Our Big 100th Episode Tackles the Big Questions for Today's Grid with Jigar Shah, Audrey Zibelman and Herman Trabish

Bryce Yonker (0:00)

Welcome to the next edition of GridPulse. I'm Bryce Yonker with Grid Forward. Today we have with us three very special guests for a very special episode, our 100th.

We got started back in the pandemic, had no idea that we were going to be jumping into this for so long, but here we are. Welcome, Herman Trabish, Audrey Zibelman, and Jigar Shah. Thank you all for being with us.

Jigar Shah (0:23)

Of course.

Herman Trabish (0:24)

Happy to be here.

Bryce Yonker (0:26)

So we thought a little bit about what we were going to do, and we decided we're going to ask the tough questions. So I'm not going to even start with softballs. Our first question really is going to be around kind of the theme that we have for our event this year, which is around affordability. So whoever wants to start, my first question is, it seems to me that a number of operators say, we're going to try to keep rate increases under inflation, but that seems like an awful ambitious target with how under invested the energy system is. Do you guys think we can keep the grid functioning without rates increasing higher than inflation in these next few years?

Anybody optimistic on that?

Jigar Shah (1:06)

Well, I mean, look, I think that it is most certainly the case that we can.

The formula is actually not that hard. It's whatever you have to figure out how to maintain a steady investment while increasing the number of kilowatt hours that you sell. I mean, it's not any more complicated than that. I think the biggest challenge that we have is that you just have this big cultural challenge in the middle, not just with the utilities, but also with the regulators who manage the utilities. I think that they all have old habits that die hard. And you know, and then Audrey's been at it for, I mean, God knows, before she was even at the New York Public Service Commission and when she was at the PJM and when she was doing her startup company in the middle, right? I mean, like, I just think a lot of the work that she's done for years are the solutions that we need to be able to manage both sides of the equation to get more out of what we've already paid for.

Audrey Zibelman (2:05)

Bryce, and I'll add, thank you, Jigar, let me add this. And I think where our discussion needs to go, what we know, right, is that we have a whole lot of old infrastructure, which is cheaper than new infrastructure. We know that there are challenges associated with any kind of infrastructure in terms of soft cost and other costs that really aren't the cost of the infrastructure, but are the cost of our not being very good at putting in infrastructure. And we know that grid is highly unproductive, vis-a-vis the fact that we don't take advantage of distributed energy and clean energy at the level that we could to actually drive down the energy costs. So to me, the right question is not, can we get it below inflation, can we do a better job of taking care, taking advantage of technical innovation, understanding what's driving costs in the system. And then frankly, be willing to, as Jigar talked about, is talk about other models because the models that we have around regulation, around markets, etc. We're all designed in the 90s for very, very different reason. And sometimes one of our models went back to the 1930s.

And so our unwillingness to recognize where we're making costs and risks into the system and therefore driving up prices should be the first line of attack. And hopefully the outcome is that we were able to moderate rates and actually make it affordable, recognizing also that affordability is not the same for everyone. It really depends on how you use energy and where you are in the value chain. And we also have to start thinking about it this in a much more sophisticated way.

So all of those things, I think, have and they're not hard things. They just the questions need to be put on the table.

Herman Trabish (3:52)

Let me go to what's happening in Michigan. Chair Scripps just answered a letter from Governor Whitmer saying that they want to do performance-based regulation.

And when I heard Audrey say nuanced and out-of-date systems, and when I heard Jigar talk about what utilities are doing, that seems to be the next step. And I don't know where you guys want to go with my comment. I'd love to know if Jigar and Audrey think I'm right.

Bryce Yonker (4:28)