Stephen Lacey (2:35)

By United, Heather Means Advanced Energy United, the trade association she now leads. The idea for building a new multi technology trade group came in 2010 after the Waxman Markey cap and trade bill failed. It was a big blow to industry and advocacy organizations that had put all their attention and resources on federal action.

Heather O'Neill (2:54)

The failure was really A wake up call for many of us in the industry, myself included. And if we couldn't get Washington D.C. to act, then we were looking and seeing States and regions were creating energy markets. They were shaping the rules of the road. And you saw billions of dollars of energy investment decisions being made annually.

Stephen Lacey (3:17)

States are often called the laboratories of democracy, and that is definitely true in clean energy, where so much of the momentum has come from states experimenting with policy to meet their unique needs. And so United was built from the start to go all in on states and regional markets.

Heather O'Neill (3:33)

There's really no substitute for that sustained engagement. You have to be on the ground, you have to walk the halls, you have to build the relationships, and you also have to really show up with credible information. You, you're a trusted resource before you're in the thick of any particular fight. And so that was incredibly powerful in terms of allowing us to kind of break through and elevate our issue and agenda. And so taking that to heart as we've moved forward in the years.

Stephen Lacey (4:06)

I'm Stephen Lacy. This week a conversation with Heather o', Neill, the CEO of Advanced Energy United States, about a new playbook for scaling clean energy at the state level. It was recorded live as part of Latitude Media's Frontier Forum series. The Trump administration has declared war on clean energy, but state leaders are still looking for practical solutions to fast rising demand and an affordability crisis. They talked with Heather about a new policy playbook that can help clean energy meet the moment.

Heather O'Neill (4:32)

And it is very much about centering the conversation around three really simple principles. Build it, make it flexible and make it affordable.

Moderator (4:50)

So let's fast forward to now post Big Beautiful Bill. There is, you know, they've accelerated some phase outs, they've maintained some credits, but there's, you know, new onerous regulations for manufacturers and developers. And it's very, it's very messy. And meanwhile, the federal government is sort of using systematic chaos to make it harder to build clean energy. And so so many people in the industry are just like asking, where do we go from here? So the blunt question for you is where do we go from here?

Heather O'Neill (5:21)

And you probably have guessed the answer to this already from my answer so far, but to me it's a no brainer, right? It's states and regions. And so my call to action for our industry is that we have to invest heavily and aggressively now in states and regions. And again, the federal government is definite making it harder, right? Whether it's HR1 or it's some of the new executive orders that keep Bubbling up. Right. They are putting real roadblocks, real regulatory hurdles in front of our industry, in particular segments of our industry. But this is where again, I look to the states and regions. I hear from the teams on the ground daily that there are huge opportunities, opportunities abound across the board in states and regions. And it's not just, you know, defending existing markets, but there are opportunities to really open up new markets and grow. And I don't think that's a surprise. Right. States are where some of our most forward looking and politically resilient clean energy policies have been developed. So states and regions is definitely the way to go.

Moderator (6:28)

So I want to dig into some of the specific states and regions and we're going to get there. But let's just set the stage for the urgency at the state level right now. I mean, there are a lot of governors who are looking at the affordability crisis and who are very, very concerned. There's, you know, a real concern about, I mean, a real desire to attract data centers, but a real concern for affordability as a result of the development of those data centers there. I think there is continued support for clean energy expansion and an all of the above approach at the state level. So there's a lot of urgency right now and a lot of new economic forces coming together. How would you define what. Just describe what's causing that urgency at the state level and how are some of those policymakers reacting?

Heather O'Neill (7:15)

Yeah, absolutely. And you've touched on a number of them. Right. We're seeing electricity costs go through the roof for consumers and we know that's just going to continue with the effects of HR1. Right. HR1 and some of what the administration is doing are going to raise electricity costs for all. So that is both here now and also going to be worse. You've got, for the first time in a long time, load growth. Right. So increasing electricity demand. And that's in part right. Driven by data centers, as you note, that race around artificial intelligence and the coming wave of electrification, both building and transportation. And then last but not least, we're all living through extreme weather events of all types. And that puts additional stress on our grid, on an aging grid and infrastructure. And so those challenges are here, they're now, they're daunting, they're interconnected. And that's, you know, states need solutions to tackle those challenges together. And so that's what we've teed up in the new policy playbook, which I know we're going to get into. One point on this because you mentioned governors So I was just at a Governor's association meeting last week and energy is front and center for those folks. Right. You've got particularly energy affordability. So you've got electricity bills going up. And as I said, right. That's going to get worse with what they've done at the federal government level. And so governors are going to feel that pressure, right? They are going to need to take really swift action. And I'll give one data point, one example, in Maryland, right in PJM's territory, customers are seeing their monthly bills increase by up to $20 a month. And so that governors are going to have to act, right? They're going to feel that pressure. They're going to need to act now. Other state leaders will need to act. And so that's where again, we're, we absolutely have to get our solutions in the hands of state leaders now to meet that moment and address those challenges. Because if we don't, the wrong solutions will win out.

Moderator (9:16)

And how do you think that's opening up opportunities for the industry to message? So I think we're well beyond decarbonization. Certainly decarbonization is really important for many state leaders, but the affordability and economic growth issue is front and center, as you said. So how does that change the way companies go and talk to lawmakers and how does that open up new opportunities in states where we're not just talking about the cleanliness of the technology but all these other attributes?

Heather O'Neill (9:43)

Yeah, this is where I'm excited. We've developed a new policy advocacy playbook and it is very much about centering the conversation around three really simple principles. Build it, make it flexible and make it affordable. We need state leaders to focus their energy agenda on speed, flexibility and affordability. And I know we're going to unpack it a little bit more. Right. With speed, it's simply about how do we build. Right. How do we build more energy projects and infrastructure. Now flexibility is very much about how can we get more out of existing infrastructure. I think there's a lot of untapped kind of juice we can squeeze from our existing system. And then affordability, as we've been talking about, we know that decision makers are going to have to make investment decisions. Right. Our infrastructure is aging. They're going to need to make investment decisions to meet low growth, meet the demand. So let's make sure that those decisions are smart investment decisions and that we're not wasting money on misaligned or backwards looking solutions. So I think for us in our industry, it's a Pragmatic moment. We have a solution set that we know is directly responsive to these challenges. And we need to be in front of state decision makers articulating our solution set early, often over and over again.

Moderator (11:04)

Yeah. So let's dig into each of those three. So with Build it, are we talking about permitting reform or a broader suite of policies?

Heather O'Neill (11:13)

Yeah, we're talking about permitting reform and so much more. We're talking about including, you know, building transmission transmission capacity and speeding interconnection of large scale projects to the grid. And this comes out of, again, talking with our member companies who have low cost resources that they're ready to build, you know, whether it's large scale, wind, solar storage and the like. And they're not able to deploy. Right. They are tangled in red tape, they are stuck in line. And so Build it is all about removing roadblocks and the regulatory red tape across a set of issues. So certainly siting and permitting reform. Right. So that we can build large scale projects. We're also talking about expanding transmission capacity and that starts with putting advanced transmission technologies to work and then speeding up interconnection by making smart reforms, including surplus interconnection. So there's a lot there and there are a lot of examples around the country that I can dive into.

Moderator (12:14)

Yeah, well, I know that. So I know United is nonpartisan and you're really committed to working with lawmakers across the spectrum. If I just look at what's happening on the left, however, you know, historically Democrats and progressives have pushed a lot of the decarbonization policies. What we're seeing is a real reckoning around permitting itself. Like they're saying, well, actually we rely too much on government for these strict set of rules and we actually need to focus on targeted deregulation to accelerate building things faster. How are you seeing that conversation play out in some of these states where there is a real concerted effort to deregulate in areas, in particular in energy.

Heather O'Neill (13:01)

Yeah, I mean, I think for Build it, absolutely right. It is about how do we clear the roadblocks, how to remove some of that red tape. So the coalitions are going to look different in different states, but there are some really great models out there around permitting and siting reform. So just a couple years back, Michigan, as one example, passed really proactive, positive siting reform legislation that's now moving into implementation and Advanced Energy United. We worked with our member companies to develop a set of siting principles that I think became part of the foundation of that legislation. There are other states where we're seeing those conversations bubble up. So Virginia is one example, Indiana is another one where we were able to have really constructive conversations about siting reform and made some incremental progress this year with legislation, definitely more to do there. But that Cisco State focus on accelerating build is incredibly positive. And I think for when you look at some of the principles we're articulating, they should appeal to folks of all political stripes, right? First and foremost, are you protecting landowner property rights? So making sure that state and local governmental processes are not impeding local property rights. And so that again, a very conservative principle. And so I think you're able to attract allies from across the political spectrum as you think about some of these crucial principles and reforms.

Moderator (14:42)

So who's doing it best and where are the potential wins coming up? What are the priorities for some of these reforms?

Heather O'Neill (14:48)

So definitely keeping an eye on Indiana and Virginia as we go forward and thinking about Michigan, again, as an example of a really positive siting reform. I think another place that a hotspot that we are hopeful that we can have really constructive engagement is actually around interconnection and the interconnection queue. And that's pjm. And I will not, I'm sure everyone who is listening understands very deeply some of the challenges around interconnection in the queue there, so I won't go into that. But when you look at some of those challenges, a lot of that needs to be addressed at the RTO level. So we're making sure that state leaders are getting more engaged with their RTOs right to make sure that that interconnection process is in line with what states are expecting and need to meet low demand. And so what we're seeing in pjm, right, is you have governors, again, both Republican and Democrat, really engaging in PJM unnecessary changes and asking good questions. How can we clear this backlog? Right. And really making sure they have the information they need to make sure that PJM is working to reform what is clearly a broken process there.

Moderator (16:01)

So when we talk about making it flexible, what are some other market reforms that we're targeting here?

Heather O'Neill (16:08)

So when I think about making it flexible, and I think everyone persistently undervalues just how much more we can get out of existing infrastructure. And in part that's because the pace of innovation here is really dizzying. When we talk to decision makers, they're definitely not fully aware of the breadth of flexibility options that are out there and ready to scale. Again, when I think about our companies creating innovative new products and product offerings You've got virtual power plants of all stripes, sizes, shapes, and the like. You've got companies using EV fleet batteries as mobile grid assets. Or on the transmission side, you've got advanced transmission technologies of many flavors. So, so many flexible options out there that we need to put to work. And again, this is where states, I think, are experimenting. We're seeing them pick up a number of what I would call no regret strategies and policies around making it flexible. So in Virginia, we passed legislation earlier this year that'll accelerate VPP pilot programs. And in California, as everyone knows, that legislative session is ongoing. And so we have bills currently moving through the process that we're sponsoring that would help accelerate VPP development and really, again, get the most out of existing and new distributed resources. In a state, Texas, we were able to pass energy waste reduction legislation earlier this year, and that requires state agencies to really work together to get the most out of demand flexibility and demand response programs. And I really like this particular model because it recognizes the value that those solutions have for both grid reliability and affordability. And then last but not least, on the transmission side, I think advanced transmission technologies are really having a moment, right? And we know we need to build new transmission, particularly interregional transmission. And in the meantime, again, getting more out of our existing infrastructure. Let's put advanced transmission technologies to work first. And so Advanced Energy United has worked in multiple states to pass legislation that does just that. So California, Massachusetts, Virginia, and then this year, New Mexico and Connecticut. So again, really having a moment. We see a lot of momentum on advanced transmission technologies, as one example.

Moderator (18:47)

And now we have a lot of utility comfort with the VPPs. There have been, you know, a number of utilities who've really gotten their operations teams comfortable with operating these resources, and they can provide valuable flexibility. And I've heard them described multiple times as, now they're considered painkillers. Instead of vitamin pills, they're painkillers. Jigar Shah was talking to me last week and described them as such. And I've heard folks in the microgrid space describe them as painkillers. And, you know, now that we just are desperate to open up more grid capacity, we have all these resources on the grid that like, it is truly the perfect moment for VPPs. Talk about, like, how that is actually changing the way policymakers are considering these resources and utilities. And then maybe if there are any other specific market reforms that you want to go into that could help accelerate those resources.

Heather O'Neill (19:45)

Absolutely right. I think VPPs are also having a moment, right. For the last couple Of I feel like last year you could not turn around without hearing something about VPPs. And they're incredibly powerful. Right. And I think you're absolutely right. Utilities are seeing a real opportunity here, right. As they think about, as they're looking at the affordability crisis, right. They're as concerned as anyone about rates going up. Right. And everyone wants to meet the moment of load growth. Right. Find me a state leader who doesn't want to attract new manufacturing, right. Who doesn't want to attract a data center. So you want that economic growth and so how do you meet the moment? And VPPs play a key role in that, right? Because it enables you to help kind of shape and shift that load so you're not having to build out more expensive fossil infrastructure, right. Where you can really take these low cost opportunities and really add to the flexibility of the grid. So we're just seeing again, I think a real appetite. But we're also at the very beginning stages of the conversation in many ways, right. The fact that in Virginia we're talking about a pilot program around VPPs. Right. So I think we're at the kind of tip of a curve, if you will, on VPPs and we're going to see them just I think really take off in terms of scaling up in the coming years as they're just a really good, no regrets answer to some of these really big challenges.

Moderator (21:16)

And then broadly in the flexibility category, are there any other rules or regulations that are in play right now that people should know about?

Heather O'Neill (21:23)

I mean, I think there's always rate design issues, right? There are any number of regulatory decisions and conversations that are taking place. You've got New York, the PSC there, the grid of the future proceeding, that's got a number of attributes. Again that'll really help on the making it flexible. You've got Colorado who's in the last couple of years passed some, I think really important distribution system planning, vpp, all the rest, many kinds of rate design elements that are coming into play. So again, I think there are regulatory proceedings across the country in a number of different states where you're seeing regulators start to recognize the importance of whether it's rate design or putting VPPs to work, getting more out of the existing grid.

Moderator (22:16)

So then those two feed really nicely into making it affordable. That means encouraging a lot of different kinds of resources. What are the crucial priorities, policy priorities for tackling affordability specifically that you're focused on?

Heather O'Neill (22:33)

Yeah, I think the beauty of making it affordable is some of what I just touched on as you Said really helps hit affordability as well. If we're accelerating interconnection so we can get the lowest cost resources online quickly, that's going to tackle affordability. All of the grid flexibility targets, programs, rate design, managed charging of EVs, all of those save customers money. So again, I think there are a number of policy solutions that we've talked about and that are in play in states that are in that affordability camp. But we also know that right now regulators and state leaders are considering making big investments in fossil and you've got affordability challenges. Those resources are. The timeframe for getting those resources built and online is pretty long at this point. A lot of folks have pointed to that and the prices are going up. And so we're looking for decision makers to really focus on the solutions that are available now. Right. And can help customers manage costs. And so we know they need to make investment decisions. So are they making smart investment decisions? Right. Are we ensuring that utilities are planning and delivering the right types of investment? And that's, you know, how do we future proof utility spending? How do we help align incentives for utilities productively? And then how can we push states to really embrace, I think, integrated planning that really gets at regulatory efficiency and achieving state energy goals and reliability standards at the lowest cost. So thinking about these efforts, not in silos, but working together. So again, very unsexy work around utility incentives and business model reform and certainly investment questions, but incredibly important as we think about the affordability and reliability of our energy system in the years ahead.

Moderator (24:39)

So let's turn back to the state level and talk about how you actually build coalitions in states. How is it different from a national approach like when you go to a state house? Who are the people you're talking to? How do you actually build a coalition compared to what you might do on Capitol Hill?

Heather O'Neill (24:59)

So I think coalition building in state houses or Capitol Hill, it's probably no different. Right. It's just an essential part of the equation and policy advocacy and it's certainly a core part of Advanced Energy United's values. The difference is each coalition is going to look different. It depends on the issue that you're pushing. It depends on the politics of the day, it depends on who's in leadership. All of those go into creating and forming a different coalition. But that process really looks the same. And certainly again, everyone in the policy advocacy space knows this, that any win is not one organizations. Right? You're winning as part of a coalition. You may be leading the coalition, you may be on the Supporter seat, but you absolutely are working hand in glove with other interests. And again, it just depends on what the issue is. I think one of the themes that we've learned, and again, whether it's Capitol Hill or it's a State House, there's just no substitute for sustained engagement. You can't parachute in, right. You have to walk the halls. You have to build the relationships and get to know the dynamics and the allies and the opposition in person. And that's why at United, we've got team members in state capitals across the country. Right. That's just essential if you're going to create that coalition and move your agenda forward.

Moderator (26:26)

Any advice for people who are operating clean energy companies right now who are thinking about what do I do? Obviously they're operating in certain states. They kind of understand the policy priorities. But like, when they are looking for how to get engaged, what are the ways they can do that?

Heather O'Neill (26:43)

So you know what I have to say here, which is join Advanced Energy United. So states are a dynamic environment, right? You like D.C. you have to know the players. You have to know the issues. You have to know the issue, environment and the politics of the day. And you also can't just focus on one venue or lever. So you have the governor's office and their team. You also have what I refer to as agency Alphabet soup. And that includes public utility commissions, right, that are making those billions of dollars of investment decisions annually. And of course, you have state legislators. And so all of that taken together is incredibly complic. Complicated. And then you multiply that by multiple states, really complicated. And so that's where we can help, right? We're on the ground. We have those relationships. We can introduce companies, innovations, technologies as part of the solution set to decision makers. And so I'd say help us help you.

Moderator (27:44)

We're at such an interesting moment where governors, utilities, regulators, policymakers, developers, data center developers, like, desperate for solutions, consumers, like we are. This is a period of, of real desperation to try to get as many resources developed as we, we can for positive economic reasons. So we think about historically, we have led with decarbonization and cleanliness. As I, as I talked about before, like, is this a better framework now? Like, do you think this is ultimately that, that there are more tailwinds for this broad set of resources than ever before?

Heather O'Neill (28:25)

I think it's an interesting moment because, yes, 100% what you say, but I also think the moment is fraught just given all of the attacks from this administration. And so it is one of those moments where I do think we have an opportunity because we are leading with a solution set that is directly responsive to those challenges. When we're talking with governors, they're hair on fire about energy affordability and they need to be. And we're all concerned about grid reliability, right? Utilities, decision makers, everyone. And so you have really most states facing very similar challenges in the affordability crisis, reliability and again, wanting to attract economic development and growth. And so I think I feel really good about us being able to show up and have a solution set, right, that is really directly responsive to those challenges. So yes, I think we have a moment where we can lean into our solution set and we are able to get decision makers attention because it is this extremely urgent moment with these challenges in front of us.

Moderator (29:41)

So I guess the best way to execute this playbook is for companies here to join United. But let's just say you handed them this playbook. Whether they join United or not, they've got this playbook. What should a company do with it in hand? How do they think about implementing this messaging strategy into their state level engagements?

Heather O'Neill (30:02)

We'd love to see folks pick it up, right, Whether they're part of United or not. I think this is just an effective way of speaking to decision makers, right? Making it clear and simple and meeting the moment. And not every company, not every solution in this playbook is going to fit every company, right? Different companies will gravitate towards different portions that are more relevant for them, for their business, for their business model. So we hope that folks pick it up and use it as they see fit. We're definitely seeing it already, I think, start to resonate, right, because it is so clearly addressing the challenges that decision makers are facing. So I hope that folks pick it up and use it far and wide.

Moderator (30:51)

Well, I mean, I couldn't agree more with the messaging. It is very much in line with what I am hearing when I talk to folks at the local level all the time and when I talk to people in the clean energy industry, this is the stuff that is resonating. So Heather, thank you so much. Really appreciate it.

Heather O'Neill (31:07)

This has been great. I really appreciate the opportunity. Thanks for taking the time with me.

Stephen Lacey (31:17)

Heather o' Neill is the CEO of Advanced Energy United, the industry's only business association built to shape state and regional policy. If you want to download United's new policy Playbook guide, you can find a link in the show notes or go to advancedenergyunited.org playbook. This is an edited version of a Frontier forum which was recorded live in.

Moderator (31:38)

Front of a virtual audience.

Stephen Lacey (31:40)

We took lots of questions, and if you want to go deeper, you can watch the full video@latitudemedia.com events. Thank you so much for listening.