Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All right, let's do something completely different here. All right,
let me get this going, send me professional radio. All right. Oh,
look at that, I've got a power point slide instead
of actually seeing my guest. That's a that's an interesting thing.
Here's something you see every day. So I'm very pleased
to welcome to the show, Todd Snitcheller. And Todd is
(00:20):
president and CEO of the Electric Power Supply Association, and
we have a lot to talk about. So Todd, welcome
to KOA. It's good to have you.
Speaker 2 (00:31):
Thanks for having me. I'm glad to be here.
Speaker 1 (00:32):
Okay, I see like a power point slide instead of you.
Speaker 3 (00:37):
You can change that if you want, but you don't
have to. Oh. I would like to ask you. There
you go, all right, just put you on TV. There,
we just put you on TV. Oh he's on TV.
Speaker 1 (00:47):
No.
Speaker 3 (00:47):
So, by the way, you and I are the only
ones who see the video.
Speaker 1 (00:49):
Everybody else only gets the audio because there's a radio
station and not a TV station. All right, So I
would like to ask you before we jump into the
topic of the day about electricity demand from AI and
and all this stuff. I saw really an interesting adjective
about your organization. The Electric Power Supply Association, and it
(01:10):
describes it as an association of competitive power suppliers. Can
you please explain to me what competitive means in that context.
Speaker 4 (01:20):
Sure, there are parts of the country where the obligation
to provide generation has been severed from the utility, and
so competitive power suppliers compete against each other in order
to sell power ultimately to the customers. But they do
so at the wholesale level, and that's who our members are.
So we compete against each other in order to be
the least cost resource that's dispatched. And when we are
(01:44):
that means we run and we power the system. So
we have every incentive to be as inexpensive and as
reliable as possible because that's how our members actually profit
and make the money that they use to operate the system.
As opposed to our utility cousins, which have a captive
customer where they have a non bypassable charge for their
investments that are made and they recover from those customers
(02:06):
over thirty or forty years, whatever the life of the
asset is, our business model is just completely different. There's
no captive customer that pays our charges. Those costs are
borne by the investor and shareholder. So it's a completely
different business model, and it's in mostly the East, but
also California and Texas are places where that happens. And
we think that's a great model, especially as we look
(02:28):
at what we're going to talk about with load growth
and the issues that are facing us going forward.
Speaker 1 (02:33):
Interesting, do you have are any of your members in
Colorado or any of your customers in Colorado? I'm assuming
like the Giant Excel is not, but I wondered if
any of the smaller co ops might be.
Speaker 4 (02:44):
No, they're all together different, so they're members of a
different association because their business model is different.
Speaker 2 (02:49):
Although I know that our members have looked.
Speaker 4 (02:50):
At Colorado is potentially places to invest, but stand by
for future investment.
Speaker 1 (02:56):
Okay, so what we're going to talk about today is
relevant to every electric customer, actually every part of the
electricity chain, the generator, the home user, the business user,
the grid operators, absolutely everybody.
Speaker 2 (03:11):
And that is the.
Speaker 1 (03:14):
I shouldn't say likely because it's a certain increase in
electricity demand coming. Well, well, we'll focus today an AI
and data centers basically. So first one, why don't you
describe for us if you could the scale of the issue,
and then we can talk about what that will lead
to and possible solutions.
Speaker 4 (03:35):
Yeah, I think you're right to note that it's already happening.
This is not a future problem. This is a today
issue that is already being wrestled with in a lot
of the country, and probably more parts of the country
than original Originally. I mean, Loudun County, Virginia is the
place everybody knows is data center Alley. But now you're
seeing data center investment that's happening in other parts of
the country, from the Midwest to the southwest to the northwest.
(03:59):
I mean, actually everywhere has the opportunity to benefit from
deployment of data centers. And the load growth projections are
really astronomical. It's hard to pin down, and there's a
great degree of uncertainty for any number of reasons, but
some of the numbers suggest that we're going to have
to add hundreds and that's with an s hundreds of
(04:20):
gigawatts of new resources over the next ten to twenty
years in order to power the data center infrastructure that
will be needed, and that is on top of retaining
the resources that already exist. In order for us to
power the economy that's already in place as we look
at kind of the status quo today.
Speaker 1 (04:38):
Put that in context for us, how I mean, hundreds
of gigawatts could be you know, one percent of current production.
It could be fifty percent of current production. Put it
in context for US.
Speaker 4 (04:48):
Yeah, it varies, but I think it's safe to say
that it's probably close to twenty five to thirty percent
more than our installed capacity is today over the next decade.
And that number is hard to fathom when you consider
how many plants would have to be constructed, where they
would have to be interconnected, the infrastructure that would be
required to do all of those things.
Speaker 3 (05:10):
It's it's a pretty daunting task. So what do we
do about it?
Speaker 1 (05:15):
And you know, we just saw this big, beautiful bill
pass that looks like if this, if the House passes
anything like the Senate version, it's going to absolutely gut
the subsidies to wind and solar. And I don't necessarily
need to drag you into that, but I'm really happy
that the what the government is doing right now because I.
Speaker 3 (05:31):
Hate those subsidies. But what is the answer.
Speaker 1 (05:38):
To solve our well electricity shortage that we either have
or soon will have is it nuclear, is it more gas?
What is it?
Speaker 2 (05:48):
Yeah?
Speaker 4 (05:48):
I think there's a couple of likely solutions as we
look forward. But I think the objective or the problem
we're hoping to solve is that energy policy has to
match operational realities of the system. So there have been
some of us suggested that you can power the grid
with only one or two types of resources and we
should retire everything else. We have others that are married
(06:08):
to one favored resource and one certain jurisdiction as opposed
to others. And I think that delta between operational reality
and aspirational policies had grown and it is now going
to have to shrink. And part of solving that problem
is going to be the fuel types that you note.
I think we're going to need all of the above,
and that's an accurate sentiment. Nuclear is having a moment.
(06:30):
A lot of folks are interested in deploying nuclear. I
think if we can do it cost effectively, that is
going to be a tool that will have to be
utilized in the toolbox.
Speaker 2 (06:38):
But at the moment, we.
Speaker 4 (06:39):
Need to keep on what we've got and then really
the technology that is most practically available in the short
to medium term as natural gas fired resources that would
also work in concert with wind, solar, and battery storage
that's either already there or going to continue to be developed,
regardless of the outcome of whatever the legislative.
Speaker 2 (06:58):
Outcome looks like when the house is done with it.
Speaker 4 (07:00):
But I think, really, at the end of the day,
because we have such an immediate need and because the
size of the problem is so large, we're going to
need to keep what we have, and we're going to
need every electron that we can put onto the system
if we're going to do this in a way that
ensures reliability and cost effectiveness for consumers.
Speaker 1 (07:17):
We're talking with Todd Snicheler, President and CEO of the
Electric Power Supply Association ESPA dot org. I think I've
got you for about three more minutes. So there's lots
and lots of talk, and as there should be about
the requirements for new electrical power generation. There's not as
(07:38):
much talk, but I want to ask you about it,
about the requirements to connect that generation to the grid
and the requirements for the grid to handle that power.
So unless the new power is right where the old
power is, there's a lot of very expensive work to
be done and Excel Energy here is dealing with a
huge political issue right now is they're trying to run
(07:58):
lines through the state. How should we think about the
issues created for the interconnectivity and the grid. Based on
the fact that we've already talked about regarding needing more electricity.
Speaker 4 (08:12):
I think we're going to be looking at a number
of different approaches, certainly in the short to medium term,
that are going to try and address the speed to
market question that the data centers want and that they
essentially require. And so the concept of colocation or putting
your plant close to where your demand center is. So
putting a power plant nearby to a data center is
(08:33):
certainly something that's being considered. Is got open proceeding at
the Federal Energy Regulatory Commission to try and address some
of that. I think as we look at where the
Crane Clean Energy Center formerly known as Three Mile Island
has signed a contract with a data center in order
for them to restart that facility. There's been contracts with
other nuclear facilities in other parts of the country. You're
(08:53):
seeing a number of different approaches that are being tried
in order to make sure we can respond to the
demand and or the type of power at a price
that the customer is willing to pay. Some of that
may be in front of the meter, like a traditional customer.
Speaker 2 (09:06):
Some of that may be.
Speaker 4 (09:07):
Behind the meter where you're not connected to the system,
at least not initially. But I think as we look
at the next five years, you're going to see a
number of approaches that are going to be utilized in
an effort to try and sort out what is the best, fastest,
most cost effective way for us to get from here
to that data center win that everybody says that they
want to get.
Speaker 1 (09:26):
All right, last question is follow up on this, and
I'm asking I'm going to ask you for a completely
wild yes here, okay, but as a wild guess, what
percent of the new electricity requirements for data centers over
the next ten years will be will be fulfilled by
(09:48):
energy generation located right at right next to the data center?
Speaker 2 (09:54):
Boy, that's a challenging question.
Speaker 4 (09:56):
My best guess is probably somewhere between two twenty five
and thirty five percent.
Speaker 2 (10:02):
I think you're going to see that evolve over time.
Speaker 4 (10:04):
So I think what you see over the next five
years may be indicative of where the trend line goes.
But then you may see that evolve over time as
the infrastructure and the resources are built out. Just apply
the system and what looks more like a traditional approach.
Speaker 2 (10:19):
That is what happens today. But that's a TVD for sure.
Speaker 1 (10:22):
Todd Snicheller is President and CEO of the Electric Power
Supply Association ESPA dot org. Thanks for your time, fascinating conversation.
Look forward to having you back.
Speaker 2 (10:34):
Thanks so much.
Speaker 3 (10:34):
All right,
All right, let's do something completely different here. All right,
let me get this going, send me professional radio. All right. Oh,
look at that, I've got a power point slide instead
of actually seeing my guest. That's a that's an interesting thing.
Here's something you see every day. So I'm very pleased
to welcome to the show, Todd Snitcheller. And Todd is
(00:20):
president and CEO of the Electric Power Supply Association, and
we have a lot to talk about. So Todd, welcome
to KOA. It's good to have you.
Speaker 2 (00:31):
Thanks for having me. I'm glad to be here.
Speaker 1 (00:32):
Okay, I see like a power point slide instead of you.
Speaker 3 (00:37):
You can change that if you want, but you don't
have to. Oh. I would like to ask you. There
you go, all right, just put you on TV. There,
we just put you on TV. Oh he's on TV.
Speaker 1 (00:47):
No.
Speaker 3 (00:47):
So, by the way, you and I are the only
ones who see the video.
Speaker 1 (00:49):
Everybody else only gets the audio because there's a radio
station and not a TV station. All right, So I
would like to ask you before we jump into the
topic of the day about electricity demand from AI and
and all this stuff. I saw really an interesting adjective
about your organization. The Electric Power Supply Association, and it
(01:10):
describes it as an association of competitive power suppliers. Can
you please explain to me what competitive means in that context.
Speaker 4 (01:20):
Sure, there are parts of the country where the obligation
to provide generation has been severed from the utility, and
so competitive power suppliers compete against each other in order
to sell power ultimately to the customers. But they do
so at the wholesale level, and that's who our members are.
So we compete against each other in order to be
the least cost resource that's dispatched. And when we are
(01:44):
that means we run and we power the system. So
we have every incentive to be as inexpensive and as
reliable as possible because that's how our members actually profit
and make the money that they use to operate the system.
As opposed to our utility cousins, which have a captive
customer where they have a non bypassable charge for their
investments that are made and they recover from those customers
(02:06):
over thirty or forty years, whatever the life of the
asset is, our business model is just completely different. There's
no captive customer that pays our charges. Those costs are
borne by the investor and shareholder. So it's a completely
different business model, and it's in mostly the East, but
also California and Texas are places where that happens. And
we think that's a great model, especially as we look
(02:28):
at what we're going to talk about with load growth
and the issues that are facing us going forward.
Speaker 1 (02:33):
Interesting, do you have are any of your members in
Colorado or any of your customers in Colorado? I'm assuming
like the Giant Excel is not, but I wondered if
any of the smaller co ops might be.
Speaker 4 (02:44):
No, they're all together different, so they're members of a
different association because their business model is different.
Speaker 2 (02:49):
Although I know that our members have looked.
Speaker 4 (02:50):
At Colorado is potentially places to invest, but stand by
for future investment.
Speaker 1 (02:56):
Okay, so what we're going to talk about today is
relevant to every electric customer, actually every part of the
electricity chain, the generator, the home user, the business user,
the grid operators, absolutely everybody.
Speaker 2 (03:11):
And that is the.
Speaker 1 (03:14):
I shouldn't say likely because it's a certain increase in
electricity demand coming. Well, well, we'll focus today an AI
and data centers basically. So first one, why don't you
describe for us if you could the scale of the issue,
and then we can talk about what that will lead
to and possible solutions.
Speaker 4 (03:35):
Yeah, I think you're right to note that it's already happening.
This is not a future problem. This is a today
issue that is already being wrestled with in a lot
of the country, and probably more parts of the country
than original Originally. I mean, Loudun County, Virginia is the
place everybody knows is data center Alley. But now you're
seeing data center investment that's happening in other parts of
the country, from the Midwest to the southwest to the northwest.
(03:59):
I mean, actually everywhere has the opportunity to benefit from
deployment of data centers. And the load growth projections are
really astronomical. It's hard to pin down, and there's a
great degree of uncertainty for any number of reasons, but
some of the numbers suggest that we're going to have
to add hundreds and that's with an s hundreds of
(04:20):
gigawatts of new resources over the next ten to twenty
years in order to power the data center infrastructure that
will be needed, and that is on top of retaining
the resources that already exist. In order for us to
power the economy that's already in place as we look
at kind of the status quo today.
Speaker 1 (04:38):
Put that in context for us, how I mean, hundreds
of gigawatts could be you know, one percent of current production.
It could be fifty percent of current production. Put it
in context for US.
Speaker 4 (04:48):
Yeah, it varies, but I think it's safe to say
that it's probably close to twenty five to thirty percent
more than our installed capacity is today over the next decade.
And that number is hard to fathom when you consider
how many plants would have to be constructed, where they
would have to be interconnected, the infrastructure that would be
required to do all of those things.
Speaker 3 (05:10):
It's it's a pretty daunting task. So what do we
do about it?
Speaker 1 (05:15):
And you know, we just saw this big, beautiful bill
pass that looks like if this, if the House passes
anything like the Senate version, it's going to absolutely gut
the subsidies to wind and solar. And I don't necessarily
need to drag you into that, but I'm really happy
that the what the government is doing right now because I.
Speaker 3 (05:31):
Hate those subsidies. But what is the answer.
Speaker 1 (05:38):
To solve our well electricity shortage that we either have
or soon will have is it nuclear, is it more gas?
What is it?
Speaker 2 (05:48):
Yeah?
Speaker 4 (05:48):
I think there's a couple of likely solutions as we
look forward. But I think the objective or the problem
we're hoping to solve is that energy policy has to
match operational realities of the system. So there have been
some of us suggested that you can power the grid
with only one or two types of resources and we
should retire everything else. We have others that are married
(06:08):
to one favored resource and one certain jurisdiction as opposed
to others. And I think that delta between operational reality
and aspirational policies had grown and it is now going
to have to shrink. And part of solving that problem
is going to be the fuel types that you note.
I think we're going to need all of the above,
and that's an accurate sentiment. Nuclear is having a moment.
(06:30):
A lot of folks are interested in deploying nuclear. I
think if we can do it cost effectively, that is
going to be a tool that will have to be
utilized in the toolbox.
Speaker 2 (06:38):
But at the moment, we.
Speaker 4 (06:39):
Need to keep on what we've got and then really
the technology that is most practically available in the short
to medium term as natural gas fired resources that would
also work in concert with wind, solar, and battery storage
that's either already there or going to continue to be developed,
regardless of the outcome of whatever the legislative.
Speaker 2 (06:58):
Outcome looks like when the house is done with it.
Speaker 4 (07:00):
But I think, really, at the end of the day,
because we have such an immediate need and because the
size of the problem is so large, we're going to
need to keep what we have, and we're going to
need every electron that we can put onto the system
if we're going to do this in a way that
ensures reliability and cost effectiveness for consumers.
Speaker 1 (07:17):
We're talking with Todd Snicheler, President and CEO of the
Electric Power Supply Association ESPA dot org. I think I've
got you for about three more minutes. So there's lots
and lots of talk, and as there should be about
the requirements for new electrical power generation. There's not as
(07:38):
much talk, but I want to ask you about it,
about the requirements to connect that generation to the grid
and the requirements for the grid to handle that power.
So unless the new power is right where the old
power is, there's a lot of very expensive work to
be done and Excel Energy here is dealing with a
huge political issue right now is they're trying to run
(07:58):
lines through the state. How should we think about the
issues created for the interconnectivity and the grid. Based on
the fact that we've already talked about regarding needing more electricity.
Speaker 4 (08:12):
I think we're going to be looking at a number
of different approaches, certainly in the short to medium term,
that are going to try and address the speed to
market question that the data centers want and that they
essentially require. And so the concept of colocation or putting
your plant close to where your demand center is. So
putting a power plant nearby to a data center is
(08:33):
certainly something that's being considered. Is got open proceeding at
the Federal Energy Regulatory Commission to try and address some
of that. I think as we look at where the
Crane Clean Energy Center formerly known as Three Mile Island
has signed a contract with a data center in order
for them to restart that facility. There's been contracts with
other nuclear facilities in other parts of the country. You're
(08:53):
seeing a number of different approaches that are being tried
in order to make sure we can respond to the
demand and or the type of power at a price
that the customer is willing to pay. Some of that
may be in front of the meter, like a traditional customer.
Speaker 2 (09:06):
Some of that may be.
Speaker 4 (09:07):
Behind the meter where you're not connected to the system,
at least not initially. But I think as we look
at the next five years, you're going to see a
number of approaches that are going to be utilized in
an effort to try and sort out what is the best, fastest,
most cost effective way for us to get from here
to that data center win that everybody says that they
want to get.
Speaker 1 (09:26):
All right, last question is follow up on this, and
I'm asking I'm going to ask you for a completely
wild yes here, okay, but as a wild guess, what
percent of the new electricity requirements for data centers over
the next ten years will be will be fulfilled by
(09:48):
energy generation located right at right next to the data center?
Speaker 2 (09:54):
Boy, that's a challenging question.
Speaker 4 (09:56):
My best guess is probably somewhere between two twenty five
and thirty five percent.
Speaker 2 (10:02):
I think you're going to see that evolve over time.
Speaker 4 (10:04):
So I think what you see over the next five
years may be indicative of where the trend line goes.
But then you may see that evolve over time as
the infrastructure and the resources are built out. Just apply
the system and what looks more like a traditional approach.
Speaker 2 (10:19):
That is what happens today. But that's a TVD for sure.
Speaker 1 (10:22):
Todd Snicheller is President and CEO of the Electric Power
Supply Association ESPA dot org. Thanks for your time, fascinating conversation.
Look forward to having you back.
Speaker 2 (10:34):
Thanks so much.
Speaker 3 (10:34):
All right,
The Ross Kaminsky Show News
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