 Welcome. Good afternoon. I am Caitlin Raimi, assistant professor of public policy at the Gerald R. Ford School of Public Policy at the University of Michigan. On behalf of our faculty, students and staff, it's a pleasure to welcome you all to this policy talks at the Ford School event. Energy policy has never been a more relevant topic. Corporations have made significant commitments to cleaner, more sustainable ways of doing business. And the Biden administration is building climate change into every area of policymaking, from infrastructure to commerce to foreign affairs. Our guest is DTE executive chairman, Jerry Anderson. In addition to addressing the role and future of the energy sector in a changing climate, he will also be giving us some insight into Michigan's response to COVID-19 based on his service co-chairing the Michigan Economic Recovery Council. Some background. Jerry earned his MPP from the University of Michigan, go blue, back in 1988. He joined DTE in 1993 and held various senior executive leadership roles before being named president in 2004, CEO in 2010 and chairman in 2011. He was the architect and leader of the company's strategy to focus on cost and operational excellence in the utility business and to develop its non-regulated businesses. As CEO, he focused on building a positive, highly engaged culture and on deeply connecting DTE energy to the communities it serves. In 2019, Jerry was elected executive chairman to serve as an advisor to DTE's CEO on business issues and to focus on DTE's community, state, federal and broader industry roles. A quick note about the format for today. We're going to have some time toward the end for questions from the audience. We've received some questions in advance, but you can also submit questions in the live chat on YouTube, or you can tweet your questions to hashtag policy talks. And without further ado, welcome Jerry Anderson. Well, thank you, Caitlin. Glad to be here. Yeah, we're so glad to have you. So I'm going to start off with a question. Many of the people in the audience for this talk are students who might be considering a career in energy policy. So could you start by briefly telling us what inspired you to get into the energy world? You know, I think I'd have to trace that to my father. I had a father who was deeply interested in sustainable energy. He was an engineer in the agriculture industry, but late in his life developed, I can only describe as a passion to try to figure out how to use agricultural waste and convert that to energy. Never really played out for him. That never happened, but it carried with me as a young person. I studied engineering and physics at Notre Dame, but as I worked my way through that this interest in energy has stuck with me. I remember traveling after I left Notre Dame, my brother and I took a trip around the world and remember sitting on a mountainside in Switzerland looking out at this incredible view and writing in a journal. I hope I can somehow connect my career to sustainability. And so when it came time to go to grad school, I weighed sustainable systems engineering or economic development poverty. And much of my dad's chagrin I chose economic development and came to get a PhD in that at Michigan and then I diverted, as you said, to what was in the Institute of Public Policy Studies and eventually to get an MBA as well. And I thought I'd end up in the public sector, but got a random letter from McKinsey. I didn't even know who they were. At the time I had to have a roommate tell me that they were consulting firm and I had to take the interview which I did. And I ended up working there for five years and along the way, one of the partners asked me would you be interested in an energy study. And I thought back to my prior interests and I said I really would. And that led to a specialization while I was there and serving electric and gas companies that and banks. And so when I came out through another series of random events I ended up at DTE to start up their non regulated businesses. And the first of those was a renewable energy business actually a waste methane capture at landfills, which eventually morphed over time to what it is today which is a renewable natural gas business, working on agricultural operations around the country to take waste agricultural projects and convert our products and convert those to methane to be used in the California carbon markets. And so strangely, after a long trip, I was doing what my dad had aspired to do, not quite the same way but I also along the way did get involved in the utilities and then the utilities got involved in the you know at one point somebody asked me do you want to cheer the environment committee for the industry. I said absolutely, I'd like to do that. And it led me to a lot of involvement in environmental policy, which again was tied to that desire to work on sustainability and as as things wound forward I found myself involved in the kingpin of all sustainability issues, which is climate change, of course. And so from that early interest that my dad had through a lot of steps I found myself doing what I thought about there in that mountainside, hoping that I'd be tied to sustainability. I am getting a chance to work on it. I can't tell you how helpful my public policy training is for the work I'm doing. It honestly is perhaps the best educational training I had for the career I ended up in. Great. It's a great advertisement for the first goal for those who just got their admittance letters. So, let's see, you've been, since then you've been a leader at DTA through many state and federal political shifts with very different perspectives on climate change. So, of course when you're making long term plans and investment decisions you have to consider the future well beyond anyone political term. So how do you go about factoring the political wins into your long term climate or other plans and how might you, like you try to predict the future government policies or where they might push you or do you try and make plans that are irrespective of the politics of the day. Well, look, I think in our industry you need to be aware of the political wins, but you cannot be dictated by them. Your strategy needs to be able to look longer term. We are the most capital intensive industry that exists by a wide margin. Our assets live for a half a century or more. Building any major project is a five year minimum and likely a 10 year endeavor from planning to regulatory approval through engineering and construction. Some of the new administrations go by in the process of building out major assets. And so you need to be aware but you can't, you can't be wed to the directions of any administration. So I'll give you an example. In my role as chair of that environment committee that I mentioned, I got very involved in the Obama administration's clean power plan development. We began in earnest in 2015 and by mid 2016, after a lot of negotiation and discussion within the industry, we'd come to agreement with the Obama administration. And what felt like it was going to be the first construct to regulate carbon in our industry. And in the fall of 2016 it was put into regulation. And I was really proud of that and thought we'd done something really important. And then the election 2016 happened. And it took about a week to understand that all of that work was going to be shelved that we were going to exit the Paris agreement, and all of the talk was about the resurgence of coal. I remember telling my wife that Christmas I feel like I threw away your my life. But in retrospect, that really wasn't true because of the way things evolved and then in early 2017 after all that work on on a carbon construct. I found myself inundated with questions about whether we were going to abandon our clean energy plans whether we're going to hang on to our coal plants now forever and so on and so forth. It was immensely frustrating because it wasn't at all where we were headed or what we were thinking. And so I pulled our team together and said, look, what do we believe? And what are we going to stand for here? And it was pretty clear that we believe this was the critical issue, public policy issue that we could affect. And that we were responsible for it and needed to be right in the middle of the solution. So in early 2017 right in the middle of all that talk about coal resurgence and whatnot. We actually came out and said, look, we're going to, we're going to reduce our carbon emissions 80% and retire all our coal plants in the process. And we've since up that to to net zero. I was afraid of what would happen. I was frankly afraid the president would personally take us the task on Twitter and those sorts of things. But in reality, the reaction was overwhelmingly positive. And we got big press coverage worldwide, literally, because people were so interested in this whole topic. And since then, the whole industries moved in that direction, the industry moved hard in the direction of commitment to decarbonization, right in the middle of the Trump administration, because the industry believes that's where we're headed. We've heard it from our investors, we've heard it from our employees, and we believe it personally. And so there was an example of the administration headed one way in the industry, headed in the opposite direction. And so I would say now for our company and for essentially every company in the industry. Climate change is at the core of their strategy. And yet the last administration would never have indicated that that would be the case. So you got to be aware, but you can't be dictated by the winds of any one administration. All right. Well, in the Biden administration, there's, there's new possibilities and new challenges. To that end, you're co chairing an electric sector climate action roundtable that includes leaders from the electric utility sector and environmental organizations. And with the mission to identify and missions reduction framework for the US electric sector, which seems to include a goal for the entire US economy to achieve net zero greenhouse gas emissions by 2050. So that was a mouthful. But what are the sort of policies that you think are necessary and achievable from the Biden administration or others to really help meet that goal. Well, maybe a minute on the group that you mentioned so was really in 2019 when I, you mentioned I moved over to executive chairman from CEO. I began to think about where can I make my most important contribution and climate change was the topic. And when I took a look forward in 2019, I thought we might have a change in administration to one that was much more focused on climate. We do now, as you mentioned with the Biden administration. But that the the dialogue at the time was was all noise about Green New Deal anti Green New Deal. And I felt that it really missed the mark on where the industries, my industries mindset was that the people's perception of us was probably a decade old. And I also felt that there was a misunderstanding of what it was actually going to take to get the net zero. Maybe the technical solutions out there frankly won't work. And so I went to Fred Krupp who leads the environmental defense fund and said Fred, I'd like to pull together a group of senior industry leaders from the electric sector, and leaders of some of the most influential environmental and climate change NGOs with a goal of us coming in committed to net zero for both the industry and the economy. But I want your help in establishing a new narrative and a new understanding by politicians and the public as to what that's really going to take. Because the industry can't front that new narrative alone, we really need the environmental community to do that too. So Fred thought about it and came back and said, I feel this can be consequential we should do this. And so we pulled together just a great group of leaders I can't name them all because it's confidential other than Fred and I who've been public. We've had a great group we've been working for a year, we've really centered in on a clean energy standard for the electric sector as as the policy vehicle. And through a lot. I've been spending a lot of time I've probably met with 40 or 50 members of Congress over the past month and a half or so. All of it trying to tell them that the industry is not only open to but is desirous of trying to strike what we call an ambitious but but technically grounded clean energy standard. We're there the mindset is is ready you're not dragging us to this by the nose. We want to see if we can't figure this out together and Fred has been doing the same from an environmental side. And we're, you know, we work together and compare notes and I'm hopeful. You know that the current construct in Congress may produce this it's a, as you know, an incredibly tightly balanced legislature, but the most lasting things done on the environmental front are bipartisan. So they're not overturned every time you get a shift in in political balance. I'd like to think that with the industry on board. We can work our way to a clean energy standard that's ambitious but technically workable and bipartisan and set the construct for us to take carbon out of the electric sector and do that in a fundamental way so that's what we're working on. And in the process or working through a lot of economic modeling and technical modeling as to what that will take, but it's been great work. Just a quick follow up you you're talking about a clean energy standard rather than renewable energy standard. Could you talk a little bit about what that what that difference is. Yeah, so, you know, in some cases folks talk about zero carbon is in 100% renewable simultaneously. I think if you get in deep inside this topic, which I am and a lot of others. So for example, Ernie Moniz former Obama energy secretary and now at MIT. I tell you, we have to do 100% carbon removal. We will not do it with 100% renewables. We are going to need new technologies in order to keep the grid stable and reliable. And in particular we're going to need zero carbon base loader dispatchable technologies technologies that run when you tell them to versus renewables which are intermittent batteries alone won't do it. We're going to need technologies that generate zero carbon electricity that may be hydrogen. It may be for a while natural gas with carbon capture. Some talk about small modular nuclear reactors, but we're going to do a ton of renewables. We're going to have to pair them up with some other zero carbon technologies in order to pull off the net zero aspiration. And that by the way was little understood a year ago that was part of the narrative change I wanted Fred to help with that was little understood on Capitol Hill a year ago. It's like, you know, widely accepted by by many now. So it's been a big shift in understanding. Great. Okay. On the other side of the climate coin. We often think about the, the role of energy in causing or mitigating climate change. But people, especially recent events in Texas in cold weather in Texas wildfires in California, it's making a lot of people worry about the resilience of our power systems and a changing climate so thinking about adaptation or resilience. So what do we need to be doing either here in Michigan or elsewhere to adapt our power system to climate change or other threats to reliable power and how much does this differ from one region to another. This is highly regional. These, these threats so obviously California is just dealing with an intense mix of issues fires, just incredibly difficult for the electric sector out there to deal with the Texas event. I'll spend just a minute on that. Frankly, that was an event that many of us in the industry have simply wondered when it's going to happen. For a couple of reasons one, they had a cold weather scare about a decade ago and a lot of people told them, you better harden your systems for cold weather. And they didn't. So, you know, much of the issue down there was gas wells freezing off and power plants not conditioned for cold weather and wind turbines without all weather packages. They'll have those now. You see that moving through the Texas legislature but that was part of the issue. Another part of the issue is they have a deregulated electric market there with a. There's scarcity pricing to, to drive reliability investments. Many of us have seriously questioned that construct as well. And then the $10,000 residential electric bills that people got was all a product of a deregulated market where marketers can pass through this price spike risk to homeowners. The price of electricity literally went from $30 a megawatt hour to 9,000 at the 300 x increase. You know, you're you're getting a year's worth of cost in a day at that rate. And so it's that that was a mess but not one that was not predicted and one that I think they'll finally probably come to reckoning with. And as you as you looked at other places, each each place has its own unique risk. So the hurricane prone states. There's a lot of prediction of increased intensity of hurricanes and I think we're seeing that more regularity more intensity. They're going to have to do system hardening for sure to address those we've talked about California wildfires and areas. They aren't the only ones in the west who could be who could deal with that over time. I would say we've, we probably sit in Michigan with the least intensity of the issues around climate driven adaptation we're seeing some, we're certainly seeing increase in warmth. So, you look over the past 30 years and I often say our people the first 15 of those 30 are become less relevant because the last 15 are just increasingly warm. So we're seeing warming for sure and we may be seeing some increase in the wind intensity of storms and therefore need to deal with the hardening of our system for that but I would generally say not like what the hurricane exposed or wildfire exposed states are dealing with. I mean, one follow up question for that. I mean, one thing I've heard from Michigan is that because we are relatively safe from climate change compared to other parts of the US that what we might end up seeing is more of a migration into our state is are you thinking about population changes as part of this. Gradually, it, you know, wouldn't that people say to me well give us enough time and we're going to be North Carolina and the UP is going to be like the lower peninsula and, you know, we're going to see population shifts. I was on a call with a member of Congress from Florida, I think Wednesday, and he was ringing his hands about population exodus due to, to increasingly hot summers, and people simply not wanting to be in a state where there's such intense heat for such long periods and you could see that in parts of the West to where they're considered ideal but frankly, in a place like Arizona if the 115 degree days go to 120 and last for a month longer. You might find people say enough of this so we aren't counting on it anytime soon but it wouldn't surprise that a long term pattern could be population migrations with with weather. Right. So, there's been a partly in terms of climate change and addressing it there's been a lot of talk of electrifying everything. Like moving to electric vehicles or moving away from natural gas and homework appliances. DTE of course deals in both electricity and natural gas. So what do you see as the tradeoffs in electrifying everything. Well that's a good question. So you're right we have a electric company on a natural gas company here in Michigan. I'd say for starters that in electrifying to to deal with the climate issue the the first hill is going to be transportation. So transportation has has now taken over as the sector with the largest contribution to carbon emissions in the country past the electric sector transportation did. And it's also, I think economically right. It wasn't 10 years ago but electric vehicles are just right there in terms of commercial attractiveness and consumer readiness and so forth and that's why you see companies like GM saying, in the next 15 years we won't be making anything buddy of these. And when you look at where our grid will be, say in the early 20, early to mid 2030s electrifying vehicles will take 80 to 90% of the carbon out of the vehicle fuel cycle so. And to do that for the largest emitting sector is a big deal. Our sectors ready to take on vehicle electrification and one of the reasons for that is that load comes pretty rateably across the year, as opposed to all concentrated in one period of the year. And so we'll plan for for that increment of load and it looks like by the mid to late 2030s we could have a load increase of 20 or 25% by taking on transportation, but we can handle that. We get to other sectors so they're actually behind a transportation electricity is industry and behind them is home heating and commercial heating and combined to those two actually are as large as, as the automotive sector is so eventually a big deal. It isn't as ready yet. And it's, it's going to be more challenging and I'll tell you why not as ready yet because gas furnaces are a lot more efficient than cars and 95% efficient cars are about 40% efficient and natural gas is a much lower carbon fuel than petroleum. And so when you put those two together and then look at what the grid can do. It's in many areas of the country it's still a bit of a toss up as to whether electrifying or using gas. Really makes a difference, but that'll change over time as our grid gets cleaner using electric heat will definitely be lower carbon and to get the net zero we're going to have to figure out the home and commercial heating. And I think there'll be two tools. One will be probably heat pumps what are called air source heat pumps which is the grid gets cleaner and cleaner clearly have big carbon advantages and when the grid gets to net zero it's a you know it's a it's a zero carbon way of heating. But there's a challenge that comes with that and that is the heating is highly concentrated in just a few months of the year. And so you get this big bulging electric usage and it happens to come at the time of year when our renewable output is lowest. So our solar output in December, January and February is is a small fraction of what it is in the summer. And our wind is actually strongest in the fall and in the spring, not in the winter. And so we go through what are known as renewable droughts where we could go 10 days with very little renewable output. And so that that you know that seasonality is dealt with today by storing 5 trillion cubic feet of natural gas beneath the surface of the country, you know here in Michigan and elsewhere in the country. And that's pulled out in the winter and used for for home eating. We're going to need something else that does that. I don't think it's going to be batteries because when you do the math on how many, you know, scale of battery investment that it would take to replace that natural gas, it's off the charts will mind the world inside out trying to do that. So people talk about hydrogen as a potential replacement for that. People also talk for a period about natural gas with carbon capture, being able to zero out the carbon but still be able to contribute to storage and then energy generation. But we're going to need something to complement those air source heat source heat pumps to deal with that that need for storage. We call it the seasonal storage issue. You know renewables batteries work pretty well to take energy from this afternoon to this evening or tomorrow. They aren't so good for taking energy from September to December or January. We'll need something else to handle that challenge. Makes sense. All right. By the way, I don't I don't see it as a, as a threat or a conflict for DT. I mean it's, look, we just have to deal with it and as an infrastructure company part of our job is to evolve our infrastructure over time to meet the needs of society and to meet the sustainability goals that that we need to go after and so this is going to be a long term journey. There are technologies and new infrastructure. Some of our infrastructure may get repurposed. We may find pipelines carrying hydrogen or carbon dioxide that used to carry natural gas will figure it out as we go. All right. Great. Let's see last question on energy. I think that has greatly changed the way that we all use energy with many more people working from home and major disruptions to travel. So I'm curious, has the pandemic changed how you see the long term future of energy, or do you see this as more of a temporary blip in energy use patterns that, you know, we'll revert back to normal in the near or near ish future. I think there'll be some permanent shifts. So, you know, you read every company is rethinking how they're going to use office, the office and office workers. And there's one CEO I know who thinks that they'll go back to anything like what it used to be. And so a typical company may have the average employee driving in a couple days a week for various things but that means three days less of commuting. Commuting is a big energy use. And so that I think will be a permanent shift, not for all employees because some have to go to jobs that require you to be there but for that 40% of Michigan employees who work in an office. They won't be traveling there as much same for business travel, I think a lot of people have found that they can get their business travel done on electronic devices. I used to fly all over the place meeting with investors, you've done all our investor meetings via formats like this, and it's worked fine. So I'll probably go see him once a year and leave the other three or four times to be in this mode. And so that's going to affect business travel. I think those will be permanent changes for the better in terms of lower energy use. One of the things that moves in the opposite direction is that as people use their home smart, energy use in the home has clearly risen. So we saw that this past year and we're continuing to see it. Our home energy use and home energy demand is up and that's likely to be permanent too. Let's see. So that leads us to a segue into some questions about your role as co-chair of the Michigan Economic Recovery Council. So this was a group of business and health leaders who were tasked with forming Michigan's recovery plan for COVID-19. So as part of this council, you were faced with this brand new pandemic with lots of unknowns, it was formed last spring. Where did you even start on coming up with a reopening plan in the face of so much uncertainty? And what was the process like for identifying which factors to consider both in order to look for evidence both on the health side and on the economic implications of whatever guidelines you put forth? Well, maybe just a little background on the Michigan Economic Recovery Council, or Merck as we call it. So I remember very clearly the evolution here. It was a little over a year ago on March 12th that I was in my last in-person business meeting. It was a DTE board meeting. And on March 12th, we had a handful of cases in Michigan, but the noise was really beginning to rumble. And I remember saying to the board, this feels like it is going to reshape everything in the year ahead. Well, it only took a couple of days and we had every employee at DTE who could be homeless homes. And it was a couple of days after that that the Michigan economy was largely shut down. I mean, the central business is only. And I can remember, I was and still am a chairman of business leaders from Michigan, thinking at the time all the former work of business leaders from Michigan is toast. So we focus on now. And the focus was to try to figure out how to be safe in business. And so we began to pull together CEOs of companies all over Michigan together on multi nights a week calls to just understand what do we do to keep our employees safe. And we particularly focused on companies who had operations overseas in China, Italy, Spain, because they had seen it a month or two ahead of us. I remember so clearly a conversation I had with an industry executive in Italy who who said early on, do not underestimate this is you get everybody home who can be home get everybody in a mask who is doing any work around other people and do it fast. And so as we started to get this sort of input, we decided that what we needed to do is to put together workplace safety rules for COVID. And we began to design by industry sector. So one of the CEOs took offices and other took manufacturing and other took retail and so forth. And we we developed safety protocols that were eventually enshrined in regulation by the state those state regulations were developed by industry. But at the same time all that was playing out. The hospitals in Detroit, just filled up to the top. I remember being on calls with hospital executives who were running out of PPE. And we're managing it by the hour, literally, we have two hours of PPE left. And in the midst of that, I remember thinking how on earth are we going to find our way out of this intense dual economic and health crisis, because there was no playbook for exiting this. And it was at that point that I went to the governor and said it seems you'd be well served to get the best advice that you possibly can from business leaders and healthcare leaders and public health leaders and university leaders. Anybody who can bring intelligence to this decision making, we ought to pull together. And actually it was a year ago tomorrow on April 1st of 2020 that she said yes, let's go. And we dove in with a team of consultants and volunteer analysts from companies and began to think about what you asked in your question. How do you tear this problem apart? And what became evident quickly was that the risk buried by geography and the risk buried by industry. And so on geography, it was all about connection of people. So we began to use cell phone data to figure out how people commuted on a daily basis or traveled and then mixed with each other. And we use that to define what became known as the Merck regions. These were the regional dimensions of the pandemic. And then we also tore our industry by workplace type and figured out how many people in each geography worked in what workplace type in offices, in retail, in manufacturing, in construction and outdoor work and so forth. Because the disease risk varies by workplace type. And then Mark Schlissel made the great offer of putting us in touch with Du Bois Bellman who leads the public health school and Du Bois put us in touch with a range of experts who knew both epidemiological risk but also workplace risk and we could bring those two together. And then what we did is end up ranking workplace type and geography by risk level so that, you know, the risk was intense in Detroit but not so intense in the upper peninsula at various times and so forth. But also, you know, outdoor work was incredibly different from working in a restaurant. And so in the end, we developed a system for standing the economy back up geographically and workplace by workplace. And remember we started with outdoor work, small number of employees, but safe. And then we went on to outdoor construction and then construction and then worked our way through manufacturing and allowed restaurants to do curbside and then eventually retail opened and simultaneously, we were developing protocols for customers safety protocols everybody in a mask and, you know, what sort of screening might be done at the entrances and so forth and I would just I would just say Caitlin that the first two months of that are probably more intense work than I ever had my career and my wife. I'm probably being rooted to my chair because I was probably in it 14 hours a day seven days a week. And it slowed down once we got through May or June things slowed down but we've, we've remained active until just a few weeks ago when I went to the governor and said vaccinations are in full swing feels like maybe we should stand down. And why don't you go stand by rather than stand down because, you know, this this virus may take another swing at us so that's the mode we're in now. Great. And so now that you are in standby mode, like where do you see things playing out now that in the state. Will you be what do you be watching out for as we get into this new stage of a pandemic recovery. There's no race between vaccinations and in this disease because since we had that conversation with the governor, we've transitioned from a bottom five state in cases to the number one state in the nation. In terms of cases per million, we Michigan is tops in the nation. And we're tops in the nation in terms of the covert variants present as well. And so I had outreach yesterday from a couple of the hospital CEOs that are part of Merck and one of them told me my hospitalizations have tripled in the last month. In half of them involved these variants. And I'm seeing a lot of young people who are sick. Really sick. The good news is that we have not seen deaths move the way they did and even lagged correlation to the cases and I think the reason is that Merck pushed really hard to get our older citizens vaccinated first. It took a little while but it was so clear from the evidence that all the death risk was in really 50 and above but especially 60 and above. I mean you literally went from a 20% mortality rate and 80 year olds to things like point one or point zero one as you got down in the 20s and 30s. So it just made so much sense to to get our older citizens vaccinated we've got two thirds of people 65 and above vaccinated now, but only about 17% of the state fully vaccinated and 27% got one shot so we don't have anything like enough population vaccinated and herd immunity and cases are running fast. So I would just tell people do not drop your guard and do not toy with this thing as a young person because what what these hospital executives are describing in terms of the symptoms are, are not nice. So I would just say we got this disease is taking one last swing at us. We get through this vaccination process vaccinations are incredibly effective at protecting people both from the intense symptoms and they're proven to be good at that breaking spread as well. So we just need to hurry and get through this. Yeah. Great. Okay, so now we have a chance to have some questions from our audience. The first one. See here is asking what is the effect on us energy independence and security of the almost total absence of renewable power generation equipment, like solar panels and turbines and transformer manufacturers. How about large scale batteries. So this by, I take it that this means we're highly dependent on foreign manufacturers, manufacturing of renewable resources. Yeah. That's got a lot of discussion as a part of cove it in this. A lot of policy discussion in the circles that I've been involved in and trying to reshore renewable manufacturing. You know, the intense cost pressures in solar, particularly from China to play into the the upsurge in solar deployment in this country. But it's not lost on people that that we're becoming dependent on that so I think it's a really good question and I think there's an appetite to see a material portion of that reshore. Whether we'll see that play through in policy as part of these infrastructure bills that are coming. I don't know. We'll, we'll have to see I think it's too early to say on that. All right. Next audience question is, what is the likely effect on power prices of incorporating ever more renewable power, especially distributed generation, like residential solar into our electricity power grid. How does your answer change of the predictions that energy storage systems like batteries will eventually experience price reductions turns out to be wishful thinking in light of the increasing cost of essential minerals. Yeah, well that that last question is a good one, the essential minerals. So I would say a couple of things if they were renewables and then there was home based renewables and then there were batteries and maybe I'll address all three. And renewables have gone from expensive to incredibly competitive over the past decade or 12 years. And in some parts of the country you can incorporate them at no cost, but they can't do everything. So, you know, in, in the Great Plains wind is really cheap and you can do wind so cheaply you can displace the burning of coal in a power plant, very economically. We don't have quite that good a wind regime here but wind is quite competitive and solar is solar was very expensive relative to wind a decade ago it isn't anymore it's it's right there with wind in Michigan so look the the state of play in Michigan for large scale renewables is that we can bring them in at a healthy clip, we still have to manage the cost, but it is nothing like a decade ago. It's so much more competitive so I think we can, we can get to a very substantial mix of renewables and do it economically, as long as we take some time to do it. So, at least renewables, typically home based solar versus large scale solar there's usually about a three to one price differential. And that's simply a scale economy. If you, if you watch the construction of a large scale project, they, you're laying out hundreds of megawatts in a, in a relatively short window. Each home projects each one is in some ways its own project with its own interconnection so as you've watched that over time it's pretty consistent pattern that it's about a three to one price differential. So I think there's a role for home based solar but if we were to try to lean on it too heavily, it would pressure that cost equation. And then batteries batteries are going to be an important part of the picture for, especially for intraday balancing where you try to balance from, you know, high solar output in the afternoon to higher usage in the evening. But they cannot play that role of taking energy over very long time frames from the summer into the intense months of the winter. Simply would be way too much battery demand, especially when in battery manufacturing, especially when added to what's going to happen to the auto sector, and whoever asked the question is right. That much battery demand will take our precious mineral demand through the roof. And we'll find ourselves dependent on some places that mine it that are not places we necessarily want our security tied to either. So I would say we got a role and important role for batteries, but we're going to have to complement them with other storage mediums like hydrogen, for example. All right. So next question what what government actions would help DTE accelerate a transition to at least 80% renewables. What role would a predictable escalating carbon fee and dividend schedule provide for DTE and other investor owned utilities to achieve carbon neutrality. So I, going back to a comment you made earlier, I would distinguish between 80% renewable and 80% clean, which means zero carbon. I, I don't know that will ever be 80% renewable. I'm convinced that will be net zero and eventually zero carbon. I think it's going to take some of these other technologies that I've mentioned to be in the mix in order to pull that off so hydrogen or gas with carbon capture, maybe modular nuclear combined with a lot of renewables. What policy regime. I think the one that I like most is clean energy standard and the clean energy standard sets just an increasing bar for the percentage of energy production that is clean or zero carbon. And, you know, the flip side of that coin is lower and lower carbon emission levels. But that is favored by the industry versus a carbon fee is that carbon fees, especially where is where they may be set by Congress, don't necessarily correlate to a to a to a known carbon reduction. Unless you know just where to set it in terms of price to get the the out or the result that you want. So that's one thing, but there's something more fundamental. The point is that in regulated companies like mine, the carbon reductions come from a transition of how we make electricity. We need to stop using coal plants and build a lot of renewables and that's very capital intensive and we have costs that come with that. The biggest stress we have in those cost is one we've already discussed, which is customer rates, and we're constantly managing customer rates and affordability. And tax simply lays on top of all of these capital plans and increases cost. And so you kind of need to go with one or the other, either attacks and, you know, leave the sort of let companies manage to that or put in place something like a cap and trade system or clean energy standard. And I think for our for our industry, the clean energy standard, driving to lower and lower carbon emission levels is is one that we, and frankly, Congress and the environmental community seem to be centering, you know, there are advocates for taxes for sure, but the discussion, the Polone bill, the Clean Futures Act, which just came out as a clean energy standard for our sector, for example, the dominant bill in the house. And most of the discussion I have with senators is on a clean energy standard as well. Great. So related to some of what you were saying there there's a question on how can we address high electricity rates in Michigan and implement policies and programs that will help make energy affordable to people who cannot afford to pay. So, I think there's two questions there one is rates and one is, is for low income. So on rates, one, one thing that I would would say is, especially for electricity but but also true for natural gas, you need to distinguish between rates and bills. And what you'll find is that DTE tends to have relatively high rates for electricity and relatively low bills. You say why is that why would, why would bills and rates go in opposite directions it's really a volume question. And so what you find is the lowest rates tend to be in the highest electricity usage states and those generally are southern states. And the reason they have high usage is that they have a whole lot more air conditioning that we do, you know those go to Houston and they're air conditioning two thirds of the year. And they tend to heat with electricity to because their heating load is not very intense so they they can get by with later systems that we have. So you put it all together and in the average home in Louisiana will consume twice the electricity that a home here in Michigan does. And it has when you're a capital intensive business obvious impacts on, you know, you're when you're amortizing across volume that is obvious impacts on rate, but they have to pay for all of those units to. And so you'll find that the southern states have low rates but high bills for homeowners, and we in Michigan will have high rates but low bills for homeowners generally. So, in conversations with policymakers, I remember asking that question to our people, why, why are rates so darn high relative to some of these other states and when you pulled it apart. It was driven by a couple of things one was volume, and the other was access to low cost fuel, like natural gas or coal and the days when those were more dominant. So what about low income low energy or energy for the low income segment. Really important issue we were really worried about it during coven. It didn't turn out to be a big issue during coven because there was so much federal assistance that flowed into the state that actually low income expenditures and so forth went up, not down. I think wealth and those consumers spending in the state generally went up during coven because of all the federal inflows. So it wasn't such a. We thought it might be an issue during coven it did not turned out to be an intensifier but we are always dealing with a segment of our community that is struggling to pay its electricity bills and highly correlated obviously with poverty which you tend to find the same people struggling with energy or struggling with food security and housing security and a range of other issues. So we have a whole group of people who focus on one trying to expand the state and federal programs that are focused on assisting. Those individuals and by the way huge increase in this 1.9 trillion stimulus plan that was just passed big increase in federal spending on energy assistance. So that'll be helpful. But just as important as the level of funds is the ability to access them. And I have to tell you for a lot of our low income citizens, the business team process to access these funds is enough in itself to put them off even trying. And so a lot of our effort over the years has been. Literally having days we call them cost energy customer assistance days where low income customers come down and sit down side by side with the person who takes them through the 30 pages they may have to work through in order to get assistance. More fundamentally what we're doing now is to try to do away with the 30 pages and get it down to one or two to fundamentally simplify the processes and thankfully. In the current administration I think we have a partner who wants to get to that so that people who are deserving of assistance can get it without undo strain and hassle so to speak so that'll be good if we can pull it off and I think we can. Great. And so last we just have a couple minutes and we have. There's a few questions that are tied to your distinction between renewables and clean energy. And so a couple questions asking about some of those clean non renewable sources. So one audience members asking what are the future plans on nuclear power and involve safety extremely long term planning high investment and also major PR hurdles. So that's one question and then there's another question on whether you have any consideration for hydrogen blending with natural gas up to 20% as is being done on the UK on a pilot basis. Maybe I'll handle the last one. First I think that hydrogen blending is something we're looking at and evaluating and I think that hydrogen presuming it comes won't come in one step it'll be blended in small volumes and then greater volumes. When you get to a certain level your pipeline systems have to be modified. So they won't be in brittle. But yes we are thinking about that we're also thinking about pilot scale carbon capture and storage back we're doing carbon capture and storage projects in California with industrial customers in one of our non utility businesses. We're working with ethanol facilities for example to capture the carbon dioxide that they produce in their industrial processes and in store that permanently underground. So we are interested in in working with those technologies carbon capture and a hydrogen and hydrogen blending at smaller scale so that we learn them. And as they evolve and I think come down the cross curve will be that much more knowledgeable. Nuclear. I don't think the the current technologies built in $10 billion projects over the better part of a decade are the future of nuclear. I think most people have concluded that we need a technology that can be built at a predictable cost at smaller scale in something more like a manufacturing setting, rather than go out to a construction site and build this massive project. And so these are known as small modular reactors or SMRs. There are a range of SMR technologies they tend to be a whole generation ahead in terms of safety features as well so the most recent large plants are another generation ahead in terms of safety but the small modular reactors take it take it even further. And I think you know if you look at today can a small modular reactor compete with you know low cost natural gas or what remains of coal or renewables the answer to that is no. When you get down the road and ask. What zero carbon firm emission source will compete. Then small modular reactors are competing with turbines that burn hydrogen or plants that burn natural gas but capture the carbon and store it in all of those are higher cost. It's going to be very important, but but higher cost and so I think there's going to be a bit of a horse race to figure out what it is that's going to complement renewables will it be will it be hydrogen dominantly or will nuclear the small modular reactors. Make a resurgence or will what role will natural gas with carbon capture play and how long will that last and so forth. And I think the general mindset that you you see in Congress in a lot of places is that we can't predict that right now so we need to create a policy regime that enables all of them to try to find their place and the most effective technologies will win. And then the the I think the questioner was right that nuclear has some some PR issues that need to be overcome. That said when you get inside the environmental community, really not necessarily publicly but when they talk to you privately they get the role that nuclear is playing and may need to play in a zero carbon world and so to a lot of policy makers not all policy makers but a lot so it does have that challenge but as we push into the zero carbon future, there are a lot of people who think it could have a role to play but we'll see which technology wins. All right. Okay, I think we're going to have to leave it there. Jerry Anderson thank you so much for joining us here today and for engaging in this important and wide ranging and interesting conversation with all of us. I also want to thank our audience for their questions and attention and and for everyone watching I invite you all to stay tuned to our website and social media for future events here at the force. So thank you so much and take care. Thank you.