle expresses deep concerns about the trajectory of retail electricity and gas rates, fearing that without addressing large load interconnections effectively, rates could soar further.
Shel Khan [22:15]: "I worry they're going to rise a lot more if we don't get this large load interconnection thing right."
5. Rising Costs of Combined Cycle Gas Turbines
The conversation transitions to the escalating costs of combined cycle gas turbines, a critical component for utility-scale natural gas generation.
NextEra CEO’s Cost Estimate
The CEO of NextEra has been vocal about the rising costs, estimating $2,400 per kilowatt for new gas plants. Nat Bullard investigates this claim by analyzing data across all 50 U.S. states.
Nat Bullard [31:43]: "NextEra CEO's number is pretty good in terms of describing reality ... about $2,230 to $2,240 a kilowatt ... double what it was just a couple of years ago."
He contrasts these figures with the EIA’s estimates, which anticipated lower costs, revealing a significant discrepancy and highlighting the urgent need for transparency in project cost disclosures.
6. Energy Efficiency: An Overlooked Investment Opportunity
Shayle and Nat explore the potential of energy efficiency as a burgeoning investment sector, questioning why it remains underrepresented in venture and tech circles despite its critical role in reducing energy consumption and supporting grid reliability.
Nat Bullard [29:07]: "People always wanted ... something more. ... Is it going to be something else? Is it something you could automate away?"
They discuss the psychological barriers to energy efficiency adoption, where saving energy often doesn't provide the immediate gratification or perceived value that other investments, like renewable PPAs, offer.
7. Case Study: South Dakota’s Antora Tariff
The episode concludes with a look at South Dakota's innovative approach to custom tariffs for climate tech startups, using Antora as a prime example.
Nat Bullard [34:23]: "Otter Tail ... designed a one of one tariff for Antora ... probably the first of its kind ... How can we learn from this?"
Shayle and Nat emphasize the importance of such tailored tariffs in fostering innovation and supporting niche players within smaller service territories.
8. Conclusion and Future Outlook
Shayle wraps up the episode by reiterating his concerns over rising electricity rates and the critical need to navigate large load interconnections effectively. He invites listeners to engage in an upcoming Ask Me Anything session to further discuss these pressing issues.
Shel Khan [36:34]: "All right, Nat, this was fun as always. Keep hunting those regulatory dockets. We'll find some more tidbits and talk about it again."
Key Takeaways:
- Large Data Centers are significantly impacting utility demand, necessitating rapid regulatory and infrastructural adaptations.
- Retail Electricity Rates are on the rise, disproportionately affecting lower-income communities and posing broader economic challenges.
- Combined Cycle Gas Turbine Costs are escalating beyond estimates, complicating the natural gas generation landscape.
- Energy Efficiency remains a critical yet undercapitalized area with substantial potential for innovation and investment.
- Custom Tariffs like South Dakota's Antora offer promising pathways for supporting specialized climate tech initiatives.
This episode of Catalyst provides invaluable insights into the evolving dynamics of the energy sector, emphasizing the intricate balance between technological advancements, regulatory frameworks, and socio-economic impacts. Whether you're an investor, industry professional, or simply interested in the future of clean energy, Shel Khan and Nat Bullard offer a compelling exploration of the challenges and opportunities ahead.
For more information and resources mentioned in this episode, visit Latitude Media.