Best of August 2026

0:05Ben Toews: All right, all right, all right. Hello, everyone. This is Volts for September 4, 2026. The best of August. I'm your host, David Roberts. So, last month, we tried something new around here. A compilation of clips from the month's episodes, strung together in a single place, so that listeners could scan and see what they might have missed. I asked at the end of that one whether you found it worthwhile and useful, and many of you wrote in to say that you did. So, we're going to make it a regular feature. Here's how it will work. Every month, there's a best of episode. Paid subscribers get early access.

0:54Ben Toews: And when the next one comes out, the previous one opens up to everyone. The July edition is open now. So if you haven't heard it or you know somebody who's been meaning to check out the show, that's the one to send them. As for August, it was wide ranging, which is how I like it. data centers twice from opposite ends, including state lawmakers dealing with them and companies trying to improve them, grid cybersecurity, public EV charging, the surprising run of bipartisan housing bills out of Idaho, why utilities can't seem to adopt anything new, what a future administration ought to do with the tools this one is busy beating us over the head with, and a listener favorite out of Uruguay.

1:45Ben Toews: As always, I deeply appreciate all of you who support this work by becoming a paid subscriber. This podcast is 100 % listener supported. I could not do it without you. All right then, with no further ado, we begin with Salim Chapman of Climate Cabinet on why a variety of electricity markets are failing on data centers and how states could do better. One point that I think is important in the paper and that is interesting to me is that these risks, they're not necessarily unique to a particular kind of market design. You know, as Volt's listeners know, there are vertically integrated utilities some places.

2:34Ben Toews: There's what are called restructured markets. There's ERCOT, whatever ERCOT is. One of the points you make in the paper is that people are making kind of mistakes. There's this kind of the same failure pattern shows up in all kinds of market designs. Can you walk through that a little bit and maybe some examples of like the different places that are messing this up?

3:00Seth Cutler: Sure. Yeah. So we, in this part of our paper, we looked at three different markets that operate within three different states. And so if you start with Georgia, which is the example of a regulated energy market. Right.

3:14Ben Toews: Old school, vertically, old school, vertically integrated.

3:17Seth Cutler: Old school, vertically integrated. I think those of which most people would sort of be most familiar with and think about when they think about utility structure. And so what we saw in Georgia is that that the Public Utility Commission approved a major gas expansion really built on justification that was derived from developer supply forecasts. And so in that instance, the process worked exactly as it should. There was nothing sort of bad faith about it, but it still created a situation where ratepayers had significantly exposure, cost exposure, if those demand projections ultimately fell short.

3:57Right.

3:58Ben Toews: So the ratepayers are paying for the gas, the gas plant build out. And if the demand doesn't show up to absorb all that gas build out, it's the ratepayers who are paying for the stranded assets, basically. Exactly. And then PJM, though, PJM is a competitive market, restructured market. Talk through that one a little bit.

4:23Seth Cutler: Yeah, so what we are seeing in a state like PJM is that you can have a single hyperscale campus being bought online. At the cases that we looked at, it was 30 % of local peak demand within that particular region. And that triggered a capacity market event, which ultimately resulted in, if people have been following the PJM sort of issue, that you're seeing sort of historical capacity prices year over year. And so what we are seeing there is that similar, the process worked exactly as it should, but by triggering that capacity market event, you had states all across the 13-state footprint that PGM covers having to take on some of the cost that was associated with bringing a new facility online when they had no say in actual decision-making around whether or not the facility would be approved.

5:27Ben Toews: yeah who pays this comes up again and again and then there's finally ERCOT which people you know I think which people think of intuitively is like sort of the most free market closest thing to a free market type of system and they might think well in that kind of market surely you know it's the developer who takes the risk if it's you know really working like a free market, but it turns out there's failures there too. Talk about that one real quick.

5:54Seth Cutler: Yeah, exactly. I mean, what we also know is as we are confronting this new period of technological innovation, we are also operating within a much more volatile climate than what we historically had. And so in the ERCOG case, we saw hyperscale growth colliding with extreme weather events. And so some of the emergency programs and gas dispatching that had to be put in place to meet that emergency event, added billions in surplus charges that really surfaced as price volatility, but wasn't actually visible as a line item on any individual ratepayers' bills that said, you know, this was driven by hyperscale growth.

6:35Ben Toews: Right, right. It shows up as price volatility in the market, which is absorbed by everybody who's involved in the market. Exactly. And so all these kind of come down to... Who is taking the risk and who is paying the price? So in all these cases, you take data centers, demand forecasts, these developer demand forecasts, translate them into a bunch of costs, right, to anticipate meeting that need. and it is the rate payers ultimately who are paying those costs to prepare. So in other words, it's the rate payers who are taking on that risk, it's the rate payers who are paying. And then if the developer forecasts don't pan out, the rate payers are stuck with it.

7:32Ben Toews: That's kind of the core theme through all those market, despite the market structures.

7:39Seth Cutler: That is the core theme. that ultimately this comes down to who's taking on the risk and who's capturing the value.

7:50Ben Toews: Next up, we have Patrick Miller, cybersecurity expert on the Chinese inverters that everyone is worried about. As I think people probably know, most inverters, you know, we're talking about inverter-based resources, Most inverters come from China right now. There was this big Reuters investigation in 2025, which said that inspectors found all kinds of little undocumented communication devices inside solar inverters and batteries. And I guess like two questions. A, what do you do about what I imagine are now hundreds of thousands, if not millions, of those Chinese inverters that are already installed somewhere and running?

8:44Ben Toews: Like, you can't yank them all out. There's no practical way to audit them all. What do you do about those? And then what do you do about the new ones? As you say, we have no jurisdiction over China. Like, how do we exercise any control over what China puts in those inverters?

9:04Seth Cutler: Yeah, I'm going to keep this at a non-technical level because it gets really technical really fast. So in general, you're absolutely right. There's millions of these things out there, and they do have a lot of undocumented communications components in them. But I want to make sure we're really understanding what that means without any hype whatsoever. However, when China manufactures a lot of this equipment, they literally do it on what's called a commodity board. So you can imagine in your mind like a motherboard, right? It's a, you know, it's a, it's a computer component where the chips and the memory and all those things sit.

9:41Seth Cutler: And they'll buy literally millions of these at once. And they'll buy them, you know, from a commodity manufacturer that just makes, you know, boards, literally like generic board. Right. And on that board, it'll have all the things just in case you need them, whether you use them or not. They don't buy specific boards with just these components. So when they, I mean, 99 % of the ones I've seen that they've gone out and found stuff, it's just been the commodity board. Yes, it came with a radio. It came with a modem. It came with a place for a SIM card. There wasn't a SIM card inserted. But it has all those components on there in case the buyer of these commodity boards wants to use that functionality.

10:20Ben Toews: I see. I see. So not nefarious inclusion of these, right? Not necessarily.

10:26Seth Cutler: So whenever you see those, you kind of have to take that with a grain of salt and think, well, if there's millions of these things out there, did they just use commodity gear and they're just not, you know, this is just part of the board that maybe it's used, maybe it's not. Now, they have found some of these things phoning home and, you know, the routing traffic through China. So that's a different discussion that's at the software level, you know, where the applications that you're using to manage these devices and that kind of stuff. So those are those are different components. And there's some supply chain there that we can impose because it's software, right?

10:57Seth Cutler: We can inspect code. We can enforce certain rules on how code is developed and what's, you know, certain like transparency of the code. We need to look at the code before we're willing to allow it. These kinds of things. And we're not just going to let updates from China happen without someone taking a look at it before it goes in, those kind of things. So there are some gates we can put in place.

11:17Ben Toews: You say there might be these elements on the boards just because the boards are sort of generic and created for maybe lots of different purposes. Could those components of the board that aren't being used be activated later? Do you know what I mean? Sort of remotely activated. Like that, I guess, is the worry.

11:37Seth Cutler: Yeah, they're there. and they could be activated, but they'd have to have, I mean, you could activate them, but you'd also have to configure them. Like it's hard to explain, but when you, just because you turn something on doesn't mean it's ready to be used. Like even a phone, you can turn a phone on, but you have to give it a SIM card. That's got an activation code. That's got, you know, all these things have to happen before it'll actually work on a cell network. I mean, you could get a phone out of the box and turn it on and it just doesn't do anything. So those pieces of gear are there. That doesn't mean even if you did enable it, that it would automatically work.

12:12Seth Cutler: So it does, it ups the ante in terms of just like flipping a switch and getting this like rogue network of these things to go do stuff.

12:23Ben Toews: Then on to Idaho, where legislators Ben Toes and Megan Egbert explain how each of them got radicalized on the subject of housing. Nothing radicalizes people about housing in America more than trying to build something. Tell us how you sort of came to be engaged on this issue.

12:46Patrick Miller: Yeah, certainly. We recognized that there's a serious issue with affordable housing, especially for the next generation to own their own home. The cost in our area is around$550 ,000 on average for a single family dwelling. And so back in 2020, we purchased a small piece of land. It had a PUD, so it had 20 units already set up to be built on it. And it was going to be small homes, probably average 1 ,000 square feet. The range would be 700 to 1 ,200 square feet. and it was on small lots. And I was like, we can sell these. We're open to sell these in the$300 ,000 range, open the door for the next generation to be able to get into a house.

13:35Patrick Miller: And partway through the process, the city came back to us and we went to renew the PUD and they said, sorry, you can't do that. There's new green space requirements and your plans don't match those requirements. And so they shut the whole project down And so it was very frustrating. I wasn't in the legislature at the time, but I saw it as a real issue back then. And it just became more and more of an issue.

14:04Ben Toews: Awesome. And Megan, same question to you. You are a librarian for many years and then became a lawyer, an employment lawyer, and were appointed to the legislature a few years ago and then ran and won your seat. What brought you to the housing issue specifically?

14:21Seth Cutler: Yeah, it was actually during the pandemic, myself, like many other Idahoans, were faced with no child care while we were still trying to work, which was a very frustrating experience that I know many can relate to. And I have the fortunate ability of having a mother-in-law, father-in-law who live out of state, who are retired, who were willing to look for a home here to help with child care during this time. And I think that that was the first eye-opening experience for me was, you know, they were moving from Chicago or in theory were willing to move from Chicago to Idaho to be close to family.

15:08Seth Cutler: And there was just no options. It was not even a possibility to move here during that time. And then, you know, the second thing that has happened is I have older children. My oldest is 20 years old. She works in the medical field. She works in a hospital that's about a 20-minute drive from our house. And she recently, she's still living at home, started looking for a studio apartment in a suburb of our capital city here, Boise, and cannot find a studio apartment that costs less than my mortgage for a four-bedroom house. And so I think there's just two examples of why this, you know, became so important to me.

15:58Seth Cutler: And then mostly it's just because this is the most important issue facing Idahoans right now. We know this from multiple surveys and just from our own conversations with people is that Idahoans are getting priced out of living in Idaho.

16:14Ben Toews: Well, let me stick with you for a second, Megan. And I want to hear a little bit about this committee, this Interim Housing Study Committee you were on. This was modeled on a similar committee they set up in Montana. I'm sort of curious. You have this room. You have these free market North Idaho Republicans. You got Boise Democrats. You got realtors, home builders, a developer, the apartment association, the city of Boise. it kind of sounds like the setup for a joke. I'm very curious how that went down in the room, how that felt in the room and sort of like what you learned through that experience that you didn't know going in.

17:00Seth Cutler: Yeah, it was an amazing experience. I will say, though, I came to it late. I took somebody's spot on the committee when they stepped down from the legislature. So I was trying to do double duty of catching up. I think the beauty of the committee comes in is exactly the way you were just explaining of, you know, how different the perspectives were that were on it. And, you know, I myself, although I am technically a Boise Democrat, I probably find myself agreeing more with the free market North Idahoans on many, many issues, this being one of them probably. And I was mentioning before we started here, I grew up in North Idaho.

17:41Seth Cutler: And it was eye opening for me, I think, that we got to travel the state with this one perspective that we were looking at. Right. So we have industry folks, we have legislators, we have cities, counties, we have representatives from everywhere. And we got to travel the state and look at this one problem. And I think the most eye-opening part for me was that it became very clear that this is not a Boise problem. This is not a Coeur d 'Alene problem. This is a statewide problem. And I think anybody who participated in that committee would have to say the same thing. We can talk about local control all we want.

18:25Seth Cutler: Local control makes a lot of sense when something is simply a local problem. This is not.

18:33Ben Toews: And here's Seth Cutler of Iona, the charging network owned by eight automakers, on why one of their sites is technically a bakery. Final question about the sort of like amenities thing is, are these customized at all regionally or like based on whether it's in a city or on a highway somewhere? like i guess how much work is going into sort of customizing the experience on a location-based

19:07Saleem Chapman: way yeah i think that's actually the fun part so you know early on we said we said listen we know we want to do things differently we want to buy land we want to we want to build our own amenities and in some cases we went and bought a greenfield piece of land it was a you know a piece of dirt or grass right and we and we built in our houston our houston rechargery is just that where we we built from the ground up an amenity and we customize it for that location what could we fit there want to build no less than eight charging bays what could we fit but what could we could fit was two bathrooms outdoor seating vending machines that's what we could fit and we and it's a great site and we know that because how much people how many people come on a daily basis but then we went and we found other sites hey this is a you know we found in our apex north Carolina location which is just outside Raleigh the suburb to Raleigh we cut our first ribbon there that was a hundred year old gas station we thought would be that'd be really cool right let's let's let's take a hundred gas station and make it the service station of the it was closed down it was yeah it was closed I mean it was a service station that was opened in the early 1900s shut down the 60s and 70s and became a uh I think they were selling kitchen granite top right when we took it over so that that was that was so we so we that was unique we made we made that into an experience that one has a local entrepreneur that sells baked goods out of that site and the reason for that was because the zoning requirements meant that you couldn't have a refueling center but you could have a local restaurant or bakery so that's so it's classified as just that and oh so it's technically a bakery with charging chargers exactly yep 100 right so that so so what we've been very flexible as we work with cities and towns are very flexible the types of sites that we're buying or leasing to, again, bring really great charging to customers.

20:49Saleem Chapman: And we've done that. There's a list of sites I can give you. Each one has a story of an old gas station, of an old natural gas station, of an old car dealership, of an old Subway's restaurant that we've taken over, and we've converted it to an ionic rechargery. Interesting. The chargers themselves, you're working with eight automakers.

21:13Ben Toews: I'm sure they all have their own apps. They all have their own gizmos. How do you make the, like literally the plugging in and charging itself, how do you make that consistent across all those apps, across all those different kinds of vehicles, across the two basic kinds of hookups? What does the charger look like? And what does the software look like? And what is the experience? Like, am I scanning a card? Am I tapping a card? Am I, you know, is it, is this something where it recognizes the car when I pull up and I don't have to do anything? What is the experience of charging itself like?

21:49Saleem Chapman: Yeah, well, I'll start with the one thing you don't do is download an IANA app because there is no IANA app. Oh, really? There's no separate app. There's no app, you know, and there's no intention to make a mobile app. And the reason for that is because to your point, every OEM, every automaker has an app today. ChargePoint has an app, Presto has an app, Ed Connect has, I can go on and on. So we actually have 14 different apps that you can use at IANA, but none of them are IANA. And on top of that, every charging station has a credit card reader on it. And we've got, you know, plug and charge and auto charge with, you know, a significant number of OEMs, even beyond just our eight, right?

22:25Saleem Chapman: So we have the eight investors that we've turned on plug and charge for most of them, the rest coming very soon. But we've also turned on.

22:31Ben Toews: So that means, so just to clarify for listeners, that means I can drive up, grab the charger, stick it in my car, and it recognizes my car and will charge it to my account without my scanning anything or tapping or doing anything. Exactly.

22:47Saleem Chapman: A frictionless experience for drivers.

22:51Ben Toews: From there to Uruguay, Ramon Mendez-Galain, who I've been wanting to talk to for years, ran that country's transition to 98 % renewables. Here he is on how he got every political part to sign on to the same plan. Well, one of the most sort of fascinating, at least from where I'm standing here in the United States, sort of baffling aspects of all this is you came in in a majority government. You had a political majority, but the president pushed you to basically generate political unity on this, to create a plan that every political party would sign off on, basically so that these changes would be enduring and steady over time.

23:44Ben Toews: And of course, I'm sure any country would love to have political unity to make their plans enduring over time. But how in the world did you get everyone from every side of politics to sign off on these very ambitious plans?

24:02Megan Egbert: Well, this was one of the two or three most important issues that allows us to make this transition. Because, yes, what is happening for the last 20 years in our Western democracies is that we're going from one government to another government and change a thing dramatically. And it's even worse because the energy sector is in a way politicized and ideologized, which means that you put the ideology in that which is a technical and economical environmental discussion, which in fact has no meaning at all. So what I did is when the president asked me to lead a technical and political committee trying to figure out a long-term solution or long-term transition on a new framework for the energy sector in the country, my proposal was let's try to discuss what the benefits are for our constituencies, no matter if they vote right or left or center or whatever.

24:59Megan Egbert: I mean, what are the benefits of going to one direction or the other? And the crucial point was, let us not begin discussing about what we should do today, not even next year, not even during this government. Let's try to imagine how we can think the country should be in 30 years from now. So we are thinking about 30 years in the future. Everything becomes much more simple when we're discussed, Because if you're asking about what we should do now or next year, the early first thoughts are, and what am I gaining or losing in this election? Should I have more and less power? Should I have more and less votes?

25:39Megan Egbert: Should I have more and less money? But if you're discussing about the future, the real future, you don't imagine yourself 30 years in the future. I mean, it's simple to discuss how you can imagine the country if you're not in this imagination. So it was not that difficult to imagine the country that we would like to have 30 years in the future concerning the power sector. And then we make a kind of reverse engineering. So if we have to be in 30, you have to be in this point, where should we be in 25 years? I'd win in 20, I'd win in 15. And then when we're going back and back, it was becoming a little bit more difficult.

26:16Megan Egbert: But at the end of the day, if we want to face on this amazing future, then we have to take the decision now. And this was the way that we built an overall agreement. But once again, the most important thing was that we built it according to the benefits of the new system we bring to our citizens. And this was the question issue.

26:37Ben Toews: Speaking of that, I'm curious what role, if any, climate change played in that discussion. Was that a big part of the puzzle or were you focused more on just basic financial and security benefits? What was the sort of discussion like?

26:55Megan Egbert: It was one of the most important points, but not the most important one. The point at that time, and now it's much, much simpler, but at that time, the point is that for any country, but particularly for a country, oil imported country, a gas import country, the most important was try to have the basis of our system based on our own national resources. Because if you have your own national resources, you don't have to depend on fluctuation of energy commodity prices, on decision of wars or whatever decision that you cannot take but other takes for you. And you have to pay for the consequences of that.

27:34Megan Egbert: And renewables for us was for sure the best option because renewables, you are not dependent on an energy commodity price. You are much less vulnerable to these geopolitical events all over the world and are your own national resources. So you are much more sovereign and much more independent, much more stabilized as an energy system.

28:00Ben Toews: Also this month, Quinn Nakayama of PG &E on the question I end up asking every utility eventually, which is, why would you ever adopt something that saves money? Well, this brings me to my final question. Quinn, maybe this is where you're going, but this is probably the question that my listeners have been waiting for me to ask this whole hour, which is if the utility spends a capital dollar on a pole and a wire, they spend a large chunk of money and they get a guaranteed rate of return on it. They make money that way. Whereas if you come in with some digital solution and you say, here's a super cheap, software-based solution that can help you avoid the need for that pole and that wire.

28:51Ben Toews: Look, you can save money. A normal business would be like, oh, good, I get to save money. But a utility business, if they save that money, makes less money. You know, this is something we come back to again and again and again on this pod. The utility wants to spend money. That's how they make money. And almost everything we're talking about under the heading of innovation is one way or another, something that avoids the need to spend a bunch of CapEx on big infrastructure, i.e. something that is going to reduce an investor owned utilities profits. And I just don't know. It just seems to me like the very basic business model we're talking about here, the very basic regulatory structure of these utilities is working against innovation almost intrinsically.

29:48Ben Toews: How do you get around that? I guess is my question. Like, how do you work around that very basic mismatch of incentives? I would say there's a couple things here. One is that used to be the case.

30:03Saleem Chapman: And I would say that if you take a look at a lot of the utilities that had zero to 2 % flat growth in their utility sector, and they weren't building a lot of infrastructure, and all of them would be like, yeah, let's do more capital. We need to figure out how to get a rate of return. That may have been the case in a lot of utilities in the past. now all these utilities, including ourselves, are like, we need to get rid of some of this capital because we can't spend it all without really ballooning rates. Like, if there are ways that we can defer capital spend, if there are ways that we can have alternative ways.

30:37Ben Toews: It may be in California, Quinn, but look out at the country. Like, I see utility executives just like drunk on this. They're like, heck yeah. Like, you want us to build a lot? We're going to build all we can build. We're super excited to spin CapEx. We're super to spin more and more. And I'm not sure that the political blowback has fully reached them yet or changed their mindset yet.

31:01Saleem Chapman: I would say there was a swing where all of these data centers happened very quickly that caused all this infrastructure to build it, be built out, that then caused this lag on the generation side. And, you know, more broadly, it was just just happened a lot faster than a lot of folks could react to. But if you think that this whole politics on raising rates and the blowout that's happening on rate side isn't on the top of executives' minds across the entire nation, I think that's just not true. And I think the reason why is that, listen, utilities actually don't want legislation coming into their area.

31:42Saleem Chapman: I don't think that they actually, utilities writ large, because you have everybody commenting into areas that maybe people are not as well informed into. And the utility space is very complicated. It's an engineering nightmare. You've got to think about protection. You've got to think about a whole bunch of other type of things. and so i would say that most utilities out there most utility executives are very concerned about customer affordability they just need to figure out how exactly do they incorporate all of this ai data center related large growth that's happening super fast without coming across as being obstructionist toward that growth and at the same time figuring out how to do this with less capital, I feel like, you know, that pendulum is vastly swinging the other direction now.

32:30Saleem Chapman: We have way too much capital as we were. And wildfire, by the way, is not just a California problem. I don't know if you've seen, but there's wildfires happening everywhere.

32:37Ben Toews: Yes, I noticed.

32:38Saleem Chapman: So like hardening infrastructure for capital, everybody's going to be coming out of their ears with capital. Now it's going to be about how do you do, how do you meet these objectives that you have on these really big ambitions that the state has on low growth the state might have on wildfire related risk or whatever other catastrophes that they're having with a changed climate that's already out there and then trying to do all of that with less money because the rate blowback is just going to be too big i think that in order for us to do this effectively though i think we need to figure out how to take some of these o &m related expenses operation management operation and management related expenses and figure out how to peanut butter them a little bit more across a broader range of time, which smells like capital.

33:26Saleem Chapman: But what I'm just trying to say is that when you have an operations and maintenance related expense, it hits the rate payer the next year, right? Yeah. A capital project that's$300 million that's spread over 40 years hits the rate payer much less over a long period of time. That's why I think even in a utility such as California, we don't want a lot of O &M expenses on our books just because next year that's going to hit your rates. And a capital project can spend a lot more money, but hit the rate payers very fractionally as rate making occurs in all of our areas. So that's just something to consider.

34:11Saleem Chapman: It doesn't really necessarily have to do with a rate of return.

34:15Ben Toews: After that, Varun Sivaram of Emerald AI on making data centers flex down for the grid. And who eats it when that goes wrong? I have some questions about just the computing front. So one of the things your framework has is these tiers of computing workloads. There are jobs that can't be touched, that have to run all the time. There are jobs that can tolerate 10 % throughput loss, 25%, 50%. There's these tiers. So one of my questions is, who decides what's in what tier? Is that something that the owners of the compute tell you, or is that something that conductor analyzes the compute and makes its own judgments about what is and isn't movable and controllable?

35:10Ben Toews: Where do the tiers come from?

35:12Patrick Miller: That's a great question, Dave. It's the heart of what we're doing, which is serving both sides at the same time, the energy grids needs and the AI customers needs. Look, at the end of the day, AI customers are doing the most economically important work in America. generating valuable tokens of artificial intelligence. And you don't want to mess with that in a way that's going to degrade their expected quality of service. And so, yes, today for our commercial scale deployments, we receive tags from the customers, the users of AI compute, tagging which of their jobs has which flexibility parameter.

35:47Patrick Miller: And it's more than just, you know, this can be flexed and this cannot be. Some jobs, a benchmarking run, for example, you really can't downclock the clock frequency of the GPU because it'll mess with the benchmarking run. Some jobs, a fine-tuning run, they can be deferred. They could also be downclocked. But some particular workloads, like a serving inference job, really can't be downclocked or paused because the user expects an answer within a latency bound, and perhaps that needs to be geo-shifted. So within different priority tiers, you know, low, medium, high, or on a scale of 0 to 100, as well as across different characteristics, preemptibility, throttle ability, the ability to be paused and checkpointed, or the ability to be moved within residency requirements.

36:28Patrick Miller: It's a complicated set of constraints. And we feed this in through what we call the normalizer to turn it into actions that we can take. And then our AI agents take the actions.

36:39Ben Toews: Well, I'm sort of, I mean, one of the things I wonder is if somebody gets that wrong, who's responsible? Like who's holding the bag at the end of the day? Like if you could down clock the power, a job slows down. And for some reason that someone didn't anticipate that breaks the job or doesn't get the result it wants or there's an unanticipated result. Is that just on the compute load for mislabeling its job or who's responsible if something goes wrong with the jobs? Yeah, great question, Dave.

37:08Patrick Miller: And I'll use this to mention, you know, this is high stakes, high reward in kind of three different dimensions. Number one, it's massively high reward because if we make this all work, we can fit 100 gigawatts, as you mentioned from the Tyler Norris paper. we can fit 100 gigawatts of AI data centers onto the grid that we didn't think we could fit. And we'll walk through the benefits of that. So massive reward. High stakes, though, is on both sides. If you don't do this right, the grid could face reliability issues. On the other side, if you don't do this right, the AI customers might face failed expectations, again, for the most economically valuable work in America.

37:46Patrick Miller: And the third dimension, of course, is a security dimension. AI data centers becoming energy technologies and this fusion of AI and the energy system, where we set at the interface, is a potential security threat, right? These are two massive multi-trillion dollar networks that are critical infrastructure for America's economy. It's the backbone of our future economy. And so we've got to make sure that we're doing all of this in a very safe way that protects the reliability of the grid, is resilient to intruders or threats from abroad and domestically, and protects the integrity of the AI workloads.

38:19Your specific question, Dave, is who pays if there's a screw up?

38:24Patrick Miller: And the answer to that specific question lies in the contracting, right? There will be, depending on the context, the grid, if they're offering you a faster connection, they may say, you know what, if you don't curtail your power when we ask you to, there may be a financial penalty or there may even be a technical penalty. I'll flip your breaker.

38:43Ben Toews: And finally, Trump used the Defense Production Act, a 1941 war powers law, to force a ruptured California oil pipeline back online for one of his donors. Todd Tucker of the Roosevelt Institute discusses whether the next administration should hand that tool back. run us through the sable case just so we can have the context for what we're talking about here just briefly talk about the role of the dpa in that case yeah so as you establish in your

39:20Saleem Chapman: introduction this is a case that has been kicking around you know california courts for years now And a company, Sable. Sable is a Texas company that was involved in the offshore oil industry in California, and they had been tied up in litigation in California, you know, for about the last decade, trying to get approval to restart production out there. When Trump comes back into office, they start floating the idea of using this sort of FDR era tool, you know, Defense Production Act, which had its roots in the second War Powers Act of 1941 under the Roosevelt administration that gives government all this power to not only prioritize governmental contracts, but actually to reorient the structure of contracts, even in private markets.

40:12Saleem Chapman: And so that's what Trump did here. He basically said any companies that can help Sable produce oil in California need to prioritize contracts for Sable in order to get that going as quickly as possible. And, you know, this is something that the DPA is a tool that the Pentagon uses a lot for defense and national security purposes. But this is one of the more ambitious uses, again, sort of really going back to, you know, the mid 20th century in doing it for a non-national security purpose, really just more to benefit an individual fossil producer. It will have some impact on oil prices, which is ostensibly sort of a nexus here that merits DPA use, but not very much.

40:59Saleem Chapman: I mean, it really is more of a handout to one of the president's campaign contributors. And so, you know, what the argument that we make in several Roosevelt pieces is that this precedent has now been set to use the DPA for clean as well. If it can be used for fossil for these purposes, then it can be used in an even smarter fashion for clean purposes. And, you know, I think that, for instance, some of the hiccups in the offshore wind industry sort of around 2023 would have looked very different if the federal government was stepping in to actually solve some of the supply chain and other challenges that Orsted and some of these companies had.

41:38Ben Toews: I mean, the question I wanted to ask is that the provenance of the DPA is sort of contested. It's in court right now. There is a, you know, one judge said basically, yes, you can use it to override California law and regulation. But that's going to go to the Ninth Circuit. And there's some speculation in your volume and elsewhere that if that gets affirmed, if a judge says, yes, the DPA can override state law, that the Trump administration is just kind of going to go on a bender overriding all kinds of California state laws and other state laws in other states doing whatever it wants on the basis of the DPA.

42:16And so I guess I would just sort of ask flatly, do you want the Ninth Circuit to uphold this judgment and affirm that the DPA can override state policy?

42:29Ben Toews: Like if you had your druthers, is this an affirmative good or are you just talking about making the best out of something bad that's happened? Do you know what I mean? Like, would you actually want the DPA to be used this way and to be affirmed as capable of being used this way?

42:46Saleem Chapman: It's a totally fair question, and I am of two minds of it. You know, I think on the one hand, in the very near term, it is obviously troubling the way that the Trump administration is using not only the DPA, but earlier the International Economic Emergency Powers Act to impose tariffs. You know, he's using a lot of the best of the New Deal legacy to hammer home things that are sort of narrow and short sighted and to benefit his campaign donors. You know, as someone who's worked a long time at the Roosevelt Institute, it gives me no joy at all that it's Trump rather than Biden that is using these authorities to the maximum.

43:26Saleem Chapman: On the other hand, in part because of all of these problems and weaknesses in our democracy and the fact that, you know, a single senator from a single state can block all sorts of policy from going forward and that, you know, filibuster rules make it really hard to do anything other than tax credits. Right. We have all these kind of fundamental problems in our system and tools like the DPA or the International Emergency Economic Powers Act. give the executive branch a way to move forward, even when Congress is being obstinate. So, you know, I think what we argue for in this volume is that if these tools are going to be on the table, we need to get rid of this asymmetry where, you know, right-wing anti-climate governments use their powers to the hilt.

44:11Saleem Chapman: But when progressive governments are in power, they sort of hold themselves back in the name of these outdated norms.

44:20Ben Toews: All right, that's August. Eight hours of conversation down to about 40 minutes, which is either a public service or a crime against nuance, depending on your view. Every one of those episodes is sitting in the feed in full, so if something caught your ear, go listen to the whole thing. And keep telling me whether this is working. The notes after the July episode are the reason this one exists. If there's a conversation where you'd have clipped something else, say which one. And if there's something else we could do to make all this content useful to you, let us know. Back to full-length episodes next week.

45:01Ben Toews: Thanks, as always, for making this possible. See you next time.