About 50 million Americans get their electricity from publicly owned power systems. In this episode, Joy Ditto, the president and CEO of the American Public Power Association talks with Robert about the lessons learned from the Texas and California blackouts, the importance of nuclear reactors and coal plants for baseload power generation, realistic timelines for decarbonizing the power sector, and why we need to, in her words, “rethink how we value reliability and supply” on the electric grid.
Robert Bryce 0:04
Hi, and welcome to the power hungry podcast. I’m Robert Bryce. On this podcast we talk about energy, power, innovation and politics. And I think we’re going to touch on most of those today with my guest joy ditto. She is the President and CEO of the American public power Association. Joy. Welcome to the power hungry podcast.
Joy Ditto 0:21
I thank you so much for having me, Robert. And I, as you noted, I’m joined it Oh, and President, CEO of the American public power Association. Apa is a national trade association representing the interests of approximately 2000 public power utilities that are not for profit nationwide, 49 states and five territories and serving close to 50 million people five, zero.
Robert Bryce 0:46
Okay, that’s great. Well, you beat me to the punch, I was gonna tell you to introduce yourself, and you did it. Right.
Unknown Speaker 0:51
I did it.
Robert Bryce 0:52
That’s great. So one of the things now in the wake of the California and Texas blackouts, in my view, it’s should be an inflection point in how we think about the grid nationally, and what you know, what, what is figuring into resilience and reliance. So reliability. But I’m curious how, what your view looking at those events in the in the rearview mirror? Are the and how they’re being discussed and how we’re going to address those issues. But how are the interests of the public power agencies? Are they different from the investor owned utilities different from the cooperatives in how they think about this? Or is everyone thinking about this in the same way?
Joy Ditto 1:31
I think there’s some similarities in certain ways and some differences and others. So thanks for that start with the
Robert Bryce 1:36
differences because that, to me, the part that I think that that isn’t being discussed very much. And I also want to talk about the scale of the grid, but but by all means, please tell me what are the differences then?
Joy Ditto 1:47
Well, so public power utilities are housed at the local level, typically associated or affiliated with municipalities, towns, or cities, there are some exceptions to that rule, but we’ll focus on this for purposes of this, this podcast and podcasts. And so they are not for profits, locally owned locally, you know, controlled so they are typically governed by city council’s or locally elected or appointed boards. So and, and often they are still what is called vertically integrated. So if they have their own power generation, they control that, in some cases, they also control their bulk transmission. But in many cases, their distribution only so they’re buying power from from third parties. So in terms of their view there, they’re providing power at cost to their customers, they live and work in that community. They’re not three states away, and they care about economic development, they care about affordability, reliability, and, and also, you know, sustainable energy. So that’s the way that they view the world. And, and so, you know, in some ways that can differ from their colleagues and the rest of the industry.
Robert Bryce 3:02
So in, but they’re not for profit, so that separates them from the investor owned utilities. Right? There’s a big difference in between the the public power entities and the cooperatives are they more closely aligned than than the than the the, the investor owned utilities,
Joy Ditto 3:19
they’re certainly more closely aligned to us. But as their name indicates, they’re providing service in very rural areas. They were kind of that last mile reminds me of broadband. We talked about it today. They were really incentivized to bring electricity to farmers and ranchers back in the day. As as communities have spread out into sort of suburbs and exurbs, rural co ops are now serving some of those x Serbs and suburb communities. So they’re they’ve gotten a little bit less rule in some areas than they used to be. But they are also not for profit, but they’re privately owned. So they’re not quite as in the public eye as we are. Our members, like I said, are governed by city councils and boards. So they have, you know, public meetings very transparent in terms of the way they do business in terms of the way their rates are developed. So the electric rates are all decided at the local level cops are slightly different business model, they have boards that decide those things. So it’s it’s it’s different. But we more we are more aligned, usually, at least in terms of marketplace issues with the rural co ops than we are with the US although we’re often I aligned with the IO us as well and many other things. So it’s not always this divisiveness.
Robert Bryce 4:31
So then in terms of how many customers the 2000 different communities roughly. So in terms of the the share of the annual sales of electricity in the US are about 4000 terawatt hours, what what percentage of the of the overall electricity is sold in the US is due to a PPA members.
Joy Ditto 4:48
It’s about it’s about 15%. We’re about 15 one five. Yeah, so and it varies from state to state. As you can imagine, we have some states that are more public power than others. Nebraska is Ohio. 100% public power and co Ops, but primarily public power in that state. And then we have some states like Washington state that’s 50%, five, zero, California is 25%. Your your state of Texas is about 25%. So it varies from place to place. But overall, it’s about 15, which is still a lot,
Robert Bryce 5:18
I was surprised in looking at your website, because I think in Texas, here, we have more than 80 different public power entities, and then another 75, or 8076, electric co ops. But let me so that I want to come back to the issue of the blackouts in just a moment. But before we get to that, I want to just get your thoughts on this because in in my new book, I’m always plugging the new book bars. But I have the table in here about it’s called America’s crazy, quote, electric grid, and this is 2016. It’s a PPA numbers at 189 investor owned utilities, 88 million customers 2000 2013, publicly owned with 21,000,877. cooperatives, a 218 power marketers, nine federal power agencies, 3300 different electric providers is the bottom line. I always look at that. And I still find it rather surprising that there is the US the ownership of the American grid is the most diffused of any country in the world. And some of that’s the I think the clearly the legacy of the New Deal. But my question is this. Are you ever amazed that it all works? I mean, you know, with entities and how complex the system is that that all of these different entities and can somehow work together.
Joy Ditto 6:30
So it’s so interesting that you say that, because we’re also the most reliable grid in the world, at least according to the knowledge I have from some of the 20th century reports and sort of how we end we’re clearly the most the wealthiest country in the world. And I don’t think it’s a mistake or any, it’s, I don’t think that that has nothing to do with the fact that we have an electric power grid. I’m saying that awkwardly. But I, you know, I think the fact that our grid is so reliable, and
Robert Bryce 6:57
please be please man have reliable electricity and enables wealth that this is
Joy Ditto 7:02
100%. And so that diffuse nature of our grid, I think it’s not all a result of the New Deal. public power utilities, the first one started in 1880 in Wabash, Indiana. So public power has been around since the beginning. That’s that last mile, the rural co ops came along, it’s kind of part of that 1930s New Deal era. But But you know, the electric sector is was was well along its way before that happened. And public power was part of that. And I think what we serve back historically, is is a what we call a yardstick, you know that we are providing electricity at costs. And electric utilities are natural monopolies. And knowing that we’re providing electricity costs, you can benchmark that markup that the investor utilities are getting for their profit. So it’s a nice way of kind of leveling things and not having things kind of spin out of control with on the for profit side, it really balances out our our sector, I think. But back to your point about while there’s so many entities in the sector, how does it all work well together? First of all, I think we this is where we do link arms, you were talking about the differences earlier, and how we, we might vary in terms of our business models and our focus, but where we completely link arms is on that reliability piece. So as the bulk power system, what we call the book power system, which is those large transmission lines, and generating facilities as that was really starting to be integrated, heavily kind of after World War Two, we came together as an industry and developed a group called the North American electric reliability council to ensure that the bulk power system was maintained at a reliable level to the benefit of everyone participating in it. So that’s one way as an industry, we’ve come together closely for decades, and we actually promulgated and supported promulgation of mandatory standards for reliability that were eventually included in the 2005 Energy Policy Act. And that was, again an industry wide endeavor. So I think that’s where we have aligned so well, the reason why I think we continue to have these diffuse distribution utilities is because there are some very specific specific things that localities and certain states want out of their electric grids that others do not. You know, we back to kind of that question around the blackout situations in California and Texas, they’re very different states, as you know, living in one of them. And those states want different things out of their grids, and they should be able to ensure that those different needs policy decisions and goals are met. And also at the local level, the distribution level that the towns and cities that we that we support in my part of the sector can have goals that maybe a town you may be a town in the West doesn’t want to say it doesn’t have the same goals as a town in the east or in the Midwest. In some cases, they share goals but it It becomes a very local decision and economic development decision about what those rates look like what the mix of the fuel mix will be those types of things. And I think that has really empowered communities to do different things with their grids.
Robert Bryce 10:14
So fair enough. Let me follow up then about the, the California and Texas blackouts, I’ve done a number of podcasts looking at the what happened. What are you? What are your takeaways? Why Why did they happen? And what are the similarities? And what are the differences between the blackouts in the two states? And why did they happen?
Joy Ditto 10:33
So I think so. It’s important to remember, and I’m sure you touched on this, I know you have, that what happened was not just impact did not just impact Texas, there was an Arctic storm that came down and in fact impacted the entire middle of the country. So these cold temperatures that were happening had significant impacts elsewhere as well. And in fact, the the kind of states right above Texas, were really on the edge of some major and they were even doing some some some smaller levels of rolling blackouts there to prevent some grid instability and reliability issues. So I think what that that is, that is kind of an anomaly. I mean, I think we saw demands in Texas, but also in that whole middle part of the country demands load what we call load, it was higher than expected well above what was what they expected for that time of the year, also. So, you know, I could parse through what happened kind of, above Texas, you know, geographically, or we could focus on Texas. And for right now, I’ll just focus on Texas since that was where some of the blackouts or significant blackouts occurred, but would love to kind of come back to some of what happened in other parts of the country as well. But I know that this has already been dissected a lot. But clearly there was the forecasting was wrong in terms of the the temperatures and the significant demand that was going to be put on the system. And because of that, in Texas, those months, the February, March months are kind of they’re called the shoulder months. And so some you take some of the generation offline for maintenance. And so some of the generation that could have been available to meet that excess demand was not available. So you sort of had that perfect storm as well. In addition, you had, we have pivoted a lot more toward natural gas use for electricity away from coal, as there have been, again, those local and state and national decisions made to address greenhouse gas emission reductions. And as we have relied more on natural gas for that electricity production, we have to rely on the supply of natural gas, not just the power generation, you have to get the gas into the power generation facility. We were having issues with the, you know, wellheads, freezing, natural gas wellheads freezing because they just don’t normally experiences those temperatures either. So there are some electric gas coordination issues, what we will call electric gas coordination issues that still have not been addressed. And frankly, we’ve been admiring that problem for a while. I would say I don’t think the electric sector has has had a lot of leverage to really bring the gas suppliers to the table. I mean, there’s been discussion but really to try to get some changes made. So we can’t force them to weatherize their wellheads. But you know, hopefully that will be one of the outcomes of this is that they’re they’re going to spend more money doing so in anticipation of some of these extreme weather events. There were are also admittedly, some some power plants in Texas that weren’t weatherize, I can tell you many of my members did weatherize their natural gas plants more heavily, but but you know, no one really planned on having for those for those who still had coal, coal was freezing on the ground. And those are just not the types of steps you normally have to take in Texas. There There are steps that you take further north, of course to weatherize and to have you know that coal, not freeze on the ground. Similarly, you know, we had problems with all generation types with with wind, wind turbines freezing, I mean, there were a plethora of weatherization pieces that I think that’s probably the biggest thing that can be corrected in the short term. But in terms of getting that supply of natural gas, that is something that the electric sector really needs to try to figure out and manage as we move forward. Whether or not you know, it’s through more firm contracts and things like that. So, I mean, there’s so many things we could talk about here and but if there’s additional, you know, focus areas, you want
Robert Bryce 14:45
your head on one idea to you and get your reaction from it. So, one of the guests I’ve had on the podcast is Meredith angwin, who’s written a great book called shorting the grid which may have sold more books for her than And very sharp woman and and her. Her takeaway is well what’s caused the blackouts. She calls it the fatal trifecta, too much reliance on just in time natural gas to your point. Too much reliance on imports was particularly clear in California and too much reliance on renewables. Does that ring true to you?
Joy Ditto 15:22
Yeah, I think that all of those things are true here. I use, we still need baseload, what’s known as baseload so very highly reliable generation sources to ensure we have a reliable system until there until there is much more affordable and ubiquitous and available battery storage. That is just let me just be very clear, that doesn’t exist yet. People assume it exists. It does not that that level of like utility scale battery storage, that it is it is there, there’s some level there, but at the level, we would need it to be able to balance out those intermittent renewables that are wind and solar, we just don’t have it. So when the wind goes down, you have to replace that wind generation, for example, with natural gas, typically, because it ramps up just
Robert Bryce 16:10
because and yes, to remind everyone I’m listening, I’m talking to joy ditto. She’s the president and CEO of the American public power Association. You can learn more about them at public power.org. But what I hear you saying as well, in when you talk about baseload, because there’s some advocates that I’ve heard say, Oh, well, baseload, we don’t need baseload anymore. Well, one of the things that Meredith, England’s point is that well, we need to assure reliability, we need fuel on site. And you mentioned coal, nuclear performed better in Texas than any other form of generation coal was second. Gas was third, it, should there be some kind of mandates? We talked about weatherization. But should there be some kind of mandates for on site fuel storage? This was something that the Doa under rick perry promoted didn’t go anywhere. But is that one way that that we can bring in more resilience and reliability to the grid?
Joy Ditto 17:03
Well, I mean, for natural gas, as I understand it, you can’t store natural gas unless there is like caverns that are naturally occurring, and then they get depleted. So unless you have, there’s some LNG that’s coming online, but it’s all it’s not very, you know, it’s not very big, and it’s only giving you like a day or two of additional capacity. So for natural gas, it’s not an easy fix, there’s not something you can just say, okay, we’re going to create storage for that. So I think there’s gonna have to be some things done between the electric sector and the gas sector, as I was kind of alluding to earlier around, how do we firm up that gas? I mean, we have firm contracts, in many cases, but the gas is still going to home heating, as a priority matter? How do we kind of figure out how to marry this a better as we become larger and larger customers of gas, and I think gas is a very important fuel. For us, I would love to keep and I think our members would love to keep coal in the mix, you know, especially if we can get some sort of very significant and robust carbon capture, you know, and storage, carbon capture utilization and storage, as it’s now called. That is, you know, we there’s been a lot of research into that, and there needs to be more. And we certainly supported that over the years to try to get us to a point where we can still use coal, because then you could store it on site. And I mean, that’s been a big benefit of coal. Previously, is that on site storage,
Robert Bryce 18:28
because, you know, that’s an interesting point that you’re making, because, you know, cold and getting much love these days, and coal plants are being shuttered. Now, unless the country even though the US has more coal resources than any other country in the world. So it right and that was one of the things I think that it’s an issue for speaking of public power for this Austin energy, whether they’re going to keep the Fayette, the Fed coal plant that they own a portion of in service. So let me ask you a question it should the coal plants that are now being considered for retirement instead, should there be a rethinking on some of this in terms of for reliability and resilience?
Joy Ditto 19:04
Yeah, I mean, I think for for my members, they’re, they’re making those local decisions, as I said, so I’m not gonna you know, the second guess what Austin’s considering doing with its coal plant, but I think overall, for our members who want to continue to use coal, it, we should consider using it as long as we can, while trying to also meet these, you know, goals that we have of reducing greenhouse gas emissions. So how do you do that? Again, I think it comes back to some major technology breakthroughs and a need to fund those. And I know you know, the federal government has been funding a lot of things recently, especially in response to COVID-19. But I think infusions of funding into these types of technologies will be essential to address the greenhouse gas emission issue while keeping electricity reliable and affordable, which is what we have to have it in order to maintain The health and welfare of our populace first and foremost, and then secondly, to maintain our economic viability. So those are the types of things I think we have to keep looking at. We have to keep nuclear in the mix. And I can talk about that if you’re if you’re ready for me to, which we are. That was
Robert Bryce 20:19
one of my questions. I want to come back to nuclear, though. But if you could just because I’m adamantly pro nuclear, you know, in my view, if we’re serious about co2 emissions, we have to be serious about nuclear, but we’re losing nuclear. But just before we leave the blackout issue, and I’m gonna put you on the spot here, right, you know, but, hey, okay, what’s the key takeaway here? What were the key takeaways there? One key takeaway from the California and Texas blackout says have has decarbonisation been too much of a priority in it over resilience and reliability.
Joy Ditto 20:54
I think I think we have to the key takeaway is, we still need some level of baseload power. While we’re in this transition we have, we have to balance it out. We have reliability, affordability, and sustainability, are three legs of the stool, that all have to be the same length, or else it’s going to topple over. And perhaps we have been emphasizing one or the other recently. But there are also these other smaller things we can be doing in terms of weatherization. And so it’s not all about that piece, but it’s certainly a factor. And I think, because, particularly in California, they have been able to import power from elsewhere in the West, you know, some of that maybe has been masked a little bit until recently, that you definitely still intermittency does not intermittency by its very nature, wind and solar, is, you know, not on 24 hours a day, seven days a week 365 or close to it, like some of these other resources are, I think we just have to admit it to ourselves that those those resources are still needed. And that we, let’s admit that to ourselves, and then plan accordingly so that we can also get the greenhouse gas emissions reductions that everyone wants. So like just admitting it in the first instance, I think, is probably the upshot from from both Texas and California. Yeah, well,
Robert Bryce 22:16
I think that’s great. I think that, you know, admitting we need baseload, and we need that reliable baseline. Because we resolutely
you know, as I’ve looked at the blackout here in Texas, it was so close to complete meltdown. And what would have happened on 15th of the grid had gone black in Texas. I mean, it scares my pants off. So if I think about it too much.
Joy Ditto 22:39
Yeah, I think, you know, we saw some of that. And elsewhere in the in, like I said, in the other states, kind of above Texas, it was it was really, frankly, the fact that it didn’t happen. So you know, that there wasn’t a major meltdown of the grid is really a tribute to, to the really smart people and who work in our industry and who were working 24 seven during that time to prevent just just that. So but we have to get better. We can’t have this situation happen again. I agree.
Robert Bryce 23:13
So let’s talk about nuclear, then you brought that up. And then Texas has to two nuclear plants, four reactors, those three of them stayed online, one of them went off at South Texas project because there was a meter froze or something, but it was brought back up within 36 hours. It can the us achieve its decarbonisation goals without nuclear?
Joy Ditto 23:35
No, not with current technology. So we have to keep it in the mix, we have to add to our fleet and our view is public power. So you know, we have long supported nuclear in our sector I was we were talking about who we were a little bit or smaller, often distribution we often our purchasing power. But we we have partnered in nuclear facilities for for many years, and one that’s being added to right now one of the few new nuclear facilities in the country. That’s that’s a that’s a big, large scale. Nuclear is in Georgia at plant Vogel and we are partners, and that is public power. And it’s co Ops, you often don’t hear about our partnership, but we’re actually a majority partner in that plant. And so we have long supported it. It’s expensive, I mean, to build new nuclear is very expensive, but the fact that you can run nuclear at such high capacity, so it’s, you can actually keep it on for so much of the day night. We you know, all of the year is so important to that technology. And we’ve even improved the capacity of existing nuclear reactors. We need to look at more advanced nuclear reactors. But I think another really exciting technology that we are, that we are involved in his public power is called small modular reactors. And I know you know about those very well. And it’s been supported by the federal government through a new scale. We there’s a consortium of public power utilities and rural electric cooperatives that are actually in that project now, going forward with small modular with with a small modular reactors. You know, it’s so exciting. So I think that’s another place we need to focus but the other pieces keeping the existing nuclear fleet online. And there have been some challenges in certain markets there. Sure. Well,
Robert Bryce 25:22
let me follow up on that. Because I’ve written I published a piece in Forbes on Inauguration Day, in fact, saying if Biden is serious about decarbonisation, they shouldn’t allow these existing plants that are slated for closure, Byron and Dresden in Illinois this year and unit three at Indian Point. I’m gonna ask you that question directly. Why isn’t there more? I’ll ask it directly. You get the Biden administration talking about nuclear, but they’ve effectively done nothing to try and keep these plants open. I mean, is this is the is this is the decarbonisation effort by the Biden administration doomed to fail if they can’t keep existing reactors open?
Joy Ditto 26:00
Yeah, anything. I think it’s a complex, it’s a more complex issue than is at face value. A lot of I don’t know, but I just I’m just wanting to like, I’ll just share with you there, these marketplaces that have been created, I their marketplaces, quote, unquote, that are called regional transmission organizations or independent system operators that are sort of these Kwazii federal entities, they they’re blessed by the Federal Energy Regulatory Commission, they are, they operate on a regional basis, they have some benefits, and actually, Texas has one, you know, are caught that, you know, well, that that, you know, made some missteps during the the Texas crisis, but also did some things right, as well. But, you know, these regional entities are intended to help, you know, provide more opportunities for bigger swaths of a region to access different types of generation that helps with some of the intermittency issue when you can access when from one part of the region and if it’s not blowing in another part of the region, for example, but it also helps just with other economies of scale, and and, theoretically, to bring the prices down to the point, though, that they can’t go and say, well, we’re gonna favor nuclear over gas,
Robert Bryce 27:15
I mean, that they’re not set up.
Joy Ditto 27:17
Exactly, exactly. What is it? They’re not Yeah,
Robert Bryce 27:20
exactly. Your reliability, so that there’s no
Joy Ditto 27:23
exactly as I was getting to that point. Yeah, I was getting to that point. So I mean, basically, these these theoretical constructs have had challenges in terms of that assurance of reliability, and prioritizing plants to stay. on my end, it’s become an economic decision to close some of these nuclear plants, because gas has been so cheap. Natural gas has been so cheap that in some of these marketplaces, nuclear is not as economic as gas. So it’s been closing because of economic reasons, rather than again, valuing those three legs of the stool, like I was talking about valuing reliability economics or affordability, as well as sustainability. That’s not in the nick. It’s only about the economics in these markets. So we do have to get back to that some of it’s a state issue. Some of it’s a federal issue, and I’m hopeful that the Federal Energy Regulatory Commission is going to look at this again, I know in the Trump administration, there was some talk about, you know, looking at nuclear and coal, especially as sort of these valuable baseload sources and, and there was controversy around that, particularly because of coal, I think. But I think coming back to it and seeing it in the context of the winter storm that happened, and the challenges in California, I think, are really important to to revisit that. And certainly, it’s something we would support revisiting. And you know, and hope and are hopeful that that will be revisited with the current work,
Robert Bryce 28:47
would that cure have to be then some kind of, let’s call it what is it a subsidy at the federal level, similar to the investment tax credit and production tax credit for the nuclear plants to keep it from closing? Because if it boils down to economics war, you know, then the owners Exelon has said Byron and Dresden aren’t profitable, so we’re gonna close them. So you know, nobody wants to have a bake sale for Exelon, but at the same time, is the is the federal government, the only entity really at this point that can step in to make it happen?
Joy Ditto 29:17
Yeah, I mean, think I don’t know if it’s a subsidy, or if it just changes to the way the rules of the road are governed in these markets. I mean, if there is a, if you can place a value on that reliability piece that is an economic value, then perhaps that’s the way to address it, rather than kind of throwing money, more money at it. And I’ll tell you that we have concerns about throwing money at these generating facilities without any assurance that the reliability piece is going to be met because we’re buying from those our members are buying from those facilities. So I think for us, it’s about how to use value reliability within the marketplace, right. So there could just be some market rules changes that could be considered and I know firk is already you know, has several Sort of technical conferences scheduled that are coming up that whereby this could be considered part of that discussion and hopefully will be. So I don’t know if it has to be a subsidy or if it’s really more about the rules of the road and the value within the marketplace that’s being placed on these facilities.
Robert Bryce 30:20
Well, yeah, I agree. It’s just that the time is running out. I mean, then the Indian Point plan is slated for closure at the end of April. And I don’t know what the timelines were for Byron and Dresden. But let me let me move on then to the the Biden administration and the their claims that they’re under the what was the energy efficiency and clean energy standard that Biden is promoting, saying that they were going to decarbonize the electric grid in the US by 2035. Get rid of all coal and natural gas? Is that a realistic goal?
Joy Ditto 30:52
So for for us and public power, we think a more realistic will be a 2050 2050 goal, it would still be hard to achieve in 2050. So by no means would that be something easy, we don’t, we’re okay with hard goals. But it’s more realistic, we believe, to look at a 2050 target for that net zero. goal. And again, there’s still not the technology in place to even achieve that net zero carbon emissions by 2050. But we just believe that that’s just a more a more realistic and appropriate goal with a bunch of new technology coming online to achieve it with maintaining our nuclear fleet, like we’ve just talked about. So again, still a hard goal, but much more achievable than the 2035.
Robert Bryce 31:39
So in 15, not achievable in 30 still gonna be hard. Is that a fair assessment of what you’re saying? Yes.
Joy Ditto 31:46
fair assessment of what I’m saying. Yeah. And again, we want to be part of the solution. So it’s not it’s not just them saying, No, it’s just that we, we, we believe that affordability and reliability, as we’ve just talked about, are still so important. And having that net zero component come in and 15 years, we just don’t think that’s achievable with current technology.
Robert Bryce 32:06
So let me go back to the resilience and reliability issue, because a lot of talk about electric vehicles and adding Evie charging stations and the investor owned utilities are all in favor. And as far as I see it, if I’m going to think about it cynically, Well, sure they’re in favor, because then they get the rate base, the cost of the Evie infrastructure, they get more nasty, and so on. But when I look at the electric sales in the United States have been fat flat for 15 years. I mean, we’re not selling more watt hours every year. In fact, efficiency has done remarkable things to reduce that consumption. Right. So is built out in the electrify everything push is gaining ground, banning natural gas and putting more load on the grid? What effect is that likely to have on rates?
Joy Ditto 32:52
Well, that’s a great question, actually. Um, well, I mean, I think we have to plan for that additional load if we get it. I mean, there’s debate, I think about what that is going to look like if we fully electrify transportation, for example, but because there’s going to be some synergies you get with using, you know, plugging vehicles in at night, and you know, there’s some, there’s some efficiencies, you’re going to even gain in the grid by doing that. So how much that load is going to look like is for debate a little bit. But assuming that we put more more load on our sector, I think that that’s not necessarily going to put upward pressure on rates, I think that the rates piece is going to the upward pressure is going to come from, again, how are we managing this transition to net zero emissions to the cleaner energy future? That’s to me where the rate debate is, is more significant in terms of Evie infrastructure and charging, I mean, there has been some some good bipartisan, and it’s such a, it’s such a difficult time in Washington to be but even be able to say things are bipartisan, I think it’s really positive. And that’s one of the areas where you seen a lot of bipartisan agreement, which is in getting some of the infrastructure charging infrastructure more affordable, putting some incentives in place for that. We’ve seen some specifically for our sector of the industry, since we can’t take advantage of tax incentives directly. So we’ve seen some support for that for us in the rural co Ops, to get some of that charging infrastructure in place. We also we have programs that our utilities provide at the local level, and just to sort of get their community’s needs met, because some in their communities want to see these more fully available. And, and that comes with the charging infrastructure. So we’ve seen some some of our small utilities, frankly, take on that issue and try to bring that about in their communities. So it’s not just for the big utilities. And I mean, I think that again, the good part about public power is when we spend money on those It’s very much a local decision and can be offset at by other things. So whether it’s whether it’s a ditional, or it can be an opt in, you know, some of our folks can just say, you mentioned energy efficiency, our energy efficiency programs have been exceedingly helpful and popular and but we allow our community members to opt into those programs. Right. So that’s how we’re kind of approaching the Eevee scenario as well.
Robert Bryce 35:30
So you mentioned some of the small members of a PPA, and again, my guest is joy ditto. She’s the president and CEO of the American public power Association said that job for 15 months if my memory serves, yeah,
Joy Ditto 35:40
it’s really short amount of time, but I was I’ve been in the industry for 20 years. So I’ve been around
Robert Bryce 35:46
so you can find joy and more about the public power Association at public power.org. So smallest and largest, who’s your Who’s your biggest member? Who’s the smallest? Do you know these?
Joy Ditto 35:57
Yeah, I Well, this, I don’t know, if I know the exact smallest. I think that’s kind of up for debate. But I’ll just give you a sense of the size. So our largest member, and again, it’s kind of depends on how you slice the numbers. But our largest number is typically cited as Los Angeles Department of Water and Power in the LA area, although there are some that are kind of biting at their heels Salt River Project, which serves the Phoenix area, New York Power Authority, which is a wholesale provider in New York. But But Los Angeles, by most measurements is our largest. We have some community, one community in Kansas, I know of that has 30 customers threezero. And we have some public power utilities in Alaska that are that size, that are providing, you know, power, just at the very been a very small, small, small town small borough. So let’s, I mean, that is an it’s an amazing, basically a
Robert Bryce 36:51
huge, huge variability in the size. In looking at the cooperative world. I think I found the smallest when there’s a one in Wyoming, I think they have 70 meters, which is not not very many. Similar in the disparity in scale, I think the largest cohort is pedernales, electric Co Op here, just some odd meters. So but how are those different interests of the small one? I mean, you’ve got your job, it’s political, you have recognize this idea of differences between the interests of the very small public power entities versus the ones that are very large. I mean, you know, they’re similar in some similar similarities in their I would assume in their interest, how do you see that in terms of the small versus big players in your own organization? How do you how do you work with all of them, make sure you’re actually representing their interests the best?
Joy Ditto 37:46
So that’s a great question. So I i’ve always, I’ve won seen our membership, because I was here, I’ve been CEO for 15 months, but I was here for 15 years before that. And I’ve put in sort of government relations capacity. I’ve long seen our membership is a microcosm of the US, because we have small towns in the US, we have big cities, we have blue states, we have red states, and purple states, and my members are in all of those places. And, and they are feeling the same sort of pressures and and desires from their communities that that we sort of see reflected in our political environment. So what we do to try to bridge that and get people to get well, first of all, there’s a mutual respect, there’s a lot of respect within our industry about whatever a community is dealing with it elsewhere in the country, you know, a, one of our members in Washington State is going to very much understand and appreciate that they are not the same as someone in Georgia, necessarily, but although there’s nuclear in Washington State to and there’s nuclear in Georgia, so they may have some similarities there. But there is a lot of respect for the political environment and each of those communities. So they come at these discussions about policy very much from that perspective. But we have a very robust policy process where our members actually get to vote on our policy resolutions, and drive toward that consensus, and we obviously break it down. And things like on things like climate change, we have a group that is a representative sampling of our members, large, small medium from various parts of the country that get together to kind of flesh out the details, and then it goes to our bigger membership. And again, I think there’s a lesson to be learned there in our if I may, in our broader political environment. In other issues, I think first of all, we need to be respectful toward each other and and think about how others, you know, may not be dealing with the same situation in their communities that we are and actually have open dialogue. So some of the debates get a little, you know, get a little bit heated and there’s arguments and there’s not always perfect agreement, but we drive to that consensus so that we can you unify each other unify our voice in Washington, DC and represent the bigger public Power View. The common the commonality we have is that we’re all community owned, locally controlled, not for profit electric utilities trying to provide highly reliable service at an affordable and sustainable use, affordably and sustainably. So that’s the common. That’s the common goal. And you’d be surprised at how far that gets you when you get into these more maybe disparate issues. Sure.
Robert Bryce 40:32
So let me revisit this issue of gas and electricity a little bit, because surely you’re one of your members, CPS energy in San Antonio. Now, they’ve sued their gas supply, they’ve sued or caught. You mentioned, you’re from your family’s from Denton, Denton has sued the court as well, there’s a lot of litigation that’s going to happen in the wake of the Texas blackouts. But you wrote a piece last month, I believe it was or maybe was in January, you pointed to this 2010 study that a PPA did on gas and the electric sector. And what in my view, we’ve seen a merger of the two sectors, right? They’re completely interrelated. But you implied earlier that the electric sector just doesn’t have much leverage over the gas sector is there is are the can the farmer and the rancher be friends here? It seems like there’s that it. You know, there are some enormous numbers here with CPS energy alone $300 million in the litigation that they’re now filed against energy transfer? How can that coordination happen? Is this going to be something that’s going to be mandated? Is it what’s next in terms of understanding the criticality of the natural gas fuel for electricity? reliability?
Joy Ditto 41:48
Yeah, great question. Two. real big, real small piece of history here in 1978, we were mandated not to use natural gas for electricity. And we were, we were then pushed much more toward coal, right. So you know, we have to keep
Robert Bryce 42:06
nitric acid industrial fuel use act of 1978. Right? Something? Yes,
Joy Ditto 42:10
exactly. Thank you, thank you. And in that, the reason for that is because natural gas was not as abundant. And it’s used in so many other different processes, like fertilizer for mentioned, farmers, very familiar with how when fertilizer prices go up, it’s very, you know, difficult for farmers. And so, natural gas is an input to so many different things, also home heating, things like that. So it was discouraged for a long time. But as the supply became much more abundant in our country over the last number of years, it’s become more available. And because it’s a lower greenhouse gas, emitting fuel, that helps us achieve some of those goals as well. So it’s a really important component of what we use, you know, what we do with our electric and the electric sector. But these challenges have existed for a long time. And I think we this, I get my hope is that we are able to get some leverage, is it going to be? Are we going to ask for a mandate? Or are we just going to ask for some sort of pricing mechanism, perhaps a safety valve of some sort, where if prices get too high on the supply side, because that’s part of the issue is it wasn’t just a reliability issue, that that is significant, we have to address it, but it was that the prices were so there was kind of the electric market prices that were allowed to stay really, really high. And they were supposed to just be, boom, you go up and you hit that price, and it brings things back down. So there was this this length of time that there probably could have been some action taken to reduce that electricity price. But the gas prices were also skyrocketing. Is there market manipulation? We don’t know yet. There are investigations going on. But I will remind everyone that in 2002 1000 2000, and in 2001, during the western electricity crisis back then, we did not know about Enron, and you know this well, because of what you’ve written about it, you do not know for months that Enron had manipulated the market. So there may have also been some market manipulation in the scenario, causing those prices on the supply side to skyrocket. We don’t know yet. But I think that’s the concern is that we can’t let those those gas prices stay that high for so long. Even when it’s a constrained environment. It’s just not realistic, given how acutely we need that fuel in the future. So how do we bridge that without getting too much into the marketplace and quelling other innovative things from happening? I think we’re still as a PPA, I just have to admit, we’re still figuring that out. We haven’t decided on a path to recommend a Congress or at or regulator yet in terms of what that might look like. But we’re an active conversation with our members about what could be a better future for us, these of you the gas industry, I know one thing that we can recommend now and that’s a better alignment of the natural of the gas day with the electric day. The electric electricity, we don’t ever sleep in the electric sector. We’re available markets are on, you know, all the time. And they actually sort of close down their markets over the weekend. So you have to be purchasing gas before the weekend. And at prices whenever
Robert Bryce 45:12
there’s breaking out the pricing mechanisms then work in the gas market, because that was the issue. Play in Texas, who exactly weekend for Exactly, yes, February 15. was president state. Right. And so some of the spot prices that were in place, as I understand it on February, well, what is that? 1514 1312?
Joy Ditto 45:30
There’s something right, yes, those
Robert Bryce 45:32
prices were supposed to be in effect for the entire weekend. But in fact, that don’t necessarily happen. Okay, correct. Well, so let me correct jumped into a couple of other things in I know, you have another engagement that you need to go to when I was working on my book on Enron, which is now 20 years ago, was published almost 20 years ago, which is crazy to me. But nevertheless, right? As I was writing that I was talking to a guy who was in the pipeline business, and he said, Look, this electric deregulation, he said, it’s not going to be good for the consumer. So direct question was, you represent public power entities that I live in Austin, I don’t get to choose my provider, Austin energies, my providers. I’m not a dissatisfied customer was the deregulation of the electricity market was a good idea. It was a good for consumers.
Joy Ditto 46:18
So there’s the retail deregulation that you all have in Texas, and you’re the only state that has, it’s really pretty much been rolled back and all the other states and not every state ever engaged in in oil and retail deregulation, we were not supportive of that. Or we wanted to maintain our essentially our vertical integration, our. And so we don’t think that it was a good idea, we think we just because of the nature of electricity, you can’t replace it, you can’t really store it for length of time, there’s these sort of things that shifted into sort of more than monopoly, the infrastructure is very expensive. It’s very capital intensive. So we don’t think it lends itself to true competition. On the retail side, the wholesale deregulation, which we kind of were talking about a little bit earlier, when we were talking about artios. And ISOs. There have been some benefits, but some drawbacks to that, right. And some of these market mechanisms that don’t value reliability, they value capacity, which is different than actually having the fuel. I mean, you can have a bunch of power plants standing by but if the fuel is not there, when we were talking earlier about, you know, the fuel being on site, and that’s a different scenario, that’s a supply issue. And it goes back to the the conversations we have need to have with natural gas suppliers and and hopefully getting some additional leverage there. But you know, that that is not really been addressed in these deregulated wholesale markets, as it were. So I hope that we will revisit that, you know, both kind of the state there’s a state federal Nexus within our sector, both at the state level and at the federal level, we need to we need to rethink how we value reliability and supply. And and that’s, that’s it, I don’t have all of the answers yet as to how we should do that. But I know, I’ll just tell you, again, we’re and I told you how we develop our policies, we’re talking about it with our members who’ve been impacted. And we will get to some recommendations, hopefully, in the near term that we can better discuss, but I think we will, we will need to make some changes.
Robert Bryce 48:26
I think that’s an interesting, I liked the way you put that, that rethink this the the energy, rethink reliability and supply issues. But then, as you even talk about that, and I, you know, I think I understand kind of the oil and gas industry a little bit, but when I look at the electric sector, I think it’s so khaki, you get the local entities, you get the state government that is is has some regulatory authority in the artios. You have first you have all these overlays that all fit together and have to, in some way sing from the from the same hymnal. But in it, that one ideal just run, as you said, that is I’ve thought about what happened in Texas. I wonder if the policymakers that decided how to structure this market just didn’t understand the nature of electricity itself, that they thought you could sell it Oh, a watt hours like hamburger, but they didn’t understand No, this is the mother network, you can’t shut this off. And you can’t risk shutting it off. Because of the danger of that. Does it true to you just that there’s a misunderstanding of what electricity is and its importance? Does that make sense to you?
Joy Ditto 49:27
I think there often is I would love to see more education on an even at the like elementary, secondary level. I do think that there are misunderstandings about how what electricity is how it can be used, especially as we’re in this sort of transition. And we do have new technologies that have come online and that have been successful. But we still don’t have other technologies that are very necessary to doing what we really want to do. So I agree there is this understanding and it’s podcasts like this that can help With that understanding and it’s it’s really interesting as I was thinking about what’s going to be my ask because I know you like to have know what’s going to be. My ask is that is that people educate themselves on this, the complexity in it. Again, the complexity is not always bad. It’s, it’s provided we have, again, an extraordinary system in our country that really serves any needs. Most of the time, we have these anomalies where we see situations occur that should never occur. And we have to be able to fix them. But you’re right, it goes back to our policymakers need to be fully educated and understand an industry that’s complex and requires more than a cursory knowledge, you have to dig a little bit deeper, you have to be a little bit more aware. But I can tell you as a non engineer, it’s an exciting industry. And the complexity is kind of interesting. So I would just encourage that people get to, you know, read your book, go to our website, public power.org. You know, and yeah, and, and educate yourselves, and there are people available to talk to you about it, too, if you ever really want to dig deeper.
Robert Bryce 51:05
Sure. So I have one other question. Well, just a couple of I saw on your bio, you’re a competitive equestrian in the sport of eventing. No, I’ve looked this up, generals country, and showjumping. Do you have a horse?
Joy Ditto 51:19
I do have a thoroughbred. Oh, yeah, I do. I do hurt sir. Yes, her
Robert Bryce 51:23
name is Virginia isn’t anything that eats that’s what I’ve been told. But you but so you’re, I mean, it isn’t to manage the horse, everything else you’re doing.
Joy Ditto 51:37
It’s not a lie, as you were implying, it’s a an expensive proposition for a hobby. But I’ve I’ve held on to it. I’ve been a rider my whole life started when I was five years old. And so yes, I have a horse. I get to see her a couple times a week I have a trainer help ride her as well, so that she gets exercise, but I do still do it. And I love it. And it’s kind of a mental mental health thing too. I think we all need to have something that we do for ourselves. And so I’m very, very privileged. And are you competing? Oh say sometime this summer? I am right now. My horse is a little bit had some an injury. So I’m not this moment. But I’m hoping that in the summer, I’ll get back to it. She’ll be she’ll be ready to go.
Robert Bryce 52:20
I’d ask about your kids. But what’s the horse’s name?
Joy Ditto 52:24
Her name is Virginia is for lovers because that’s our moniker in Virginia. I live in Virginia. Virginia is for lovers. It’s like a slogan. And so her name is Virginia is for lovers. But she goes by Ginny gi and NY.
Robert Bryce 52:38
Got it. Last last two questions. And my guest is joy did Oh, she’s the president and CEO of the American public power Association. You can find more about her at public power.org What are you reading your fiction reader nonfiction.
Joy Ditto 52:53
I’m all of it. I’m all of the above. And I listen to audiobooks a lot in the car. And so especially when I’m going on to see my horse, and right now I just got finished reading the latest stephen king called later that’s my kind of that’s my like, just when I don’t want to think about anything. And then I just read. Yeah, yeah. When I just read. Also for for for work called it’s called the ideal team player. I don’t know if you’ve ever read the Five Dysfunctions of a team, but it’s kind of another. It’s a management book by the same guy about the ideal team player. So just trying to make sure my team is operating optimally. Here at agta. Last question about you. I want to hear about what you’re reading. Oh, gosh, are you reading your I want to read your book,
Robert Bryce 53:42
I snack. I’m
Joy Ditto 53:43
not just the asking the questions, but I want to read your book. So that’s going to prepare, you
Robert Bryce 53:48
don’t have to read it. You just have to buy it. That’s the old joke. But a question of power. It’s really good. It’s out on Amazon. I mean, as a retailer. The last full book that I read was a gentleman in Moscow, which I just loved. And I read a lot of sections of books, I don’t generally read them front to back. But nevertheless, that’s one. But I’m good to hit you with the final question here. So joy, what gives you hope?
Joy Ditto 54:19
Oh, what gives me hope is that we all at the end of the day, need electricity, and we all should figure out a way to optimize it and come together around that. I’m also what also gives me hope is that we are free in this country. And it’s it’s a beautiful thing to see that freedom put into practice. So that’s very helpful. Looking at my 13 and nine year old child children. My girls are also also very helpful. Last as I would say, I mean the fact that we have a vaccine to combat this virus and you year, and it’s being rolled out better than anywhere else in the country. I mean, sorry, in the world, in this country is incredible. And that is super helpful to me. So I think that’s where I would throw up.
Robert Bryce 55:17
I got a shot last week. It was just amazing to see all the volunteers there. I mean, there were dozens of them. And I thought
Unknown Speaker 55:23
it was Yeah,
Robert Bryce 55:24
I mean, it just,
Joy Ditto 55:25
it’s incredible. I mean, think,
Robert Bryce 55:27
an amazing event.
Joy Ditto 55:30
One, think about that complexity right there and how we’re doing it so well in our country. We’re really good at logistics. Yeah. So, so yeah, that’s amazing. Congratulations on your shot. I haven’t gotten mine yet. But hopefully soon.
Robert Bryce 55:44
Yes. Well, listen, joy, you’ve been very kind with your time my guest again, to all you in podcast land. My guest is joy ditto. She’s the president and CEO of the American public power Association. You can read up on her at public power.org This has been another episode you’ve wasted as they click and clack used to say on the tappet brothers that you wasted a perfectly good hour here at the power hungry podcast. But come back anyway. And if you like it, give us a bunch of stars on your favorite podcast platform. And we will see you on the next thanks again to you joy, and we will see the rest of you back for another edition of the power hungry podcast.