Bloomberg Audio Studios, podcasts, radio news.
Of course, the rise in AI services also driving demand for electricity, Growing computing power and the rise of EVS have traders looking for ways to invest in the energy grid. Pleased to say that. Joining us now is Patty Poppy of Peach and Eight joining us around the table.
Patty, good morning to you, Good morning John, great to be with.
You, fantastical catch up with you. We're going to see massive demand potentially evs data centers. Can you help frame that for us? How big is this going to be over the next few years.
Yeah, we forecast, in fact, we shared with investors here in New York this week, a doubling of demand between now and twenty forty. That's a keeger of about four percent year over year. And we think that's a great opportunity because we see ways of serving that load while reducing costs for all customers on the grid.
That's a big challenge. So help us understand how youre going to make that challenge.
Yeah, so our grid today is underutilized. We actually the utilization factor of the grid today is about forty five percent. We see that growing to sixty seventy eighty percent, even and so imagine more fully utilizing existing assets lowers the unit cost.
That's what happens in every other business, but energy.
We've built the grid big. We've built it big decades ago. Now we get to utilize it and make it smarter. So with modern computing, we can actually optimize how we utilize resources on the grid and use them more efficiently.
So utilities have been sort of the hotbed. It's basically been the way for people to go into AI in a new way to represent some of the power usage.
It's going to be necessary.
I know the PG and E has lied behind a little bit of the broader rally that we've seen in utilities. What are you telling shareholders in terms of how you're going to close that gap, what sort of pieces you're going to really lean on.
To catch up.
Yeah, what we share with investors is that we have we are on track on our turnaround. PG and has been through some very difficult times in the last decade, and we have put the company on a new and solid footing.
Over the last four years.
We have implemented a safety and financial safety both physical and financial safety framework for the company that has now given investors' confidence to come back in, So we have both the benefit of the new demand and closing our discount all at the same time, which makes us both one of the growthiest utilities and the ability to reap some of the benefits of our turnarounds.
What will be the contours of the utility companies that benefit most from the AI boom. I know that you talk to the likes of Apple, you talk to all of the California tech companies in your state, after all, but there's really a question of what it takes to win.
Yeah, we're proud to serve Silicon Valley, we serve the Bay Area of California, We serve northern and central California. So all of those great tech companies are our customers, and so we're very tightly knitted with them and helping deliver on their demands. We think that we can serve
their load with mainly transmission and distribution. There will be some new generation added, but the utilities who win are those that own and operate transmission and distribution systems where there is data center demand and EV demand.
It might surprise you that in.
Santa Clair County specifically, forty three percent of new vehicles sold last year were electric that's flexible demand. The first form of flexible demand on the grid. The lights come on when it's dark, air conditioning comes on when it's hot. EV's can charge any time we send the right price signal we've got excess power in the middle of the day. Because we have distributed solar, we can fill as I say, the belly of the duck with EV demand and that
costs nothing. That is utilization of existing assets to the benefit of all customers, not just at EV driver, but all customers on the grid get a lower unit cost of energy.
If someone told me recently they cald of phone, you have the second most expensive pound rights in the United States. Can you help me understand why that's the case.
Yeah, Rates are a reflection of how much energy you use. We all have a grid that has to be built for a peak day. So if you have a grid and like ours in California, doesn't get stressed, but a handful of days of a year versus a Southwest or a Southeast utility where they have heat every day, we
have to build the grid for that peak day. That's why evs and dynamic demand are such a benefit, especially for PGNE customers, because we have an underutilized grid that drives a rate up, but their actual average bill is not nearly as high as much of the country.
Could we talk a little bit about power plants as well. How easy is it to build and connect new power plants in places like California.
Well, it depends what you think of when you say power plant. In California, we think of clean energy. So last year in the California Independent System Operator Zone, we added nine gigawatts.
Of new power supply. That surprises people.
Nine gigawatts added in California last year that serves nine million customers. That nine gigawatts was mainly renewables. Mash with storage. Storage is the game changer. In fact, April sixteen, think storage was the number one resource utilized in California. Again masched with solar. We have great solar penetration massed with storage. That's a new kind of energy supply. One hundred percent of the energy that pg NEED delivered to our customers
last year was carbon free. We have a modern energy system in California, and PCG is so proud to serve California, where I think it's the golden era of energy for all energy providers, but particularly in the Golden State and we get to power the Golden State and we're proud of that.
How much time are you spending in Washington, DC and how much to Washington DC policies really change the way you approach some of this in terms of what the different potential subsidies are for grete energy or not, and also where solar panels are coming from and how much they cost, given that a majority of them are produced in China.
Yeah, I don't spend much time in Washington DCO.
I wear boots. I wear boots in a hard had.
I had to do my hair special for today to be with you. Listen, I'm boots on the ground with my team. We are building the grid of the future and a lot of that it depends on us. We have a saying performance is power. When we perform and as we perform at PGE, we can deliver the power that people need.
But to that point, how much is your business model challenge depending on what comes out of say tariffs on solar panels, that you will need to deploy for some of these energy purposes.
Yeah, because our grid, again is underutilized, we have a lot of the resources we need.
What we need to use them smarter.
So I need to be with my tech companies because we're building a digital grid. We're building resources that are technical that are small bets, not big bet asset deployments, but leveraging the grid and serving customers in a much more dynamic way. It's a smarter, faster, more affordable grid, and we don't need much help from out of state to do that.
Part of this was fantastic, fantastic. I see you in person without the hot hat.
Yeah, anytime, anytime, John, I'll come back.
Bring it.
It's okay, okay, good, next time I'm wearing it.
I think that would be nice some people in financial markets wearing tin hats, because that's a very different reference. Paddy, Pappy there the PG and e CEO