← Shift Key with Robinson Meyer
Shift Key with Robinson Meyer
Heatmap’s Reporters Talk About Electricity, Inflation, and the New Era in Climate Politics
01:01:18
Rob debriefs with colleagues on the latest climate news.
Loading summary
Transcript88 lines
- [00:00]
A
You are listening to Shift Key Heat Maps weekly podcast about decarbonization and the shift away from fossil fuels. On this week's show, it's a special roundtable with other heat map journalists where we talk through what's on our mind after New York Climate Week. What is the biggest story of the year yet you may not have heard? And also about this new thing Democrats are taking on the politics of electricity affordability, energy affordability. Is that a good idea and what does it mean? Well, all of that and more. It's all coming up on Shift Key after this. America's future depends on reliable power provided where and when it's needed. It depends, in other words, on long duration energy storage. Hydrostor's advanced compressed air energy storage technology is helping build the grid of tomorrow with secure, reliable power and thousands of American jobs. With bipartisan support and a flexible supply chain. Long duration energy storage is the missing puzzle pie piece to scale energy independence. Learn more about Hydrostor's Willow Rock project and the future of energy storage@hydrostore.ca hi, I'm Robinson Meyer, the founding executive editor of Heat Map News, and you are listening to Shifts Key Heat Map's weekly podcast about decarbonization and the shift away from fossil fuels. The My co host Jesse Jenkins is off this week. On this week's show. You know you've heard of a first of a kind nuclear plant, a first of a kind experiment. We have a first of a kind podcast episode for you. I'm going to be joined by three of my Heat Map colleagues and we're going to have a roundtable about our thoughts and impressions at this interesting moment in climate, politics and policy. We're just coming off of the end of New York Climate Week here at Heat Map. We had a big event in Union Square and we've watched, I think, the politics of decarbonization shift over even just the past few months from being one focused on cutting emissions and climate to a politics that you increasingly hear from Democrats of affordability and lowering costs. Here to discuss those changes are, I have to say, three of my favorite people to talk about climate change with. It's our producer here at shiftke and Heat Maps, deputy editor Gillian Goodman, Heat Maps founding staff writer Emily Panakorvo, and Heat Map staff writer Matthew Zeitlin. We're going to talk about New York Climate Week. We're going to talk about whether this new politics of electricity affordability is a good idea for Democrats. We're going to talk about some future ways you could actually lower power Costs. And we're also going to talk about what's next for climate policy, what we all have in mind. And so let's get it started. Welcome Matt, Emily and Jillian to Shift Key.
- [02:45]
B
Excited to be here.
- [02:47]
C
Always a pleasure.
- [02:48]
D
Thanks so much.
- [02:50]
A
We're recording this on Monday, September 29th, which is the Monday after Climate Week in New York. It's not like the cop, you know, the big UN climate meeting in every November or December where like actual work happens. Climate Week is just the same week. Everyone has decided to hold meetings and events in New York at the same time. But, you know, it can be an informative week. You can learn a lot or you can learn some things. And so I wanted to just start by asking like, what was a takeaway? What was one thing you brought away from your experience going to events? Perhaps other people's, perhaps heat maps. Climate Week this year. Let's start with Matt.
- [03:32]
D
Yeah, I would say the thing I took away from it is that there's so much discussion of electricity prices and both I think in a substantive way, like how can various carbon friendly, climate friendly energy generation reduce electricity prices? Then also there's a lot of the politics is very front of mind. As you know, this was the first New York Climate Week since the presidential election where obviously cost of living was a huge issue. And it was interesting because you'd think that politics was top of mind. It would be about changes to the Iraq regulatory issues, the kind of assault on offshore wind, maybe just the events we hosted or events I was at. For a lot of people it seemed like that stuff was almost in the rear view mirror or just like, was kind of just part of the, just the air we breathe now. And that this electricity prices issue was much more of a forward looking thing to be concerned about.
- [04:30]
A
It does feel like we've hit this point of like, and I don't know what it is, but I feel like everyone went through it at the same time. Like nine months into the Trump administration, there's lots of Trump administration left to go. But like it's a recognition that the era we're in is now the era we're in.
- [04:46]
C
Yeah, we seem to have metabolized Trumpism, Trump 2.0 ism, very, very quickly as a community.
- [04:52]
A
Yes, exactly, exactly. And now it's like, okay, what's the next problem? Like, this remains a problem. This is gonna be a problem for the next three and a half years or two and a half years. But what is the next thing to think about? Gillian, though, what was your big Climate Week Takeaway?
- [05:06]
C
Well, I just like to amplify Matthew a little bit. Like that was also something that I picked up on a lot. Is this real desire to say, like, well, here's what I'm thinking. Like, what are you guys thinking? Like, what's next? What do you think is the right strategy? And especially compared to last year when there was so much money from the Inflation Reduction act flowing through all the companies that send their representatives to Climate Week, there was such an up energy, like a lot of really flashy pizzazz y kind of things. And this year, the amplitude of the vibration at Climate Week, I would say was substantially reduced, but the frequency was, if anything, higher to do a little. I guess that's a physics metaphor in the sense that everyone seemed to be kind of buzzing, but at a very low, low, but persistent hum about like, what are you thinking? What are you doing? I would say that the other. And yeah, that leads to one of my big takeaways from, from the week is this debate that's ongoing about basically what to do with the ira, the legacy of the ira. I think that everyone is tired of talking about the IRA as such, but what to do with the ideas and the model of climate progress that was embodied in the ira, whether we should continue forward with this kind of wonky, like, very detailed mode of policymaking, or whether it's time to scrap that and then, you know, tbd, what the next model is. I wouldn't say that I at least picked up on a real defined model of what would come next, if not that mode of policymaking. But it seems like there were two camps. One camp that really wanted to continue to pursue industrial policy as embodied in the ira, and another camp that felt the need to abandon that.
- [07:01]
A
Emily, what was, what was your takeaway?
- [07:04]
B
This wasn't so much from witnessing people talk about this on a panel or anything, but just in conversations on the side. I got the sense that a lot of the kind of more progressive climate groups were taking the week to really do some soul searching and like, deep conversations about, like, to how to rejigger their strategies in this new era of like, don't say climate change. You know, don't talk about the climate, if you want to talk about clean energy, talk about affordability, et cetera. And so I'm just kind of interested to see how that starts to manifest in the real world. And what we start to see from groups, they do start to significantly change their strategies or their messaging in the coming months.
- [07:51]
A
To some degree. I feel like, Emily, what you're Observing and like what my thoughts about the dynamic Jillian was observing are very similar, which is, I feel like the takeaway isn't even like what comes after the ira, but also like how we should even think about it. And I feel like one of those big fault lines is like climate policy is always going to be a little technocratic, I think because of how inevitably tied up with the economy it is and how these are all like very techno scientific issues that require like fairly, you know, policy that takes into account like different forms of energy generation and kind of wholesale economic forces, et cetera, et cetera. But like, I do feel like there's a fault line in. Was the inflation Reduction act actually too much about climate change? Was kind of building a lot of different policy around this centerpiece of climate change a mistake? Or should the next. Or was it not enough about climate change and the next bill or the next piece of policy should not only have all this technocratic like pro decarbonization policy in it, but should actually go fairly aggressively at the perceived enemies of this climate policy, be they fossil fuel companies, utilities, potentially NIMBYs. Is this climate moment about finding a new set of political enemies and openly entering into contention with those political enemies? Or is it about like making climate policy just part of the mix of technocratic changes to policy that Democrats do when they're in power, just as they make technocratic changes to healthcare law and technocratic changes to tax law. And they may harp on kind of who those laws are meant to take on, but there's not a, the same kind of basic approach of enemy creation that we see in that I think some people want to see out of climate policy next time.
- [09:50]
B
I think it's hard for me to imagine a similar set of policies that is less about climate like, or that that kind of sells itself less strongly related to climate change. Because it was already called the Inflation Reduction act, it had no climate name attached to it. Like none of the policies. I mean, I guess there was obviously like a lot of grants focused on reducing emissions and subsidies for clean energy, but like also subsidies for manufacturing and for so many other things that only if you read the terms and conditions would you know that the real goal of this policy was to reduce emissions. So maybe Democrats didn't do a good job selling it that way. But I also like, you know, our polling showed that so few people even knew what it was. So the idea that it was too much of a climate law just doesn't totally makes sense to me.
- [10:46]
C
Well, people didn't know what it Was, but you know, that also maybe means that they had a more extreme view of it than was actually the case because the way it was sold was largely as a climate law. You know, we are going to create the jobs of the future, good paying jobs in green industries and we're going to win the future and keep it safe for our children and grandchildren. It seemed like the elected officials we had at our event, Heat Map House at Climate Week, we're very much going in the direction of trying to make climate policy less about climate and more about energy and electricity and affordability. Representative Sean Caston of Illinois, Senator Brian Schatz of Hawaii, both essentially made this point. Clean energy is cheap energy. Cheap energy is clean energy. And the way we're going to make energy more affordable is by making it cleaner. That same is a, certainly a simpler message than we need to save the planet, we need to save the global climate. That doesn't necessarily mean that it will be more effective, but, and you know, that's not my job to determine either, but I find it an intriguing approach.
- [11:53]
A
Well, I think that's a perfect segue because the big trend right now, I feel like, what if I had to make an observation about Climate Week, it would be this massive pivot to affordability. Just this. Every climate group now wants to tell you about why the policies that they supported last year they now support for affordability reasons. And we've talked about that previously on the show. It's something we've written about. I've written about why electricity prices are going up and it turns out for reasons that don't have a lot to do with climate policy, but also don't actually have a lot to do with like fossil fuel companies per se in most parts of the country. Matt, you recently wrote a piece about how this big shift to affordability is playing out as politics and why it wind up creating problems for Democrats down the line. Can you just talk a little bit about what you wrote in that story?
- [12:40]
D
Yeah, so in my story I focus on New Jersey, where there's a gubernatorial election later this year. There's also one in Virginia. But New Jersey is interesting because it, it has, I think maybe the 8th or 9th highest retail electricity prices in the country and has seen substantial increases in prices in retail electricity prices in the last year, something around like 25%. The incumbent is not running Murphy because his two terms are up. So it's two fresh candidates with Mikey Sherrill, who's a congresswoman from, I think northern New Jersey, and she's a quasi Incumbent. But she's in this weird situation where, unlike Democrats nationally, who can talk about how electricity price increases are Donald Trump's fault and run against him and not really be responsible for doing anything about it, she wants to be governor, and she's implicitly saying that her predecessor's record on this is not good. And her proposal is to freeze prices, you know, use the regulatory authority in New Jersey over the state's utilities to institute a price freeze, say no more, electricity rate hikes. And that's quite interesting because in our Heatmap Pro's polling of this, we found that the public tends to blame the three things they seem to blame the most are utilities, which makes sense because they're the ones who literally set the prices and are billing you. They blame their state government, which makes sense again because they regulate the utilities. And then they blame increased demand for electricity implicitly, data centers. And in our reporting, you know, they seem to basically have it right, more or less about who's responsible for this. So it's obviously quite tricky for Cheryl. And what's so interesting about it is I think the most effective ad that the Republican Governors association outside group has run is her saying something along the lines of, oh, this green energy stuff, it's going to cost an arm and a leg, but if you're a good person, like, you're just going to do it. She says most of those words. I don't know if I have it exactly right. What's so funny about this is that this is an excerpt from a podcast she was on where she's explaining this.
- [14:38]
A
Ad is like phenomenally, phenomenally deceptive.
- [14:42]
D
Yeah, yeah, this ad. She does say all these words in that order, more or less. What's so interesting about it is that she is describing kind of a meta sense, the bad message that Democrats should not send on climate change. She's saying we should not say it's going to cost an arm or a leg, but you got to do it because you're a good person. She's saying that's a bad message, that Democrats should not say it. And what the Republican Governor association has clipped that out and saying, like, oh, this Mikey Sheryl wants you to pay more for electricity because you're a good person. So, I mean, it is deceptive. But I think quite telling in that Democrats feel so vulnerable on this issue that they feel the need to have this kind of meta conversation in public about what they should and shouldn't say, which I think shows that they know that the public perceives them this way. And they're, I think a lot of Democrats think that the public thinks of them as the party that will make you pay more for electricity because it means you're a better person. They know they're quite vulnerable on that. And thus we're having these kind of meta conversations about it in public by elected officials running for high office.
- [15:55]
A
I just want to know, by the way, that how phenomenally deceptive the ad is. I actually, like, saw it in a restaurant. I was like, oh, my gosh, what did she say? And then it's like, from a podcast. But they've taken video of her, like, speaking at a conference. Kind of looks like she's saying it at the conference anyway. But it does seem that this is like, the risk for me, not only of what Democrat of kind of playing up affordability issues, but like Democrats playing up affordability issues without an intent of actually changing the policy to fix the affordability issues. I last week wrote about this new Democratic, this new bill from House Democrats called the Cheap Energy Act. And Representative Castin came and spoke to us about it, who's one of the co authors, former CEO of a renewable company from Illinois, now represents Illinois's western suburbs in the House of Representatives. He came and spoke to us about it at the HEMAP event. And he was like, you know, something he said to me was like, we're lucky that cheap is synonymous with clean, that clean is synonymous with cheap, but the goal is cheap. Which is great for him to say, but I do like, I think that there's a basic risk here for Democrats of talking a lot about affordability and then prescribing all the same policies that they prescribed when they talked a lot about climate change.
- [17:19]
B
Yeah, this is something that came up in the story that I wrote about, like, affordability messaging a couple of weeks ago. And I think some of the people I spoke with pointed out what Mickey Sherrill is doing as like, a contrast to that, because actually putting a freeze on utility rates is different. It's a governor using their authority to actually, like, do something different. Whether or not she can actually do that, I think has been. There's. It's still a little bit unclear, but I think there's also this in. Matt brought this up in his story that he wrote today. There's this, like, very tricky line that Democrats will have to draw if they continue to go down this affordability road, which is like, yes, clean energy may be cheaper compared to the alternative, but bills are going to keep going up unless you have something like a rate freeze. Or some kind of intervention policy like rates will continue to go up. And so just saying clean energy is cheap or this will lower your bills. I just don't see how that will work unless you find a way to help people understand the nuance in that.
- [18:31]
A
Something that really stuck with me from our heat map event that we did during Climate Week, where we had a number of speakers come and we interviewed them on stage, was your interview with Commissioner Uchena Bright of the New York puc, the entity that regulates utilities in New York, where you kept asking her, basically, like, how do you manage, on the one hand, trying to meet these directives from the state around climate policies, things that we certainly in the room want, while also keeping electricity prices down. And I felt like she was very gamely answering, but also it wasn't like an easy answer for her.
- [19:06]
B
Yeah, I totally agree. And I think she was also somewhat diplomatic in her responses. I think we ultimately got to a place where she was like, it's not absent from your rates. Like, it's in there, but it is not the number one driver.
- [19:22]
C
Well, and in that story, I can't remember if it's the story you referred to, Emily, or a different story you did. But also, like, some of these are relying on a counterfactual. It's not like installing more renewables will lower your energy bills actively. It's like installing more renewables will lower your energy bills against the rise that otherwise would have happened if we had fulfilled those energy needs with a different type of energy. So if only we could just say that installing a ton of solar and like, this has always been the problem for me with saying solar is the cheapest form of new energy we can add to the grid. Yes, but your bills are still going up, and that's a really tough thing to communicate to people.
- [20:01]
A
Well, and also your bills are going to go. I think there's this interesting. I felt like there was also this interesting disconnect that emerged from talking to Democratic officials at our event where people want to talk about generation, where they want to talk about how solar and wind, especially solar and batteries, are like the cheapest form of new generation you can put on the grid, which is generally true. I mean, there's different stipulations there. They're kind of cheapest, if you care, don't care. When in the hour, when in the day they happen. Obviously, adding storage then makes them a little more expensive, but then allows you to use the solar anytime. But people want to talk about generation, but when we look at, like, why electricity prices are going up. It's not really a generation story, it's like an infrastructure story. And where the infrastructure comes from is actually in the distribution grid. Like the vast majority of the electricity price hikes since 2020 have come because we had to replace or update or just rebuild as a matter of course. The last mile parts of the distribution grid in the us the poles and wires that get electricity from substations to your house. And because transformers have been in shortage at this point for four years or something. Now, partially, we do need to care about generation because if AI and data centers are increasing electricity demand, then like we're going to need to generate more electricity and then we care about the cheapest place we get that generation from. It's interesting because we are still used to thinking about electricity, I think, as a generation story. And whatever the cheapest thing is when you hook it up to the wires is what's going to be cheapest for the system. But in fact the problem is the infrastructure and not what's going into the wires at the top end.
- [21:39]
D
Can I share a second insight from Climate Week? It's actually not an insight, it's a human being. It's Charles Hua of the organization Powerlines. I think I saw him at every event I went to, including our own. And for our viewers, our listeners who may not know, Charles is a former Department of Energy official and he runs this organization called Powerlines, which is an advocacy and research group entirely about electric utilities.
- [22:04]
A
Former Shift Key guest too, and Shift.
- [22:06]
D
Key guests and public utility commissions. He really wants people to pay more attention to public utility commission races. And he's been trying to make an argument and I think this is kind of the cutting edge of sophisticated progressive political thinking on this question where you attribute high electricity prices to gold plated infrastructure spending by utilities because they can then rate base their investments in transmission and distribution and then get return on that from the ratepayers. And I think what Rob would say is that this last mile distribution investment spending that we've seen, it's harder to argue that that's the gold plating because you need to do it anyway. But the best argument about this is getting into the nuts and bolts or the poles and wires of how utilities make investment decisions. And when I talk to people about this, what they talk about is how utilities get a lot less questioning when they spend money on what's called as regional transmission. It's essentially transmission within their own territory that's fast tracked through the spend, the regulatory process. And so like they can build a lot of that transmission and it's like, not a huge deal to the PCs, even though over time it can add up to higher prices.
- [23:27]
A
I feel like I'm being placed in the position of Mr. Big Utility here, but I am not on the utility side. What I do think is that, I mean, you hear this argument about why electricity prices have gone up is that as we've talked about on the show in the past, in 2005, electricity demand basically plateaus in the US and then largely outside of Texas, we enter a world where there's no electricity. No, where electricity demand doesn't rise in the US for like 16, 20 years. And now it has, and now it's returned. And I feel like the explanation that you hear is that utilities have a responsibility to deliver returns for their investors during this period where electricity demand isn't going up. And so they have to look around for a place to find a return. And the way utilities make money is to, like, build new infrastructure. And so they don't need to build new power plants. They don't really need to build new generation facilities because demand isn't increasing. And so what they do is there's this infrastructural turn, so to speak, toward, as critics say, gold plating infrastructure. Because then when you build, when you do capital expenditures as opposed to operating expenditures, because of how their rate base, how they get, like, folded into the rates that utility customers pay are like, what allow utilities to meet their return. And so in this era of low demand, or like secularly low demand, Right. It's gold plating infrastructure that, like, allows utilities to continue to be a profitable business for their investors. I think the issue is, like, we can decide that happened. The question is, now what?
- [25:11]
D
Well, the funny thing about this is that I was at this presentation by Third Way, where it was very smart. They, the panel, they had a political strategist who didn't know anything about electricity, admittedly did not know about utilities and electricity policy and how it worked. And then they had someone who had worked in the Department of Energy and FERC for like a decade on transmission to explain how it works. And so what was interesting is that this woman, she was like, look, electricity prices aren't going to go down. The best hope you have is having them rise slower. Then she said, the way you make them rise slower was through substantial investments in transmission. And it's like, okay, the utilities are going to make a rate of return. It's like the solution to this problem, which we say is caused by Gold plated infrastructure spending. It's just like a slightly different type of infrastructure spending. I think this kind of leads to the political issue, right? Where it's like, look, just imagine you knew nothing about the specifics of the policy we're talking about. You just knew the broadest stereotypes of the Democratic and Republican party in any state or in the country as a whole. And you're like, okay, which party is going to support more spending, often by a unionized workforce in pursuit of a public policy goal of a cleaner grid. And it's like most voters are going to say the Democrats. And then you go to Democrat HQ or distributed Democratic HQ in a ballroom in New York City and the moderate Democrat. This is someone's a third way conference, right? They're like, look, here's what we need to do. We need to increase the infrastructure spending and transmission distribution. So like, are the voters crazy to be suspicious that this plan is going to result in lower electricity prices? I don't think so, no.
- [27:15]
A
But I think the subtlety that yes, we would like the way to slow the rise of electricity prices is to build more transmission. So why aren't we building more transmission actually then opens, if the, especially if the utilities can make money for it actually then opens. A very interesting policy dispute and also like interesting set of questions about political actors here because on the one hand I think there's one argument about why we don't build transmission. An argument that I've made many times in the past which is that like, oh well, it's actually really hard to build inter regional transmission. It's really hard to connect different service areas because there's not a sole, unlike building a natural gas pipeline, there's not a sole federal permitting authority. And so if you want to build a new long distance transmission line, you have to like go to every individual state, municipality and county and get their permission to build it. And this becomes like really salient for decarbonization because the whole way we're going to decarbonize, especially if we use solar and wind out west, is like building solar and wind in the interior of the west and then connecting it to the coasts where most people live. There's another reply to that account and I think it actually does kind of explain utility behavior here. There was a piece in Utility Dive earlier this year that we'll put in show notes by Arjun Krishnaswamy, who's now at the Federation of American Scientists and used to work in the Biden era Department of Energy and in the White House where he basically Is like, look, you want to build transmission, that's great. But utilities won't ever want to build that transmission because what they don't want to do is connect outside their service area. So they're happy to build intra regional transmission where they like build a lot of power lines that go zigzaggy across their service area and help them supply the lowest cost power to people already in their service monopoly. But like, because it reduces costs for them. But what they're not eager to do is like connect to service areas next door and lose some of their monopoly ability to charge prices to their captive service area. I think that's interesting because it gives the policy two different valences, right? It says on the one hand it does allow you to run a kind of populist campaign around utility price. You say, okay, look, they don't want to build transmission to their neighbors because utilities want to charge you money. If you're a Democrat, that's like a big deal because that's, you know, you were talking earlier, Matt, about things that voters believe or don't believe. That kind of fits into the worldview of things Democrats can argue to their constituents. At the same time, there are actual policy ideas, including in bipartisan permitting reform to deal with this. And one of the most interesting ones is that you would require each region of the country to have a certain minimum amount of interregional transmission capac. And so you say in an emergency what's good for the country is being able to send a certain amount of energy like long distances. And so therefore we're going to go through each region of the country and say you have to be able to move at least I believe usually the number in the proposed bill is like 30%. Like you have to meet 30% of your demand or 30% of your local load through. You have to be able to move 30% of your load like from your neighbors. And that would be quite powerful because like very few regions in the country could actually meet that standard today and it would force a lot of transmission construction that isn't being built right now. This episode of Shift Key is brought to you by Hydrostor. The US economy is growing fast and so is its demand for reliable energy. But generation alone isn't enough. Long duration energy storage is the key to building a resilient, secure grid that can meet tomorrow's needs. Hydrostor's advanced compressed air energy storage technology stores clean energy for hours at a time and then delivers baseload power when it's needed most. Hydrostor's Willow Rock Energy Storage center in California will provide 500 megawatts of storage, enough to power a city of half a million people for more than eight hours and employ over 6,500 people during construction. Backed by bipartisan support at all levels of government, Hydrostor is leading the charge in utility scale storage. With projects underway across America. We're helping communities unlock economic growth and achieve energy independence. Learn more about Hydrostor's unique technology and how it's powering America's future@hydrostor CA I.
- [31:47]
C
Want to back up a minute and just ask what are we talking about when we're talking about gold plating? What constitutes gilding the utility infrastructure and what is not getting built because we're doing all of this gold plating?
- [32:00]
D
Well, it's funny, right? You'll never read an IRP or they'll be like, here's our gold plated spending. What the advocates would say is that it'd say unnecessary, often distribution, transmission, distribution spending that's going across their territory and is not like bringing down prices. I mean again, it's like a completely subjective. Well, not completely subjective. It is a subjective claim.
- [32:25]
C
I guess part of what's motivating. Part of what's motivating. My question is like are we talking about things like installing smart meters?
- [32:31]
D
Well, in California there's been backlash to undergrounding. You know it's funny because the utility structure makes it so anything good you want to do, you have the people have to pay for. So like even undergrounding electricity lines has become quite controversial in the American west because it's so expensive. Now is that like gold plating or is that like climate resilience to increase chances of wildfires? It really just decreased chances. Decreased chances.
- [33:01]
A
Yeah.
- [33:01]
D
Yeah. No, Is it resilient? Is it building up climate resilience to the more wildfires caused by.
- [33:07]
B
I mean I will just point out like it is also a choice, a policy choice by public service commissions and those who put people on those commissions to give the utility the rate of return that they get. There's a lot of advocacy around lowering that rate of return and also to put the degree of the cost of that gold plating on ratepayers. They could have investors share more of that cost and they're just scared to do that. The utilities scare them away from doing that. But it is possible, it's in their power at least I guess to rob.
- [33:47]
D
What you were saying earlier, how do you make a populist argument that results then in more inter regional transmission being built by saying, oh, they're building the bad transmission distribution. We're going to build a good transmission distribution. I want to bring up an interesting historical fact. If you ask many people in Democratic politics who their favorite senator ever is, living or dead, and who they think Democrats should model themselves after, they'll often say Paul Wellstone, the former senator from Minnesota who tragically died in an airplane accident, often bandied about as a potential presidential vice presidential candidate by the most progressive members of the Democratic Party. What's so interesting about Paul Wellstone, he was not always a politician. He was also an academic and he wrote about politics. He wrote about rural politics, which is one reason why he's so popular today among Democrats is that they see him as his type of politics can appeal to the types of voters that Democrats are losing.
- [34:45]
A
And we should just set him here like he emerges as a extremely progressive Minnesota Democrat in the 90s in this moment of class depolarization, like the severing of the working class away from the Democratic Party that continues to define our politics today.
- [34:59]
D
Yeah. So his first book is about long distance transmission. It is about this political dispute over building a power line from North Dakota to the Minneapolis area, the area he's from and would represent. And it was to bring coal power. Coal fired power from North Dakota is very coal rich region to the city. Here's the Amazon description of this book called Power Line the First Battle of America's Energy War. Powerline describes the opposition of rural Minnesotans to the building of a high voltage power line across 430 miles of farmland from central North Dakota to the Twin Cities suburbs. Convinced that the safety of their families and the health of their land was disregarded in favor of the gluttonous energy consumption of cities. The farmer led revolt began as questioning and escalated to rampant civil disobedience, peaking in 1978 when nearly half of Minnesota's State highway patrol was engaged in stopping sabotage of the project. After construction was completed, the power line proved difficult to defend and unprecedented guerrilla warfare brought many towers to the ground. Through pulse quickening personal interviews and big picture analysis, Powerline lays bare the latent unexpected power of the people of rural America and resonates strongly with today's energy debates. So I will just say I think it is highly, highly unlikely that you are going to be able to make a populist argument for increased long distance transmission. Obviously the context now would be to bring clean energy from one area to another. It's not coal fired energy, but I'll just say I find it unlikely that you are going to be able to create a strong, populous political coalition around increased investment in electricity infrastructure, especially linear infrastructure. I'll just also note that much of the climate movement today arose out of opposition to linear energy infrastructure. And yes, you can pivot to say it is clean energy infrastructure, it is clean linear energy infrastructure. But there's like some fundamental issues here that I think are quite, quite difficult. And I think a lot of the advocacy in this space is kind of, you know, I'm waving my hands right now in a way that's not great for podcasting, but to say it is obscuring some of these kind of key fundamental issues around infrastructure in the United States.
- [37:32]
A
In other words, you're not going to be able to build a populist movement that says, hey, look, the problem is that utilities are not building enough large scale infrastructure in rural areas.
- [37:42]
D
Correct. I find it unlikely you're going to get, you know, a rural urban coalition in favor of building long distance infrastructure across agricultural areas so that large cities can be better supplied by clean electrons than they are right now.
- [37:59]
A
Or cheap electrons, because that would be.
- [38:02]
D
Cheap is clean. Clean is cheap. I was at all the same events you were, so yes, of course.
- [38:07]
A
Well, I think that this just to. I thought Gillian's question about what is gold plating? Was quite keen because I think it itself reveals some of the distinctions here that really matter in that when you. What is gold plating? When you look to see what people call gold plating, sometimes it is smart meters. And some people say, well, the smart meters were a good idea, but we don't use them as much as we should be. And if we actually made full use of smart meters, then smart meters wouldn't count as gold plating. Sometimes gold plating is these transmission lines that go within the utility service area allowed it to move electrons or solve local areas of congestion. Sometimes it's sensors on the utility lines that are able to detect a wildfire or detect a kind of change in the quality of the electricity that allows you to know that there might have been a kind of wildfire ignition event or cut off a power line before it starts wildfire. And we've talked on previous episodes of Shift Key about how one way you could resolve this in utility regulation is by basically having the regulator set a cost goal for a given project. And then if the utility comes under that cost goal, it makes money. And if it comes above that cost goal, then it doesn't make money, then it loses money as compared to, like, its expected rate of return. What's interesting is There was a recent, like, very in depth study on why California electricity prices have gone up so much. And what it found was that basically in city owned or publicly owned utilities, that would be utilities that, you know, are not responsible to an investor, but responsible to the public in some way, they are basically doing many of the same things that utilities are doing with their lines, like they're making many of the same decisions. Because ultimately it's very hard as a utility. I think this is the implication. Ultimately it's very hard. If you have to make a decision as a publicly owned utility between efficiency and reliability, you're going to err on the side of reliability. I think what's interesting, though, is that even though they're making many of the same technological decisions as for profit utilities, publicly owned utilities are often doing it cheaper, which does suggest that there is some ability to introduce a different regulatory structure that allows utilities to keep costs low. Let's change the topic for a little bit. We're going to release this the first day of October. We're going to be 75% of the way through the year, give or take one quarter left. We've been spending this whole time talking about electricity prices. We often talk a lot about Trump. I wanted to ask what is the most important non Trump, non electricity price story of the year? What have you, like, been thinking about? And you're like, man, if Donald Trump was the president and if electricity prices weren't through the roof, we'd be covering this a ton. But I have less time to cover it because I have to cover those other stories that are a really big deal. Emily, I want to start with you.
- [40:54]
B
I guess I'd say the story that I published last week about what's going on at the Greenhouse Gas Protocol, which is a nonprofit organization that basically governs a series of standards that companies, corporations all over the world follow to calculate their greenhouse gas emissions. So if you are Microsoft and you want to come up with your annual emissions estimate of your operations and of your supply chains, you use this methodology that the Greenhouse Gas Protocol has written down, and it's kind of standardizes reporting across all these companies. And so the Greenhouse Gas Protocol is now revising their standards. They're changing how companies calculate their direct emissions, their electricity emissions, their indirect emissions from their supply chains and from how they deal with carbon offsets and things like that. And so my story last week I think is evidence of, like, I started to work on this story in June right around the reconciliation bill and never wrote it because there was just so Many other more pressing things going on to cover and came back to it a couple weeks ago. And I think, you know, in light of the wind and solar tax credits going away after that reconciliation process, this story is even more pertinent because the methodology that comes out of this process is going to really determine how companies buy clean electricity, what they buy, which resources they're investing in, whether it's wind and solar or more like batteries and geothermal plants or nuclear.
- [42:30]
A
And just I want to understand, like, one reason the GHC Protocol is so important. I feel like this is like good scene setting, is that because it goes first, it often winds up kind of indirectly determining what the policy is going to look like when government policy eventually shows up. Like back when the sec, the securities and Exchange Commission, was in a mood to regulate, and specifically in a mood to regulate how companies reported to the public their greenhouse gas emissions. Like, like the scheme that the SEC came up with was basically adopted from the Greenhouse Gas Protocol. Even the way we talk about scope one, emissions, which are emissions from your direct activities, Scope two, the emissions from the energy you buy. Right. And then scope 3 are like emissions generated by people using your products. That whole scope way of talking about emissions, which I think is quite non intuitive, I would add no offense to the Greenhouse Gas Protocol. Listeners to this podcast, like, came from the Greenhouse Gas Protocol and then it was just like enacted into policy. And so when the Greenhouse Gas Protocol, like decides something, it's quite important because it often. Because then a lot of companies comply and that makes it very easy to come down the line and enact whatever scheme or category it came up with in policy.
- [43:41]
B
Yeah, And I mean, in this case, the SEC is not requiring that anymore. Trump revoked that. But in Europe, there's a Europe Corporate Sustainability Reporting Protocol, or I can't remember the exact acronym, but it's fine.
- [43:56]
A
It would be different.
- [43:58]
B
They, they have adopted the Greenhouse Gas Protocol. Like they are using it, Europe is using it, California is using it. So even if companies say, we don't like the way this turned out, we don't agree with it, we think it's a bad reporting standard, and we're gonna pretend it doesn't exist. Not all companies can do that because if you operate in Europe, if you operate in California, two of the biggest markets in the world, you will have to.
- [44:23]
A
And just quickly, what is the actual substance of the fight over how to define electricity emissions in the protocol?
- [44:30]
B
Yeah, I mean, we could record a whole podcast on this. So maybe we will one day, but I'll try To keep it short. So there are basically two camps in this fight over the scope. Two Protocol one is advocating for a more granular accounting scheme where they want companies to purchase clean energy on an hourly basis and match it with their hourly operations. And they want that energy to come from a source of clean energy that's relatively close to their operations. So in theory it's possible that that energy would be powering their facility, when in reality they can't actually choose which electrons come to their facility from the grid. On the other side is folks who are advocating for. It's called consequential accounting. That's the jargony term, but they're advocating for a way to basically calculate how much greenhouse gas emissions are actually being avoided by a clean energy purchase. So that hourly method, it doesn't actually tell you anything about emissions. It just tells you a purchase was made at a certain hour in a certain place. The other method would tell you, and we also think that that purchase avoided x amount of emissions.
- [45:41]
A
The benefit of the latter approach, if I'm understanding it right, is that it would incentivize companies to, to get rid of or to like pay attention to the most emissions intensive part of their electricity emissions profile fast.
- [45:55]
C
Not quite.
- [45:56]
B
The main benefits of the consequential accounting is you wouldn't have to worry about hourly matching, you wouldn't have to worry about where you're buying this electricity. You can be an Amazon data center in West Virginia and you can buy solar credits in India or in somewhere else in the world, but somewhere where you know that they're going to be most impactful in terms of emission reductions and get a lot more bang for your buck. It's all about maximizing the impact of the dollar spent and having the flexibility to purchase clean energy anywhere in the world. The problem with that, what that introduces is a lot of difficult accounting questions around if you're purchasing solar in India, would it have been built anyway if you hadn't purchased it? Because it's a growing solar market and so it's just really hard. You're basically trying to estimate a counterfactual what would have happened if I didn't make this purchase. And that's tricky.
- [46:53]
A
Interesting. Okay Matt, what's the biggest non trump non price story of the year?
- [46:57]
D
It sounds obvious, but you know, the world's largest emitter of greenhouse gases by far is China. And by all indications their emissions have peaked either this year or last year. It's just something that we've covered because of the massive expansion of renewable energy and also how their economy has shifted to be a little less carbon intensive. And then I'd say a big piece of news that last week, for the first time, they put out some actual national targets about reducing their emissions by 2035, which brings them past that 2030 line that they were using before. And it's before it was like, carbon dioxide emissions will peak by 2030, which they did early. Now they're saying all greenhouse gas emissions will decline by, I think, 7 to 10% by 2035. And while this commitment is not sufficient to say, meet the Paris goals, one and a half to two degrees Celsius, it is the most substantive, clear commitment by the Chinese government over an actionable period of time to, to reduce their emissions. I think they have a goal of getting that zero by sign, like 2060. But this is like a, this is a real emissions reduction goal.
- [48:04]
B
I think it's also significant because, and I guess this does bring it back to Trump, but this is technically, I believe, China's ndc, their nationally determined contribution under the Paris Agreement. And with this being the year that the US Is no longer in the Paris Agreement, and this is, you know, all countries were supposed to have updated targets for 2030. And so this is China's first target for 2030. They've never set a near term target before. So I think it's just significant that they're kind of coming back into the Paris Agreement, even though it's a relatively weak target. The fact that they're making it, I think in contrast to the US Being totally out, it's like they're stepping into the leadership role a little bit.
- [48:49]
D
I mean. Yeah, I mean, what's interesting is that the dream of a coordinated global response, of global missions, targets, something dreamed up by Western diplomats in the 1990s, which was realized in the Paris Agreement. China is now kind of stepping into the leadership of this kind of international scheme to ameliorate climate change. At the same time the United States has abandoned it. And I think that has significant as for reasons that have nothing to do with climate change, just from geopolitics and like, who is going to be the leader of these institutions when the United States has taken such a decided turn back from them?
- [49:26]
A
And it's like a story across the board too. This is happening with the imf, it's happening with the United Nations. It's like a number of these multilateral global institutions that were created basically to be housed in the United States, in which the United States would play a defining role, are now, increasingly, the key impetus for them is coming from China.
- [49:45]
C
Well, one more interesting facet of China's goal is that it said 7 to 10% from their peak emissions, not some earlier time like 2005 or 1990 when their emissions were lower, which would require greater emissions reductions. Rather, they didn't even say a year. They didn't say peak as of this year, which some people have said that China's emissions have already peaked. So they're giving themselves a lot of wiggle room in that goal.
- [50:11]
A
Jillian, do you have a non Trump, non electricity story?
- [50:14]
C
I think that a story that I have been intrigued by, that I think is very important that and I should preface it with I'm not a scientist and haven't been deep enough in this story for exactly the reasons that we've been discussing. But the foundational text of Heat Map News is climate science is over. The end of Climate Science. We've reached the end of climate science.
- [50:41]
A
I wouldn't call that the foundation.
- [50:42]
C
It's like the first story if you get to the bottom of the infinite scroll, I believe it's story number one.
- [50:49]
A
Yes, but no, it was called the End of Climate Science. Yes, in a Fukuyama is sense.
- [50:54]
C
Yes, yes, exactly. But I think that in this, in a Fukuyama esque way to give context.
- [50:59]
A
Yes, exactly.
- [51:00]
C
I think that in a Fukuyama esque way we can say that in the past year, year and a half, climate science has come roaring back. There are some really big unanswered questions about the oceans got really hot and nobody really understands why. And we should probably have a better understanding of that. And I think a lot of them fall under the umbrella of is climate change accelerating? Because if the answer is yes, that changes the policy response and policy priorities a lot.
- [51:34]
A
I just want to say as the author of the End of Climate Science, that the idea of that post was never that climate science has ended. It's that the project envisioned by climate science of getting the world convinced of justifying the need for global decarbonization. Right. The initial project of like we're going to be able to collect all this data and then we're going to know climate sensitivity better. Like we know the climate sensitivity. And then the idea was the question now is what happens as we ramp down our emissions. I guess the rebuttal though is maybe we don't know climate sensitivity if the planet is warming faster than we thought on. So every week here on Shift Key, we do a little segment. We call up shift downshift and we pull One item of news from the big bad world of climate change and decarbonization and energy and if it's making us, if that item is making us feel more upbeat about climate change, then we call it an upshift. If we, if it's making us more downbeat about climate change, we call it a downshift. You're always on the other side of the mic for this one. You're always on the other side of the virtual recording studio. What do you have to share with the class today?
- [52:42]
C
This might be my first shift.
- [52:45]
A
I think it's your first shift.
- [52:46]
C
So I have a downshift today which is that if you are listening to this and you have not yet purchased an electric vehicle in the United States, it is too late to take advantage of the consumer electric vehicle tax credit. This is the 7,500 up to $7,500 tax credit for buying an electric vehicle that was re established in the Inflation Reduction act and then dramatically curtailed in the one big beautiful bill Act. This is bad news for anyone who's interested in buying an electric car there. It is important to mention that there are still some state level rebates. So you should do your research before you give up on the prospect of buying an electric vehicle as too expensive for you now that this federal tax credit has ended. But it is $7,500 that is no longer on the table.
- [53:37]
A
Definitely a big downshift. Emily, what's your upshift or downshift for us?
- [53:42]
B
Okay, mine is just a story that I read in E. News this morning that says that the Department of Energy has added climate change and emissions to their banned words list. This was specifically an email sent out to staff, I believe by the Office of Energy Efficiency and Renewable Energy, which is like the office at Department of Energy focused on renewable energy. And yet folks who work there can no longer use the words climate change, green decarbonization, or emissions in any of their sort of like requests for applications to grants and things like that. And I don't know, I guess on the one hand maybe this doesn't matter that much and maybe not saying climate change could be good politically in the long term, but it's just that policing of language and removing the underlying reason of why we want these things, why we want renewable energy, is just sad.
- [54:36]
A
Matt?
- [54:37]
D
Yes, my upshift of the week is some recent comments made by executives in the oil and gas industry, both a Dallas Fed survey and the New York Times story where they are lamenting the Trump administration's treatment of the offshore wind of the wind industry because they fear this ability of the executive branch to cancel, obstruct, interrupt, disrupt large scale long term infrastructure projects because they're worried about it happening to them. Some choice quotes Toby Rice of EQT Corp. Big natural gas company. This is the New York Times. I feel for the wind guys, man, I know exactly how it feels when you have an energy project that's close to getting built, getting stopped. I would like to see a world where that doesn't happen happened. Darren woods, the chief executive of ExxonMobil ever changing policy, particularly as administrations change, is not good for business, it's not good for the economy and ultimately it is not good for the people. And then there's also an anonymous Dallas Fed survey respondent who said day to day changes to energy policy is no way for us to win as a country. Investors rightly avoid investing in energy of all types now because of volatility of underlying business results as well as quote stroka with pen risk that the federal government wields as it relates to long duration energy developments. And the reason I see this as an upshift is because, I mean for two reasons depending on which of the two perspectives of climate policy you take. You know, this is a good thing, is it could be a good thing because you're like, oh great, a Democrat will win and they are going to see this, the standard that the Trump administration has set and they're just going to not care at all. Cancel all oil and gas projects on public land, stop work orders, declare war on the industry, whatever, and going to.
- [56:30]
A
Be hard to do that after you campaign on affordability, you know, so from.
- [56:33]
D
One perspective, it's like the Trump administration has gifted Democrats with these tools from a more pragmatic and I think more likely perspective is that if there were to be a permitting reform bill passed in this Congress, it will not happen without support of the oil and gas industry. And the American Petroleum Institute I think is actually pushing the ball forward on this to get Republic first. And what they need to do is get Republicans and Trump administration, who obviously does not care at all about permitting clean energy and transmission projects, to even care about a bipartisan permitting bill, something they want to be engaged in and something they want to sign. And if you have so many members of the industry making these kind of dire comments in public and really in direct relation to how the wind business is being treated right now, which is like enemy number one for the Trump administration, it could be an upshift in just that this industry, which is very influential in this administration. They see the stakes of rationalizing the permitting system for energy infrastructure projects to be quite high and so something they might want to do.
- [57:37]
C
Rob, what's your shift?
- [57:39]
A
I'm so glad you asked. I have a big downshift, which is this morning, the Department of Energy announced that it would spend $625 billion public dollars to help America's coal industry. I think this is like the biggest bailout attempt we've seen from the Trump administration yet. It includes $350 million for coal recommissioning, modernizing or retrofitting. I want to flag though something the Secretary Wright said, the current energy secretary, where he went on FOX News to talk about this big effort to bail out coal. And he talked about how important coal was not only for power generation but for steel production and how important steel production is to, like, America's economic security, blah, blah, blah, blah, blah. And I just want to say, first of all, if you haven't noticed, Chris Wright, Doug Burgum, Lee Zeldin, Doug Burgum of the Interior Department, Lee Zeldin of the EPA are going on FOX News all the time. They're on FOX NEWS all the time now. It's crazy. But second of all, this announcement from the Department of Energy has nothing to do with metallurgical coal. It has nothing to do with the kind of coal that we use to make steel, number one. Number two, the US Exports metallurgical coal. There's no reason to subsidize it further. It doesn't need our help. Number three, Congress just subsidized metallurgical coal. In the one big beautiful bill, there was a tax credit for metallurgical coal production. And what we're going to do because we have relatively fixed new steel refinery capacity in the US Is, as we've talked about on the show in the past, is take the tax credit that Congress has put forward for mining metallurgical coal, the kind of coal you use to make steel, mine more coal and then export it largely to China or like in plurality to China. I'm completely flummoxed by the administration's tact here. And I think it is a real tell that Chris Wright brought up metallurgical coal when he went on Fox because these policies are not justifiable through their effect. These policies do not strike me as justifiable through their effect on the power sector. My mind could change. But the fact that he brought up metallurgical coal when they have nothing to do with metallurgical coal. I'm sorry, I'm just really. It was a real downshift. You're heated, I'm heated up. And that will do it. For our first ever Heat Map News roundtable here at Shift Key. I want to thank Matthew Zeitlin, Jillian Goodman and Emily Planet Corvo for joining us at this roundtable. Next week, Jesse Jenkins will be back. We'll be talking about China's new ndc. Actually, we're going to have a whole episode about it. If you enjoyed this episode, you can rate us on your favorite podcast app. You can find my co panelists today on the social network of their choice. Emily, where can folks find you on online if they want to follow you more?
- [60:23]
B
I'm Emily Pont bluesky and Twitter or.
- [60:27]
D
X. Matt I am attsitelin on Twitter.
- [60:32]
A
And your avatar, crucially, is Elmo in a kind of Apocalypse now mode.
- [60:37]
D
Yes. And I'm out at Sightlyn on Blue sky, where my avatar is Harry Dean Stanton in the HBO series Big Love.
- [60:44]
C
Gillian I'm oodjillian across all platforms. That's Jillian with a J, crucially.
- [60:52]
A
And I'm obtainmeier on X. And you can find me by typing my name into Blue Sky. I don't think there's any imposters there. You've been listening to Shift Key, a production of heatmap News. Our editors are Gillian Goodman and our co panelists today, also Gillian Goodman and Nicolorcello, who has heretofore not made an appearance. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music is by Adam Cromwell. Thank you so much for listening and see you next week.