Brad Wyant (00:00)
Hello and welcome to the Management Under Construction podcast. I'm Brad Wyant
Dee Davis (00:05)
And I'm Dee Davis.
Brad Wyant (00:07)
And today we're going to be talking about the power grid, your power bill, and why do energy bills keep going up? So this is going to be a two part episode. In part one, we're going to discuss the reason that energy bills are on the rise, how energy use has changed over time, and a brief history of how energy has been billed and passed. We're going to discuss things like how renewables and green energy policies
have and continue to impact the cost of energy today. Then in part two, we're gonna discuss some of the different ways that consumers see energy usage on their bills now. We're gonna compare the rates and methods in different parts of the United States. And we're gonna talk about what you can do to positively impact your energy bill. So Dee, what is your background with the grid? How did you become educated about it?
Dee Davis (00:59)
I started learning about how the energy grid works. Back in the early 2000s, I was building cogeneration plants. A cogeneration plant creates its own power and sends power back to the grid is what it really does. I built a number of cogeneration plants in various parts of San Diego, some pretty big ones on some college campuses and in various areas of the city. In that I was working with the utility a lot. It was before solar became really big.
selling excess power back to the grid, being able to buy power if our cogeneration plant was not capable of producing enough at a particular moment for the need of the client. And I worked with some just incredibly smart people. I got to see this software that just shows everything that's going on with the grid, where all the power's coming from, where's it going to, how is it priced. It was really an incredible experience.
And it spurred my interest in learning more about where does all this energy come from? How do we manage it all? It's very complicated. And you add things like renewable energy, like solar and wind and individual consumers producing their own. And it gets very, very complicated very quickly. We're not going to get super deep into those weeds for you here today.
We are going to be taking some of that information that we have, we're going to be touching on it on a higher level. I see people constantly just so frustrated saying, I've done everything I was supposed to do. I did all the energy retrofits, but my bill keeps going up. What the heck is happening? That's the question that I want to help answer. Whether you're a residential customer or you're a commercial customer, the answers are very much the same.
So we will dive into some of that. I did spend an entire year doing nothing but studying the power grid in California at that particular time. And then I spent another year studying nothing but a water and where it comes from and how it moves around the state in California. So lots of my information is based on what is happening in California specifically, but since then I have started studying it in other states as well.
Brad Wyant (03:10)
A whole lot of expertise there, very excited.
Dee Davis (03:12)
I am a very, very tiny amount compared to so many people that I know in the industry just live and breathe this all day, every day. So we're gonna give you what you need to know and some really cool information that you may not know about how all this stuff.
So whether you're a commercial energy user or a residential one, energy is going to be a huge part of your monthly expenses. If you're a residential user, it could be 10 to 25 % of your overall utility bills, and it can be 30 to 45 % if you're a commercial user. So let's see what's going on with these energy bills and why conservation is really only a piece of the story. So there's five main reasons why your bills don't ever go down. Have you ever had a
energy bill go down like all of a sudden you got a big discount for some reason. Did that ever happen to you, Brad?
Brad Wyant (04:01)
No, that's never happened to me,
Dee Davis (04:03)
It doesn't happen to anyone. One of the main reasons for changes that we've seen in the last 30 years, I started off just picking 30 out of the air. And when I started doing research, it turns out that was actually a really good timeframe to pick. There's lots and lots of data available on what's changed in the last 30 years. Technology is the number one reason why things are different today than they were 30 years ago is we have a vast
vast expansion of electrical use for things that are everyday in today's world that didn't even exist 30 years ago or were very uncommon 30 years ago. the things in our daily lives are one of the biggest reasons. Regulation and commercialization of the utility industry happened a while back. We'll touch on that. Confusion of how energy is built. We're going to go into some depth.
on that, especially in part two, and the constantly changing way that it's built. And then the energy landscape, just what's really going on out there in the world and how decarbonization and some of the modern things that we're doing are greatly impacting our ability to produce and consume energy.
You've lived in various parts of the country like I have, Brad. What have you seen and experienced in your time as a utility bill payer?
Brad Wyant (05:23)
In what short time I've been paying utility bills. California has been way more expensive than anywhere I've lived, but.
The winters in Michigan, where I lived most recently before now, were a lot more expensive than I thought they were going to be. I was used to California. I was used to even Colorado, where it's so sunny that during the winter you don't have to pay all that much for heating. But with the lack of sunlight in Michigan, I was paying a lot more than I used to in the winter, probably twice as much as I used to pay in the winters in Michigan.
Other than that though, it was such a small fraction of my cost living in apartments and other small buildings. It was not something I thought about a ton as I looked down a barrel of trying to own a piece of property one day and look at things like the monthly recurring costs, property taxes, water bills, and electricity bills. You have to really consider, do you want a house with 10 foot ceilings? Because that's going to have a lot more.
Of an energy bill than the house with 8 foot ceilings or the apartment I'm in now has these gorgeous 1214 foot ceilings with a beautiful skylight, but it gets up to 80 degrees in here in a hurry and I try to cool it down to 76 and I'm sure that's costing my landlord lot. But luckily I've fixed myself into a 150 flat. Or water, gas and electricity, which in California is not too bad for a space as big as this.
Dee Davis (06:53)
especially in the area that you're in. That's great. You did in preparation for this podcast, send me a couple of your utility bills from when you were in Michigan. I wanted to see what the price point was compared to some of the other ones that I had to compare to. I saw that you had electricity and gas on those bills. Do you happen to know if your heating was gas or electric?
Brad Wyant (07:13)
The heat was gas, yeah.
Dee Davis (07:15)
Okay, so you're using a lot more gas and gas is typically cheaper than electric, but you are using a lot more gas in the wintertime, it sounds like probably something you weren't used to doing.
Brad Wyant (07:26)
Definitely.
Dee Davis (07:27)
Your local utility is who delivers to your home or your business, but that's really only a tiny little piece of the picture. So without getting really deep in the weeds, and I swear I'm not going to here, there's three main parts of the power grid, the generation, the transmission, and the distribution. So let's do a really quick overview of what those mean. The generation is not surprisingly where the power is generated.
The power grid in the United States is pretty massive, but it's only somewhat connected. There's a huge section in the East and another huge section in the West. And Texas is all by itself in the middle. They pulled out of the rest of the country's power union in 1935 when the federal power act was passed and regulation of the power industry started. So everybody else is kind of doing the same thing and Texas is doing their own thing. Power plants.
generate in large quantities. So it's measured in what we call megawatts. A megawatt is 1 million watts and a power plant might generate somewhere between 500 and 750 megawatts of power. So a whole bunch. Super fun historical fact is the very first power plant that was ever built was built on Pearl Street in Manhattan, New York in 1882.
Before that, no power plants.
Brad Wyant (08:49)
America first.
Dee Davis (08:51)
You don't usually live super close to a power plant, so that means that power has to travel a long way to get to you, the user. That's where the transmission comes in. So it's generated over here, it's transmitted across a long distance to get to where you are and get to your local area. That could be hundreds or even thousands of miles, depending on where you are on the planet.
So because it has to travel such a long distance, we have what is called transmission loss. So if I generate a megawatt of power at a power plant, a hundred miles away, I don't get a megawatt by the time it travels a hundred miles. I lose a bunch of that electricity along the way and that's called transmission loss. So what that really ends up meaning is you have to do a lot of math and estimating to figure out how much you need to generate then
get it to where it needs to go and how much do you actually end up with at the end of the line when you go to flip your switch?
Brad Wyant (09:49)
D, I once read somewhere that power losses can be as high as 33 % in transmission, that you can make a megawatt and only end up using 666 kilowatts. Is that true? Is it really a 33 % loss?
Dee Davis (10:07)
Yes, it absolutely is. It can be even more than that. But yes, in general, I would say on average, it's somewhere in that neighborhood. It's a lot. I put together a class on electricity, how it works, how it's used, and we get into like really painful detail on all this kind of stuff. But it's not a simple one-to-one ratio. So I've had people ask me the question, I don't understand why they can't figure out how much power we need.
When I turn on my switch, why is it such a big deal? Why can't they just figure it out? Why are there days where we have brown outs or black outs or we have all these issues? Well, they're generating it way over here. It's being used way over here and a whole lot happens in between. Not just transmission loss, but are your lights on or off? Is your air conditioner on or off?
And there's a billion of those in between where it's generated and where it ends up. so all those things matter. The utility providers actually do have a very hard job and it's a little mind boggling when you really start getting into the weeds and thinking about it.
Brad Wyant (11:14)
the intelligence and coordination required to generate just the right amount of power because if you generate too much power that starts to have very bad consequences and if you generate too little power that obviously brown and blackout is what you get. The demand matching that has to go on these plants that will ramp up and down. The people that do that job are some of the most stressed people I've ever met.
shaking with our coffee every morning and they're just mellowing out at night.
Dee Davis (11:49)
is
an area where AI and predictive modeling can be very, very helpful in learning trends and predicting when demand will go up, when demand will go down. You have to put it together with weather because now we have wind and solar in the mix. Is wind going to be blowing? Is it not going to be blowing? Is the sun going to be covered up by clouds? What time does the sun go down today?
highly complicated. I don't know if I would want that job, to be honest with you.
Brad Wyant (12:19)
Yeah, not only do you have to be somebody who can predict what people are going to do when they're going to turn their microwave on. Now you have to be a weatherman. You have to figure out what's going to happen with all those solar panels out in the desert and how they're going to be impacted by random clouds and what the wind's going to do. It's a tough, tough job.
Dee Davis (12:37)
Yeah, for sure. As consumers, we pretty much just deal with the local utility. They're responsible for delivery, maintaining local lines, providing billing and customer service to the client. And your utility, wherever you are, only serves your specific area. Where Brad is right now, his power company is different than the power company is where I'm sitting. So that's who we pay. So that's who we tend to be mad at.
When the bill comes and we see it and we go, my God, my bill is so high. We're mad at the utility company. We're screaming at the utility company, but there is so much more to it. There's lots and lots that happens before it ever gets to the utility company. But you know, there is some interesting, I'm going to say some questionable things that happen at the utility level too. If you are a commercial client, oftentimes you are assigned by your utility company.
an account representative, which is an individual human person that you can talk to on a consistent basis about your utility bill and how you can do better in your particular facility. I've worked with lots of energy representatives for commercial clients.
Brad Wyant (13:46)
Are there examples of things that you would think would help reduce your bill that don't end up actually having all that big a difference? Like, let's say I'm a store owner and I want to put my neon sign on 24 hours because I want it to advertise for me even when I'm not at my business. But then I think, well, how much money could I save? How much good could I do for the planet if I turned it off between midnight and six a.m.?
Is that something that would have a big impact on my bill or wouldn't have a big impact on my bill as a business owner?
Dee Davis (14:23)
have a minor impact on your bill, but it might be cumulative with a bunch of other things that are going on in your business. I see lots and lots of businesses, they might as well light their money on fire. way they're air conditioning units blowing full blasts in their front door is propped open. I see that all the time. I mean, every single summer,
Every time I go into a shopping area, I will see at least some stores doing that. Well, they want the doors open to welcome the customers in. And I tell you, as a customer, when it's blazing hot outside, you want to walk in that store and that AC feels good. But I'm telling you, that person is lighting $100 bills on fire to make that happen. And it just kills me.
Brad Wyant (15:08)
I'm not paying to refrigerate the outdoors. Close the darn door. That's crazy to me that business owners would do that.
Dee Davis (15:15)
yeah, I see it all the time. And believe it or not, we're going to talk about who has the highest energy rates here in a little bit. Hint, hint. It's Hawaii. And I see it in Hawaii all the time. I believe in the Honolulu airport, if I remember correctly, it was open to the outside. There wasn't even a way to close it off. Blasting air conditioning. And I just thought you've got to be kidding me. And I'm going to tell you how much they're paying per kilowatt hour for energy here pretty soon.
Brad Wyant (15:42)
Hawaii pays so much for everything. I was looking at a job out there once and the cost of milk was like three and a half times what it is anywhere else. like, I don't know.
Dee Davis (15:53)
I lived there for a while. I I have a station there in the Navy for a little bit. So yeah, everything's imported. How we use energy now versus how we use energy in the past. You were a kid much more recently when I was a kid, we have a whole different world today. So let's just pause for a second and think about. We power today that we plug in today that we really didn't 30 years ago and things that we either didn't have at all.
Brad Wyant (15:55)
You did?
Dee Davis (16:22)
or just were not nearly as common. Household things like multiple laptops, cell phones, tablets. Every single person in my house has one of each. I mean, that's most houses. Right. Or more. Yeah, maybe more. I used to have a work phone and a personal phone when I worked for somebody else. Maybe you have a personal laptop and a work laptop. You're plugging all this stuff in.
Brad Wyant (16:37)
If not more.
Dee Davis (16:48)
Every single day to charge it or while you're using it or whatever. And I have a ring light right here while I'm recording to make me look better. I didn't even have that five years ago. We have televisions in every room. Every bedroom in my house has a television plus a living room. We have electric cars, electric bikes, printers, smartphone, smart homes. I'm sitting in a home that was built as a smart home and I made it a dumb home.
It took some work, let me tell you. All these smart devices. Do you have an Alexa or something like that in your house?
Brad Wyant (17:24)
I do, the one with the screen so I can read recipes on it.
Dee Davis (17:28)
Okay. And a lot of people have that kind of stuff. My siblings all have it. Almost everybody I know has some kind of thing like that in their house. Well, those things are designed to be plugged in and turned on 24 hours a day. They're listening for you to say the magic words all day long. So they must be plugged in. They must be turned on.
your Wi-Fi router is the same way. Now I no longer have Wi-Fi in this house, but when I did, what I have is a little mini IT closet that's always on though. All that stuff has to be plugged in and turned on all the time. So if you think about all the things in your house that are Wi-Fi enabled or smart in any way, those things didn't exist 30 years ago.
They're all plugged in now. They're all turned on all the time. Now, when I go to my daughter's house, this cracks me up. I can operate the fans, the lights, the music, and a whole bunch of other stuff in her house with just talking to the darn thing. And it's super cool, but it's totally unnecessary. It's using a ton of energy. We call those vampire loads. They're, they're things that are plugged in and on.
and ready at all times, but you're not using them. They're called vampire loads because individually each one of those things, that neon sign, that wifi router, that cell phone charger, they're plugged in and they're drawing energy even when you're not using it. So individually it's not a ton, but collectively it can actually be 50 % or more of your bill.
Brad Wyant (19:06)
And I seen at the hardware store those timers that you put on Christmas lights where they switch on at a certain time, they switch off at another time. And I've thought about trying to use something like that on a wifi router or on another device. But a that's 20 bucks that I'm going to go spend on one of those pieces of plastic a couple of times for all the different things that I have in my home.
And B, I'm just not sure how much power I can save. I mean, how much energy am I really spending on my wifi router? My power bill doesn't tell me. I could go online and I could Google the device and try to get wattage and amperage and draw and things like that. But then that's a bunch of work and laundry's piling up. This is too early for this question, but how do you recommend consumers approach these kinds of optimizations? If that's what it
what they're thinking about trying to do.
Dee Davis (20:01)
There absolutely are strategies like timers and power strips that we can use for these kinds of things. You are getting a little ahead of me there. That's okay. We'll get there. But there are strategies that you can use to manage those vampire loads. If we have a hundred things that are plugged into our house and we're only using a few of them at a time, do we go around and unplug 95 things?
Maybe that's possible. Maybe that's not realistic, but there's some other ways we can do that and we'll talk about that at the end of part two.
What we're looking at now is things that are plugged in all the time, like toasters and can openers and phone chargers and mixers and printers and scanners and DVD players that are not used more than they are used. Those are the things that we got to think about as we're starting to formulate these questions about what can I do differently than I'm doing now? I changed all my light bulbs to LED. Everybody kind of knows that one, right? And then we'll talk about some more strategies as we go along.
back to the power industry, the business of supplying the public with power, regulation and commercialization, as I said, started in the late 30s. It has gotten extraordinarily complicated. I'm not even going to try to delve deeply into the regulation thing because you go from zero to a hundred feet deep really, really quickly on that topic. Suffice it to say,
that the business of providing energy to the public is a for-profit business.
Make no mistake, it is a for-profit business. So when you say, those guys are making a bunch of money off me, yes, yes, they are. They have shareholders. You can buy stock in energy companies. There are publicly held utilities. So you can go buy stock if you, whatever your power company is, whoever your main supplier is, you can go buy stock and it will do very well over time.
My brother-in-law inherited a whole bunch of stock that his parents had invested in back in the day. The regulatory agencies, their job is to regulate a super interesting balance of serving the public and serving the shareholders at the same time.
Brad Wyant (22:13)
I'm not saying that nobody should make any money running utility, but I just think it's interesting to have the conversation of whether telling a company you need to optimize profit when optimizing profit may not be in the public interest. There's an interesting trade-off there. Let's say, for instance, you live in a wildfire-prone state and you don't want to cut the budget for preventing
wildfires for going out and doing the proactive thing that is required to maintain the systems that prevent that. Without getting too deep into weeds, a lot of people feel a lot of our ways on that. And I think I certainly lean towards the, you find a way for somebody to be able to make money at it, side of the argument, then people are going to do it really well. You just have to regulate them so they don't lie, cheat and steal. But I certainly
hear the people on the other side of the argument that say no let's go communism let's go Marx let's get it all publicly owned it's it's it's a interesting debate to have but I know where I stand.
Dee Davis (23:19)
Like I said, it gets very, very complicated very quickly. For one minute, a number of years ago, I started getting into some of these regulation topics and quickly realized that you're either in the deep end and thorough understanding of all this stuff, or you're just on the surface going, what's going on? It's really hard to be in between. A lot of time and energy has to be invested into fully understanding it. And it's a moving target. It's constantly changing. So by the way, in
fire prone states, there's a line item on your electric utility bill that is a wildfire prevention and it's a percentage of your bill, just FYI. Go look for that. We get the nickel and dining. There's how much you're paying per kilowatt hour is a piece of your bill, but the whole rest of your bill is fees. And we'll talk about what those ratios look like here shortly. We usually see
There's some states and some jurisdictions that do a great job, I think, or a better job in balancing the cost increases and the regulatory authorities will force the utilities to do things like by fire prevention helicopters, provide free education and resources to their clientele. I've been the beneficiary of dozens of free education seminars put on by the local utility.
because I found out they were doing it. And I'm like, I get to go learn this stuff for free. Excellent. I might've even taken all my CEM classes for my certified energy manager classes for free through the local utility. All I had to do is pay to take the test. If you know where to go and you know where to dig, you can get a ton of stuff for free. Before I got solar on my house, I went and learned all about solar panels, the difference between all the different kinds, how to size them properly so I could design my own system.
So there's lots of free stuff out there and these regulatory agencies are forcing the utilities to do this kind of stuff to help offset some of the fee increases and things like that that happen. We see is very few people taking advantage of that stuff. So wherever you are on planet earth, I highly recommend that you get onto your utilities website and find out what they have and whether it's your energy utility or water utility or gas utility.
find out what they've got available for free. You might be surprised. Then you can take advantage of rebates. I've replaced a refrigerator or a freezer, got a rebate, replaced a washer and dryer, got a rebate, all kinds of stuff that you can do.
Brad Wyant (25:57)
And I would just say that the people who do that for a living, even though you may not think of them very often, are some of the smartest people on the face of planet. The job of getting power to your house is immensely challenging and requires such deep and varied skills. Just to hang out with some of these people that do this job, even if you're not a nerd about your own power or you're not concerned about your own power bill, just go learn.
Learning is fun and learning will be a good use of your time no matter what you're learning. But these people are pretty cool to learn from, think.
Dee Davis (26:34)
Yeah, I've I've learned massive stuff and yes, you're right. Very, very smart people hang around there and I've been very grateful to learn from them over the years. Some jurisdictions and states don't do as much, but you know, check it out in your local area and see how you can benefit because you might be surprised. A lot of times they will pay for your upgrades if you fill out the right form.
Where most people start seeing regulation come through is rate increases. What a shock. And again, when was the last time you saw a rate decrease? And I researched it by the way. Are there ever rate decreases in the commercial and industrial sector? There have been a couple of dips, but very slight dips over the last 30 years. Basically the trend is up as far as cost per kilowatt hour. Changes in how rates are
and we're going to talk about this in a little bit of depth. Time of use, tier, seasonal, peak pricing, all these kinds of fun little words and playing little games with how we're calculating and defining these things is managed by regulatory and approved by regulatory agencies and incentives and rebates to user. So if you ever bought an EV and you got an EV incentive, that's how that's happening.
through solar appliance upgrades and if it's your water utility, water use reduction.
Brad Wyant (27:57)
funny story to interject here. One of the things I got to do during my MBA program was to run a two day conference where we got to talk about sustainability and energy. And one of the big companies that sponsored was Chevron and Chevron executives came and we got to hang out with them and talk. And one of the things we talked about was increasing cost of power. And one of them said, well, why would you expect the cost to go down? We already took out.
all of the easy natural gas, all of the cheap natural gas, no one's going after the expensive natural gas first. Now, every next time that we sink a well or we drill into something, it's harder than it was before to get to that stuff because we already got all the easy stuff, which was like, yeah, that makes sense. It's like, no wonder my power bill keeps going up.
Dee Davis (28:52)
That's a fair statement. And it's something that I never really thought about either. You just have the very skeptical things never go down. They always go up, right? Well, yeah. Especially when you're talking about something like that. Yeah. The easy stuff was already harvested. You're digging for that. So that's interesting. Good one.
Brad Wyant (29:12)
And unlike areas of the economy like computer science where we follow Moore's law and we get twice the computing power every two years, we're not getting twice the drilling efficiency into hard rock every two years. We're just about as hard as it was 40 years ago to drill through the earth to get out the oil.
Dee Davis (29:34)
Absolutely. In fact, I just bought a 10 pack of thumb drives and I think they're like 64 gig thumb drives. Yeah. I remember you could barely put anything on a thumb drive when they first came out. It's full. okay. You got to put it on four different things, you know, and now my whole computer would probably fit on one of these thumb drives. It's crazy. So how energy is billed. We're going to go over how it used to be billed.
And maybe how it's still built in some areas, depends on where you are. But this is where we started and looking at some energy bills that I've gotten to look at from across the country in the last few weeks. Some places are still doing it this way, which is a good thing. I call it the way back machine. So if you go on the way back machine 30 years ago, 40 years ago, whatever, we were charged a straight rate for energy usage by kilowatt. So.
It's called a kilowatt hour or KWH on your bill. It's a measurement of energy usage over time is what that is. And that's the hour part of it. So if you had a light bulb that was a hundred watts and you burned it for 10 hours, you would have used one kilowatt hour. So back in the day, if your house used 150 kilowatt hours that month, you're being charged was a flat five cents per kilowatt hour.
your bill for energy usage would have been 150 times 0.05 or $7.50. Very straightforward. There might have been a few taxes and some other fees added in. Maybe your whole bill was a whopping $8.50. Fast forward a bit to 1998. The average residential rate jumped to 8.26 cents per kilowatt hour in the United States.
Commercial rates about seven and a half cents, industrial rates about four and a half cents. So you'll notice here that commercial and industrial customers are paying less per kilowatt hour because they're using larger amounts than everybody else. So think of it a little bit like a bulk discount rate that you might get. We don't get that as residential customers. By 2008, the average energy rate jumped almost 40 % from where we started.
at a nickel per kilowatt hour. By 2018, residential averages were up to 1287, which is another 14%. So we already went up 40%. Now we've gone up another 14%. So it was fairly stable for commercial and a slight drop for industrial. But for us residential folks, we've had more than a 50 % increase in unit cost over 20 years.
And you haven't seen anything yet. Hold onto your shorts because it just gets better. At the close of 2024, residential customers were averaging 16.4 cents per kilowatt hour, a 99 % increase from the unit rates in 1998. That's period of 26 years. In 26 years, the rate per kilowatt hour has doubled.
This is not talking about fees or any of the other regulatory things. This is just straight cost per kilowatt hour. And this is an average across the U.S. Places like Hawaii are paying four times that.
Brad Wyant (32:53)
Well, I'd be curious to see what areas the country are paying.
more than the average increase and which ones are paying less than the average increase, I would think that the areas that have continued to grow population centers are probably paying more than the average because the need to get more base load to those areas has grown. And by base load, that's a term that I've only learned about recently in the power world. It's the minimum amount that
any given area draws. So let's say in Seattle in 1990, microwaves were the biggest draw. weren't all the things we were talking about earlier, Wi-Fi routers and printers and all those kinds of things in the home computers. But then by 2010, 2020, we've got all those things in the home. So base load, the amount of power consumption in the home has gone up a ton.
that base load means there's gotta be more distribution to that area. So all of a sudden, you've had to double the number of poles between your power plants and that urban area. that kind of investment, that kind of time that would take to do that, the project management at all, yeah, that's gonna cost an awful lot of money, but still twice the rate.
Dee Davis (34:14)
Yeah. The reasons why these things are happening in that 30 year window are wide and deep. We're going to talk about some of those and we've, touched on some of them already. The demand is skyrocketing. We scratch our heads and go, how can we continue to have a housing shortage? But then you look at tourist areas and you're thinking, well, in some areas, half the houses are Airbnb's.
You still have to house the residents. Now you have this Airbnb demand or hotels or wherever people are staying. It matters. You need water and energy for all of this. And how are you gonna get it there? How are you gonna deliver it there? It's gotta be available all the time at the flick of a switch for the customer on the other end. I wish I could draw a straight line for people and I could say,
If we were just being charged straight rates per kilowatt hour and it were as straightforward as that, I could draw a very straight line for you and explain very clearly what's happening out there. Unfortunately, that's not what's happening. It's not a straight line. It's a very confusing, jiggly, going back and round in circles kind of line. And we're going to get into some more depth here in a little while.
in part two of the episode.
We'll get more into the confusing rate structures that we currently have. But in addition to all the things that we've already mentioned, we have this thing called decarbonization. Raise your hand if you've heard that term. Both hands. So what does that really mean? It means that we're getting away from carbon-based or fossil fuels like oil and gas. What that leaves us with is electrical.
Brad Wyant (35:50)
Yeah.
Dee Davis (36:02)
And people say, electricity is clean. It's perfectly clean because we're using all these green methods. Yes and no. The generation part isn't that straight of a line. It depends on where you are in the country and the time of day. So anyway, we're trying to get away from fossil fuels like oil and gas. And in addition to the so many ways and places that electricity is generated, we generate it with coal still in many places.
nuclear, wind, solar, hydroelectric, to just name a few. Governments are setting climate goals that require carbon-free power, which means getting rid of natural gas and combustion engines as a fuel source. So this can be anything from a leaf blower to a lawnmower to an electric car.
and all of it's being charged on this exact same grid we've been talking about.
Brad Wyant (36:52)
I read something somewhere that a two-stroke lawnmower or a leaf blower being run for a couple hours does such immense damage to the pollution side of things as opposed to driving a conventional four-stroke combustion engine because of the oil that gets mixed into the gasoline that I'm in favor of electric appliances for lawn mowing for
leaf blowers and for the noise, the noise of leaf blowers on the weekends is like one of the veins of my existence. You have to be able to supply the power and that power has got to come from somewhere. In the case of a two stroke engine, just about anything is better than using a two stroke, but it's still going to come from somewhere.
Dee Davis (37:42)
Yeah, you make the leaf blower comment and I crack up because I hear people using the leaf blower all the time as this huge example of if we just got rid of all the leaf blowers, the whole world would be fine. And it's like, well, it's not quite that simple. And I was, I was laughing last weekend because there's a common area in my neighborhood that's right in front of my house once a week or once every other week, whatever they come and they mow and they trim and they use a leaf blower and they were using an electric leaf blower.
Brad Wyant (38:10)
Mm.
And it's coming down. We're improving electrical technology. Enormously over the past 30 years, I mean compare the corded 120 volt. Black and Decker drill that I had when my dad bought it in the 90s as a kid, I would use that drill for projects to the handheld lithium ion drills we have now with the brushless motors. The amount of spinning power we can create with
the amount of power consumed, that's been a huge leap forward to make these kinds of things even feasible at the industrial level that you're talking about with these big boilers and chillers in terms of pumps and all that. We've had some big leaps forward, but there's a minimum threshold of how much energy we're going to be able to get this down to, and it's still pretty darn high. I listened to another podcast. We can jump the shark and talk about another podcast on a podcast for a second.
Where this guy was talking about a car storage facility where he was going to try to put in as much power as he could for electric cars. This was back in the early days and we thought there were going to be bunch of electric sports cars and this guy wanted to build a place that could facilitate that kind of ownership and. Just increasing the amperage of the service to his building in Los Angeles from 400 to 500 amps was going to be hundreds of thousands of dollars in months and months of time to.
cut up the street to bring in all this power to pay for the copper. The amount of work it takes to build out an increase in your building's service rating is enormous and not to be taken lightly.
Nothing is free.
be like a conversation effectively on chat. If you're going to sit down and ask it a couple questions back and forth according to the paper that I found, it's about like that.
Talk to you soon.
