 Stanford University. I'd like to welcome our panelists to come join me on the stage, and I'll introduce them as they come on up. We have Sally Benson, Precourt Family Professor of Energy Science and Engineering, and Senior Fellow at the Precourt Institute for Energy, at the Woods Institute for the Environment, Steven Powell, President and Chief Executive Officer of Southern California Edison, Nancy Fund, Founder and Managing Partner with DBL Partners, and Jason Glickman, Executive Vice President of Engineering, Planning and Strategy at PG&E. Welcome to you all. So let's maybe start if we could with the challenge I was outlining there is we're electrifying everything. How do we do that and support grid reliability? We did have a challenge in 2020. We had an outage over two nights, August 14th and 15th, that affected 500,000 customers, and that's the only outage on the trunk grid we've had in 23 years, but it created a huge firestorm of response and became a national news story, and so we have to do both things, support grid reliability and decarbonize and electrify. How do we strike that balance? Let's just go down the line. Great. Well, first of all, David, thank you for having us and Arun and the team. I will say it is I'm a double Stanford alum, Management Science and Engineering, and so it's a little bit of a homecoming. It's fun to be back on campus with everyone. You know, I think that event, everything you said, David and Arun said about California needing to set a positive example, and having the world root for us and having the media and stakeholders root for us is so vital. So we can't have those stories and examples where livelihood and health are threatened because of issues on the grid. I think we'll talk obviously a lot today about the amount of infrastructure build that's needed, you know, continuing that pace of storage, build out, transmission build out, offshore wind, everything you talked about. I think the ingredient or an ingredient we are really, really focused on, we need to be focused on as a state, so we appreciate the seven gigawatt goal and particularly our PG&E is on that load flexibility side. Getting a lot more intelligent and surgical about where and when the demand is and is coming and the ability to manage that load in a different way. I mean, I thought, you know, you referenced 2020. 2022 was instructive as well, you know, September 6th when we had that peak, all-time peak high in the Kaiso. And I don't know how many folks here remember getting a text message that day. Does everyone remember? Some remember got a text message saying, you know, I can't remember the exact text, but it was please do your part. And we were sitting in our operation center for PG&E watching, you know, watching probably the same charts that a lot of folks were for the Kaiso and you saw this, you know, near instant two gigawatt decline in load from a very frankly blunt force instrument, right, a text message that I don't think we want to be deploying that with regularity. But I do, it does have us wondering about what is the power and the potential when you can have the choreography of all these electrified devices on the grid, whether it be a pool pump, an EV, your AC load, etc. I think that's, we think that's really going to be a vital ingredient that we need to be able to bank on and make sure the grid's reliable and scale long-term. Thank you, Nancy. I'm Nancy Fund with DBL. I've been working with many people on this stage and with many of you in the audience for 20 years. We're just facing our 20-year anniversary this year. And what we do is try to answer the questions that David and others asked with innovation, with entrepreneurial investment. We're an impact venture capital firm and we've done a huge amount of climate investing over the years. And we're so proud to, I don't think DBL could exist in any other state but California, but now we need, of course, to spread what we're doing globally in order to safeguard the health and safety of our next-gen citizens. So in terms of the electrification, the ability to have grid stability, I mean, we all know the answers. We need virtual power plants. We need demand response. We need smart grid tools. We need more renewables storage. And as David pointed out, we're doing a very good job at that. I would say that, again, looking at the entrepreneurial lens and trying to see how do we create the big companies of the future that will create the jobs that people want to have and contribute to a tax base so that we can fund these programs, it's important to recognize that distributed resources play a critical role. And that's an area where we're actually seeing some stepping away. Rooftop solar is going down as much as by 50% or 40% because of changes in law. We don't have to get into all of those details, but that is a thriving area that we've exported to other places and plays a critical role in resilience. I think we all read and actually have experienced when the power goes down or when there's a hurricane or a fire, some of those communities that have residential solar, that have residential storage are the beacons of functionality. And so I think there's a lot to be learned there. And not that we want to depend on distributed resources for everything. Of course, that doesn't make sense, but they play a critical role. And in terms of hearts and minds of Californians, very, very aspirational, very important to kind of who we are. So I would say don't, as we move to post-net metering and such, we really do need to recognize not just the generation capacity that we get from distributed, but the resilience. And then I would also say that we spend a lot of money and my fellow panelists can say this more specifically, spend a lot of money fighting wildfires. And we could spend that differently and more productively if we could avoid the ravages and the loss of life and the carbon generated in wildfires. And I'm sure we'll get to some of that. But certainly tools to prevent wildfires, get to them sooner. This is all doable. These startups are beginning. We're working with utilities. And it's time. It's been completely like the cigarette smoking of the 60s, those ads that David showed us. You know, the smoky the bear motif is just not okay for the 21st century. And we can use tech. We can even borrow from companies like Lockheed Martin and folks that know how to do precision dropping on targets and reduce the complete disaster of catastrophic wildfires and allow prescribed good fire to happen more safely. So we're excited. There are so many areas to invest in. We'd like to read really early on that curve as we were in EVs back in 2006. But we do need the trifecta we call it of policy innovation and capital to come together. And so I would draw our attention to the huge amounts of money that we're spending fixing things that could be prevented and create new industries at the same time. So I look forward to talking about that. All right. So I think the conversation around the use of distributed resources, whether that's how you manage electric vehicles, everything on the customer side is a key ingredient. Absolutely. You know, David, you talked about the amount of energy storage we're already putting on the grid. So to get enough energy capacity on the system is really important. I look back at what happened in 2020 and most people that were involved in those rotating outages lost their power for 30 minutes or an hour. Outages like that are, you know, and they could, you knew in advance hours even that you may lose your power. Outages that happen, you know, on the grid, customers may be out for a 24 hours because of a grid outage and they're out that long and they didn't know what's coming. So there's not as much planning. So when you talk about grid reliability, the amount of resources and energy in the system is an important part. The functioning of the grid underneath it is critical, the wires. And so it's another piece that we focus on a lot. When we look at, you know, what needs to happen in the state by 2045, certainly all this electrification is going to lead to a lot of load growth. For Southern California Edison, we think that's 80 to 90% load growth by 2045. That's a lot of additional load that has to flow through our wires and our infrastructure. When we look at what we have to do with the grid itself, between now and 2045, we're going to need to build about four times the number of transmission line miles that are built in a year to each year today. We have to do about 10 times the amount of new distribution circuits on our grid every single year than the ones we're doing today. So, you know, you had a big number on three times the amount of renewables. The grid investment has to be huge to go with it. So when you look at what has to happen on the grid, there's a number of pieces and I break it down into reliability, resiliency and readiness. On the reliability side, a lot of the grid is old, been built over years and years. And so we've got a lot of investment just replacing aging infrastructure. We don't replace it with what was there before. We've got to replace with updated standards and change how we're putting it out there. Grid modernization, getting the sensing, the automation, the technology to control things more autonomously is another important part. So that's unreliability, resiliency. You mentioned wildfire, which is a lot of our investment has gone into hardening the grid against wildfires. But it's not just going to be wildfires. It is other extreme events, climate adaptation overall. It's going to create a lot of investment needed to fortify the grid. And then on the readiness side, that's really the load growth that we're seeing. So we've had basically flat load growth, no load growth, for nearly two decades. Now with electrification beginning to swamp what you're seeing from rooftop solar and what you'll see over the next number of years, we still believe at least half of roofs will need solar on them by the time you get to 2045. So that part will happen too. But making sure you can connect customer loads so you can, all the new EV chargers, the data centers, all the load growth that's happening across our systems, getting ahead of that, not waiting for the load just to show up. We're going to have to invest in advance. Otherwise you're not going to be able to keep up with the tremendous load growth when we start growing at 3% and 4% a year. So for me, how do we get there? It's looking at every facet of the grid. Yes, you've got the resources that connect to it. You've got the customers and how you control their loads. But the wires in the middle need an overhaul and need a lot of investment. And that's really a lot of what we're focused on as well because those outages can be really impactful and unpredictable for customers. Great. Sally? Okay, all of the above. Anyway, it's great to be back here in California. I think a lot of you know I spent the last two years or good part of the last two years in Washington, D.C., working in the White House Office of Science and Technology Policy on all of the innovation issues that we're talking about. And I can say that we are in an incredible situation in part because of California's long time leadership that there are many incentives, financial incentives that are going to help us go farther and faster even than we could but for California's amazing policy. So more renewable generation, hydrogen, EVs, heat pumps, you name it, there are now incentives available through the Inflation Reduction Act. And for the infrastructure, a lot of the things you've talked about, there's also support from the Bipartisan Infrastructure Law to help support that. So anyway, it's an exciting time to be involved in this. So just a little bit back being in California. So you don't appreciate how fantastic our environmental laws are here in California until you live someplace else. And just simple things like traffic, our cleaner gasoline and our drive to EVs make it so that air quality here is so much better than it is in major cities on the East Coast. And I think back to, I'm sort of almost a California native. And I think when I was a kid, you could often not see San Francisco from Berkeley. You certainly had no idea that there was like a mountain range across the bay. None of that was there. So good work to all of us Californians. Anyway, I'm so happy to be in this community, in this state. So to address the issue of resilience and reliability and so forth. So today, about 20% of the end-use energy we use comes from electricity. I know it doesn't feel like that because, you know, it seems like electricity is everywhere around us. But if you look at between driving and heating and industry and all of that, that really it's only 20% that comes directly today from electricity. In the future, that's going to be more like 50, 60, 70, 80, maybe 100%. So it really highlights the importance of reliability. Because we're not going to have any choices really. So I think from that perspective, we really need to go into this thinking about built-in suspenders. You know, that we have to have redundant systems that when we are under a threat, be it from wildfires, be it from cyber attacks, be it from extreme weather, be it from an earthquake, that we always have a plan B if we are going to be so reliant on that. Which brings me to another point and perspective that we really need to think about this as an electricity system. And because of all the exciting progress about cheap solar and lower cost wind and so forth and battery storage, I think we've started to think about this as a bunch of components and certainly a lot of policy has driven towards making sure that we can deploy all these components. And the great news is they're inexpensive now. But now what we need with this sort of eye to belt and suspenders, we really need to think about this as a system and how do we build resilient systems that will make sure that we have the 24, 7, 365 energy that we need. So just to say two more things. One is that we really need to look at the distribution systems. We have a distribution system that was built on the 1960s power grid. Maybe later. It's getting better and better. But it was not built for everybody having EVs and everybody having electric everything. So I think one of the parts of resiliency is really looking, are we electrification ready on all the distribution lines within the state? And some will be ready and others will need work and we need to begin doing that work today. And it won't just be building more wires, but it will be building the intelligent control systems in so that we can manage power flows within distribution systems, including taking advantage of energy assets embedded within the distribution system. So storage systems, rooftop generation, community scale solar. How do we begin managing these as assets that again can help during periods of resistance, during periods of threats? So yeah, that's a perspective I'd like to bring to this. Thank you. Great. So what we'll do is go maybe another 10 minutes or so with the panel, and then I'd like to open it up for questions. So be thinking about questions. We'll have someone with a roving mic. So we're in a period now that I like to call the great implementation. We have set all these big goals in statute or by executive order, 100% of new vehicle sales by 2035, 100% of the electric grid by 2045, carbon neutrality by 2045. We have a 6 million electric heat pump goal. All these things are kind of set. And really I don't think there's a big need for a whole bunch of big, bold new policy. I think it's really about how do we get this done in a way that works. And I would like to just go down the line. When you think about the biggest barriers to doing what we need to do, what is at the top of the list? And from rates to, you know, reliability, I'm just curious if we could go down the line. What is it you think we have to contend with? What keeps you up at night on this question? Three barriers? Do I get 10? How many do I get? Don't take them all. Yeah, I won't take them all. We certainly talk about these a lot. I'll pick three that are, two or three that are top of mind for us. One is, and I'll say, David, I think we agree, when you look at any kind of long-term pathway study commissioned by the state, by our friends at Edison, ours, 80 to 85% of the technology is there. And so we really, really, really have to be focused on how do we innovate in scaling. Some of the things that we're focused on is, one, at the customer premise, you know, we talk about the distribution system. We have a lot of homes and multifamily dwellings in the state of California that have outdated panels, you know, and homes where maybe they have a 100 amp service and they might need 400 amps in a fully electrified future. And that gets expensive quickly, even in an affluent community. And so we're really, one of the things that we think we need to be focused on is how do we minimize the disruption and the cost for customers, all residential customers, but particularly, you know, moderates, lower income customers of those upgrades. How do we take that from a, you know, five or $10,000 plus, forgetting even the appliances, the devices, but the panel, and bring that down as little economic as possible. I think on the distribution system, we've got to be able to have a forecasting and funding and cost recovery mechanism that is much more responsive to customer demand. You know, there's so many benefits to the regulatory compact we have in California with multi-year rate cases. Customer environment is changing so quickly. You know, in terms of, we reference data center growth, explosion EVs, and so meeting customers where they are and having a whole paradigm. To Steve's point, we've had 20 years where the paradigm has been no growth. And really arguably, 50 years in California where the objective has been to destroy electric demand. We really actually now have an objective to grow electric demand. So how do we set up the whole paradigm from a forecasting and funding mechanism to do that? And then the third, and I'm sure, I don't want to steal a cylinder, I'm sure Steve will talk about this, but we have got to find a way to rapidly shorten the time frame and the cost of transmission build-out. Just under any scenario, even under the highest distributed resource scenarios where you say 70, 80 percent absolute theoretical full potential of every building in the state is blanketed with solar and storage, we still need a lot of transmission, both rebuild and new transmission. We need to find a way to really significantly shorten those timelines and reduce the costs. Nancy? Okay, so in terms of barriers, we often fight against the lack of awareness as to how compelling clean solutions can be and that they're not more expensive. There is a narrative, and part of it is because of incumbents or as David is describing, the machine that kind of perpetuates fossil fuel support and adoption. And so we often find ourselves having to educate folks that we think should kind of know better. And for example, just something that we've done in terms of the electrification of almost everything category is we've gone and looked at. When we invested in Tesla, it was like people need cars, they love their cars, but we've got to unhinge them from fossil fuels. People also feel the same way about coffee. They're addicted to their coffee and it has to be just this roast and this good, and yet the roasting of coffee is a huge carbon sink because it's all done with natural gas. Lots of particulates and these tend to be in lower income areas. And so the notion that you could unhinge from natural gas and roast coffee with electricity and distribute that is doable and there are companies out there doing that. And yet, and in fact the California Energy Commission has supported the intersectionality of decarbonizing coffee roasting with making lower income neighborhoods where these roasting companies are safer and more healthy. And they funded one of the largest roasters in the Bay Area, heirloom coffee in West Oakland, so close to 880 that you can almost touch the cars as they go by. It's a pretty rough neighborhood and yet they are a leader with the help of the CEC and a company in Berkeley called Bell Weather Coffee that makes these electric roasters. A leader in creating better coffee with a lower carbon footprint. And I find myself later today going, I'm going to have lunch with the chairman of the board of Pete's Coffee who you would think Pete's being a California company for all these years. He would be all over this and he's a very smart guy but people just don't understand that these things are doable because this is when EVs first were here, we didn't believe that you could actually have a car that was fun to drive and economical. So there is this mindset, this educational barrier that we face but we feel that working with programs like the food production program at the CEC and working with entrepreneurs who can show you the benefits of these switches that will make great progress. There is a latency there that we have to fight against. Nancy, I was just going to say we have so many options when you order coffee. The double half-calf mocha, frappuccino, all electric is the... Yeah. I'll make that. Yeah, exactly. The de-carbon coffee. De-carbon coffee. De-carbon coffee. It's coming. It's coming. Lowest carbon coffee is on the bag of Bell Weather Coffee. So again, we're all like, what? You can do this, but it really isn't rocket science. We can do it. And then another barrier that we face, and this is more of a financial barrier, but it does affect us, is some of these developments take a long time to actually achieve scale. And right now our capital markets are really rewarding, yes, revenue growth but also profitability having profits and growing them. And that's what public market investors are looking at as what they want to... If they want to buy an IPO, it has to kind of look like that now. And if you go back to 2010, when Tesla went public, it had revenues of under $100 million, which would never happen today. You could not go public at that size. And it had a loss of $150 million. Again, you couldn't get a company public today with that profile. And that is a barrier because these companies don't show up on the scene all of a sudden being perfect. I mean, it took 10 years until 2020 for Tesla to achieve profitability on a yearly basis. And I think we need to educate people that this is a work in progress, that we walk before we run, but that we have to move that direction and we need the support that we had a decade and a half ago of the capital markets and of the institutional buyers to make this transition. And so I know that's something that is a little hard for California to solve on its own, but the good news is that there are, you know, with the new transparency and carbon accounting that we're all witnessing, it is going to wake people up and educate people to the hidden liabilities in a balance sheet that isn't moving towards decarbonization and that I hope will help with this issue of how to finance these companies because as we've seen, they do need billions and billions of dollars. All right. Jason, you're right. I wasn't going to talk about transmission, but you covered it well. Oh, complete no. I mean, what's that? It's one piece. The challenge is how do you turn this grand plan into something that's executable on the ground? And they're going from concept to reality as a real challenge across every dimension here. Transmission is a great example. It takes a really long time and you can get stopped at every level, you know, at the state level, at the county level, at the local city level and being able to move forward. And you've got a lot of decision makers that are constantly challenging an individual project now have to do tens and hundreds of those projects over time. That's a big challenge that we've got to work through how we do that, the deciding, the permitting, the licensing, et cetera. Customer adoption can be a challenge. We're seeing great adoption with electric vehicles right now. We are not seeing the same thing with building electrification. We're behind when it comes to building electrification and we need more unique programs, ideas, ways to reduce barriers to build the adoption behind building electrification because that's another key part of all of this. So customer adoption can be a real challenge. Obviously, there's labor and supply chain that create both near-term, mid- and long-term crunches. Near-term, I'm more worried about supply chain. Long-term, it's getting enough resources to build everything that needs to be built. But all of those comes back to one that constantly lingers out there that we're always balancing what can be done is affordability. Affordability can undermine all of this because there are so many different investments that have to happen. Whether it's the resource side, customers having to adopt these electrification technologies that maybe they can't afford, that's the one that probably keeps me up the most at night. So we have to figure out what are the solutions. We've got to figure out how to be more efficient and effective. All the numbers I talk about in terms of the amount of grid investment, I want to find ways to reduce the amount that's needed. So how do you get technologies that, grid-enhancing technologies will get more out of your existing transmission system that allows you to get more out of every single line you put out there. Same thing on the distribution side. How do we redesign our system so that it actually takes less wires and less infrastructure to get in there? That's a big part of it. You have to look at rate design as well and getting the right signals to customers. Identifying any way you can to reduce the cent per kilowatt hour charge that a customer pays will help with electrification over time. So there's a lot of dimensions and affordability is complex, but that's probably the biggest one that overhangs that keeps me up. Great. Sally? Okay. Yeah. I want to talk about the existing building stock. So, you know, if you look at EVs, for example, or cars, where the turnover time is maybe 10 to 15 years for the vehicle stock, but buildings are different. You build a building and it exists for a long time. Today, the average commercial building in the U.S. is about 50 years old and it will be here in 2050 and perhaps much longer than that. And focusing now particularly on commercial buildings, that, you know, if you have a portfolio of buildings, sort of the typical way you do things is you make a small investment over a portfolio and it's very slow to do things like electrification or upgrading your HVAC systems. It's also extremely expensive, very capital intensive. And so one of the things that we've been trying to do to overcome that is to, and we've been using the portfolio of buildings on the Stanford campus as an experiment in that, you know, we have 180 buildings. They're everything from over 100 years old to modern hospitals and so forth and we've had the opportunity to test them. And what we've been working on is can we develop sort of a software, you know, a wraparound so that instead of having to go in and completely pull out HVAC systems and control systems, can we somehow trick the system by doing stress tests to understand, well, for this older building, what is the potential for demand response? What is the potential for improving efficiency? Just through data, so digital technologies. And what we're finding is that there's low hanging fruit out there that, you know, anywhere from, say, 15 to 30 percent demand response flexibility. We're also being able to identify that many buildings, commercial buildings in particular because of the way the systems are designed that they are using way more energy than they even need to use because one or two zones in the whole building are driving, you know, over consumption of cooling as an example. So commercial buildings which use about 35 percent electricity in the country are an obstacle and a challenge, but there are ways to overcome them. And I think we need to start pushing on, again, affordable solutions, low cost solutions, solutions that don't require capital investments, or very low capital investments. So that's one area. Another one is that, you know, people are really busy. People don't have time to think about energy. You've got your job, you, you know, want to have some fun. You want to be with your family. You've got your kids. And particularly in communities, lower income communities, I think we have the opportunity to not sort of wait for every individual to make the choice that they're going to do this. But if we could develop new strategies where we go into a community and house by house and block by block, think about, well, what needs to be done here? What will it take to do it? How much will it cost? How do we develop a financing model that's equitable, affordable, and that we could implement through, you know, state-based programs or partnership programs? So I think that's in that same vein. And then I'm just going to highlight actually two more. One is this energy storage. You know, the EV revolution that's so exciting, you know, at the same time that's growing rapidly in California and around the world, EV supply chains for batteries are stressed around the world. And we have many sort of almost single points of failure in terms of where these materials are sourced from. And in a world with growing national security threats around a whole set of issues, we really need to be thinking about how do we strengthen the domestic EV supply chain. So that's one part of storage. The second part is long-duration energy storage. Certainly lithium-ion batteries are going to be a huge contribution to the California-based grid. I think they're going to be the workhorse of energy storage. But we also know that long-duration storage is going to be necessary. And today the opportunities for long-duration energy storage beyond hydropower are quite limited. So that's why at Stanford, together with Professor Chu, we've been developing a new program called Steer. And the idea behind Steer is to look deeply at these issues. What are alternative chemistries? Could we move to sodium batteries, for example? And, you know, is there a potential to make it cheaper? And how quickly can we do it? And what are the critical obstacles in roadblocks? So I think, you know, improving energy storage is really important. And then this one final thought. Alignment is going to be really critical. So we're frustrated. It's slow to permit. It's slow to get projects on the ground. Well, I think the heart of that is a lack of alignment between all the players. So as we, you know, continue this incredible revolution that the Professor Majundar talked about, the greatest transformation of our time, we really need to make sure that we've lined up things in terms of equity, economy, national security, and what's the last one here? And the environment. So often we think climate and environment are the same thing. Well, they aren't necessarily the same thing, particularly when you look at the massive amount of land use that's going to be required for all these renewables that we are going to need and want to introduce to the grid. So working on that alignment from the ground up, you know, if we can get everybody thinking, you know, working along the same path where everybody wins, it will be much easier to go quickly than if we have to do that on a case-by-case basis. Thank you. Can I just add on that? So that last point I think is a really important one. The choices that have to be made are going to be really tough because you may not be able to save all the net catchers and all the frogs and all the various, all the environmental impacts that are going to happen. You have to make those trade-offs. And right now different agencies can get in the way of decisions trying to protect what they're trying to protect. We've got to figure out a way to get all of those aligned and in some form of unison and say, here's the trade-offs we're going to make and here's the overlying umbrella that is driving that whole thing. There is an effort to take the oil and gas leases on federal land and morph them into more renewable energy sources and derive revenue from that. So that might be a solution. To be clear, I'm good with frogs and toads. All right, so let's open it up to questions. If I could ask, when you ask your question, just to introduce yourself into the panelists if we could keep the responses brief so we can get a number of folks. Before that I want to make a shameless pitch which is can I have all the Energy Commission staff please stand up for a second, which is for those of you... Lindsay, I'm looking at you. The pitch is this. For the young people, the students that are here today, there has never been a more important time to be in public service. For all this to succeed, the regulatory architecture has to be built to enable the incentives to work, the rules of the road, and that is done through our state agency, the Public Utilities Commission, the Resources Board, the Energy Commission. We are only as good as the people we get in. The opportunity is amazing. I started as chair five years ago, our budget was a billion. It's now nine billion. The good we can do, you mentioned long-duration storage, we're spending $330 million to bring that in, and we need talent. So if you are thinking about what to do when you finish your program, think about public service and try to talk to one of those CC team members. Okay, let's go to questions. Yes, ma'am, in the white. And if you can introduce yourself first. I'm Claire Broom. I'm with 350 Bay Area, an environmental and rate payer organization. First, I'd like to commend Chair Hochschild for the seven gigawatts of demand flexibility, which the Energy Commission is charged with implementing. And I can't wait to see what you do after the pool controls, and I encourage your staff. Heat pumps, heat pumps are next. Second, very quick comment. There's this bogeyman of September 6th, and the very heroic consumers who, for free, decreased their energy use to prevent brownouts. For that same day, based on the Cal independent system operator market rules, utility scale batteries discharged at 3 p.m. when there was still plenty of solar. So let's be sure we're looking at policy, not just at building more infrastructure. And finally, my question. I'd really like to hear from Nancy. To me, DERs are such a great solution to many of the challenges that have been raised. And I'm really curious to hear from Nancy what she thinks are the top, say, three policy impediments to recognizing the potential for DERs. Thanks. Thank you very much. So, you know, there's a long history of policy around distributed resources that David has been very involved in wearing many hats over the years, and we all have been. And I would say that without the policies of the California Solar Roof, what was it? Million solar roofs initiative and net metering in its early versions, we wouldn't be the leader that we are today. I think that's widely accepted. So what we're seeing today is that we're moving on because solar is not enough in terms of distributed resources. We do need storage to kind of bring the full benefits of solar to bear and to reduce the ducker, which I'm sure you guys are all familiar with. And so that led to changes in the net metering regulations, which are relatively recent. And I think we're still working our way through, because I think that the two gentlemen sitting next to me support distributed resources as much as any rooftop solar company does. But the issues of affordability and linking incentives so that we get the most bang per buck relating to solar and linking it to storage, those are all really still being worked out. And so I wish I had the crystal ball as to where that will end up. But I am concerned that some of our leading companies, I read somewhere that Sun Run laid off 2,000 people because of this change. And now we have so many problems with California people leaving and now we're having states go to Florida and all these other places, which don't have the base regulations that we have to be successful. So I guess I feel that there has to be a coming together of allowing distributed resources to thrive, making them accessible to low income areas, which we are doing and which we've always done. There was always a set aside of the million solar roofs initiative and others to give more incentives to low income neighborhoods. We can do it. It's just a matter of policy and public will. And the roles of utility, I think the utilities become so important as we move to this increased load, to this increased use of EVs as a distributed resource. So I would say that we have had a little bit of a blip in terms of rates of adoption of solar. I think that some of the incentives for distributed storage will help to bring that back up and perhaps we should couple the purchases more. Are we doing that, David? Are we creating incentives to couple solar and storage? Because I think that would be a big win. For low income, I think there's still incentives. No incentives for solar left for non-low income. Well, maybe that's something that we can look at. For the questions. Let's go to Johnny. Just project. What an August panel. Amazing. You guys have talked a lot about what happens at the local and the distributed and sort of on our whole front here. Sometimes we hear about the sort of third leg of the story being the broad regional. You know, we talk about, oh, we've heard that if you want to grid run by the weather, you need to grid bigger than the weather. And I wonder if you could speak to sort of what good work has been going on with California and other states and energy throughout the West to build out the transmission and get over the friction in the operating markets. Sure. Let me start. Go ahead. All right. So, you know, a broader West-wide regional grid will provide more diversity. It'll provide better reliability, affordability. You can spread resources out and leverage the resources that are around. The Kaiso put together their enhanced the imbalance market that's been operating now for a number of years. And you've got a huge amount of the load in the broader West operating in that, basically the real-time market. And there's been, I think, four or five billion dollars of benefits to customers from that market. Now, the next steps are extending that to a day-ahead market. And so the California Independent System Operator recently got their EDAM, as they call it, Enhanced Day-ahead Market, designed and approved by FERC in December. And the plan is to have that go live in 2026. So we're looking to build that day-ahead market out, which will, you know, right now, less than 10% of your energy is clearing the real-time markets. You go to the day-ahead, and now you're getting more than 90% of it, so a lot broader benefits. The operation of those markets really helps when you get in the crunch time during summers. And so each summer of the last few years, it's actually been different parts of the West that have benefited. In the past, California's had to import a lot, and that visibility and the flows has helped California. This past summer, the Desert Southwest was really hurting, and they benefited significantly from actually drawing resources from California elsewhere during their peak times. And so as you broaden out those markets and go beyond just a real-time or a day-ahead market and begin to look at system and transmission planning and a full regional transmission operator, there is a lot more benefits. Those benefits are smaller if you've got multiple markets. And so part of what we're looking at, as well, is how do we get to a single West-wide market that will drive efficiencies and reliability and, frankly, put more resiliency into the West? I'll build just real quick building on Steve's last comment on resilience. You know, traditional power system modeling right from an engineering perspective and then looking at the economic benefits from an affordability and then managing reliability, we don't actually yet have a paradigm for how we really plan for or value resilience. You know, traditional one-in-ten loss of load planning doesn't account for the types of things like we had in 2020 or we're going to continue to have with these compounding events, right? You have, you know, a fire on the northern California border that results in some transmission lines needing to come down. You've got smoke, solar production's down. It's hot, people are running AC, they've got EVs. We've seen it, right, in terms of these events kind of pan-caking. And I think we know we're going to see more of it around those kind of compounding variables. And so I think we don't yet have a good way to put a price tag on that, but we know it's high. And so I think the resilience benefits are there. We also need to be keeping our eyes open for alongside, to Steve's point, the reliability and customer affordability benefits. Okay, next question. Okay, go ahead. My name is Miss Margaret Gordon. I'm the founder and the co-director of the West Oakland Environmental Indicators Project. What I would like to hear, where is the plan of action to talk about the justice and the injustice and regarding those who are most vulnerable and impacted for not having all these required or these proposed energy efficiencies to be a pathway to net zero. I haven't heard of anything that where's the community-driven process from Stanford. Where is the expectation that there will be something that will be more supportive of the targeted neighborhoods who have the most impact? And also, where's the health piece in this? Because we pay what I have every day by being exposed. And I'm not hearing anything like that from this panel or from you as the emcee of it. Yeah, ma'am, with your permission, I can respond to that, so that's a very fair question and actually there is good news. Sorry? Yeah. So let me share what's happening on that. So the state of California is absolutely embedding equity in every single energy program. You mentioned air quality. So one of the key things for indoor air quality is natural gas stoves. So we're doing a billion and a half dollars in incentive money for people to convert. That 100% of that money is going to low-income households. Of the $4 billion we're doing right now for electric vehicle charging, we set a goal at the Energy Commission to do 50% in low-income communities. We're doing 68% today. In our demonstration projects that Joan is leading, we're doing about a billion and a half dollars for clean energy projects such as energy storage. We're at about 70% in low-income households. And then for things like solar that used to be incentives going to all income classes, it's only going to low-income, there's a lot more that needs to be done, a lot more. We recognize that. And I think one of the things that is a particular pain points around power generation. I grew up in the city of San Francisco. We had two power plants. They weren't in the wealthy neighborhoods. They weren't Pacific Heights or Marine District. They were in Hunter's Point, Bayview. And Ms. Espinola Jackson is one of my mentors in San Francisco. And she led the fight really to get those shut down. Those facilities have been shut down, but we still have too many that are operating. About 40% of our gas fleet in the state of California is still in low-income communities. And we're not going to stop until that's done. I don't want you to get the impression we're satisfied with that, but I do think it has been a seed change. And I would say this. I think what California has done on this has affected the Biden administration. And now the Biden administration has implemented a larger point, like what is the goal? It is, in addition to getting to 100% clean energy is to do it the right way. And this is not just for urban communities, but also for tribal communities. We have a big program. We have actually 20% of the Native American tribes in the United States are here in our state of California. We've done eight tribal energy microgrids, including two $30 million grants to support tribal energy sovereignty. So I see that as a down payment, but not the end of the job. Any others, like Sal, you want to add to that? Sure, yeah. Anyway, thank you for bringing this up, because absolutely it's incredibly important. I want to just highlight a couple of areas where Stanford faculty have been leading in this area. And then I'll talk about some of the new programs that are taking place. So one of the big issues is how do you prove and quantify the impacts of power plants or even on-road transportation on different communities living in different parts of the state or the country. And Professor Azevedo is one of the leaders in developing the tools that were able to quantitatively demonstrate, beyond any doubt, that in fact that low income and community of colors are disproportionately impacted by pollution. So that, I think, is very important work. We recently just did a study showing that, actually from a California perspective, we import still coal-based power generation as well as natural gas power-based generation from other states. And we were able to actually show that our imports, again, disproportionately are impacting a low income and community of colors even beyond our own state borders, which is something that we need to do something about. So that's some past work. Saying a little bit more, Holmes Hummel, are you here, Holmes? Okay, Holmes. Holmes is one of our leading researchers working on these issues. So I encourage you to speak to Holmes, a fantastic leader in that area. The second thing is tomorrow we are having another companion meeting to this on a new program that has been initiated called Ernest where we're working with a consortium of universities around the country on equity-centered, equity-focused energy transition strategies. And again, Professor Ines Azevedo is leading that. So I'm not sure if you're planning on being here tomorrow but do get in touch and we'll find a way to keep hearing from you more. Well, thank you. We'll follow up. Nancy? I just want to offer it's so true that West Oakland has disproportionately high respiratory disease because of particulates and such and while it takes a huge effort to turn that around I would invite you, if you're interested in a coffee roasting company that is in West Oakland, heirloom coffee that's a pretty big employer in that neighborhood if you'd like to visit and see how the natural gas roaster in all of its sort of noise and particulate generating glory is being replaced by silent ventless non-polluting electric roasters and creating great power and being supported by the California Energy Commission I would love for you to see it and perhaps bring some of the members of your organization and start to build that partnership that you've talked about. Thank you. Let's try to go a little faster. We've got seven minutes left. Ma'am in the black, go ahead. Good morning everyone. Dr. Glaude Casada I'm with the State Treasures Office the California Clean Tech Financing Authority we love the CEC, we love Stanford we love Proverb, if you want to go fast go alone, if you want to go far go together I wanted to ask the panel what they feel about building emissions saving ordinances and how jurisdictions can be more part of the solution in conjunction with community groups to ensure that these ordinances are followed at the point of sale which is very progressive. It will impact the large commercial owners, the residential owners that are turning over these properties possibly for profits SOBESO, SOBESO is very popular in Berkeley building emissions saving ordinances if you could speak on that and how you think it's part of the solution. Anyone want to speak too? I'm sorry. Building. Building ordinances. Oh sure. I mean it's very important, obviously Berkeley was the first ordinance to call for eliminating natural gas in new buildings and many many other municipalities followed that and states now are leading the charge however the courts did undo that ruling a few weeks ago or a month ago so that is a setback but I don't think it undermines the central point is that so much can happen at the level of building codes and ordinances we've seen that time and time again when Gavin Newsom was mayor of San Francisco he passed one of the local ordinances promoting solar energy and all of a sudden put San Francisco on the map so there is a cloud future in some of these ordinances because they do tend to get politicized and then land into the courts where I just don't think it's a center of expertise and so you don't see the decisions necessarily being supportive but for us they're a leading indicator when we make investments, when we see things like Berkeley or other ordinances coming together and do the analysis and look at the market we're very very mindful of the importance of that activity. One little story to tell just in 2019 the commission adopted a solar mandate on all new homes so we built about 100,000 new homes a year and I don't think that would have been possible had not cities we had seven cities that went out ahead of the state and did a solar mandate ahead and so now there's about 75 cities that have done some form of all electric mandate or all electric ready mandate and that really is a seed planting exercise for the state code. This to me is the prime example of what Sally was talking about in terms of alignment and we talked about it in the electric transmission context but how do we to your point that seed planting and create some commonality whether that's in code or even preceding code changes having some commonality so that frankly as a dual fuel utility we're not winding up with 75 different versions of how to implement building electrification because that becomes very very challenging creates equity issues who wind up with this kind of we call Swiss cheese and risk of stranding infrastructure so this is one that we're very keenly attuned to finding a way while respecting local jurisdictional authority creating some alignment at the state and county level as well. Okay, Min, let's go to you. Hi, Commissioner Hotchow spoke earlier about the great California climate experiment and how others are looking for us to fail. What I worry about is actually not just the resiliency and reliability and I want to commend Steven for talking about the affordability that is front of his mind because what we're seeing are double digit rate increases and while Californians pay two to three X times more than consumers and businesses in other states for the poor KWH for our electricity our buildings are more efficient than others so how do we reconcile the investments that we need to make we know we need to make in terms of grid infrastructure, distributed resources and transmission lines and distribution lines and substations, how do we reconcile those rate increases with what we're telling the public in that this transition is going to actually save them money okay, I mean EIX, SEE, talked about your pathway to 45 where consumers actually are going to save money in the long run but we're seeing double digit rate increases how do we reconcile those two? Do you want to go for it? We had the most recent GRC from PG&E so let me comment on this the end game we have similar analysis to Steve's team the end game is very attractive in terms of being able to shift the money that's spent on gasoline and other liquid fuels into the electric system because it's just so much more efficient how we get there who pays, how they pay when they pay we got to find a way to answer all those questions I think we the most recent rate case that we worked through are all vital safety investments a bunch of it is catch up on some wildfire spend but I do think it's also indicative of how the path to that attractive end game can hit some bumps along the way and I'll just reinforce what Steve said that we're very very focused on trying to make those bills as affordable as possible that show up on the PG&E or SEE or SDG&E letter head showing up in customers inboxes every month and also I think we need to have a real conversation about what do we want on the utility bill, what do we want showing up being paid for in other ways that we don't yet have a you know a consensus around did you want another question you want me to close this can I just give point a little factoid and we have to leave no stone unturned because when we talk about the cost of wildfire the more foundation just came out with a study that showed if you can get to fires earlier you could save anywhere from three to eight billion dollars and so investing in our infrastructure to eliminate the catastrophic spreading of wildfires not only saves lives and habitat and ways of life it's saved billions of dollars and it's all within reach couple quick points so our analysis says by 2045 you should see a 40% average customer will see a 40% reduction in their total energy spend we have to think about total energy spend not electric bill energy spend is gasoline natural gas and electricity combined yes electric bills will go up by 2045 to help make all this happen but you're spending so much less on gasoline and natural gas to get through this transition we also have to be really clear on what's driving increases at certain times we've had double digit rate increases for four or five years in a row now it is primarily driven by wildfire investments and so it has not been the clean energy transition that is driving those increases that we're seeing we don't we have to make sure that people don't say that hey the rates are going up the clean energy isn't working no that's not what's happening here we've got a midterm period where we have to spend to fortify against wildfires and drive that resiliency once the grid is hardened it's maintenance from there that's when you've got room and bills for the other pieces so important parts that it's easy to take the messages and mix them up and say this isn't working that's not the case we've got to make sure that we're focused on that total energy spend and the transition and we do have to find every single way we can to make it more and more affordable all right with that friends will you join me in thanking our terrific panel