Episode Transcript

Robert Bryce 0:04
Hi, everyone, welcome to the power hungry Podcast. I’m Robert Bryce. On this podcast we talk about energy, power, innovation and politics. And I’m pleased to welcome a longtime friend of mine, Jacob Williams. He is the General Manager and CEO of the Florida municipal power agency. Jacob, welcome to the power hungry podcast.

Jacob Williams 0:24
Thanks so much, Bob. Glad to be here.

Robert Bryce 0:26
Now we’ve known each other for a while for him when you had a different job while a long while ago. But as I warned you that guests on this podcast introduce themselves, so imagine that you don’t know anyone. You’ve arrived at a party. You’ve arrived there and you have about 60 seconds to explain who you are, please go ahead. Okay.

Jacob Williams 0:46
All right. Well, Jacob Williams is CEO at Florida missile Power Agency, born and raised in, in central Illinois, actually Springfield, Illinois. And then with the University of Illinois for undergraduate double E degree, they’re from University of Illinois, moved to Wisconsin to work for an investor on utility that became a light utilities for 13 years in the Madison area, got an MBA while I was up there. And after 13 years of working for them, or a subsidiary, moved down to St. Louis, to work for Peabody Energy, where you and I met and had to two major roles there. The first was being in the the group that developed the largest coal plant to be built in the in the country in the last 40 years, the Prairie State Energy campus that came online in 2011. And my role is to get all the municipal or all the partners involved, which ended up being municipal utilities and cooperatives. And then for the last eight years was the head of Global Energy analytics for Peabody Energy. And you know that that was my day job. my night job was kind of going around the world, telling the value of affordable energy and what low cost energy did to improve the quality of life of billions of people not unlike what you do all the time. And that’s where you and I met along the way. So after that, Peabody is in bankruptcy, seven years ago, I had the opportunity to come down here to Florida, check with my wife. And she she agreed to essentially slowly close her solo medical practice and we came down to Florida, and I became the General Manager and CEO, Florida, missable power agency. And it’s been a wonderful time down here.

Robert Bryce 2:37
And you’re based in Orlando.

Jacob Williams 2:40
We are Yeah. fmba is based in Orlando. And, you know, for those who don’t know what a joint action agency is, FM pas, has 33 member cities that make up the the agency, that’s all the municipal utilities in the state of Florida, we provide both wholesale power to about 27 at least part or all of their needs. In those 33 communities combined serve right at 19% of the population in Florida, or 4 million Floridians. So it’s a rather big group, so to speak.

Robert Bryce 3:17
Right? So the as a joint action agency, FN pa stands between I guess I think about it as a stands between the power plants and the power providers, the publicly owned power entities like I live in Austin, we have the city owned utility Austin Energy. So those are the those are the customers are the the city owned utilities, or the locally owned Yuto, the municipally owned utilities. And then you’re buying that power either in the in the in the book market, or does FM pa own generation.

Jacob Williams 3:51
We own almost all our generation. In fact, we either own it, we own and operate most of it. We own almost all degeneration we provide. So we’re a little bit a little bit deeper into the business than most joint action agencies. So yeah, we provide the electricity to the cities, the cities, provide the distribution service, build the individual customers, except for et cetera, we just provided on the wholesale power on the transmission system and then deliver to their communities and they take it from there. You’re at the same time, you know, we’re not like a cooperative, you. Were not unlike a cooperative, you think of it as 33 cities that are cooperative members, that and they’re the owners of F MPa. So we have 33 bosses.

Robert Bryce 4:41
Gotcha. So we’re going to talk about the EPA proposed rules on co2 emissions, the what are known as the greenhouse gas standards and emission guidelines for fossil fuel fired power plants that were issued in May, but I just want a couple of other quick points, because the reason we’re talking is FM pa just recently filed comments on this EPA proposed rule. But about how much just a couple of other technical things here to put FM pa in context, your total generation capacity is how much then.

Jacob Williams 5:20
And at the end of 25, it’ll be 2100 megawatts that we’ll have control over.

Robert Bryce 5:26
Okay. And so but today, it’s, what 50 To 1500 megawatts, something less than that, then

Jacob Williams 5:32
about about 1717 150. And we’ll be acquiring over the next few years, we’ll be acquiring 340 megawatts, more of natural gas combined cycle units. So we’ll be at 2100 megawatts and 2025.

Robert Bryce 5:49
Gotcha. So 4 million Floridians they’re what 28 million or something. So the rest of the Florida then gets their power from either coops or investor owned utilities. Am I didn’t double check on my figures here. But is that is that?

Jacob Williams 6:05
That yeah, the investor on utilities that were 19% or municipals? I think the coops are around 12% or so. So the other call it 70%? Is investment on utilities?

Robert Bryce 6:18
Right. Got it. Okay. So let’s talk about these EPA rules, because I’ve written about them. I’m still stunned quite a bit about how onerous they are but if they are indeed enacted. But you’re there, you had sent me your comments along with the those of the Florida reliability Coordinating Council in your responses to the EPA. So broadly, if you can, I know what can read from your letter, you’ve made some really good comments here. I want to talk about green hydrogen, and some of these other things CCS, but you’re, you’re in charge of providing reliable, affordable power to your your customers and their customers. What is wrong with this? What is the what is wrong with this EPA rule? I mean, you know, give me the if I’m you have, I’m in an elevator and you have less time than you did to introduce yourself, you have 60 seconds. What are the key things here that are so important? And why are why is FM pa coming out? I think it a very strongly worded letter saying this doesn’t work or won’t work?

Jacob Williams 7:22
Yeah. Well, if you think about it, it’s a fundamental transformation of the electric bulb power system in eight years, in a system that took 40 to 60 years to build. And the power industry like all energy doesn’t, doesn’t transform in years, they transform in decades. And essentially, it would close all the coal plants in the United States, which Purdue which has which produces 20% of the power today in the country. And the other 40 In the next 40% is natural gas generation. And it would either force, most of the large gas plants that produce most of the power do either ramp back to 50% utilization, or to go to green hydrogen in eight short years, right. And we’ll get into what hydrogen is. But it’s just not doable to completely convert the entire fleet of natural gas units to partially burning hydrogen in eight short years, giving given that permitting requirements and land acquisition all these things we can get into. So it leads lead us to the FRCC to come to the conclusion, since we can’t do the hydrogen in eight years. By limiting the generation to 50% utilization of the big plants, Florida would have about 8% of our energy would not be served in 2032. Ie, that means rolling blackouts regularly in Florida. And and

Robert Bryce 8:54
let me interrupt because I read that that I liked the way you put that. That was very succinct. So you’re projecting of the Florida reliability Coordinating Council, which we didn’t discuss what that is, but I’m guessing that’s the entity like NERC except it’s or like the North American reliability Corporation for except for Florida, am I am I understanding that right?

Jacob Williams 9:13
That’s right. FRCC is the sub region underserved? circ is one of the they’re so national regions that reports to the in our CC or the NERC that NERC, South Florida stands for itself because we’re a peninsula state and of itself. FRCC is a sub region of all that.

Robert Bryce 9:35
Right. So but to repeat, what you’re saying is that your projections are FRCC projections are if this EPA rule goes forward that by 2032, you could have an 8% shortfall in terms of available power statewide in Florida.

Jacob Williams 9:52
That is correct. If you took the EPA at their proposal, and had the ramp are big gas units Back to 50% utilization. And why is that important is because 75% of our electricity in the state of Florida is produced by natural gas units. And most of that 60% of that is done by these big units, that would have to ramp back from, you know, 60 to 85% utilization, back to 50% utilization, where there’s just not enough units to pick up all the Delta, the reduction that goes on. And so we ended up with 8% of our energy not served. In our high level analysis, it can be done, given the fact that EPA gave us 77 days to restructure the entire electric grid that took 40 to 60 years to build.

Robert Bryce 10:44
And 77 days, I didn’t follow you on that part. Explain that. That’s that was the required turnaround on the comments.

Jacob Williams 10:51
That is correct. They put out comments back in late May in originally had 60 day comment period. And and they graciously allowed us 17 more days to try to analyze a fundamental transformation of the industry. So in 77 days, this is what we could do. So

Robert Bryce 11:09
well explain that to me, if you would, because you spent your career in the power sector in one way or another. And, you know, I guess we’re about the same age. So 30 some odd going on 40, maybe close to 40 years. What the hell with 38 years

Jacob Williams 11:24
in the industry? What what is

Robert Bryce 11:28
how did we get here with this EPA? Is this a reflection of they’re not understanding the industry? Because this is an I would characterize it as and I don’t think I’m being this is not a partisan observation Zun extraordinarily extreme proposed rule. I mean, that would, as you say, fundamentally reshape the industry and do it in eight years, we’ll in as you know, in the utility sector, as I’ve been around enough to know, that’s next week in utility terms. Right. You know, that’s eight years in terms of planning in terms of what the industry requires to get ahead to get the permits the these other things. So the question, What the hell with EPA, what why is this, from where how do you explain this extreme, this extreme mist proposal from where is it coming? What is what is? Why are they doing this?

Jacob Williams 12:26
Well, that’s the I mean, that’s the head scratcher. Obviously, there is an agenda to get rid of all the coal plants. So this proposal does exactly that. And what was interesting about the proposal was, as we understand is it was being drafted by the EPA. Originally, the gas units weren’t in the the proposal. And after it made the rounds in DC, the White House and other agencies said, Oh, no, you have to get the natural gas plants rolled in as well. Well, when that happened, you know, that went from impacting 40% of our generation to 60%. And, and so it was a major, you know, it’s a fundamental belief that that, unfortunately, I think the current administration has that, you know, climate emergencies there. They believe we’re in a climate emergency, and no matter what the cost, we should do this. The interesting thing is a few days after the proposal was issued, if you remember, the Senate Energy Committee, chaired by Manchin, Senator Manchin and Brazos had the head of NERC, Jim Rob, and the CEO of PJM. Right, and then one of the co op people there. And they asked him, had you been consulted at all about this? And the answer was no. And you would think that the Ne, ne, RC would have been consulted with by the by the EPA, and the answer is none of them were. And they all expressed concern that I’m not sure how we stay reliable with this kind of proposal. I’m not sure DoD was consulted with it. In clearly the utilities weren’t asked ahead of time and, and given the short timeframes and reliability regions can even do the detailed work they normally do to develop all their plans, you know, 70 days over over summer vacation is, you know, incredibly short.

Robert Bryce 14:26
Well, is it fair to say that, that this regulation, this proposed rule is coming at the same time when already the RTOS are warning about reliability with existing generation right and the and the retirement of, of existing coal plants due to various reasons, which we you know, are separate apart from our discussion here, but we’re already from what I’ve seen NERC say what PJM miso had been saying for the last 24 months are saying, we’re headed for a reliability problem. And now here comes the EPA. Seeing with even more onerous regulations that could force the closures of so much generation capacity. I mean, this just seems like a complete train wreck further. And I’m going to add one last thing. This happens, this may rule comes out just a month after the EPA also said, Oh, by the way, you’re gonna have to make electric vehicles. Right. This is the timeline here matters. No, yeah.

Jacob Williams 15:22
Yeah. Yeah, you know, the irony was, is, as you point out, PJM, hey, you know, had just put out a comment that said by 2027, they have major capacity shortages, because of all the coal plant retirements going on there. Well, what is going to backup the coal plants, so that would be the natural gas plants in PJM. So not only are they already short from the coal plants, but then the gas plants would be under this role by 2032. Completely tone deaf to what’s what the industry is dealing with. And you’re seeing reliability regions, that, you know, miso and several others that are having real trouble finding capacity to meet the needs going forward, because all the coal plants are being retired and, and even some of the gas plants have been retired. So yeah, it you know,

Robert Bryce 16:18
so the so the generators are facing a will. So I try and think about it in terms of risk, what are the risks that they’re facing, but if to revisit what you’re just go back and think of, again, about what you just said, so whoever has capital to maybe build generation, they’re facing political risk if they build it, right, because of the uncertainty that this proposed rule then injects into the their future market? So they have a regulatory risk and a technology risk, because they’re not sure where to place their bets. So does this, I guess, how does this affect the risk elastic question this way? How does this proposed rule affect the risk profile? If you’re a generator wanting to get into the market?

Jacob Williams 17:05
Building a new fossil fuel unit? I don’t know how you do it in this environment, it’s very difficult because of these rules that are coming out. And, you know, one wonders if that isn’t the goal of the US EPA is to essentially cut those construction of new units off at the bass and forces to rely on only intermittent solar and wind, which, of course, you know, it’s it’s odd that we’re talking today, the entire eastern interconnect on July 28, is in the middle of, you know, peaking out at summer peak loads in 60 to 80% of the electricity throughout PJM. Miso SPP are caught not in New York in New England. It’s coming from gas and coal units. And so those very units that are carrying the grid on the hot, humid summer day, as we talk are being challenged to to essentially back down or shut down completely. It makes no sense. Makes no sense at all.

Robert Bryce 18:07
Well, let me read a couple of things here, what you you. You talk about green hydrogen, and this is the left this is I think, from the FM pa letter, and again, my guest is Jacob Williams, my friend Jacob Williams. He’s the General Manager and CEO of the Florida municipal power agency in Orlando. It was either your letter or the FRCC letter says EPA proposes the use of green hydrogen and quotes green hydrogen technology to fuel many natural gas plants by 2032. Unfortunately, this technology is not commercially viable today, nor do we expect it to be available by 2032. for use around the country. This is your f is the FM pa FM pas preliminary analysis shows the EPA is rule to use green hydrogen generation would increase power costs 100 to 200%. Well above EPA is own estimate of one to 2% annual increases. This is a particular hardship for fmps membership, nearly half of our 33 member communities have average incomes that are 50% or less of the US average. So let’s talk about the green hydrogen thing first. So you know about combustion technology. You’re an electrical engineer, you’ve been around this, you know, coal plants and gas plants. How would it let’s just assume there was green hydrogen available which I’m I’m getting my colors on my hydrogen, right? That means it’s only been zero carbon, hydrogen that’s been produced been put been electrolyzed some way from either a nuclear plant or or solar wind, but assume we have this magic green hydrogen. How would you use it? Could you put it in an existing gas turbine? Could you use a Recep how would you use it if it was available?

Jacob Williams 19:50
Yeah, yeah. Well, you assumed away the most important piece so we’ll go back to that.

Robert Bryce 19:55
We’ll start there. Don’t Don’t let me get away assumptions here, William.

Jacob Williams 20:01
Yeah, you assumed way, the most important piece, but but the rule would require us to have 30% of our fuel to the natural gas plants be hydrogen, right. And everybody’s going through a blend the process right now they’re trying to see how much hydrogen, they can blend in the natural gas with the existing units. And so that that’s part of the process that’s underway. And you know that that’ll continue on that that is in that and of itself is a worry because they, they start there, but within eight years, they get to 90% blend of hydrogen. So you go from 30% to 90%. That’s a huge jump. But let’s go back to the part you assumed away, which is by far the bigger problem. Green hydrogen, as you said, is hydrogen produced using power from non co2 emitting sources nuclear, wind or solar? Well, in order to do that, at all the gas plants, you can’t just suck power off the grid, you actually have to have those green sources next to the hydrogen production facilities. Otherwise, if you’re sucking Power Off The Grid, it’s not all green. Right? Right, because it’s a mix of whatever is put on the grid. Right, right. All right. So that’s first problem. And then you say, so I need to put these facilities at the plants. Well, those plants may not may or may not have the ability to add, and all that stuff there. I mean, is you’ve articulated very well, this is a lot of land tied up for for, especially for intermittent solar and wind. And and you don’t have the land next to these gas plants to do that. Second problem is even if you do it remotely, they say, Well, you can use the natural gas pipelines to move the hydrogen around. Well, hydrogen is a very small element. And the natural gas pipelines are either going to move natural gas, or hydrogen. And when you put hydrogen natural gas plant, they’re not designed to carry the small molecules, that methane, methane is a much larger molecule. So that doesn’t work. So you can’t use the existing infrastructure. You know, overnight to do that. The third thing is, you got to build the you know, electrolyzer, and their electrolyzer essentially, is electrolyzed water. So take all this energy, and break those two hydrogen away from the oxygen and then store the hydrogen. Well, you got to have hydrogen storage facility. At the power plants, how are you going to permit design building permit, hydrogen storage facility, each of these gas plants, whether it’s gas plants, around people, and around the communities around interstates around critical infrastructure, you know, hydrogen isn’t the most neutral substance, it has a tendency to be rather explosive if things go wrong. And so I would assume most of the communities where these gas plants are next, you don’t want you know, a huge hydrogen storage tank that could have cataclysmic problems, they’re not going to want to permit it right next to their communities. How do you do that in eight years?

Robert Bryce 23:13
Well, that’s a good summary, I and

Jacob Williams 23:18
if you permit it, then you gotta go. Build all that stuff. In eight years, you don’t have time, you’re not gonna get done?

Robert Bryce 23:26
Well, so if I can interject, because I’ve been meaning to write something about hydrogen. And I’ve used the title before the headline rather of the H. H stands for hype, which is my little take on the hydrogen thing. But so but yeah, assuming I assumed a way that we could make the green hydrogen but it takes one and a half units of energy to produce one unit of hydrogen, right? On a just on a on a joules and joules out basis, right. And then as you point out, you’ve got this very small molecule that’s really hard to handle. But let me read a little another paragraph because it follows on your pit your your line about the pipeline or your discussion about the pipelines. I’m reading again from your FMP a letter which was dated just in the last couple of days. To start, I’m quoting to start the existing pipeline infrastructure cannot be used for hydrogen to comply with the proposed rule. So if MPa and other entities would have to develop this infrastructure throughout Florida, the design permitting and construction is not feasible by 2032, and likely not before 2040. To provide a recent example, this is your land use issue and the one that, you know, I think I have succeeded in pretty much irritating all of the wind and solar crowd because I point out that their land use problems are not there, they’re intractable and they can’t build the amount of capacity they claim they can. To provide a recent example I’m going back here to provide a recent example of the civil trail natural gas pipeline inclusive of estimated completion dates for extensions, will take approximately 14 years to engineer permit and construct in addition to federal and state permitting requirement Sub betrayal had to overcome substantial public opposition regarding potential impacts of the Floridian aquifer, wetlands, endangered species and habitats and environmental justice communities? Well, that’s a standard natural gas pipeline. Right? Once that had been, you know, we’ve we’ve permitted and built that hundreds of 1000s of miles of those. And yet, the requirement for hydrogen would be you would have to build a new pipeline, because you can’t, as you point out, you can’t use the existing pipes because of hydrogen embrittlement of the small size of the molecule, etc. So this is another, I think, put her under the broad heading of land use conflicts because you can’t get whatever that is from the molecule or the electron from here to there. And as you know, and I want to come back to the Florida’s population density, because that’s another point that you make in your piece. But that the pipeline permitting, tell me a little more about the several trail story that’s a new one to me.

Jacob Williams 25:57
Yeah, yeah, sable trail. It was it was the third natural gas pipeline into the state critically needed, because 75% of our electricity comes from natural gas, there are only two. And if you lost one, you know, this was, you know, a decade and a half ago, you couldn’t serve the electric load in the state. So that to choose a minimum. So they got the third one, you know, permitted and move forward. It took 14 years to get an obviously needed pipeline, there’s only three that we have into the state. And it took 14 years. In fact, there were people, you know, protesting coming in from North Dakota in the winter is coming down here and protesting and then going back in and then protesting the XL Pipeline. In the summers when it was little nature of North Dakota.

Robert Bryce 26:53
Protesters, the protesters followed the weather. That’s, that’s funny I hadn’t heard about.

Jacob Williams 27:03
Yeah, so anyway, it you know, it took 14 years for pipelines. How do you do this? Because you would obviously need a hydrogen pipelines to be permitted and built and or storage facility. So you know, the timing just doesn’t work.

Robert Bryce 27:18
Okay, so let’s talk about that land use. Let’s dive into that a little further. I didn’t realize the power of the population density. How is this playing out already? What are the other you mentioned? We talked about the disabled trail pipeline? Where are the other examples of these land use conflicts playing out already? Even if, you know, we set aside all these other issues? Where are you seeing these land use conflicts today in Florida?

Jacob Williams 27:44
Yeah, I think it’s, it’s just starting you seeing some of the solar projects get declined. In their initial permitting. It’s the county level and that around certain communities. But again, as we looked at, as you mentioned, the population density and all that’s going on in Florida. You know, there’s not nearly as much buildable land as people think, because you know, a quarter of it is tied up in federal wildlife areas. Lake Okeechobee Ocala National Forest, the Everglades, yada, yada, yada. And then you take that into account that that almost a quarter is is truly wetlands, even in the parks where you build and you realize there aren’t big tracts of dry land, that there aren’t people. And you remember, in Florida, we don’t build a bunch of high rises in Florida for the most part, it’s all it’s a dense population spread out with, you know, low intensity kinds of housing. So as we were going to go from seven 8% of our electricity to 27% of our electricity from solar in the next 10 years. That’s a huge landmass, it’s got to be utilized to produce solar. Now, the thing to remember is, you know, there’s the Panhandle part of Florida, there isn’t much load over there. So putting solar over there doesn’t necessarily mean it’s getting power to where we need it. So you’ve got a very dense area in the Lower Peninsula. And there’s not a lot of, you know, it’s going to be harder and harder to cite solar projects here and we’re seeing it already.

Robert Bryce 29:15
So why not wait, so what about wind? The wind resource just isn’t that I’ve seen the maps but tell me about the wind resource in Florida.

Jacob Williams 29:23
My joke is winds only good during a hurricane and we don’t know what those and and I don’t think we’re going to put wind turbines, you know, five miles off the coast of Florida. I think the people on the beaches, they’re going to go No way that’s going to happen.

Robert Bryce 29:42
Well, so. Okay, so then tell me the solution here. Tim, walk me through what if MPa and the Florida reliability Coordinating Council, what are you asking in the I read your letters, and I could recite it but what are you asking for? What’s the relief that you’re hoping for here?

Jacob Williams 29:58
Well, I think it’s One we’re at from FRCC standpoint, and I’m the chair of that. So that’s a separate set of issues, there’s a there’s a reliability issue, their total focus is reliability. And from that standpoint, there needs to be additional studies, we need to engage NERC Cirque, DOE for all of them need to have a say, into is this capable, and we need, you know, 120 180 more days to actually do the initial analysis to make real comments in that the timeline is too soon. 2032, we already know that can’t work. And so delaying to 2040 or beyond. That’s the reliability answer. fmps concern is far more fundamental. And that’s to the price of electricity for all us consumers. You know, our member cities want low cost and reliable power, that’s their primary goal. And, and this program will will, like we said, double or triple the price of electricity, simply because putting all that hydrogen equipment is very costly. The assumptions EPA used to do that was completely out of bounds, we’re talking than being off by 10 times what the cost of hydrogen is today. or more. And so if you had to put that hydrogen in the power plants and build all the infrastructure, you know, we’d be looking at 200% increase in prices. That’s not sustainable. You can’t and and to the the issue of Florida, you know, since we use so much electricity, we use double the amount of electricity per family is folks in California in New York, and we have a large fixed income population with all the retirees, and a typical amount of low income population use a lot of electricity, we just can’t afford these kinds of price increases. And so that’s fmps. primary concern is, you know, there’s technology out there that theoretically can meet the needs, but it’s not commercially available in mass didn’t serve the entire country. And so our answer is Stop the music. And let’s think of a better way here.

Robert Bryce 32:10
So let’s jump back, if you don’t mind, Jacob, to the issue of the hydrogen itself. So I know I waved my hands and say I assumed all this, that we can produce this hydrogen, but talk about the combustion part of that. Well, if you had the hydrogen, could you put it in your existing turbans? Could you Has that been tested? I know that they are, that word Scylla has been testing it in their combustion, or their internal combustion engines, their big, recent engines. But are you? Are you up to date on where hydrogen might play? If you had the you know, you can produce it all that you could use it actually for power Gen? Where would it? How would it fit in? Or does it fit in now?

Jacob Williams 32:52
It is they’re testing right now it being used in combustion turbine single bind cycle. So FPL, Florida Power and Light is doing a test on it. Their Okeechobee facility, where they’re blending in a small stream of let’s say, five and 10%. Okay, it’s very different than 30%. For the entire fleet. They’re just getting information, because it has different heat characteristics, combustion tendencies and all that there are others around the country they’re doing. I think SMUD is doing something in Sacramento is doing some hydrogen blending and all that. But that’s one thing to do a test scale for one, but eight years from now to have the entire country doing it on all the big units. You know, GE still trying to figure this out for all their units. Yeah, you know, so we’re not ready for it.

Robert Bryce 33:41
And you mentioned GE, because they’re the they’re the provider for the will the LM 6000, I guess is one of the main workhorses of the electric sector. That’s a standard gas fired turbine that is used throughout the industry. Yeah, but but those specs on those Turbans are very precise. And for the fuel mix, and the air mix, and all these things have been worked out over decades. Your point is that I’m assuming hydrogen would would burn at a higher temperature. I don’t know that for some, you know, for a fact, but that would have a different different heat characteristic than ch four right? So that that that hasn’t been but that hasn’t been tested.

Jacob Williams 34:16
Try it and remember the byproduct of that is water when you burn hydrogen. So you know, you’re you’re you’re introducing different elements, even on the turbans and the real issue is G es seven F and H class combustion turbines. That’s where all the big combined cycles are. They’re in these really big 300 megawatt combined cycle and above, but that’s where all the energy is produced in the United States is in those big units. Yeah, there’s a bunch of smaller ones but you add them up and they’re not anywhere near what the big ones that run day in day out, you know around the clock in GE is just testing it out on the first couple to see how it will work and getting data on it. So you know, you need about five or 10 years of testing. So you see what the long term ramifications is before you say, Okay, let’s start moving this way. And then then you gotta upgrade all the units, because there are going to be burner upgrades and all these units, it’s not going to use the existing burners without changes.

Robert Bryce 35:14
You know, I didn’t think about the water as the byproduct of the combustion, but yeah, you’re gonna have a lot of water potentially inside the turbine or inside the combustion Hall. I mean, you know, what do you where do you do? What do you do with that, then?

Jacob Williams 35:26
Yeah, you got more steam than what you’re used to? I don’t know if it’s good or bad. It’s just it’s something different. Right?

Robert Bryce 35:32
Right. Yeah. Well, I hadn’t, hadn’t thought about that. I mean, I’ve looked at the Broad thermodynamic issues, my friend Steve brick calls. What does he call hydrogen? He said, It’s a thermodynamic obscenity. And I think he’s just talking about the production of it, right? It just takes so much energy to produce the molecule to refine the molecule, the front end.

Jacob Williams 35:50
Okay, so that stable element, obviously, right.

Robert Bryce 35:54
So let’s talk about one other thing that we haven’t discussed, which is part of this broader EPA rule, right? So they say hydrogen, or you run at lower capacity factors? 50% or less? Yeah, we’re you use carbon capture and sequestration? How many carbon capture and sequestration projects are active today in Florida? Zero. How many CCS projects are you aware of in the United States that are successful? Zero, you exclude a candidate. So zero. And I’m being a little, I’m making these obvious questions here. But you know, this is where you live your power business. But yet the EPA is claiming in their proposed rule that CCS is a mature technology ready to deploy now. So if you just again, focus on Florida? Yeah, would that require? Because if you’re going to do CC, if you’re going to attach CCS to and one of the existing gas plants, you’re 75% gas, how, how would that work? And what are the land use implications of that?

Jacob Williams 37:00
Well, you would have to find the right geologic formations underground to store the co2. I’m not sure it’s there. But you know, there may be some of that, but obviously, we’ve got a ton of issues, because you’d be drilling through aquifers and our aquifers are, are challenged already. So

Robert Bryce 37:28
you know, don’t don’t challenge already. How, what do you mean?

Jacob Williams 37:31
Well, for fresh water, we, we, we have a challenge for the amount of fresh water we use in making sure they don’t get infiltrated with seawater, so you can’t suck those things dry and have no issues where all of a sudden, you’re bringing seawater in the freshwater aquifers, you know, Florida’s got a lot of sand in it. You know, and so we don’t have great barriers, so to speak. But But it’s, we haven’t done a lot of work. But our understanding is we’re not a great place for carbon capture storage. We don’t have the kind of geology underground that would do that. Well. So that’d be the first problem. The second is, again, Florida’s kind of, you know, it’s everything is sand, all the homes are built on. So if there’s any shifting at all that goes on underground, your foundation to your home is going to have some problems pretty quick, because Florida is all sand, you know, our backyard, all of it’s based on sand. So if there’s any movement, things will shift radically.

Robert Bryce 38:32
So then why I’m going back to this because I’m what you read on it. But we’ve talked about the hydrogen issue as the this kind of technology possibility in the future that EPA is saying, Well, this is ripe, we can use this now. Yeah, they’re doing the same thing with CCS saying, Oh, well, this is ripe. We can use this now, does it? How do you see this? Does the EPA just not understand? I mean, certainly they have technical people, do they just not understand how difficult these technologies are to deploy at scale? Why are they claiming that they’re, these technologies are ripe and ready for deployment? Now,

Jacob Williams 39:07
my personal opinion is a this was to kill all the coal plants to take all the coal plants out in this would do it around the country.

Robert Bryce 39:15
So just to reiterate, I know you mentioned that before. So you’re saying that the goal was that initially with this regulation was that at the Biden administration, at whatever level, there was a target on the coal business, we’re going to shut them all down that that was an original that was the original part, but then it expanded to gas.

Jacob Williams 39:33
Well, you have to conclude it and as we said, what happened? We understood the rule was being developed in the EPA. And then it got after it was done, it got passed around to the other agencies in the White House stepped in and said, You got to do the gas units to something on the gas units, because otherwise you’re just attacking, you know, 20% of the generation and you’re not, you know, completely getting to their net zero goal by 2040 or 2050. What Ever it’s gonna be. So the gas units got thrown in. And when they did the gas units, they did it very late in the process. And it’s clear from their writing, they did not understand the implications, especially regionally. Because Florida is by far the most impacted state in the country for natural gas, we use 75% to natural gas for our generation, no other region of the country is more than 50. And so when you looked at this rule, you go, this doesn’t work down here. And you know, and then you get into the whole, well, you’ve got solar, and you go, yeah, we’ve got solar. But, you know, on hot summer days, like today, the clouds come and go all day long. So our solar is very intermittent down here. So you can’t run the grid on it. You can use it as supplemental, but it’s not the baseload. So I just, I think they were putting the position that they had to do something and they put something out hurry. Case in point two, that is the the information is put out in late May, July 9, they updated their entire data set to better define the gas stuff. Because they had put it out so hurriedly. And people were commenting, saying This makes no sense that they updated a bunch of information. One could only assume they hadn’t spent a lot of time thinking about the gas, and certainly hadn’t vetted it with the entire industry to know what the ramifications would be. And they were starting to hear rumblings of that. So, you know, I can’t, I can’t make, you know, hard conclusions. But it’s very odd that this happened the way it did on a fundamental transformation of the electric grid.

Robert Bryce 41:38
So was it fair to say then reading back what you just said that this is all of this is being driven by climate alarmism?

Jacob Williams 41:48
You would, yes. I mean, it’s fair to say that that the the, that there is a high priority on climate change and wanting to reduce co2 emissions dramatically, and we have said constantly, you know, goals have to be 2050 and beyond not just 2030 and 2032 stuff, because we just don’t have the technology and the timeframe. So yeah, it’s clearly clearly the the EPA is driving to, you know, get rid of the fossil fuel units as quick as possible. And this is certainly one way to do it.

Robert Bryce 42:24
So you’re to reiterate you, you think you’re your response in your letter, and the Florida reliability Coordinating Council also said, we need more time to study this, we need a better technology, we need to bring in North American Electric Reliability Corporation, we need Federal Energy Regulatory Commission involved southeast Electric Reliability Corporation doe that there, there has to be far more analysis done before this rule can can move forward. That’s so if well, so let’s let’s just for the sake of discussion here say, Well, none of that happens. And the EPA says, well, sorry. We’re gonna push this through, what’s your what’s your alternative? Do you go to court?

Jacob Williams 43:05
Well, I think it you know, whether we go to court, I think you’ll see states and so forth, file suit and say the EPA is again, overstep their boundaries, just like they did in the major doctrines on the Alaska co2 issue, where West Virginia sued them. Right. Ultimately, the Supreme Court ruled, because if you think about it, it’s a fundamental transformation of the electric industry done by the EPA, who doesn’t have jurisdiction over the electric industry, right. And if you jack up prices by, you know, 150 200%, to customers around the United States, that’s a fundamental economic viability for the country, and impacts everyone in ways far beyond with EPA charter is, and so this should be something that Congress should be weighing in on, this is not something that the EPA should be, you know, kind of going, Oh, well, you know, this is the rule. I mean, it’s one thing to say we need to clean up, you know, streams and make sure we’re, you know, lower, always getting slightly better in that put on on water quality, etc. But this case is a major jump to just completely reconfigure how the electric grid is done in 10 years. That’s not their call. You know, so

Robert Bryce 44:25
well, so but I’ll just, I’ll ask the question again. So do you see a scenario where F MPa or the FRCC would would join in litigation?

Jacob Williams 44:32
I doubt they would join I think what you’re gonna see is something like state of Florida saying hold it this hurts all our customers, we have standing and they would jump in. I think you may see some major trade organizations jump in but not unlike what happened before. I think you’re gonna see states jump in. It’s not going to be an individual entity like us. We’re helping provide the state information to arm them, but we don’t have the war chest to fight you know to do so. like this, it’s got to be done at a, at a larger level at a company or the state or regional level.

Robert Bryce 45:06
So let me follow up on that. So that’s an interesting point, because I don’t and I’m familiar with FM PA. So you’re right. It would be probably the state of the states would have more firepower. Yeah. So FM PA, what’s your budget? How many employees do you have?

Jacob Williams 45:23
We have 70, direct employees, they call it 140, when you take into the PowerPoints that we operate or operate on behalf of us, so annual revenue of about $500 million.

Robert Bryce 45:38
But that’s not but that a small staff or the 500 million is because you’re buying and selling so much power, that’s what

Jacob Williams 45:45
we’re generating. We’re buying so much gas and generating so.

Robert Bryce 45:48
Okay, right, fair enough. Sorry. I miss misstated. So I wanted to talk just a little bit more about public power, because I think that this is one part of the grid that people don’t understand, right, we think about the electric grid,

Jacob Williams 46:00
or oddly,

Robert Bryce 46:02
give us an idea. I know, had the former head of the American public power Association on on the podcast in the past, how important is public power in the in America today,

Jacob Williams 46:16
public powers, about 15% of the customers in the nation are served by a public power community and about 15% from the cooperative. So again, we’re about 30%, over all around the nation. You know, so it’s, it’s, it’s important. Public Power, communities tend to have lower cost electricity, then then the other providers provide. It’s locally controlled, and all that. So it’s, it’s a big deal. But it’s, it’s very diverse. It goes from, you know, towns of 500 people in Kansas, to Jacksonville, Florida, or, you know, or Los Angeles, or Orlando, places like that, that are public power communities that own their own grids. So it’s an extremely diverse community. It’s about 2000. Communities overall, they go from the smallest communities to the you know, some major cities are a part of public power. The most interesting thing about it is, in general, the public power community, affordable electricity and reliability are their calling cards. It’s not about making money for shareholders. And so, issues like this, there’s an interesting discussion, because our community say, Look, we don’t want to spend a bunch of money, if it’s going to raise prices to our customers, we’ll do things if it’s going to improve reliability, if we’re getting a little bit cleaner, but we’re not going to sacrifice our customers well being with high electric race, just to say we’re a little bit cleaner, you’re not going to do that. If you think about an investor on utility, quite often, they make money the more capital they spend, so they want the newest greatest widgets that are out there power plants and infrastructure, because they’ll make more money. And and nothing wrong with that. But you just gotta understand, there’s a difference of incentives, and I’ve worked in both worlds.

Robert Bryce 48:05
Well, I think that’s a key point. And I’m glad you talked about public power in that way. Because I do a lot of public speaking, I speak to a lot of public power entities, a lot of coops I’ve spoken to the investor owned utilities, my messages are always the same. I’m just not like I’m playing favorites, you know, the land use conflicts, labor, these are the challenges excessive reliance on a single fuel, including gas, why we need natural gas, and nuclear. These are the things I always talk about. But I think you are giving that quick rundown over 2000 publicly or community owned entities around the country, including Austin Energy where I live, that’s 2000. Then you have 800 Co Ops, a couple of 100, investor owned utilities a little bit less than that. And then the public power agencies, the Federal Power agencies, Bonneville, TVA, a Columbia, I mean, these are big entities, and somehow, I mean, this is, so I’ll ask the question that this way, isn’t my observation framed as a question, Isn’t it remarkable that it all even works, I mean, that we have these 3000 different entities all connected in a grid that with 100, with, you know, millions of miles of wire 1000s of power stations, and somehow, you know, now nearly a century after the New Deal, and how the New Deal changed the way that you know, the situation how the whole system worked, then it all Amazingly, it works. Did you ever sit back and just think it’s just incredible, that we are able to make it all function as well as it does.

Jacob Williams 49:28
It is a extremely complex engine that drives the electric industry of the country, with all these different parties involved in it, but it does work. You know, and that’s a testament to 40 to 6080 years worth of developing the industry. And then I go back and say, and you want to change it all in eight years. There are way too many moving pieces to do something like that in eight years. So,

Robert Bryce 49:58
but doesn’t that betray them? Then the ignorance or the naivete or the or the, what does that say about the regulators that their lack of understanding of the complexities, the decades of work the things that you just mentioned? What does that say about the EPA that they would propose such what is a radical rule?

Jacob Williams 50:19
It’s clear that they’ve never been in the industry in the energy industry as a whole, because you know, even gas and oil. These are industries that you build things for 40 years, and it takes you 10 to 15 years to build. It’s just naive to think that that an industry can change. Always, you know, people always go well, can’t we just change on a dime ago, these aren’t iPhones getting, we don’t get the next generation iPhone every year, every 3040 years, we get the next generation of a power plant. So you got to think and much longer turns because the capital requirements are just so so. Not so large.

Robert Bryce 50:57
Well, I think that’s, I think that’s the right it’s, I wrote it down, it’s naive to think that the industry can change this much in just eight years. Right. Yeah. paraphrasing what you said. But that I think that sums up what pretty well, your sentiment? Well, Jacob, we’ve been talking for nearly an hour, my guest again, is my friend, Jacob Williams. He’s the General Manager and CEO of the Florida municipal power agency, and find out more about them at FMP a.com. I’m assuming your letter is available on your website.

Jacob Williams 51:26
It will be real soon. Yes, it well, we just got it yesterday.

Robert Bryce 51:30
And then. So my last two questions, and I told you, I’ve asked you these questions. So the first one is, what are you reading your I know, you gotta Well, you got a shelf shelves full of books behind you. So I’m assuming you’re reading some of those. What are the what are the ones that are at the top of your list these days,

Jacob Williams 51:45
the the last two I’ve read actually one of them was listening to Bill O’Reilly is killing the rising sun. I’ve been finishing up all the killing series. And that’s about the Asian or the Japanese part of World War Two and all that which happened to then lead right into the movie Oppenheimer, because that’s a big part of that story. So it was wonderful to read that and then go watch Oppenheimer.

Robert Bryce 52:10
So we’ll just I’m sorry to interrupt. So you send to us or you listen to books. You listen, you said you listen to it, or

Jacob Williams 52:15
listen to him. When I’m doing when I’m driving, or when I’m doing chores out in the yard around the house, I just put in the the, you know, the, the pods and listen to books all the time?

Robert Bryce 52:26
I gotcha. Okay.

Jacob Williams 52:28
All right. The second one I’ve just recently completed is, is actually one very germane to the municipal sector, which is a book called the city that lost control. And it’s a book and it’s a book about the Gainesville regional utility, which, after 15 years of, of poor decisions by city council, led to the state of Florida actually taking over the utility board in Gainesville, here this past few months, because they had the highest rates in the state for the last 15 years through decisions made by a city council that weren’t really looking out for customers that wanted to use the utility as a social program and not as an electric utility providing low cost power for everybody. And after 15 years, the state ultimately took over and it’s the story of what happened. It’s it’s a fascinating story. So,

Robert Bryce 53:24
you know, I someone reached out to me on LinkedIn and told me about that and I hadn’t had haven’t had time to follow up. But yeah, look into that the city that lost control, who

Jacob Williams 53:34
was controlled by but by Edinburgh Barsky, yeah. At Burton Barsky.

Robert Bryce 53:38
Okay. So my last question, Jacob, I asked this of all my guests, what gives you hope?

Jacob Williams 53:45
What gives you hope? What gives me hope down here in in Florida is fmps board of directors is focused on low cost power, then they’re focused on providing a fundamental service for everyone. And if you have cities and people who are that’s their focus. They can withstand a lot of these other issues that go on and they’ve given me the power to engage in national conversation. Even though it’s it’s, you know, that we’re not not the largest entity in Florida. So it gives hope to see people starting to rally around and realize that affordable energy for everyone is important. You go around and tell that story and the light bulb seemed to be coming on. Every community I go meet with I talk it, you know, to a trailer park community city council meeting, cuantas club, wherever, you know, the lights come on, and they go, Oh, that is important. And it’s neat to see. You know, people react that way. So it gives me hope that the regular person really, it’s once you explain it to them for a few minutes, they understand and they want to do something about it.

Robert Bryce 54:56
Well, I think that’s a good place to stop my guest again I will tell him, Jacob Williams, he is the General Manager and CEO of the Florida municipal power agency, FM pa.com. I encourage you to go to their website and read their comments on this EPA proposed rule, which is called the greenhouse gas standards and emissions emission guidelines for fossil fired power plants. That came out in May that, if implemented, I think could cause a tremendous amount of damage to the grid in the United States. And I’m not It’s not hyperbole, I think that is just a fact. So Jacob, thanks for coming on lucid and and concise discussion of these issues. So good luck to you. Thanks again. And thanks to all of you out there in power hungry podcast land for tuning into this episode. Tune into the next episode. It might be as good as this one. Until then. See you. Thank you.


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