Inside Trump's Energy Affordability Strategy, with DOE's Alex Fitzsimmons

Julia (00:00.034)
Hey Brandon, you and I were at the first World Cup game in LA. Super energy. How'd you find it?

Brandon (00:05.703)
It was amazing and I'm just jealous that you had better seats than me, Julia. But I had such a good time.

Julia (00:12.102)
Sports ball, yay. I know my friend was like, I'm gonna use a t shirt that says, I just hope both teams have fun, which is absolutely how I feel. One guy got an own goal for from Paraguay and I felt so bad for him. Neil, you had your own sports outing. How are you doing?

Neil (00:26.286)
В had a blast, so I was in New York this weekend. My son wanted to see

Chess on Broadway before it closed. Didn't realize when we booked the tickets that it would coincide with New York City hosting the World Cup and the Knicks winning the NBA title. It was absolute stimulus, overload. And then I returned home to DC and booked it out to the golf course to take a bunch of former Buffalo Bills slash Washington commanders, London Fletcher, Derek Dockery, Antoine Randall L out onto the golf course. I would like the records to reflect I beat Antoine.

Randall Allen, serious NFL star by eight strokes. And current Chicago Bears wide receiver scope.

Brandon (01:04.798)
And Chicago Bears coach.

Brandon (01:09.614)
Spare down. I think we've covered every sport here except for the UFC match at the White House.

Neil (01:15.971)
Yeah.

Julia (01:24.034)
Welcome back to Political Climate, brought to you with support from ClearPath, a leading conservative advocacy organization working to accelerate American innovation to reduce global energy emissions. I'm your host, Julia Piper, and by day I'm Vice President of Public Affairs at the sustainability-focused fintech company Goodleap. For years, America's energy debate was largely about transition, what fuels to move away from and what technologies to build next. Now, a different challenge is taking center stage.

Can the United States produce enough energy to power AI, advance manufacturing, and economic growth without sacrificing affordability, reliability, or national security? What comes first when the country needs all of them at once? This week we sit down with Alex Fitzsimmons, Associate Deputy Secretary of Energy, to discuss the Trump administration's energy affordability agenda amid the race to add new power capacity. It's a wide-ranging conversation on everything from power market reforms to how the DOE is leveraging loans and grants to a new golden age for nuclear.

And much more. We unpack the administration's energy priorities and why they believe rising energy demand can actually lower prices over time. That's all coming up on Political Climate.

Julia (02:32.27)
As always, I'm joined by Brandon Hurlbutt, who served as chief of staff in President Obama's energy department and went on to found Boundary Stone Partners and Overture VC. Brandon, I know you're traveling again this week. What's on the docket?

Brandon (02:42.926)
This week I'm Chicago for the Obama Presidential Center grand opening. So I'm gonna see all my old friends and colleagues and really excited to be there.

Julia (02:52.142)
Those be some interesting rooms to be in. Curious to get the readout once you come back. We're also joined by Neil Chatterjee, who served as an energy advisor to Senator Mitch McConnell and as chairman of the Federal Energy Regulatory Commission under President Trump's first term. He is now Chief Government Affairs Officer at Palmetto, a clean tech developer. So big news in the energy world this week. Neil, right up your alley. FERC just dropped its response to the advanced notice of proposed rulemaking, a noper initiated last year on large load interconnection. Hot off the presses.

As we record this, what's your two minute hot take? You know, we'll have to unpack this on a future episode. But as a former FERC commissioner, what do you make of it?

Neil (03:29.26)
Yeah, look, it was really, really interesting and a bit of a surprise. I think in the run up to the FERC meeting, a lot of people, myself included, assumed that FERC might go the direction of a notice of proposed rulemaking, of taking the proposal that DOE had sent and converting it into a nationwide rule that would apply everywhere. Instead, what the commission did at the last minute made a change and they opted to use their authority under the section two.

Of the Federal Power Act to instead go region by region to basically have the different competitive power markets that about two-thirds of Americans live in the footprint of these power market regions, and basically have them say, look, either the way we're doing things is just and reasonable and defensible, or we've got to propose some changes to figure out how to

How do we get power to these data centers while maintaining reliability and affordability? It was a very sort of FERC maneuver. I think some will interpret it as a rejection of DOE's proposal to the commission. I don't think that's right. I think what they did was basically take a FERC process that will

Ultimately achieve the same objectives that Secretary Wright laid out in the Anoper, but do it in probably a slightly faster, more legally defensible way. Now I want to be clear, this is just the starting gun. There's a long way to go. You know, there's a tight timeline. The competitor power markets have 60 days to come back to the commission. Depending on what they come back with, the devil will really be in the details there. But I think this was a good first step. Not everybody agrees. I think there is some grumble.

On the part of some of the hyperscalers who thought FERC would go bigger, who thought FERC would go bolder, who kind of feel like, hey, if FERC was gonna do this, why didn't you do it a year ago? Why wait till now? And this could really get bogged down in process. But at the end of the day, this is so complicated. It's so challenging from a legal and implementation perspective. I think FERC.

Neil (05:36.874)
chose a more cautious path to avoid getting bogged down in a bunch of litigation. And I think generally, at least in FERC world, there's almost unanimous support for this. And that's the final piece of this that's so interesting. The commission vote was 5 0, bipartisan vote, you know, really in response to what was an elegantly crafted proposal from DOE. So for all of the talk of polarization in Washington and polarization in energy, at least when it comes to this issue, Republicans and Democrats seem to be working

Together on it.

Julia (06:08.02)
Well, this is not the end of this conversation. We'll surely come back to it. And while we spoke to Alex Fitzsimmons before this announcement, this is a thread we do pull on in our interview. And not only when it comes to just the A NOPER and AI large load interconnection, but really the broader picture of how we meet rising demand today in America and the Trump administration's energy priorities.

Alex is an excellent guest to talk about this. He is officially the Associate Deputy Secretary of Energy and Senior Advisor to Energy Secretary Chris Wright. He recently served as the acting under-secretary of energy and previously helped lead the department's work on energy efficiency as well as energy security and cyber threats. Before joining DOE, Alex worked with our podcast sponsor, Clear Path. He also has direct experience working in the energy industry.

He really has a depth of expertise and can speak in detail to a lot of pieces of the energy puzzle. So without further ado, let's turn to our interview with Alex. Associate Deputy Secretary of Energy, Alex Fitzsimmons, welcome to political climate.

Alex (07:06.498)
Thanks for having me. It's great to be here.

Julia (07:08.014)
So we wanna jump right in. You are a busy guy and we wanna make the most of this conversation. We have a lot we wanna cover with you. So let's start with the affordability agenda. This is something that we're hearing a lot about from energy decision makers to the average person on the street in America right now. Frankly, we're going into summer, people are looking at how

They can spend their dollars, where can they travel to? What is their air conditioning bill going to be like? And I know you're thinking a lot about affordability. And you're specifically working to implement the president's ratepayer protection pledge. I've seen you describe this as quote, the framework to reindustrialize America, win the AI race against China, and to lower energy costs for the American people. Go a little bit deeper though. What does that agenda really mean to you? And how are you starting to implement it?

Alex (07:48.14)
Yeah, of course, it's a great question, Julia. And so first, I'd say President Trump and Secretary Wright are committed to building a more affordable, reliable, and secure energy system. We know that energy demand is rising and that we need to meet this challenge as cost-effectively as possible. Now, higher demand can actually be a pathway to lower energy prices over time, but we have to get it right. And so this is why President Trump convened this historic.

Meeting at the White House a week after the State of the Union address, convene the leading technology companies in the country who signed the president's ratepayer protection pledge. And what they agreed to do is something that's never been done at this scale or scope before in the US power sector to

Buy, bring, or build all of the new generation that they need to meet rising energy demand, to pay for all of the network upgrades and transmission investments that they need to serve their incremental load. They agreed to enter into long-term take or pay agreements that would hold residential ratepayers harmless, regardless of whether they end up using that energy or not. And then finally, they agreed to increase the amount of investments that they're making in their local communities, which go beyond the energy benefits of the load that they're bringing.

And so what we have seen since that meeting at the White House that the president convened, a number of states and localities are implementing the president's pledge in real time. So we're seeing a lot of places around the country that are implementing large load tariffs and a number of utilities that are implementing common sense energy policies that

Are resulting in rate freezes and rate reductions. And so we have a few really important examples of that. I think the biggest is Georgia power and Alabama power.

Alex (09:33.206)
Who have also leveraged low-cost DOE financing to support construction of new infrastructure that they need to serve a lot of these large loads. And they have announced multi-year rate freezes and rate reductions as a result of our low-cost financing and getting the policy right to accommodate new large load. Other utilities like Indiana Michigan Power have announced that they're gonna be filing for rate reductions this year.

Owing to load growth from AI data centers. DTE Energy in Michigan recently announced rate freezes through at least 2028 for the same reasons. You look at Louisiana, Entergy has what they call a fair share plus framework that looks and sounds very similar to the president's ratepayer protection pledge, where these large load customers, including data centers, agree to pay for the full cost of service and contribute additional local benefits to the community. And so

We see a lot of places where this model is working. And so what we've been focused on, the Trump administration, is this three-pronged strategy to stabilize, optimize, and grow the energy system, which I'm happy to get into. It's about preventing the premature retirement of reliable, dispatchable assets that we have today, making better use out of the existing system. The US electric system is only utilized at about a 50% rate, the vast majority of the time, although the system is.

Built to meet system peaks. And then of course, we need to grow the supply of especially reliable, dispatchable generation that gets its capacity accredited at peak demand. And so what you see is

This potential inversion of typical supply and demand dynamics that exist in almost every other sector of the economy, except for this case, where normally rising demand would increase prices. That is not necessarily true based on how the utility business model works. If the rate base grows faster than the Cap X, you're spreading CapEx over a larger rate base. That puts downward pressure on prices.

Alex (11:31.476)
If you get the policy right, if you implement the president's ratepayer protection pledge. So that is the path that we see. Lower energy prices is more growth, not less growth. So I

Neil (11:41.074)
We're recording this on Tuesday, June 16th. My former colleagues in the Federal Energy Regulatory Commission are gonna act on Thursday, potentially on a notice-proposed rulemaking in response to DOE's advanced notice-proposed rulemaking to basically lay out the framework for how to do this. I've been very vocal. I thought what DOE put together was very elegant, was very sophisticated.

It is not without controversy. The states are nervous about FERC getting this massive expansion of authority and overruling their historic jurisdiction over retail rates. You've got monopoly utilities who don't like the idea of FERC intervening. But man, I feel like everything you just laid out, like we need a win here. And FERC's an independent quasi-judicial body. So I'm just asking you your general opinion.

How hard should they go here?

Alex (12:38.742)
It's a great question, Neil. We look forward to seeing what FERC produces. Like I'd refer you back, as you know, to the A NOPER that the Secretary sent to FERC, which included a series of principles that the Secretary would like to see in the A NOPER. And they incorporate a lot of the things that have since been incorporated into the president's ratepayer protection pledge. It's about how can we cost effectively achieve speed to power? This is a goal that

We all share. And we see states, utilities, jurisdictions that are pursuing common sense energy policy where they are preserving as much reliable dispatchable generation as they can, where they're optimizing the use of what they already have, strategically investing in upgrading the transmission system. And when they are trying to procure more reliable capacity that shows up during system peaks, and then they combine that with.

Policies, large load tariffs that implement the principles of the pledge that shield residential ratepayers from the incremental cost of serving large loads. And that will look different in different jurisdictions, of course, whether you're talking about a vertically integrated utility like Southern Company, Georgia Power, and Alabama Power.

Outside of an RTO versus other utilities that I mentioned who are operating inside RTOs, some of them own generation, some of them just own the wires. So it'll look different in different locations, but the principles remain the same. And what we're already starting to see is that regions that are incorporating these principles of buying, bringing, or building your own generation, paying for the network upgrades, long-term take or pay, investing in the local communities, they're seeing.

Positive results. And so we would only expect that to continue, and we would only expect any action out of FERC to complement what's already happening.

Julia (14:29.538)
So I understand you're you're talking a lot, Alex, about the context of within utility tariffs. My understanding is that the utilities are the more skeptical parties of this A NOPER concept, but it sounds like they're already embracing some of these principles. Can you demystify for me what's so new and novel and how it maybe challenges the ways that traditional utility rate making has worked when it comes to the A NOPER? Or am I missing something here?

Alex (14:51.032)
I think look t typically you would rate base everything and spread the

Brandon (14:55.959)
Fixed cost.

Alex (14:56.438)
Costs across a larger rate base, and that may or may not lower or raise prices based on whether the CapEx is growing faster than the rate base. The president's pledge is a novel approach which recognizes that we need to be leaders in the 21st century, we need to win the AI race against China, but that residential ratepayers should not be shouldering the burden of the incremental cost of service to bring these new loads online and serve them. So

The pledge is the formula to make sure that the rate base can grow faster than the capex that's being spread across the entire rate base, and that as much capex that's required to serve data center load is being paid for by the data centers, which

Will be used by the data centers, but in many cases, will also benefit all of the ratepayers. So now we have a formula where we're investing in energy infrastructure that's needed to meet rising energy demand that hyperscalers and data centers are paying for, but that everyone will see the benefits of. And when I talked about more growth being the path to lower energy prices, not less growth.

There's actually strong data behind this. All of this is from EIA. You look at over the last five years, the states with the biggest reduction in electricity demand over the last five years, it's California, Maine, Connecticut, Massachusetts, and Hawaii. The biggest reduction in demand over the last five years have seen electricity prices rise by fifty-eight percent.

Compare that to the states that have grown their electricity demand the most over the same period of time, have only seen their rates rise by an average of 13% over the last five years, which is well below the rate of inflation. So those states are North Dakota, New Mexico, Texas, Oregon, and Virginia. And in the case of North Dakota, North Dakota increased its electricity demand by 67% over five years, and they're paying six percent less for electricity than they were even 10 years ago.

Alex (16:56.002)
That's why we make this point that we need to lean into growth. Growth is a good thing. It will put downward pressure on prices over time in places that have common sense energy policy and implement the president's rate payer protection.

Brandon (17:08.748)
A lot of renewables in those states you mentioned, but I want to ask you a different question. First of all, I can see you're sitting in the horseshoe at the DOE and I spent, you know, many years there. Thank you for your service. I know how hard your job is. Thank you.

I wanted to ask you about the energy dominance financing office. When I was there, it was called the loan program office. And we had a lot of debates about how you use that capital. So Treasury did not want us to crowd out private sector capital, wanted us to take more risk. The Office of Management Budget just wanted the taxpayers to get paid back. We ended up, you know, catalyzing some new technologies like utility scale solar and EVs with Tesla. We were the first money in. And then once we proved that those technologies could work.

The DOE got out and the private sector financed it from there. That's how we saw the best use of that program. How are you planning to use the program and balance that risk? I see you've done, you know, four deals so far. What are you expecting to do in the future? Are you going to take some risks to catalyze new industries, or do you want to use that money just in a way that taxpayers certainly get paid back?

Alex (18:11.107)
Thanks for the question, Brandon. And thanks for your service as well, you know, back in the day.

Brandon (18:14.72)
So gray hairs, gray hairs, a lot of them from that. Yeah. I hope you're it's not touching you yet, so that's good.

Alex (18:21.434)
I I am so glad that you can't see that on the camera. So, what I'd say to that is President Trump Secretary Wright revitalized, reinvigorated what was the loan program office. It's now the DOE office of energy dominance financing. I mean, who would have thought we'd become the largest energy lender in the United States now? But we have about two hundred and fifty billion dollars worth of lending authority, and we view EDF as a key tool to advance the president's agenda.

What we are focused on in some of the deals that you've seen is adding as much affordable, reliable, secure energy, especially dispatchable generation, to meet rising energy demand. And so a couple months ago.

DOE closed this historic loan package with Georgia Power and Alabama Power, $26.5 billion deal, which was the largest loan package in the history of the federal government outside the financial crisis. Not just DOE, the entire federal government outside the financial crisis. That is obviously a very low-risk loan, loan package. It's really hundreds of individual projects, because of course, Georgia Power and Alabama Power have strong balance sheets, very well capitalized.

This is an encapsulation of the president's energy dominance agenda. It includes six gigawatts of nuclear upgrades and life extensions, five gigawatts of new natural gas generation, three and a half gigawatts of battery energy storage, a gigawatt of hydropower up rates, 1,300 miles of transmission, both new and existing, and it will result in seven billion dollars worth of ratepayer savings that are passed along directly to residents.

In Georgia and Alabama in the form of lower interest rates. Because as you know, EDF has the lowest cost of capital that you can get. We can lend at very competitive rates. And the utilities have to pass those interest rate savings along directly to ratepayers. That has allowed Georgia Power and Alabama Power to file for multi-year rate reductions while building all of this new energy generation and transmission that's going to be needed to meet load growth in their service territory. And

Alex (20:30.96)
So now after we close that loan package, we have major energy companies coming to us now and asking for that quote

Southern style deal. We have a huge portfolio of projects, actually oversubscribed in EDF. Our goal is to run out of lending authority in the next year and have to go back to Congress and ask for more. But we're going to finance projects that we think have the reasonable prospect of repayment, our good investment for taxpayers and a good investment for ratepayers that will build more reliable generation and transmission and put downward pressure on energy prices.

Julia (21:03.18)
What about more innovative solutions? When we optimize for commercialized technologies less risky, totally understand why that's a beneficial. But do we also need to make sure we're bringing up the next generation of innovative technology supporting American entrepreneurs? How do you balance that need as well?

Alex (21:18.936)
Yeah, that's certainly the case. And it's a question of what funding vehicle you use for it. So EDF, our lending authority, is not going to be a good fit for really early stage technologies. We do larger scale deals, first of kind, nth-of-a-kind type of projects, but we've seen a number of companies grow up through the DOE system.

From RPAE, which maybe a $1 million to $10 million type of grant of non-dilutive capital, all the way through to EDF. And like first of a kind pilots, scale up projects all the way to commercial scale technologies on the order of 1 billion or more. I think a great example of this of a company that's grown up through the DOE system Fervo Energy.

Julia (22:05.854)
Geothermal company.

Alex (22:06.872)
You look at next generation geothermal technology, where this was a company that received funding from ARPE, received small amounts of DOE funding along the way, but at strategic points in time, that catalyzed new private sector investment. So combined with the technological advances that they were making along the way. And it took a while, right? And Fervo Energy just had an IPO, but Tim and Sarah and the whole team over there have been hard at work trying to get the time and cost of drilling down for years. And you think,

Strategically timed government investments allowed them to cross multiple valleys of death. There's not just one, there's multiple valleys of death to commercialize a new technology like that. And it provided some confidence to investors that this is a technology that can work. And so it was patient capital, strategically timed, that they were able to leverage to reach the scale that they've reached now, where they are signing commercial deals.

Brandon (23:05.95)
I Neil's gonna want to jump in and brag about FERC 2022 at some point here. So, but I just have one follow-up to that. What you described is the best part of the DOE. And I get a lot of questions from our listeners, and I'm hoping you can explain this. There's all these many billions of dollars, tens of billions of dollars from the bipartisan infrastructure law and the inflation reduction act that went for the kind of grants that you're talking about: first of a kind financing, Office of Clean Energy Demonstrations, Manufacturing Energy Supply Chain Office.

A bunch of that was all frozen when you all took office. And then some of those grants were released, I believe. Some of them were canceled. And then there's like a court thing going on right now where they're trying to decide whether some of those canceled projects was like legal. And then there's a some that are still stuck in purgatory, I think. So can you just explain where we are and all this process with the grants and what's happening?

Alex (23:59.0)
Sure. As you mentioned, we came in on day one. There was a lot of money moving in and out of this building. Any administration comes in, they conduct a comprehensive review of the entire portfolio. We did that. Individual office directors, office leads conducted an individual review based on a set of criteria. We needed to make sure that the investments that we're making made financial and economic sense. You have to have a business case for the product, the technology that you're working on, even if

If it's not commercially ready, we needed to be able to see a path to commercial viability and it needs to make economic sense. And it has to be technologically sound. So that was the basis upon which we conducted our review. We have moved forward with a lot of projects, and we will continue to review the entire portfolio on an ongoing basis because we owe it.

To the American people, to taxpayers, to be good stewards of taxpayer resources and to make sure that we are spending our incremental funding, whether it's base funding, IIJA, IRA funding, whatever it is, that we are making the best investments we have with the available information we have. Part of that means rigorously enforcing project milestones. When projects are failing or have failed over a certain period of time, that

Capital needs to be reallocated to projects that have a path to commercial viability. Those have been our principles this entire time, and that is what we will continue to do.

Neil (25:29.0)
to build on that, Alex, a little bit and I'm not gonna ask about Frick Order twenty two twenty two much to branch to grim, but I wanna get it in into the recording so that we have

Brandon (25:38.776)
Mm.

Neil (25:39.334)
I'd expect nothing less, Neil. I want to pivot a little bit to Cole. So Cole, very important to me. I'm from Kentucky. I grew up in Kentucky. I obviously worked for Senator McConnell. Cole was a big part of my tenure at the Federal Energy Regulatory Commission. In 2017, then Secretary Perry sent us a notice of proposed rulemaking similar to the A Noper on Large Load Interconnection that the Commission is facing today to compensate baseload

Plants for having the attribute of on-site fuel. So for coal plants, having coal supplies on site. And look, I've been pretty open about this publicly. I was making my transition from partisan legislative aid to independent regulator. I wanted to do it. I wanted to adopt it. One of the loudest voices in my ear advocating against it.

Was then FERC general counsel James Stanley, who is now the deputy secretary of energy. He was much smarter than me, pro markets. And he didn't like the idea that I was pursuing a strategy that would put a finger on the scale essentially for coal against natural gas. And he was like really pushing me to reject this NOPER, which we ultimately did because it wasn't legally viable.

Eight years later, the department with James in charge is kind of propping up coal plants, which I'm not against. I just want to be totally clear. I'm from Kentucky. I care about these people and these communities. But I'm just curious, what do you think has changed over the last eight, nine years that I got blown up for wanting to preserve coal communities? And now it's like DOE's taking these steps and no one's even betting an eyelash.

Alex (27:29.974)
Yeah. Well, look, what's changed is rising energy demand. And we're of a fundamentally different outlook than we had eight years ago. few people saw how much more energy we would need to reindustrialize the country and win the AI race. And you look at the previous four years under the previous administration, you had electricity prices that rose by about 30% nationwide. You had the premature retirement of tens upon tens of gigawatts of reliable, dispatchable generation. DOE published a resource adequacy.

Report last year after President Trump declared a national energy emergency on day one of his second term. And that report found that on the path that we were on previously, the US was set to lose a hundred.

Gigawatts of reliable generation by 2030, mostly coal, but also natural gas and nuclear. At the same time that we would have to potentially build 100 gigawatts of new generating capacity to win the AI race and onshore manufacturing meet rising energy demand, that would have resulted in 100 times more power outages by 2030. 100 times more loss of load hours, simply as a function of not having enough supply to meet demand. Despite the fact that the US is the number one energy producer.

Producer in the world and a net energy exporter for the first time in decades. That was an obviously unacceptable outcome for President Trump and Secretary Wright. And so that is what has changed. And so we had to come in. I mentioned our three-prong strategy to stabilize, optimize, and grow the energy system. We spent much of last year focusing on the first part of that: stopping the bleeding, stabilizing the existing system. And so

Emergency orders that Secretary Wright issued last year prevented the premature retirement of 17 gigawatts worth of reliable generating capacity. Last year alone, some of those plants were actually running during winter storm fern this year and helped prevent certain regions like MISO from slipping into energy emergency alert three. They only went into EEA two. They didn't have to shed load. And part of that was because there were coal plants operating in MISO that would have otherwise

Alex (29:35.92)
Otherwise, been shut down if it were not for the emergency orders that we issued. And so that is an important part of our strategy, is to make sure that we are not prematurely retiring these assets. Cause that not only worsens the reliability of the bulk power system, which Nurk has now called a five-alarm fire for the grid. Every long-term assessment that Nurk issues has gotten worse and worse over the last few years.

Premature retirements not only make our grid less reliable and less stable, but they also increase costs. Because in a lot of cases, you're talking about assets that have been fully paid for by rate payers, but that were prematurely being shut down years before the end of their useful life. So that was just not acceptable. It it doesn't make a more affordable system, doesn't make a more reliable energy system. That's what's changed, and we're gonna continue to pursue those policies.

Neil (30:25.974)
It's such an essential point that Brandon and his buddies will refute. But the fact is, those plants were dispatched. The fact that they were dispatched, it exemplifies that they were necessary, that they should not have been shut down. So DOE stepping in and keeping those plants online actually prevented a resource adequacy, a reliability threat. It was a huge deal. And this is what happens, Brandon. I'm sorry when politicians get in the way of

What engineers should do, which is make these complicated calls around resource adequacy. Alex, you and your team, you were validate you were validated for that.

Brandon (31:05.934)
I have a question about this. I've been wanting to ask a Republican, Alex, but I can't ask Neil because if you listen to previous episodes, since he doesn't know what an Overton window is, I don't trust that he can answer this question. You worked at a battery company, so I trust your judgment on this. If you pair renewables with a battery, isn't that dispatchable? Why do Republicans keep saying that it's not dispatchable?

Alex (31:27.47)
Well, first of all, Neil, you you nailed it. You absolutely nailed it. So thank you. I would say, Brandon, to answer your question, look at what the nonpartisan grid operators accredit capacity, right? This is an important point. The energy system's built to meet peak demand. So every regional grid operator has to procure a certain amount of capacity and a reserve margin.

And the way they determine whether they've hit those levels is by accrediting capacity for different resources. So as you know, nuclear power will get ninety-five percent of its nameplate capacity accredited by grid operators to meet system peace. Right? Sure, yeah, yeah. But like you turn it on, it's the safest, cleanest thing we have, most reliable. It runs full out whenever you need it. It's always there. Coal and natural gas also get the vast majority of their capacity accredited.

Then you go further down the list and you have wind and solar that get their capacity accredited at significantly and this is just the reality. Can I mean look it

Brandon (32:25.856)
When paired with a battery when it's paired with a battery?

Alex (32:31.486)
Solar and storage has a role and has a growing role. You look at data from the US Energy Information Administration, the majority of capacity additions over the next few years are gonna be solar and storage. Part of that is because battery costs have come down dramatically. Part of that is rising energy demand. It can be built fast, can be built quickly. I think there's a lot of supply chain issues we still have to work at. Solar and batteries, but

Brandon (32:52.182)
Gas turbines. Yeah.

Alex (32:55.66)
Batteries get their capacity accredited, solar and storage, solar gets some of its capacity accredited. You just have to look at where it makes economic sense to build. So for example, in the southwest United States where there's a lot of sun, solar and storage make sense. It's getting built there. It's getting built in Texas. It's getting built in places where it makes more economic sense to build and it works. You look at MISO, will only accredit five percent of solar's nameplate capacity during the winter. So

It doesn't make as much sense there. And even if you pair it with batteries, it can help a little bit, but it's hard to overcome that 5%. So all this is it everything matters. It's just about trade-offs. Nothing is perfect. We just need to have an honest conversation about math and physics.

Brandon (33:41.482)
Well, that's a s far smarter answer than Neil would have given us, so thank you for that.

Neil (33:46.606)
So, Alex, real quick, there is a perception that the administration is against renewables. But what I have seen, and in conversations I've had with folks at DOE and in Congress and elsewhere, the administration is supportive of solar. Can you speak to solar in particular, the secretary, officials within DOE? Like, do you all see solar as a viable power source to get us through these energy demand challenges?

Alex (34:15.36)
Neil, look, as Secretary Wright has said, we're not for or against any individual technology personally. It comes down to math and physics. And so what I've talked about, what the secretary has talked about, is the need to build an energy system that meets system peaks, because that is what's most important to keep the lights on.

Right, we have to be able to meet peak demand in the summer and the winter. And we just have to evaluate individual energy technologies and consider the trade-offs. As I mentioned, there are a lot of places where solar is getting built. It's getting built economically, solar and storage in particular, in combination.

But what we are against are the subsidies and mandates that the industry has enjoyed for 30 years that contribute to perverse economic incentives that raise energy costs and result in a less reliable energy system. Okay. So, for example, the industry enjoyed these tax credits, and they also enjoyed a lot of state-level policy support. So I would

Direct you to this study that Lawrence Berkeley National Lab produced last year that found that renewables, in this case wind and solar, that were deployed inside of an RPS, right? Of a state-level renewable mandate, did actually increase the cost of power for ratepayers. However, renewables, especially solar, that were deployed outside of an RPS.

So that were not mandated did not have a meaningful impact on wholesale power prices, did not meaningfully increase prices. So, what does this tell you? If you eliminate the subsidies and the mandates, you allow these technologies to compete, they will get built where it makes economic sense to build them, especially if.

Alex (36:00.098)
And this is really an an and it's a this and this scenario. You can build as much variable resources as you want. It does not obviate the need for dispatchable generation that gets its capacity accredited to meet peak demand. So folks who think that you can only replace dispatchable generation with non-dispatchable generation or less dispatchable generation are going to be in for a rude awakening.

That is a recipe for higher electricity prices and a less stable system. If you want to invest in variable generation because it makes economic sense in certain places, you can do that provided that you are also investing in dispatchable generation because we have to keep the lights on to meet peak demand. That's our fundamental responsibility.

Neil (36:43.566)
I would like the record to reflect that I agree with one hundred percent of your remarks.

Julia (36:48.386)
There. And dispatchable meaning Alex, is natural gas really what comes to mind there? A ramping style solution or batteries in the mix as well as a Brandon's point.

Alex (36:59.308)
It it means resources that when the grid operators call on them, they are available. They can be counted on to show up at system peaks.

Julia (37:08.27)
Well, it goes to the peak question you're talking about, Alex. Like we have this system that is underutilized and yet we're building for the peak. And so it's been interesting to see more discussion around these flexible solutions, which take different forms. Even looking at the infrastructure we're building to make sure it's smarter and updated before necessarily building new, while we also need to do that. But we need to get more out of the system we already have, not just building new generation, but using a whole suite of technologies to build smarter. So we get more out of the grid we have. Do you think that's part of the roadmap in your view?

Alex (37:38.36)
It certainly is. Yeah, we need to optimize the use of existing resources both on the load and the generation and transmission side. And and we've been doing a lot of work in these areas. So there was a great report that said energy systems utilized about fifty percent of the fastest, most cost effective incremental megawatts we can get into the system are from by upgrading.

Julia (37:54.52)
I think Book University.

Alex (38:02.092)
Megawatts that already exist. And so I mentioned the Georgia Power, Alabama power loan package includes a lot of upgrades on nuclear, natural gas generation, some coal, and then major transmission upgrades. So we're using we're leveraging both grants and loans to achieve these goals. We had a $2 billion funding opportunity. It's called the Spark funding opportunity to strategically reconductor and use grid enhancing technologies to target areas of the bulk power system where we know that have high.

System congestion costs. There are billions of dollars of system congestion costs based on particular nodes that have high locational marginal pricing. And those are billions of dollars of costs are being passed along directly to ratepayers every single year. So we're looking at targeting our transmission investments strategically to upgrade existing lines where you can two or three X the capacity of a line in half the time at half the cost. And if you do it in the right places where there's high system congestion, you can actually

Put downward pressure on rates over time. So we're gonna do that. We're gonna upgrade the transmission system. We're obviously upgrading the generation system. And then we're exploring the use of more flexible loads. And I think certainly the FERC ANOPER contemplates large loads being curtailable. The use of energy storage can play a role here too. So I think you're gonna see a variety of policies and technologies to better utilize the existing system that we have.

Neil (39:30.956)
That's what's so great about this proposal. I'm hoping that FERC will take affirmative action on Thursday. It really does thread the needle. It's not political, it's not trying to force a particular outcome. This idea that you will establish a framework whereby the hyperscalers, the big data center companies, will get exponential interconnection in exchange for a mandatory obligation to curtail power.

Creates this huge opportunity for demand side resources and flexible resources. This is not political. It's actually genuinely novel and smart. And I think it's a huge deal. And I feel like DOE FERC deserves a lot of credit. It'll be the single most significant regulatory action on the energy side, probably since the creation of competitive wholesale power markets in the late 90s. It is a huge deal, Alex.

People don't understand this. You're really good. I hope you get out there and do other podcasts and other media to explain this to people post Thursday, because this is so significant. And yet people don't recognize how big a deal this is.

Alex (40:41.39)
Well, Neil, thank you for that. And I would say you're exactly right. If we can get this demand interconnected faster and it's curtailable, you're strengthening the overall stability of the energy system. You combine that with the president's ratepayer protection pledge, where you're shielding residential ratepayers from the incremental cost of service. And you have utility companies that are coming to DOE to get the lowest cost of capital that they can possibly get to build the incremental generation and transmission that.

needed to serve these loads that will get connected faster. That's a recipe to win the AI race and lower energy prices for the American people.

Julia (41:20.59)
So we're talking flexible load here and different tools in that bucket. You did talk previously, Alex, about nuclear power, sort of a back.

Own this reliable generating resource. It's having its own sort of renaissance, if you will. I think you've even called it potentially a golden era for nuclear in the United States because we have built these big plants, but a lot of them are aging. There's a new generation of nuclear power solutions, but a lot of them are still waiting to commercialize and they still need permits and approvals and all of that. I've heard some people say, are the small modulars going to pencil if they have to go through the same permitting process as a large-scale one because you're getting less power with the same friction. So, how do you think about the new era for nuclear?

clear today and how do we seize it?

Alex (41:59.308)
You're exactly right. Secretary Wright has called this a golden age for nuclear power.

There's never been a president more supportive of revitalizing the US nuclear industry than President Trump. Saw a series of executive orders last year to quadruple US nuclear capacity by 2050 from about a hundred gigawatts now to four hundred gigawatts. We have unleashed an ambitious series of programs to advance those goals across the entire nuclear life cycle. So we are investing in restarting shuttered nuclear reactors, including constellations.

Crane Clean Energy Center, which is Three Mile Island. We're restarting the Palisades nuclear plant in Michigan. We are, as I mentioned before, strategically investing in uprates. We have this new program called Uprise, where our goal is to facilitate at least five gigawatts of nuclear uprates by 2030 and then have 10 new large nuclear reactors under construction by 2030. So upgrading the existing system, investing in siting and constructing.

adopting new large scale reactors and then continuing to invest in next generation small modular reactors and things along those lines. And it's just been tremendous

Amount of investment in a relatively short amount of time. One of the executive orders the president signed last year directed DOE to get three new SMR designs critical. So basically, from a paper design to achieving criticality by July 4th, 2026, we had one of those reactors go critical just a couple of weeks ago. We're gonna meet that deadline here in the next few weeks. So just incredible amount of enthusiasm right now for existing nuclear for next generation.

Alex (43:45.444)
Nuclear. We've been working on the supply chain too. So in January, we had a $2.7 billion award for low-enriched uranium and high assay low enriched uranium HALU, which is the nuclear fuel that's needed for all of these reactors. We created a consortium under the DPA to cooperate with the industry and with other federal agencies to advance the supply chain together.

We are very bullish on the future of nuclear simply because we need more energy. The fundamentals have changed, where you actually have rising energy demand that supports investments in new nuclear projects, and you have customers, form of hyperscalers, who are willing to pay the higher upfront cost. So those factors combined with growing bipartisan support, and certainly support from President Trump and Secretary Wright, have created not just enthusiasm, but steel in the ground for new nuclear demand.

Development in America again. So we're really excited about what's been achieved so far and what is still to come.

Julia (44:48.77)
To close us out, you talked about supply chain. And this is one other piece I feel like the administration's really led on is critical minerals and shoring up our supply chain there. We need these materials not only for batteries, but in defense applications and other technology solutions that allow America to win the AI race. Close us out here with how you're thinking about not just the energy system, but how we build it and the pieces that go into it and shoring up our supply chains with a security lens in mind.

Alex (45:12.288)
Yeah, a absolutely. And I mean y yeah, we could have a whole podcast only on this topic.

Brandon (45:18.008)
But look it's called you're welcome anytime.

Julia (45:18.946)
Come back.

Alex (45:21.71)
Have have me back. Have me back. So what I'd say about this is in my previous life, only a few months ago, I was the acting undersecretary of energy and I was also the director of DOE's cyber office. And you know, we talk about security of supply chains. That includes where we're sourcing technologies and resources and minerals from, but it also includes how we are securing those technologies from a cybersecurity standpoint. And so

On the cyber side, we know that we have to deploy tens of thousands of individual components and subcomponents to meet rising energy demand that supports all this energy infrastructure we have to build. And we know that a lot of this infrastructure and these components are produced with known cybersecurity vulnerabilities. And

That's why it's important that we're working with trusted partners and allies. We have a supply chain testing program called Cytrix. It's a multinational lab effort where we work with some of the biggest OEMs in the energy sector that produce the vast majority of the components that are used in the energy sector. We can procure those components, tear them apart, test them for cyber vulnerabilities, figure out how to mitigate those vulnerabilities, and then get that information back out to the vendors and to the energy companies that are buying those products and deploying them. So that's one reason why we need to onshore.

For the industry to the extent that we can, but then also work with trusted partners and allies around the world. The other big piece that you mentioned, obviously, is critical minerals. And this is very challenging. I worked for a company that was competing directly against China to make graphite that's used in the anode of batteries. And you have to say, just to compare and contrast the efforts of this administration versus the previous one, that they definitely cared about this issue.

But the problem was they could never wrap their head around what a comprehensive whole of government strategy would look like. So we are never going to be able to outspend the Chinese government or out-subsidize them. And we shouldn't try to beat them at their own game. And so we should be making strategic investments, and we are with both.

Alex (47:22.232)
Grants and loans, but we also have to have the right trade policy mechanisms in place. And so what you've seen under the Trump administration is we have continued to invest in building a domestic and allied supply chain, but we are also trying to work very closely with our key partners and allies around issues like pricing. So you can throw as much money at at the problem as you want if non-market actors that engage in unfair trade practices can swoop in.

Flood the market and crash prices whenever they want. Doesn't matter how many grants or loans you throw at the problem. This is why the administration convened this Critical Minerals Ministerial a few months ago, had more than 30 allied nations that were present. They all agreed to a framework to set price floors and to create an allied.

buyers club for critical minerals. And look, price floors offend every free market bone in my body, but when you're talking about a strategic industry where we do not have a level playing field, it's necessary.

We want free trade, but you have to have fair trade to get to free trade. And so we have to address the unfair trade practices that have occurred over generations in other industries as well, losing other industries overseas. And that starts with proactive trade policy between tariffs, countervailing duties, price floors, contracts for differences with partners and allies in combination with strategic grants and loans that we're funding out of DOE. That's our strategy. And I think we will be considerably more successful.

with that strategy going.

Julia (48:52.93)
forward. Incredible. We could absolutely talk much longer. Really, really appreciate your time. we covered a lot of ground there. Thank you so much for the breakdown. We'd love to have you on again soon.

Alex (49:03.486)
Happy to be here guys. So appreciate it.

Brandon (49:04.438)
That was great conversation.

Neil (49:06.392)
See ya.

Julia (49:08.462)
Well.

He could cover so much ground. I have to give him credit for having so much material at his fingertips. And there's even more we could have talked about. The Department of Energy has recently offered funding to new coal plants. We talked about them shoring up existing ones. That's something we didn't get into, but that's a new development for plants in Alaska and West Virginia. We also talked about geothermal energy. There's a new funding announcement just earlier this year: 175 million for new technologies there. 500 million, at least for critical minerals, was announced recently, but that's only one pillar as he described with.

Critical minerals work. That's just to sort of flesh out and put some numbers around what the DOE is doing. I guess, Brandon, you were at the Department of Energy when you hear Alex speak, and he did say our administration is taking whole of government approaches, at least on critical minerals, in ways that past administrations on the Democrat side maybe did not. What is your view as you hear him talk about it? Because there's a pretty good theory of the case that he's presented here of their strategy and it is quite comprehensive. Was there something that maybe Democrats were missing? I think.

Brandon (50:05.944)
They've done a tremendous job on critical minerals. I'm really excited about what they're doing. And there's a ton of companies like Endolith that we've had on this show where we can outinnovate the Chinese on this. And I'm glad to see that they want to support that. I also heard him say that he wants to use all the $250 billion in the energy dominance financing office. I think that would be great. I wonder how they're gonna be able to do that. They gotta pick up the pace a little bit. You know, they've done four or five deals and they've got two and a half years left. So I'm curious to see how they're gonna do that. It seems like

Like they're gonna steer towards more commercially viable deals and take much risk in those. And then on the grants, how are they gonna get some of that money out to the more innovative technologies? That story of Fervo is exactly the magic of the DOE and hope we continue to see that.

Julia (50:51.456)
Neil, what stood out to you from the conversation? I just

Neil (50:53.838)
thought he was really competent and thoughtful and straightforward. And we are in divisive times where there's a lot of political polarization. I actually think DOE is rising above the polarization, or actually rising above is the wrong framing. They're beneath the radar. I think DOE is doing a lot of really smart things that will advance our energy future in a

Complex way that is weedy and technical and outside of politics. And I appreciate that. And I actually thought Alex captured that really well.

Julia (51:28.386)
Yeah, I think the rubber's gonna hit the road when it comes to affordability. We started there, I'll end there. He talked about states where you know utilities are lowering rates or at least not raising them as quickly. To put some numbers on that, in the first quarter of 2026, utilities saw 9.4 billion dollars worth of rate increases. That's on top of $31 billion requested in 2025. This is according to Power Lines and other research organizations. So I think

Yes, we're gonna see maybe a softening of the increase, but the increases are coming and there's always a delay, right? So consumers are still gonna feel this pinch. So the challenge in energy is that things move fast and slow. And I think for any administration and for any lawmaker at any level of government, there's gonna be some tough questions they're gonna have to answer. And the challenge with energy is explaining really complicated stuff to the person at your Thanksgiving table. Are they gonna capture that? Because I think they're still gonna feel the pain and people will want.

Leaders in charge. I think they're gonna have some tough questions to answer. But we'll have to leave it there and continue to pull the thread on future episodes. Thank you everyone so much for listening. That is our episode for this week. As always, please make sure to like, follow, and subscribe to Political Climate on your favorite podcast app and social media platforms. It's the best way to stay on top of updates and new episodes. Head on over to political climate podcast.com and check out our website. We have a newsletter we promise is launching soon.

We are brought to you by ClearPath. It is a conservative clean energy advocacy organization working to accelerate American innovation and reduce global energy emissions. You can catch all of our episodes on Apple Podcasts, Spotify and Beyond, or on X at poly underscore climate and LinkedIn at political climate. I'm Julia Piper, your host. Bruno Falcon is our producer. Thank you for listening.