Podcast Summary: Currents – Ep328: Optimizing Distributed Generation Assets
Date: December 18, 2025
Host: Todd Alexander (Norton Rose Fulbright)
Guest: Barrett Balata, CEO & Co-founder, Agilitas Energy

Episode Overview

In this episode of Currents, host Todd Alexander sits down with Barrett Balata, CEO of Agilitas Energy, to discuss strategic approaches to developing, owning, and optimizing distributed generation (DG) renewable energy assets in the US. The conversation centers on Agilitas’s vertically integrated business model, recent shifts in the DG market, capital allocation, regulatory impacts, and where new opportunities are emerging. The dialogue provides a candid inside look into the challenges and possibilities for withstanding market volatility, maximizing existing asset performance, and diversifying technology stacks.

Key Discussion Points & Insights

Agilitas’s Business Model: Vertical Integration in DG

• Agilitas Energy’s Approach:
  • Fully vertically integrated—develops, builds, owns, and operates all assets in-house (00:38).
  • “We do our own development, both M&A of projects operating and notice to proceed, as well as greenfield origination...” – Barrett Balata [00:52]
  • Internal EPC and project management allows for tailored optimization.
  • Power markets team with backgrounds in thermal generation brings regulatory and operational sophistication (01:09).
• Why Integrate?
  • Greater control, reduced reliance on third parties.
  • De-risks investment across the project lifecycle.
  • Focused, disciplined market and program targeting: “We're only targeting markets, programs, and specific types of incentive structures that we want to own because we're not ever doing a development to sell to another counterparty.” – Balata [03:28]
  • Higher project success rate; less about chasing the lowest cost of capital, more about extracting value at every step (03:42).

Financing Across the Project Lifecycle

• Raising Capital:
  • Traditional segmented development makes sense for capital/risk alignment but Agilitas’s model benefits from handling all phases internally (02:15).
  • The approach allows consistent returns, mitigates risk via discipline, and validates projects for ownership rather than “flipping” (03:06-04:16).

Opportunities in the Current Market

• Shift from Greenfield to Operating Asset Optimization:
  • Historically acquired pre-NTP (Notice to Proceed) assets, but there’s now a “massive dislocation” and opportunity in underperforming, existing portfolios (05:24-07:00).
  • Many DG assets are not meeting original expectations due to mismanagement or market changes (06:03).
  • Optimization strategies: repowering, PPA restructuring, operational improvements (08:09).
  • “Over the last 12 months, and I would say probably for the next 24 to 36 months, we see a massive dislocation within the DG market, in particular, specifically in operating portfolios.” – Balata [07:17]

Market Pricing, Yield, and Value Creation

• Softening Prices and Higher Hurdle Rates:
  • “Yes, the pricing in the market has gotten softer... the rose colored glasses of what the spreadsheet business looks like has changed.” – Balata [08:04]
  • Growing focus on actual operational performance versus modeled projections.
  • Asset management is now critical; DG portfolios need real attention and expertise to perform.

Regulatory & Policy Impacts

FIAC Rules (Federal Incentives for American Clean Energy)

• Impact on Development:
  • Compliance requires detailed diligence—“drill to the center of the earth” – Balata [10:22].
  • Ambiguity around how rules apply, especially to services and equipment (10:40).
  • Adds friction and cost, particularly for non-originated projects; can require design changes and cause delays (11:20).

Investment Tax Credit (ITC) Sunset

• Mixed Views on ITC Phase-Out:
  • Can be harmful to developers but may reduce overall system costs and perverse pricing effects (12:36-13:02).
  • “Like with most government incentives, it generally has the perverse impact of increasing prices.” – Balata [12:46]
  • Long-term view: electricity's value and revenue opportunities will balance out ITC loss.

Tariffs

• Tariff Volatility:
  • “Threading a needle” as tariffs shift unpredictably (14:13).
  • Mitigation: pass costs to manufacturers where possible, seek friendlier trade relationships (14:35).

Storage vs. Wind/Solar Policy

• Energy Storage’s Unique Path:
  • ITC for storage extended into 2030s encourages growth (15:20).
  • Storage seen as essential for grid stability—dispatchability gives storage a market edge (15:34).
  • Digital nature allows fast grid response; deployable faster than thermal generation (16:30).

Market Outlook

Pricing Trends

• Expectation of Higher Prices:
  • “There is going to be much higher pricing throughout the electricity market as a whole.” – Balata [17:13]
  • Regional differences (PJM, ISO-NE highlighted for challenges).
  • Demand outpacing new generation; infrastructure costs and electrification further drive rates up (18:00).
  • Subsidy reductions mean price signals must rise for new projects to be justified (18:35).

Grid Interconnection as Bottleneck

• Status of Queues and Reform:
  • Still a significant bottleneck; some reform, but grid operators and utilities remain slow (19:23-20:52).
  • Anticipation that only the best projects will move forward as lower-quality projects drop out.

Technology & Strategic Evolution

Expansion to Hydroelectric & Gas Generation

• Hydroelectric:
  • Agilitas is expanding into hydro as a baseload resource, seeing new potential and untapped opportunities—especially with ITC extension for hydro (21:45).
• Gas-fired Power:
  • Considering selective small-scale gas-fired assets to complement renewables (22:30).
  • “...as we continue to look at economic signals... we will probably look at some gas fired power plants as well.” – Balata [22:30]

Notable Quotes & Memorable Moments

• On vertical integration:
  “We have a strong power markets background... being able to take that ISO regulatory kind of framework and knowledge and being able to put them on our operating fleet.” – Balata [01:09]
• On market discipline:
  “We're not ever doing a development to sell to another counterparty. We're doing a development and then eventual build for something that we're going to own on our balance sheet.” – Balata [03:28]
• On legacy assets:
  “Maybe the dirty little secret is a bunch of the distributed generation assets that are already operating and built in the marketplace aren't working to what they were originally supposed to do.” – Balata [06:03]
• On the role of storage:
  “Storage 100% serves a core function and probably can get deployed faster than many other types of assets...” – Balata [15:54]
• On electricity pricing:
  “If you remove one subsidy such as the investment tax credit on [a] generating class of assets... the price signal of the top line revenue of those projects has to be higher to justify new projects coming online.” – Balata [18:35]
• On interconnection and state pushback:
  “Certain states, and you already see it now, will want to take some of that power in their own hands and try to deploy distributed generation even faster than it is being deployed today.” – Balata [20:52]

Timestamps for Key Segments

• [00:38] Agilitas Energy’s fully integrated model
• [03:06] Managing risk and capital across the lifecycle
• [05:24] Changing focus—optimizing existing DG portfolios
• [08:04] Market pricing and operational reality checks
• [10:22] Regulatory friction: FIAC rules
• [12:36] ITC phase-out: impacts and opportunities
• [14:13] Tariffs and sourcing strategy changes
• [15:20] Energy storage’s bright future and differentiators
• [17:13] Electricity price outlook and regional challenges
• [19:23] Grid interconnection queues and reform
• [21:45] Expanding into hydro and future asset mix

Takeaways

Barrett Balata and Agilitas Energy exemplify a pragmatic and opportunity-driven approach in distributed generation—doubling down on operational excellence, optimizing neglected assets, and staying nimble in technology and regulatory environments. The episode reveals the complex but promising path forward for DG, with integrated business models and deep market discipline poised to thrive as the sector matures and old assumptions are realigned to meet today’s challenges.