Committee of Chief Risk Officers 8000 Research Forest Dr. info@ccro.org STE 115 #278 http://ccro.org The Woodlands, TX 77380 9 Advancing Our Energy Industry’s Risk &Compliance Best Practices That means you're going to need more transmission. The rest of the country trying to get from point A to point B. I think transmission's going to be a huge, huge issue. Buildouts run about seven years plus right now. That’s assuming you go fairly quickly to get a transmission line permitted, and that assumes that you have no obstruction from a state or a state park wherever you're going. So, you've got a huge, got a huge timeline hangover there. I think transmission's going to be a huge, huge issue. Distribution. If you just take the EV thing. DC pass chargers take three phase power. The vast majority of the country does not have three phase power. So, if you're going to try to implement just that, the last I heard is like $350,000 to $500,000 per mile to take a single-phase circuit, turn it in the three phase. And that assumes, to your point, you can then get new transformers, you can do the substation refit, you know, on the backside of the local. We don't have the gear. If you had the time, you don't have the gear. And if you have the gear, we don't have the people. Chris Dann: And then it's almost impossible to build transmission anyway, from a political perspective. It's very, very hard. In fact, part of the logic of this act was that it was supposed to be coupled with senator Manchin's permitting reform. The idea was that they were going to pass inflation reduction act, and then right after that was going to be the permitting reform that Manchin came up with. But that died. So now, you've just got the money without the permitting reform. It's hard to see how the necessary transmission gets built. It's hard to see how the necessary transmission gets built. Anderson: So, in this wonderful energy environment of the future, if I’ve built a bunch of stranded assets, solar, hydrogen, whatever, sitting out in the middle of nowhere with no transmission line connected to them, do I even care? That is, do I still make a return on my investments? Andy Roehr: In theory, you will get a check for just releasing hydrogen. You get a slightly larger check if you took it ran a turbine and created power. There are some rules around things like it has to flow power. But it doesn't say for how long. In theory the investment tax credits have a five year claw back. So your investment probably has to do something resembling generating power for five years. Then again, there's nothing in the law that says it has to meet 80% of nameplate or whatever. In theory the investment tax credits have a five-year claw back.