Open Circuit – "The Politics of Making Electricity Cheaper, from PJM Reform to VPPs"

Podcast: Open Circuit
Host: Latitude Media
Date: January 29, 2026

Episode Overview

This episode dives deep into America's evolving electricity affordability debate, framed by two starkly different policy approaches: the Trump administration's aggressive, top-down push for reliability via conventional generation and market intervention, and a quieter, tech-driven state-level movement embracing distributed energy, virtual power plants (VPPs), and grid optimization. The three industry-veteran hosts—Stephen Lacy (Latitude Media), Jigar Shah (Multiplier), and Caroline Golan (Envision Energy Advisors)—deconstruct recent emergency grid interventions, discuss the implications of proposed reforms in PJM (the US's largest power market), and spotlight state-level efforts to use innovation and flexibility as alternatives to brute-force capacity additions. The conversation blends technical insight, political context, and frank opinions about the future of electricity pricing, utility incentives, and investment.

Key Themes and Discussion Points

1. Current National Backdrop: Political and Social Tensions

Timestamp: 04:00 – 09:48

• The episode opens amid somber reflection on national unrest: protests, state violence, and broader societal anxiety under the Trump administration.
• The hosts stress the clean energy sector's diversity and the need to stand on “humane, reality-based, true freedom-driven principles.”
  • Quote: “What is happening now is not okay. This is not about left versus right or about immigration policy per se. It’s about standing up for a humane, reality-based, true freedom-driven principles.” — Stephen Lacy (08:51)

Notable Moments:

• [06:58] Jigar Shah: Speaks candidly as a person of color about fears for naturalized citizens and the dangerous precedent of government actions.
• [05:14] Caroline Golan: Expresses hope, but acknowledges heartache and worry for friends and the nation.

2. The Trump Administration’s Top-Down Reliability Mandates

Timestamp: 09:58 – 17:18

• The Trump Administration’s emergency response to Winter Storm Fern: A call to deploy 35 GW of backup generators and batteries to maintain grid reliability.
• Jigar Shah critiques the move as well-intentioned but hollow, lacking operational clarity, regulatory guidance, and proper compensation pathways:
  • Quote: “It’s just another example of where this administration has good ideas and no intention of executing on them.” — Jigar Shah (10:42)
• Caroline Golan echoes operational confusion, emphasizing that most industrial users lack clear lines of authority, adequate permits, or logistical feasibility to respond as expected.
  • Quote: “Most industrial customers… the first thing they ask… is what’s the timeline, what’s the environmental permit situation, are we going to be fine? ... There was no clarity on that.” — Caroline Golan (13:39)

Notable Segment:

• [13:36] Caroline offers a European example: even in crises, successful demand response requires direct communications and trusted operational relationships—not just policy pronouncements.

3. Reforming PJM: Emergency Auctions and Load-Payer Mandates

Timestamp: 18:01 – 43:29

The Administration’s Plan:

• Push for an emergency PJM capacity auction to force large (esp. tech/data center) energy consumers to directly finance new power plants.
• Ostensibly designed to address a looming capacity shortfall and keep prices low for the general public—but implementation details remain fuzzy.

Caroline Golan’s Analysis:

• Describes a regulatory and financial tangle:
  • On one side, capital is “tied up” by sky-high minimum demand charges, interconnection collateral requirements, and regulatory hurdles.
  • Quote: “You have these two forces working against Each other… I just, I don’t see how the different parts are going to work with each other.” — Caroline Golan (18:57)
  • The ultimate challenge: conflicting forces among utilities, developers, and policymakers mean no easy path for market-based or bilateral approaches.

Jigar Shah’s Perspective:

• Criticizes lack of centralized, competent process: “They clearly don’t have a plan and there’s nobody in charge of actually creating a plan.” (24:30)
• Unpacks the technical/practical feasibility of “bring your own capacity” (BYOC): e.g., small-scale battery deployments on existing community solar sites for rapid capacity addition—but such opportunities lack structure and guidance.
• Expresses skepticism about real preparedness vs. policymaker “posturing.”

The Loops Problem and Grid Physics:

• Both warn about the physical and economic risks of big customers building their own “loops”—on-site generation disconnected from the grid, risking redundancy, reliability challenges, and operational chaos.
• Technical reality: backup systems built for emergencies are ill-suited for continuous use, while grid inertia and spare parts management remain underappreciated complexities.

Structural Takeaways:

• Deep tension between building centralized, utility-scale generation and encouraging decentralized, flexible solutions.
• Genuine risk that rushed bilateral deals lead to stranded assets, overbuilt (but brittle) infrastructure, and rising long-term costs.

4. State-Level Innovation: Grid Utilization, Distributed Resources & VPPs

Timestamp: 44:08 – 57:24

Examples Highlighted:

• Illinois: Bipartisan legislation for 3 GW of batteries to defer expensive grid investments, with buy-in from utilities and unions.
  • Quote: “The politics of this moment is figuring out how we get the three traditional democratic sort of like constituents… to all come to the same table.” — Jigar Shah (45:32)
• Virginia, New Jersey: Governors leading with legislative packages to measure and optimize grid utilization, lowering bills without massive capital outlays.
  • “If you improve grid utilization by 10 percentage points, you can onboard all these large loads… and decrease bills for everybody by 5%.” — Jigar Shah (44:53)

Caroline’s Caution:

• While encouraged by consumer empowerment and “not treating grid and generation as silos,” she warns of fragmented implementation, unclear incentive structures, and the perennial challenge of measurement, verification (EM&V), and regulatory uncertainty.

5. The Promise and Limitations of Virtual Power Plants (VPPs)

Timestamp: 57:24 – 68:44

Reality Check on VPPs:

• Caroline shares that, despite the hype, only one VPP provider in PJM (Voltus) was ready to sign bankable, accredited deals at scale. Others required significant customer acquisition help and could not assume risk.
  • Quote: “There was only one within PJM that was willing to take accreditation risk, that was willing to do all the customer acquisition and was willing to make what we signed look like every other PPA we’ve ever signed… that was Voltus.” — Caroline Golan (57:25)
• Jigar notes the sector’s immaturity—contract standardization, utility data access, and risk-sharing are still maturing.
  • Utilities are often unable/unwilling to deliver smart meter data (a key, FERC-required enabler for VPPs) to aggregators and customers.

Investment and Affordability Potential:

• VPPs offer the tantalizing possibility of addressing both peak demand and customer bills by using distributed assets (batteries, smart panels, flexible loads) as "strategic reserve."
• Returns: Upfront lower CapEx with faster capacity delivery versus slow, costly new central generation.
• The potential for VPPs to substitute for new poles/wires or peaker plants hinges on regulatory pathways and rapid scale.
  • Quote: “There is nothing else that can actually deliver in a 12 to 18 month period.” — Jigar Shah (62:56)

Social Equity

• Jigar raises the tragic mismatch between speculative willingness to pay high prices for new capacity and the reality of energy insecurity for millions: VPPs and energy efficiency could offer broad, immediate value if better accredited and implemented.

6. Looking Ahead: Collision Course or Hybrid Solution?

Timestamp: 70:12 – 74:02

• Both hosts agree the sector is on a collision course between federal (centralized, “vibes”-based, capital-hungry) approaches and pragmatic, innovative, and distributed solutions emerging at the state level.
  • Quote: “My hope is… the Supplier industry sort of takes back their role in terms of producing innovative capacity solutions in the market and structures that in a way that allows not only for data center capital investment, but third party investment in the way I know we all want to see.” — Caroline Golan (70:38)
• Jigar projects optimism despite the uncertainty, citing readiness in supply chain, capital, and political will among the “prepared” actors. Cautiously bullish on the possibility of the right solutions prevailing—if states and innovators can overcome inertia and execute well.

Notable Quotes & Segments

| Timestamp | Speaker | Quote/Moment | |------------|------------------|-----------------------------------------------------------------------------------------------------------| | 08:51 | Stephen Lacy | “What is happening now is not okay. This is not about left versus right… It’s about standing up for a humane… true freedom-driven principles.” | | 10:42 | Jigar Shah | “It’s just another example of where this administration has good ideas and no intention of executing on them.” | | 13:39 | Caroline Golan | “What everyone was concerned about is if I do this in two months… am I going to get $100 million fine for going over air permit? And there was no clarity on that.” | | 18:57 | Caroline Golan | “You have these two forces working against Each other… I just, I don’t see how the different parts are going to work with each other.” | | 24:30 | Jigar Shah | “They clearly don’t have a plan and there’s nobody in charge of actually creating a plan.” | | 44:53 | Jigar Shah | “If you improve grid utilization by 10 percentage points, then you can onboard all these large loads… and decrease bills for everybody by 5%.”| | 57:25 | Caroline Golan | “There was only one within PJM that was willing to take accreditation risk… that was Voltus.” | | 63:42 | Jigar Shah | “VPPs basically form a strategic reserve that can be dispatched to meet those peaks… That increases grid utilization, that reduces costs…” | | 70:38 | Caroline Golan | “My hope is… the Supplier industry sort of takes back their role in terms of producing innovative capacity solutions…” | | 72:32 | Jigar Shah | “I am super bullish and optimistic because… luck is preparation meets opportunity. I mean, Lord almighty, I’ve been prepared for this moment and so I’m going to hit it hard.” |

Segment Timestamps

• Opening & National Backdrop: 00:08 – 09:58
• Trump Administration’s Emergency Approach: 09:58 – 17:18
• PJM Capacity Market Emergency Reforms: 18:01 – 43:29
• State-Level Distributed Energy & Grid Innovation: 44:08 – 57:24
• VPPs: Promise, Challenges, Investment: 57:24 – 68:44
• Closing Analyses and Forecasts: 68:44 – 74:02

Tone & Style

The discussion is candid, technical, and policy-savvy, with a constructive but critical edge toward federal approaches and genuine enthusiasm for bottom-up, innovative solutions. The hosts blend industry wonkiness with humor, empathy, and an undercurrent of urgency, aware that outcomes will materially affect American families, businesses, and the climate.

Key Takeaways

• America faces a policy crossroads: heavy-handed, centralized intervention versus distributed, tech-centric, market-based reform.
• The biggest barriers to affordable, reliable electricity are not technical but regulatory and organizational: permitting, incentives, and data access.
• VPPs and grid utilization present real, near-term opportunities if policymakers align incentives, decrease friction, and unleash innovation.
• Political inertia and “vibes-based” policymaking at the federal level risk deepening inefficiency, raising costs, and stranding capital if not countered by focused, state-led, and industry-driven reform.

This summary captures the high-level context, nuanced industry analysis, and the natural flow of expert discussion. For those forging the energy transition, the message is clear: the future of affordable power depends far more on execution, communication, and stakeholder alignment than megawatts and mandates alone.