Committee of Chief Risk Officers 8000 Research Forest Dr. info@ccro.org STE 115 #278 http://ccro.org The Woodlands, TX 77380 8 Advancing Our Energy Industry’s Risk &Compliance Best Practices The tax credits basically flow right through to your customer. You essentially get federally subsidized electricity for your customers, and as a regulated utility, you get to earn a rate of return on it! So, everyone's going to do this as much as they can. It's hard to see the political opposition to a utility that comes to the regulator and says, “I'm gonna build wind and solar with union jobs and my customer rates are going to go down.” So what's the intervener that opposes that? a great opportunity from a regulated utility standpoint. You couldn't ask for a better opportunity. Andy Roehr: I did see a draft of something the other day where what regulators want to do is to figure out what the final capital cost deployed is for the rate base, and only let them earn a return on the non-subsidized component. Remember that a lot of that revenue from the regulated utilities goes into public pensions. There's a lot of politics at play here. That return goes to the teachers’ pensions, it goes to calper. There's a lot of politics out there in this arena of utility finance. So, back to your earlier point about this is policy by another name. There are a lot of things that they're trying to do. For example, if you look at underfunding of pensions over the last decade. This is an interesting way of doing a pension bailout. This is an interesting way to drive a lot of money into we'll call it -some well deserving pockets. So, I think you're right. On the intervener side, somebody's going to do it because they're going to feel bound as a consumer advocate to at least beat somebody up. But it's hard to find a loser in here unless, unless it’s for those of us paying the bill. Chris Dann: They get a check directly from the federal government. They're all going to do as much of this as they possibly can. There’s money on the table. Why wouldn't you pick it up? That certainly has an impact on the power markets. Renewables is already a pretty challenging space because you've got long interconnection queues, you've got basis and congestion problems, you’ve got supply chain and labor shortages. Well, this bill just puts an enormous amount of money into the already challenged renewables space. And all the non-taxable entities, they're going to do it. The regulated utilities can do it. So, the numbers that you've seen that have been announced are, are enormous. Well, this bill just puts an enormous amount of money into the already challenged renewables space. Andy Roehr: Well, I start with transmission. If you're going to build all this, especially wind and solar, you're going to, be looking for bigger. For example, for solar plants you're going to be out to “cover the Katy Prairie.”