Ten Years Hence - Innovation, Part 1: Powering the Future

 What will the process of creation and renewal look like by 2035? How will we leverage innovation to meet the challenges of the future in areas from our power grid and collaborative intelligence to community health and resilience building? Explore questions, ideas, and trends likely to affect business and society over the next decade. Let these ideas serve as a springboard for structured speculation about emerging issues and the next ten years.

Join Exelon leaders Sunny Elebua, Senior Vice President, Chief Strategy and Sustainability Officer, and Jeanne Jones '01, Executive Vice President, Chief Financial Officer for a discussion how leaders in the energy industry are looking to innovation to stay ahead of future threats to energy transmission and distribution to their millions of customers across the country.

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Transcript

Jim 0:06

Welcome. This is 10 Years, Hans. My name is James O'Rourke. I'm a professor of management organization and former director of the planning center here at Notre Dame. I'll be your instructor and your host for this series. we've arranged a series of eight lectures for you that I think you'll find both interesting and exciting. Our aim is to engage in some structured speculation about the future, specifically the decade just ahead, and the world we're likely to inhabit ten years from now. We'll do that from a number of perspectives. But all of it will be focused on one subject, innovation, the process of creation and renewal. Sonny El Aboua is Senior Vice President and Chief Strategy and Sustainability Officer at Exelon. He is responsible for the development of integrated strategy that addresses jurisdictional trends across their operating companies, coupling Exelon's growth. With the needs of their customers, regulators, and communities. In this role, he is also responsible for the development of Exelon's sustainability strategy, including the path to clean, and leads Exelon's efforts to evaluate and advance the technology, policy, and regulatory transformation required to achieve a net zero GHG goal by 2050. Aliboa also oversees technology and innovation functions across Exelon. he holds a bachelor's degree from the University of Nigeria and an M. D. A. from the Wharton School at the University of Pennsylvania. Gene Jones serves as Exelon Corporation's Executive Vice President and Chief Financial Officer. Ms. Jones is responsible for overseeing the execution of all financial activities. Including the capital investment process, financial reporting, planning, tax, insurance, credit management, investor relations, investments, corporate mergers, and acquisitions. She also serves on the Exelon Executive Committee, which sets strategy and direction for the company. She previously was Senior Vice President, Corporate Finance. She earned a Bachelor of Business Administration degree from the University of Notre Dame, and an MBA from Northwestern University's Kellogg School of Management. Ladies and gentlemen, please help me welcome to Notre Dame, Sonny El Aboua and Jean Jones.

Exelon 1 2:27

Really excited to be here with all of you today and to kick off this series. as, Professor O'Rourke noted, Sonny and I work together at High Salon. we're going to talk a little bit about the grid today, what is going on in the energy industry? What are some of the key threats and themes that we're seeing in the industry? And then how do we innovate to stay ahead of that? You talk about 10 years, hence, that's how we think about our strategy. Our strategy, as we said, as an executive committee, we're constantly thinking about where our customers are going to be 10 years from now. And what do we have to do today to address that? very relevant to what we're doing in the business world. and as we think about that, we're going to start with a little bit of a background of who is Exelon. we are the largest transmission and distribution company in the United States. We serve 10 and a half million customers, across several jurisdictions. ComEd in Chicago, Baltimore Gas and Electric, Pico in Philadelphia. And then we also serve our nation's capital in Washington, DC. when you think about the energy industry, we were born of innovation, right? The electric light bulb, but our companies go back 200 years. Baltimore Gas and Electric was founded in 1816 as the first gas company, Commonwealth Edison in Chicago, its founder, you may have heard of Thomas Edison. and while it was born of innovation from something big, like the light bulb. There has been innovation, that has allowed us to continue to exist for 200 years. So you think about Innovation and how the grid was established. Our founders went out and started talking to customers and agreeing to get six customers to hook up their electricity. And if all six of them did it, it would be cheaper. And by the way, those six customers can pay over time. We're going to invest. That was innovation in what we call setting rates or how we charge our customers. we've also innovated in, technology. So back in the day, you may remember you had a meter on your house. And when we wanted to know what was going on or how much usage you were using of the grid, we would send someone out in a truck Today, 94 percent of our customers have what we call smart meters. We are in the control room, we are monitoring those meters, and we know maybe before you even know if your power is going to go out. And so we'll see an outage over here, we'll switch you on the feeder through digital automation and all you'll see is your lights blink. You won't even experience an outage. But that was a kind of innovation that has allowed us to continue to meet changing customer demand. and if we think about existing for the next 200 years, the threats and the changes in the themes are much, much bigger. so before I go into that, let me just give a little bit background around what is a utility. when you think about how the power comes to your house, there are generating stations. So whether it's nuclear plants, coal, gas, wind, solar, that's generating the power. That power then is transmitted to a transmission system, which captures that energy. And then, steps it down to lower voltages called the distribution system, which gets it into the homes of businesses of all the customers that we serve. there are companies that have all facets of this, power stream, whether it's the generation transmission distribution, we are solely transmission and distribution. and when you think about the grid itself and all the work that needs to be done, all the investments, all the capital deployed to make this all work, it really prohibits natural competition. Imagine if we were sitting here investing to set up all of this structure for one, neighborhood, and then another company was doing another neighborhood, the inefficiencies that would exist there would be massive. And so because of that, we are a monopoly. We have franchise agreements with our territories that allow us to serve those customers and no one else. So we are a monopoly, but we are regulated. in order to invest and spend money, we have to work with our state commissions. So the Illinois Commerce Commission, for example, in Illinois, at the state on the distribution side, that local network, but then at the federal level through FERC, they have to say, yeah, I agree with you. This is what you should be investing. This is going to meet reliability needs in the most cost efficient way. So we have to work with our policymakers and our regulators to ensure that what we invest is allowed. But we are a publicly owned company. We have investors that own the company. And so how does that flow of funds work? investors will buy our stock, right? They'll give us money to invest in the grid. that is matched with debt from lenders. So we'll take about a 50, 50 capital structure. We'll get 50 percent equity, 50 percent debt. We'll then go invest it in the grid. Whether it's capital that is going to improve the system and extend the life of it, or just O and M, whether it's maintenance, everyday work that's done on the system, we recover that through customers, we give a dividend to our shareholders and we grow our earnings. so that's while it's a little bit different than other corporate America, the sort of investor situations is pretty similar in terms of, managing, that flow of funds and ensuring our commitments to our investors. I'll touch really quick on what that looks like. if you're investing in a utility, you want steady, predictable growth, right? We are pretty low risk because we are regulated. When we spend that dollar, someone has told us we're going to be able to recover it and earn a certain return on it. And so our investors want to see, a total shareholder returns somewhere in the eight to 12%. They expect on average for us to grow our earnings or investments by about 6 percent on average across the industry. And then provided to the meal somewhere around 4 percent for that total. 10 percent shareholder return. They are not looking for the double digit, high risk, high return that you would get it, So this is what our investors looking at. And I share that to say that makes it a little difficult when you're thinking about innovating, right? They don't want you to invest a ton of money and risk losing it, right? They are looking for that steady, predictable return. Now we know we have to innovate right to meet the challenges, but that's that tension that we have with inventors. We are owned by a variety of different investors. but, we have passive funds like Vanguard stage three, but we also have active managers like Fidelity and others, and we spend a lot of time on the road with them, helping them to understand our growth projections and et cetera, so have that, investor. we want the 10 percent low risk return, but how are you getting ahead of these challenges on the grid? these are just some of our peers that I share. We are tnd only as I mentioned You have vertically integrated and those are the folks that have the generation along with the distribution of the energy And then you have what we call ipps independent power producers. We're making a resurgence In the stock market right now. and it is related to one of the things we're going to touch on. AI is driving the tech stocks crazy right now. But if you think about who really can capture the outside of AI, you've gotten a video, right? And they've made a run, but a lot of the data center companies are private. They're privately owned, so you can't invest in them. And then maybe you can invest in the hyperscalers, the Amazon, the Googles of the world. But then you're making a bet that there's a commercial use for that AI that they're investing in. So who else can you invest in to capture the sort of momentum around AI? Maybe the generation companies. The companies that are going to have to build the power to match the demand that is coming from artificial intelligence and data centers. And so these stocks right here, I've had a ridiculous run. Constellation is one of them. We used to own Constellation. We spun them out February of 22. They own the largest nuclear fleet in the country. And we're super excited for them that nuclear is finally getting the recognition that it deserves so what's interesting is as investors look at this space they're wondering though is the old mantra of I just want steady predictable growth and a good dividend really what I want? Or is this really a call on AI? Is this really a call investing in a utility stock on the clean energy trend? So it's a unique time where you're battling between investors that typically are pretty conservative, but yet maybe see this opportunity to see a big, increase in growth in the sector that has not been seen before. one other sort of foundational thing I want to mention is that as we think about investing, as we think about meeting our customer demand. there are two fundamental principles that we have to make sure to run a reliable grid. One is that, the supply of the electricity and the demand have to be met, simultaneously. There are no ways to store power for a long period of time, right? when you think about these baseload generating machines, nuclear runs all the time, gas runs all the time. cold wind run all the time, notwithstanding sort of weather and other sort of things, but they're running all the time, but a lot of those are being replaced by wind and solar and hydro and other what we call intermittent resources. So that complicates this, if you've got demand increasing and demand here, is the generation have to be going at the same time. The other thing is, it has to be matched on a daily basis and you have to get ahead of it. 5, 10 years from now. you can't decide tomorrow that you need another gas plant in your service territory when it takes 5 years to build a gas plant. So the modeling, the prediction, the trying to understand when and how is this demand going to come on is critical to making sure that there is a balance across the electricity grid. for us, some companies have the generation and they can manage it. For us, without the generation, we rely on PJM, which is our regional transmission organization. Who schedules the generation outages and make sure that they are working with their member companies like us to understand how much generation do we have in the area? How much more do we need? When can we get it built? So that, that balance of supply and demand is so critical on a daily basis. And then thinking ahead, five, 10 years to make sure you have what you need. Given you can't just turn on another generation station. so let's get into that backdrop. Let's get into some of the things that make our job a little bit harder, but also very exciting. we've got three things that we're going to talk about that are going to require us to innovate and adapt to our customers. The first is demand growth. we talked a little bit about this. This is really driven by the data centers. I'm going to get into some of the details on that. But you've also got a lot of manufacturing coming on shore as well as electric vehicles. I will say I drive an EV. I never want to go back at the range. Anxiety is real, but, they're pretty awesome. and then there's a changing generation stack. I mentioned this a little bit too, while nuclear is having a resurgence in terms of generating types. you have a lot of states that are still, having ambitious clean energy goals, around the retirements of gas and coal. And while they are being replaced in terms of megawatt hours with solar and wind. all that gas plant runs all the time. If the sun doesn't shine, we don't have the solar and we don't have a way to capture it. So you've got this base load generation retiring, replaced with intermittent resources. That is, happening pretty rapidly, and we can talk a little bit about that more. And then last is climate change. we're watching the fires in L. A. we've had significant activity in our territory. The grid itself, what we define as resilient today. is very different than it was 10 years ago, and that is rapidly changing as well. So just a quick deep dive into each of these. when we talk about demand growth, that is simply how many people are using the grid. in this chart on your left, you've got the historical energy consumption in the blue line, and then you've got the generation in the red line. And all the way back to 2005, we've always had excess, right? So we've always had more generation than we needed, which was great. When we needed a call on that generation, if it was really cold, really hot, that generation was there to meet what we call the peak load. So you can see, based on the forecast, starting, very soon, even in the low end scenario, you're gonna, start to see demand growth that's significant. And we could find ourselves in a position, very likely, where that demand growth is higher than the generation available today. what's driving that is, you can see the different components. But 44 percent of that is the data centers I mentioned. In our region alone, I mentioned we work in that PJM region. PJM has predicted that there will be a 30, 000 megawatt increase over the next several years. That is the equivalent of 13 million homes in our service territory. That's adding two New York cities. This is unprecedented. We have not seen this level of growth. as you can see, for the last decade or so, it's been flat to declining. the majority of that is the data centers. These data centers, and we have many of them in our service territory, they're massive. They're the size of football fields. Some of them go up to a gigawatt of demand in and of themselves. And a gigawatt you can think of as equivalent to about over 400, 000 homes. In Chicago, and I shouldn't say Chicago. It's really the surrounding area in Commonwealth Edison, our Chicago based utility. We are one of the top five locations for data centers. We see 11 gigawatts of high certainty data centers coming into that service territory. So using that same rule of thumb, there's We're going to see basically a doubling of who we serve today in the next decade. And so you can imagine not only the amount of infrastructure in the grid to handle that, where's the generation coming from? And so that's what we're working on. to then what we need to innovate to solve. And we know, that we have to do it affordably. because these are not, these data centers bring revenues, they bring jobs. not to mention all the great things that we're going to learn from the data centers, but there's a real impact to the other 10. 5 million customers that we serve in terms of reliability and affordability, but that's what's driving the demand growth of that 44 percent just to give you perspective. Over the last decade, the data center use has, or data center demand has tripled. It's about 4 percent of U. S. electricity consumption today. They're expecting it to triple again and be about 12%. So it's a rapid and sudden increase in the demand on the grid. second key theme I mentioned was the changing generation stack. This visual here just shows you today, when we talk about what generates electricity in this country. Today, that's the mix. as we see the changing and the clean energy transition, nuclear, we see a resurgence of, but many states have goals, including Illinois, for example, which has a goal of net zero by 2045, 300 percent renewable, in the 2030, 2040 timeframe. So what that means is those coal and gas plants are going away and being replaced by wind and solar, which is great. But again, we don't have enough storage today to capture that to ensure is available all the time. as this demand is increasing, what you're seeing, is the supply that can, meet that demand is changing and is more intermittent. we need to adapt and figure out how do we manage that demand while we get the right amount of generation to supply it. And then the last key theme is climate change. The National Weather Organization has estimated in the last year, the number of weather events over a billion dollars has doubled. so while we are seeing, for example, the L. A. wildfires. We saw 40 tornadoes touchdown in our Chicago area, including in the city of Chicago over the course of a couple of days last July, that impacted about 400, 000 of our customers. and with the technology we put in and the investments we put in, we're pleased to say we were able to get those customers all of them back on the majority of them within 48 hours. And we were also back tested to be able to say we hadn't made those investments. The number of customers would have been out double. you think about winter storm Uri in Texas. that was a really traumatic and tragic event where the grid went down during winter storm Uri in Texas. there's a cost to that. I think the cost of that storm alone was 80 to 130 billion, but over 200 people lost their lives. And so when you think about the cost of investing in the grid to accommodate these changes to these themes, The cost of not doing it is greater. And so that's what we struggle with and what we wrestle with. How do you make the right investments to address these changes and ensure that our customers have a safe, reliable, and also clean grid. and so with that backdrop, I'm going to turn it over to Sonny. You've got the, my job's easy. I just tell them all the problems to figure out how we adapt

Exelon 2 18:04

listen, this is a really exciting time to be in our industry and before we even get into it, how many, I know this is a mixed crowd, but how many people here on TikTok or social media, any form, right? LinkedIn, you're all in. Okay, who's thinking about buying an electric vehicle or owns one right now? Yeah, good. Now, the point I'm making with all of this is everything Gene's talked about, like this changes that we're seeing in our industry is driven by demand supply mismatch as well as climate, right? Those are the two key things. The demand supply mismatch is a function of, changing supply stack and load growth. But think about it. While we talk about social media and the need for us to be connected with people, the computing behind that social media is also the same computing that we use in like advanced computing for medical research. So when we're talking about this growth in data sciences and data centers, what's most important is to realize that this powers all aspects of life. Some of it is social. A lot of it actually deals with quality of life. And it needs energy to sustain it. And that's where we come in. We come in as thinking about ourselves as not just, the basic stuff, but the fundamental stuff. And for us to be able to do that, we need to constantly innovate and think about the challenges that we will face over a 10 year future. Now, before I get into the next couple of slides, I always want to put this in lay terms. When you think about innovation, there's some things that you need to just have a sort of like ground stakes. It's about the journey. Sometimes the destination is clear. Sometimes you need to figure it out together. If you figure out the destination, the next thing you need to do is figure out the route, right? How do you get there? sometimes you need people to get you there. And if you figure out the route, the next question is who you go on with, who helps you get there. So you need to figure out how you get there with a team. And that's why partnership, creative thinking of having a North star is super important for all we're going to be talking about. So as we think about how we enable this future, we think about it from a perspective of how we make investments in the physical infrastructure. How we work with our customers to drive affordability, and more importantly, how do we shape the landscape so we can all get there together. First element of it is partnership. For us as a utility, it is super critical for us to realize that as much as we know a lot about the grid, there are people that can actually help improve our thinking. And the folks that help improve our thinking sometimes might be in our sector, sometimes they might be outside of our sector. It's super important for us to focus on following a technology from birth to maturing. I'll give a good example. We've talked about changes in weather patterns and new climate change. One of the first things we did recently is in 2022, we did a climate study with Argonne National Labs. And that climate study focused on like temperature and humidity. And it looked at a 10 year forecast of what northern Illinois would look like, which is our common region. And guess what we found that the weather moves up north, or it can be up here. in about 10 years from now, the weather in Illinois will feel a little bit like Central Reserve. It's going to be a little bit warmer, it's going to be a little bit more humid. And guess what? That has an implication for how we make investments. What does that mean? It means things like our wooden poles. They're more humid, they'll probably degrade a little bit faster. You may have non endemic species like pests who might actually be, nipping away at them. So you may have to have a different plan for how you change out the wooden poles. It means things like your transformers, like they get rated for performance based on ambient temperature. If they don't have the ability to cool down overnight because the days have been really hot and they can't really cool off at night, guess what? Performance begins to drop. So you may have to change some of those things quicker. Or you may have to get bigger sizes because they get de rated. So you need to think about the infrastructure and how you make those investments. And none of this would have been possible without the partnership with, with Amharicon. And as we begin to think about some of those relationships, we go into things like, I asked about electric vehicles. If you own vehicles, there might be a connection between you and the grid as you charge those vehicles. So we worked with University of Delaware and we had a vehicle to grid pilot that essentially says, The battery in your vehicle can become a great resource. Let's figure out ways that we optimize our charging Participate in markets. Okay, create an income for you And while using your resource to actually stabilize the grid and talk about this demand supply mismatch. We did that with the university We've looked at things like advanced coating technologies that we can use to cover pipes so that we can actually, help with transporting clean molecules like hydrogen. And as we begin to think about the world in 10, 15, 20 years from now, our investment cycles are usually between 10 to 30 years. As we begin to think about the world 10, 20, 30 years from now, we always think about not just adapting to it, but mitigating some of the factors that lead to this climate change. A good example of a mitigant is like a greenhouse gas called SFC, sulfur hexafluoride. It has a global warming potential that is really high. So how do we eliminate that from our system? We partner with the Dutch and we're trying to eliminate use of greenhouse gases and outbreakers. And the more we include there's no greenhouse gas barriers Easier it is for us to think about reducing the overwhelming potential of some of those gases So partnership becomes important in every aspect of what we do because we realize that some of these Partnerships actually help shape some of the things that we do and we actually prepare for the world. But guess what? Even as we think about these partnerships, it's important to know that the world that we're going to live in with this changing climate sometimes might require us to do something different. And that's why we're talking to schools like the University of Notre Dame. In a world where the working temperature outside is a little bit warmer, you may need to think about changing your work practices. people might need to take more breaks hydrate because it's warmer. They may need to change their PPE, their protective clothing, so they're not really suffering heat stroke when they're out there. For you to be able to think about things like that, you need to shift the mindset of your workforce. And that's why you think about things like innovation. So when people come into the workplace, they don't just think about executing on a list of assigned tasks. They think about how those tasks impact them, The environment and decisions that make in the workplace beyond all of that, and the partnerships that we create, we know that it's super important for us to help our customers along the way with making their business more affordable. Gina's talked about reliability, affordability. Those two things are super critical. In fact, they're almost like table stakes for liabilities, almost table stakes. And a reliable grid is the foundation for all what we'll be talking about, delivering a great product. We've made investments in advanced metering infrastructure, like the smart meters, that helps us know what is happening even as we begin to look at your homes. There's this convergence of like hard physical infrastructure with data driven technologies that makes them a whole lot smarter. And an example of Very smart devices, the smart grid, the smart meter that you have in your home. It tells us a lot about things going on around you. Power quality, consumption pattern, and how we can help you make good energy choices. We've made investments in distribution automation for devices that enable us to locate faults, isolate them before they cascade, and self serve and self restore before things get worse. And those technologies are so critical in ensuring that you don't have rolling brownouts whenever you have service disruptions, those investments keep it so reliable and they're also more important because the ability to proactively make those investments help keep the cost down. Now, in addition to that, we try to keep our workers safe. I've just talked about workers and changing how they work in external environments. We sometimes use things like drones to become more efficient, and also take them away from like safety challenges to implement a lot of work that we do whether it's line inspection whether it's like Spraying, to contain, like the growth of vegetation. We do all of that. Guess what? Work that typically would take an average human about two days to like essentially spray herbicide on like vegetation management. The drone can do it in about 45 minutes. Super efficient. And even more importantly, cost saving for our customers. So all of these operational innovations help drive down costs. We also have financial innovations in thinking creatively about how we access capital and bring that back to our communities. One way to do that is through applying and receiving federal grants. And the great thing about us is we were able to attract about 150 million of great financing, to our communities in Chicago and Philadelphia. Why that is important is not only does it allow us to address a critical need in the community, Gives us the opportunity to actually partner with the communities to design an end state in some instances Those communities want certain things, they might want more solar more clean energy We also want the adoption of like new technologies like the one charging stations That's what we're doing in the city of brockford in illinois. Just allowing more adoption of solar and evs More importantly we're building that together with a workforce development plan using federal funding It helps us minimize the amount of dollars that we put in and keeps the cost of a bill low We're also looking at things like transmission that helps drive down cost In a manner that also shows up less and less on the customer bill now in any customer bill You remember it's going to be a function of two things It's going to be a function of the unit price of electricity and how much you use A lot of what I've talked about now drives down the unit price. How can we help you reduce quantity that you use? We do that by aggressively helping you with managing your consumption. We do that through energy efficiency programs that allow us to just help you minimize how much you use. We do that by sending the right price signals. We send the smart meter we talk about. It gives us the opportunity to tell you a little bit more about what the unit cost is. And guess what that does? It helps you with your heating modification. So maybe you think a little bit differently about when you use energy, how you use energy, and more importantly, what the implications are for you. And as you think about that, it becomes more critical for you to also understand that you have water levers that are available to you. You may choose to self generate. If you want to generate your own electricity, you can put a solar panel on your roof. Guess what? We can make that easy for you. The date we have about. 3. 5 gigawatts of self generated electricity on our distribution grid. That's a lot of solar panels across our different jurisdictions. And more importantly, we invest heavily in our communities. We know that over the next 10 to 20 years, as the grid changes, the requirements of the workforce will change. And I've talked about innovation and the need for us to think differently. We also need to train differently. We've seen something that could potentially be a business risk for us. And guess what we did. We turned it into a business advantage. We established workforce development programs and infrastructure. Where we actually train people, particularly craft workers, who come in and are able to like, pick up some of these new skills, earn a living wage for their family, help with community development, and even more importantly, ensures that we have a pipeline of skilled workers as we begin to think about re evolution. The community relationship becomes even more important for us because we're investing in the communities that we serve through some of these efforts. And, finally. I've talked about the journey, the need for us to be in, on the same direction with some people and how we're headed in a, a final end stage. Guess what? We have multiple people on this journey with us and we have many ways that we engage with them. Different platforms. Gina's talked about engaging with our investors. I've talked about our customers. Some extent we have a lot of industry engagement with industry groups and research partners. We're having engagements with our employees, we talked about keeping them safe. We are present in our communities and we have to act as a responsible forward citizen. So we have all of those relationships going on and guess what the underlying factors we play a critical role in balancing all of those relationships. So you'll see us show up in different ways. And we show in a manner that allows us to make sure we create the most optimal solution for instance We've talked about demand supply mismatch a lot of that. It's because of the activities of the balancing authority So today i'm talking about how we can ensure that we have a functioning market That helps us bring more generation and helps us address the supply challenge We've talked about the need for apps to have a level playing field. We are talking to and making sure that we're doing transmissions. We're also making sure markets function effectively. That's what we do. We're talking to stakeholders like who are asking us, Hey, listen, the world is changing. Are you committed to your climate goals? Yes, we are. Because you can't refuse climate science. So we're talking to those who volunteer. We have a commitment to reduce our greenhouse gas emissions. And we intend to do that. We're talking to our local partners and states who have energy mandates and say, Hey, we need to get there by 2045 2050. How can we get there? We are in the midst of those conversations with them, shaping energy policy, making sure that. Nobody's left behind. Inclusiveness is going to be critical because of the economic unevenness that is prevalent in our jurisdictions. some people have an economic advantage over other people, but everyone needs to enjoy the benefit of a clean grid. And so we need to ensure policies enable that. balancing it cleaner and brighter, creating a cleaner and brighter future. the core of everything that we do, and we want to do it in partnership with as many people who are headed in the same direction with us. Mapping the route together, partnering with us to figure out alternate routes, and even more importantly, just innovating with us. And it's super critical that we have that mindset. We've done a lot of things right, and there are a few things that we don't know, and we need to partner with the right people to ensure that we do work through that, but more importantly, I think we have a solid foundation of outreach to build.

Exelon 1 32:31

We think we have a unique position, to be able to meet all of these challenges. size and scale is going to be critical. So the fact that we are the largest, we have a diverse portfolio. when we innovate in one operating company, we can do a pilot there. And rapidly deploy those learnings across the other operating companies. That is going to be very helpful. I also think just doing what you do really well. Gives you the trust from partners to do more. So when we operate in the top 25 percent of the United States in terms of reliability, the top five utilities, I think we're three of the five, and I think our fourth is right there, right behind them. when you operate well, when you do things well, you're trusted by your regulators, by your customers to do more. So we cannot take our eye off the ball in terms of delivering really strong reliability, really strong customer choice. and I think also our position of being transmission and distribution only. so while we don't have generation, we can't just go build, another plant tomorrow and meet this need. Not having that generation gives us the trust and the understanding and the ability to go in and advocate for our customers, because when we used to own nuclear, I used to be the financer for our nuclear division, and you'd go in to talk to policymakers in Illinois about the energy transition. They would just tell me well, you're just you know, you're just shopping for the nuclear plants You just want nuclear to win out in this now that we don't own any generation. We can have a customer forward looking Discussion with our policymakers in a more trusted environment. So I think all of the things Plus our unique ability to innovate with our communities. We always put our communities first. that also builds up the trust with our customers. So when we come and innovate and provide them a new option, if they're more willing to hear from us, when. when you put in an EV and you don't know who to go to for putting in a charging, station in your garage, or you don't know what the right rate is, if you trust ComEd, if you trust your local utility, you're going to call them first to figure out what do I do next. And so we want that partnership. We want to continue to have that trust with our customers. And I think all of that positions us well. It's not going to be easy, but it is going to be exciting.

Jim 34:35

All right. Thank you. Ladies and gentlemen, let me begin our question period with, something, a near term issue that we've been mulling over. A friend of mine who's a graduate of the university and the chief marketing and brand officer at Gallo wineries, he's thinking a lot about the energy they use on their property from Chicago to Modesto. A goal, it used to be a fantasy, now it's actually a goal, is to take the properties off the grid to generate her own. She has access to solar, wind, biomass, which has advantages in that you can use it when you need it, store it. Not so much access to title, but there are some parts of her property where she can generate a fair amount of electricity. She's doing that, but she says, my problem is. I cannot store it. I sell half of it on some days, a third of it on others to PG& E, and then I buy it back a couple of hours later. You said, this is really infuriating. So she said, I want a box I can put this electricity in and then use it when I need it. So what do you have for her?

Exelon 2 35:46

That's a unique situation that calls for storage, and the most common form is battery storage. Lithium ion. lithium ion is one of the technologies out there, and it's a great technology, but there are also developments going on that could potentially. solve for more than just lithium ion. Yeah, i'm excited. so lithium ion is the most prevalent one and it's the most currently available and I think you know The bigger challenge now is trying to size The installation to fit the amount of energy that you're essentially feeding back into the grid So you could have a four hour solution an eight hour solution like depending on how much size you want How you want to size up the battery? The higher go in size, the more, a little bit inefficient it is. That becomes a little bit more costly. but for most folks, if you have a traditional home, behind the meter lithium ion storage is probably what is best suited for you. The great thing about being able to self store and self generating store is of course you have that energy security. Like you have your ability to say, I self generate and I use. You also have the ability to control a little bit of your exposure to market fluctuations with prices. That's great, but it's also super important to remember that you also connected to the grid for the most optimal solution to be connected to the grid and the grid connection is super critical because, think about like you have a solar storage, you can put potentially. store enough to give you maybe one to two days of utilization, but if you have an extended period of, black outage, you still need to be connected to the grid.

Jim 37:19

Do you see a time when, people, individual homeowners who have a box in the backyard where they could store two days worth of

Exelon 2 37:27

That would be an ideal situation for us because as you pointed out, we've been talking about this demand supply mismatch and this demand supply mismatch can be solved at what I call the bulk system level, which is just building more large generation like industrial level, storage at the transmission level. But it could also be stalled at the distribution level. And distribution level means you have to put a lot of those batteries behind the meter in the ohms. And as a result of that, you can actually help optimize the use of the grid. That way those resources can be called upon in periods when you have an extreme event where there's a spike in demand on the grid you can actually call those devices for us if there are policies and regulatory mechanisms that allow you to Make that work. We're in support of that. for it to work a couple of things need to be in place for the utility It's usually the ability to recover your investment costs and do so in a manner that helps the adoption technology for the customer usually a price decision most times you're looking at the payback period If I'm going to put a battery in my house, I need to ensure that this investment pays off over the long term. How much am I saving from energy use and how quickly can that pay back over the cost of investment?

Jim 38:41

I bought a generator and, I would say three or four times a year lights go out to fruit, you're going to hear it outside in the yard, all the lights come back on. Pretty good. Generally speaking, last time this happened, it's around 10 p. m., came back on around 3 a. m., and this was probably a tree that took down a transmission line. I've asked the people who sold it to me, how long could this run? The electrician said, three weeks. I said, okay, I like that. I said, what happens after three weeks? And he said, we come out in brand new, I'll change the plugs, I'll try and get you back online. I said, What's the lifetime of this? And he said, it's going to run until it dies. But he said, this is like a small Toyota in the backyard. it's a solution right now, but we're dependent on the gas company as well. and the investment was why? This thing was about 10, 000, and every woman in the neighborhood said, you paid what for that? Every guy in the neighborhood said, oh, God, that's really cool. Yeah. So it's a gender difference on how cool you think the investment is. with an energy storage box, that would be an investment on the customer's part, not the energy distributor or generator. So you're spreading your costs, am

Exelon 1 39:54

It could, but I think about it as the evolution that we've seen no different than solar panels on people's houses, right? So this is just another sort of individual, customized, distributed generation. and yes, typically it is the customer deciding they want to do it. they've done the math on the payback. but again, we serve all customers. And so how do you think about, I can afford solar panels on my home, but

Jim 40:16

not everyone

Exelon 1 40:17

can. And so from an equitable perspective, how do you make sure, as Sonny said, everyone enjoys the benefits of a more cleaner, resilient grid. And so there are programs, for solar, for example. you do provide incentives, whether they're state incentives, there's federal incentives, there's, different, rates that we're allowed to chart. With, the partnership with our commissions to incent people to adopt it, our job is to make sure everyone has access to those, and is aware of them. So that I think is, it's the, the concept we have a foundation we can look at to say, how do you take what we've seen before as we evolve to now the next thing being these batteries at the individual's homes. How do you make sure you leverage that innovate? Make it even better. but I also think, what did they say that, necessity is the mother of innovation, right? Storage the technology given the resurgence in demand. I think you're going to see some players step in to help fund the innovation and the technology advances. You're seeing the hyperscalers that are, their business is dependent on AI and data centers being able to run 24 seven, they want that generation built. They want to make sure we can do it quick. so I do think you're going to start to see, we've seen partnerships announced, I think Amazon, partnered with another utility in Virginia around SMRs, Google and Kairos was it, also, so you're starting to see different players come into the space to help innovate and accelerate some of this technology.

Jim 41:41

Let me close my question with kind of a wacky idea. suggested to me about 40 years ago when I was in the Air Force. senior scientist, at Los Alamos said, what we're looking for is a box about the size of a steamer trunk in the backyard that's nuclear powered. it should be cesium powered or something. what's the probability of that happening? You'd be independent of anybody and it would operate in perpetuity. but you're going to have depleted uranium or whatever in the backyard. have you dealt with suggestions like that?

Exelon 2 42:13

heard, we've looked at things like micro reactors.

Jim 42:17

Yeah.

Exelon 2 42:18

Yeah, and there are companies out there who've looked at it because sizing, scaling is the most important part. But I think what you Point that out is probably the biggest challenge, the general acceptance around the risks and the management of a micro reactor in someone's backyard, right? Some people will be enthusiastic. Others wouldn't go near it. Yes. Yeah. And I think that portion of it is a little bit more of a. A barrier to adoption than anything else because it will require you to actually be a little bit more specialized in your knowledge And how you deal with it and oversight, you know from

Jim 42:53

regulators Department of energy has come out and great job the depleted materials Let's go to you. What are your questions? let's see if you've got some questions. Let me go, here if I could, please. Yeah, so you talked about as, you use more like renewable energies for generation, like solar and wind. you're like peak load times changing, you're not able to meet that demand. As you like, do more sustainable, generation, do you think that, you're going to need to supplement that? Nuclear fossil fuels like always going to be necessary. Or is there a third option that you guys are thinking about?

Exelon 1 43:25

So I think we think, eventually, right? We need that the technology to meet us on the storage side. So we do believe in this clean energy transition. Nuclear has got to be a part of it. nuclear is interesting. gosh, two, three years ago, when I was at nuclear, we were shutting down playoffs, right? They just weren't making enough money, and now we're seeing a resurgence, I think, but they're very costly to build. So the last time a nuclear plant in the United States was built, the Southern Company built both one and two. Started in 2013, 2014 just completed them 10 years to build and I think they were two times over budget. so with that being said, they are carbon free. They're excellent assets. So you are seeing, TMI, which was the site of the worst, us, nuclear incident is being rebuilt funded by Microsoft, which is excellent. So I think you're going to see a resurgence of nuclear. I think gas, we believe gas has to be part of the transition. until we find the technology on the storage side to compliment the renewables. so it's that's how we're seeing it. In addition to that, it's what Sonny talked about, managing the demand. So both energy efficiency, every customer using less, going into different homes, retrofitting, appliances and changing to, helping them consume less. But on top of that, what we call time of use rates and sending our customers to use less during the peak. My husband's favorite game is to play when he gets the text from ComEd to lower our consumption and how much money he has saved. customers also, he's very excited about it, but then also we send, the best thing we found, we send our customers letters. It's telling them how much they're using relative to their average, neighbor's usage. And it is the most competitive thing ever. People want to use less than their neighbors, and you start to see that impact their behavior. so it's going to be a combination of that,

Exelon 2 45:03

It's a combination of resources, but remember, the most important thing is everyone's solving for something. You can be solving for reliability and low emissions. like the mix of resources to solve that for you people have to build optionality into Some of the new generation coming off. For instance, if you see the buildings in gas plants now They have the ability to actually burn hydrogen So that you put five ten years from now you can make small retrofits and you can use a clean fuel So ultimately gas could be a transition fuel But some of the investments we made can be repurposed in the future to actually burn clean fuels. And that means you can solve for reliability and have no carbon in the future. How

Jim 45:45

about geothermal? Those three parking lots. In the last two years, there were massive holes, I mean like six, eight feet deep, and they put these geothermal piping systems in there, and brought back all the dirt, paved it over again. This building is heated now by geothermal power, and there's more coming. what's the future of that, briefly, and for those who aren't familiar, how's it work?

Exelon 2 46:12

these are heat pumps, and at very basic levels, it basically involves using the Earth's core as a heat sink or a heat generating device. most heat pumps work with just arbitraging the ambient temperature with the temperature in the room. if it's a ground source heat pump or air source heat pump, it just requires you to pump. Air or move air using a temperature gradient You can extract heat from the earth and use that to heat a building on a cool day You can probably use the load sink if you're at the place. using a air source heat pump. It's possible use ambient temperature. Can we do that at scale? You can do that at scale the real challenge with it though is It's geologically dependent You need to ensure that you can tap into the right location. Some places are more difficult to actually, sit on the right place if you're sitting on a rock formation is difficult for you to actually get right. That's one. Two, the temperature gradient might be such, it doesn't work for you. So that, on super cold days, like if you are in the Midwest, it may be difficult for you to really heat your house because the temperature outside is so cold. you probably need an augmented heat source in the room. it's geographically and geologically dependent. Thank you.

Jim 47:20

other questions, students?

student speaker 47:22

some of the things that we need for here is to transitioning the year? Is it like money? Is it technology, people skills?

Exelon 1 47:32

So it's all the above, but I would say the biggest, that we really worry about is affordability because there's so much work to address so much investment that needs to be done to address these changing dynamics. And there's only so much that customers can afford, and especially when you think about all different types of customers. So I think, doing this affordably and reliability is always critical. And I guess maybe I would put them on the same bar, but I would say those are the two things you know, we can invest, I guess I would put affordability on top of that because with unlimited funds, we know what we need to do right. We know how to keep the grid running. We know how to address these challenges. It's how do you do it in an affordable way that customers can be on that journey with us and not left behind.

Exelon 2 48:15

That's exactly right. I think that's the most important thing for us. Portability and moving everyone in the same direction. Nobody left behind. As you go along this journey, you figure out real quickly that pace at which you can adopt new technologies and use that to serve a customer's need becomes like a little bit of a multiplier. Affordability is driven most times by technology.

Jim 48:34

Can we get that done without the government?

Exelon 1 48:36

one of the things that's really exacerbating affordability right now I go back to is the lack of generation in the United States. in the areas that we serve, we're part of an organization that regional transmission organization that looks out and says, here's how much demand I have. Here's how much generation I have, and here's how much margin I need. What they are seeing is there's not enough margin. So what they do is they have an auction for generators and they say, submit your generation and what you want to be paid, and we'll send you a price signal through that auction. That auction cleared, how much higher was it? I think it went from 75 to Tuesday. It was like 10 times increased, right? So customers are feeling that, right? We don't actually, we don't own the generation. That has nothing to do with us, but what they're feeling is that is the amount that we have to pay generators to incent them to build. So to your point, you may have heard, president Trump speak the other day about accelerating. The ability for people to build in the United States. so moving through permitting and zoning and other barriers to build generation, and then it becomes the clean energy question. Are we going to build gas and coal when, we're trying to be certain climate goals? but I think that having the federal government step in to remove some of the barriers. But also we need those businesses to build. And so our states are working with those, with us and the generation companies to say, what do you need? What do you need to build more generation? Because as more supply, simple supply and demand economics, right? As more supply generation comes in, the lower the cost per customer, the lower the price signal for more.

Jim 50:05

In relatively small, relatively rich countries, Denmark, Finland, Norway, even France. The government plays an outsized role, but this is somewhat different given the scale of the United States.

Exelon 1 50:18

And I think we're at a critical point where you would say, again, we have a free market where we operate. We don't have regulated generation. Other states do. So if you're in, I don't know, Georgia, right? Georgia can just say, I need more gas in five years. I'm going to go build it. We are relying on a competitive market in the states we operate in that a business is going to look at this, say that price of mall is enough and I'm going to build. It's the cynical part of us is right. those same generators are enjoying these high prices, right? There's no incentive for them to build. Cause as they build, then they're pushing down that capacity price that they get. So our states talk about whether it's state or federal stepping in, our states are stepping in to say, I may ask the utility to do this. I need that generation built. And I don't want to wait for a competitive market. and just for those generators to step in, I know I can ask the utility to do it, and I know they'll do it quick, and I know I can regulate how much they charge customers. So you are, it's, we're at a critical point where people are questioning in the competitive markets, are you going to start to see STEAMs or federal, agencies step in?

Jim 51:19

I have a question here. first directly related to what you just said. Given the foundational nature of utility power, what is the limit on a customer's willingness to pay? Have we gotten close to that?

Exelon 1 51:30

Yeah, we have. I think we're seeing it right now because our customers are starting to see the impacts of that auction that I mentioned where the power prices on the bill. So a customer's bill is comprised of our cost, transmission and distribution. So the infrastructure to distribute the power, but then you also have the supply portion, which is, the gas and nuclear. Historically, we've been able to invest and meet these reliability needs at call it a 2 to 3 percent normal inflation increase for customers because of the incremental investment we need to make, but also because of the lack of generation, our customers are seeing double digit increases It's not only the increase itself, it's the pace. It's one thing if you step into a 10 percent over time, but to have that overnight, our customers are really feeling it and I'm hearing it. It's not just Exxon, it's every power company. my mom in New Jersey is calling me, asking me what's going on with, the company there. I think we're at that point. and that's why this is critical. I'm working with our states to say, how do you get more generation built quickly? How do you think of a way? To do it, and innovate around, maybe they pay for it over time, how do you, not abandon free markets or competitive markets completely, but allow the states to run their own competitive, bidding process. and by the way, we're going to let the regulated utility come in and bid too, and that might actually lower the cost for customers. in the states we operate in, Maryland, for example, is looking at legislation to allow that type of new mechanism to incent generation to come in. Pennsylvania is also, all of our governors have written letters to PJM citing this real customer concern and real sense of urgency around needing more generation to help combat some of the increases we've seen.

student speaker 53:10

In

Jim 53:10

terms of affordability. That's the cost per unit of the energy by the different types. Can you rank for us? What's the cheapest and what's the most expensive right now from a

Exelon 1 53:21

generation perspective?

Exelon 2 53:22

Yeah there's this thing From a generation perspective you have a map called the lab wise cost of energy And some technologies are more expensive than others when you actually size them for their capacity and the investment cost The most Expensive technologies right now if you were to construct a new nuclear plant, it would probably be the most expensive if you had to construct a plant with storage, it would be more expensive then you would get things like offshore wind being a little bit more expensive But then on the cheaper side of it, you would have your traditional solar which is quite cheap but intermittent Your combined cycle plant any form carbon capture is also super efficient and on the lower side of it So some of the renewables like solar wind and combined cycles are on the lower side when you start adding sequestration and building new Nuclear plants they become a little bit more expensive But the bottom line is most times people don't look at it in that form for the markets in which we operate All of those resources pitch their energy into the market. So you buy a consolidated clearing price And that clearing price is essentially what you pay So if you're in illinois and we bought from pjm, there's a mix of solar gas Renewables and that forms a clearing price So you're not really saying i'm paying x amount because it's nuclear or i'm paying y amount because it's renewables rich, so it's that blended price

Jim 54:50

Okay

Exelon 2 54:50

Given

Jim 54:50

the current state of storage at scale, is there a limit to how much intermittent power you could bring onto the grid to avoid, what happened in Texas?

Exelon 1 54:58

Yeah, what's interesting there is you had baseload, what we call baseload generation not running. And that happened in 2014 in PJM as well, so it is the wind and solar, but it's also the gas plants, do they have enough on site fuel, and have they invested enough to withstand temperature, meaning, is the plant resilient enough, have they invested enough in maintenance and other things to be able to withstand those temperatures that they normally don't withstand. So I think we've learned a lot in terms of it wasn't just the intermittent, but it was also the baseload generation that wasn't, ready to be called on when we needed them. but with all that being said, no, we need to diversify fuel mix, right? So there's this, that we call peekers, right? That are, they're ready to be called on. In that event of a surge in demand or unusual weather patterns. so that's why we always say it's not a one size fits all, right? And even though some might be more costly We need to have that combination of generating sources to be able to meet the different demands.

Jim 55:54

The tinker station so if they're sitting idle who pays for that? How does that sustain?

Exelon 2 56:00

So essentially if you think about it They're basically being rewarded for being available in the event of a need. so they basically get compensated through a capacity price mechanism at the end, the organized markets, RTO runs an auction. You bid your capacity means I essentially say I'm available when called upon. And in exchange for that, availability, you're going to get, a certain amount of dollars per megawatt per day. So you keep using those dollars to keep you afloat when you don't need to get called on and when you do get called on. essentially you dispatch your planters needed so it runs on a different model But the vegan plant from a pure economic basis is usually very lean. You don't put a lot of staff on ground you make sure that you actually run the plant in a way that is so cost efficient And then you rely on capacity RTO.

Exelon 1 56:53

Yeah, you're not getting the, so most plans get the energy and capacity. So the energy being the DLA, what you get in the market, and the capacity being there to be called upon, when needed. And their majority would be the capacity.

Exelon 2 57:04

Most of it will be capacity. You get your energy event once, but it's usually in critical need. And in some instances, those energy events often correspond with Price spikes. Oh, yeah. Let's see if you are like a peaking plant at Texas and you were able to dispatch, you know on the date even though you don't have a pure capacity market. You could make a lot of money because the price was like Insane, it was like 1200 more than that four digits at least.

Exelon 1 57:30

so you make all your money on that day.

Exelon 2 57:31

Yeah You can make all that money in one day in those kind of markets, because usually you're responding to a systemic shock.

student speaker 57:39

Hi, so given that, U. S. was not relying on electric gas as Europeans, and also there are less restrictions. What do you think Ensobon has in terms of creating or driving innovation in terms of now switching to more, sustainable?

Exelon 1 57:55

Sorry, just the last part. What innovation on which type of system?

student speaker 57:58

Transforming into more sustainable systems.

Exelon 1 58:00

of gas, for example.

Exelon 2 58:01

Yeah.

Exelon 1 58:02

To withstand the hydrogen.

Exelon 2 58:04

Yeah, I think, if you look at the domestic, Energy consumption market in the U. S. most of the energy we use here. We generate here from an electric viewpoint, so we're not really reliant on gas importation. what we're trying to do is ensure that we can use domestic energy sources. Some of the utilities we serve, sitting on a huge shale gas plate, so you can actually extract gas from the ground and use that to power your combined cycles and also heat homes. But we always know that when you burn gas you get co2 and as a result you begin to think about the Greenhouse gas potential and we need to get to a lower greenhouse gas future So we started making investments in looking for ways to acquire alternative forms of fuel like hydrogen and also minimize the carbon impact of some of the gas, either through sequestration technologies or figure out ways that you can do gas efficiency programs, Big challenge of using the gas infrastructure in the is that the gas grid is not very smart a lot of the leak detection is from sniff, right? So if you can find ways to make the gas grid a little bit smarter you can use Satellite analytics to see where you have gas leaks you can change your pipelines Maintenance program so you can actually take breaks on time You can use new materials that have very low emission factors, leak rates, those things help you run a gas system more efficiently. And when you reduce those fugitive emissions, you actually do more for the environment compared to just saying you're not using gas at all. You can actually have a better impact running a much more efficient gas system than saying you're banning gas.

Jim 59:41

My question is around security for the system. And, in Virginia, where I'm from, we had our distribution system hacked a couple years ago and caused a mess for weeks. And, I realize you had a backup grid and that's supposed to be there when you need it. That didn't work in Texas, but they have a different system that you do. with what you're thinking around, people who are trying to hack the system, or some rogue players who are trying to get in and destroy your pipelines or your transmission systems.

Exelon 1 1:00:08

Yeah, I'll start, but feel free to chime in. we think about it in both the cyber, but also physical. Our head of security, for the last several to our former FBI. And so we make sure that we maintain really strong connections with the FBI and other state agencies to stay on top of the threats. so we have a strong, and that's where again, size and scale come in, right? The ability for us to do that as a large organization, is critical when you think about smaller organizations, not having a size and scale, it's a little bit more difficult, but. from a cyber perspective, staying on top of the threats, we have a whole security team that just sits there and tries to hack the system, and find different ways that might be vulnerable. so investing and making sure that we get, our policymakers and our regulators to understand how much work it is and that we get recovery of that, and stay on top of it is critical. on the physical side, we've had, coming through the FBI, finding out that there's folks that want to attack our substations and take down lines. And so investing in physical security, so whether it's, cameras, technology, but also just different fences that can protect critical, substations. And we classify all our substations by category to say which ones are critical. And they're all critical, right? But which ones could take out, X number of homes and businesses that's how we stay on top of it. But it is, it's one of those things, actually, that, you don't realize how much work we know it, but I don't think, our customers are policymakers without educating and partnering with them to Sonny's point, keeping them on this journey with us. That you would maybe not realize how much needs to be done to prevent that.

Jim 1:01:42

We have a couple minutes left. Who has that last in on the sky deck? Just speak a little bit about the workforce of the future. Given all that, interesting information, the risk, the opportunities for the industry and the company, a lot of young people are here. What would you say about the workforce of the future? Some of the challenges and opportunities, the kinds of skills

Exelon 2 1:02:01

Yeah, we are really looking aggressively at that for a number of reasons. One, the great evolution and the fact that a lot of what we're doing, is rapidly changing means that you may not have to look at the traditional way of just hiring. you may look for a slightly different skill set. in addition to that. You also look at how you use technology to enable some of that. So I give a good example. Someone who's a traditional field worker, may need to clock in, figure out what a fault is. get, kidded and then go out, make a service call, come back, log it in and essentially say, okay, this is how I spent my day with things like generative AI. You could have all the resolution on a work that basically just gives you enough information for conflict resolution. When I say conflict, system conflict, not physical conflict. Like solving the problem on the grid and you'll have all that information in your power. So augmenting the workforce with technology means that you need a different type of worker, not just the traditional folk out of Tenerife, but someone who knows optimizing of technology. So that's one part of it. The second part of it is, you need folks who can actually take huge amounts of data and convert it into, reasonable forms of, interaction that is best for the grid. So you need a lot of, folks who are first in, interpreting data, both from the human resources side, from, finance side, from the grid use side. So you necessarily need to think about folks who are more comfortable with huge volumes of data. And then finally, I would say. The traditional that you think of, like, all right, I'm an engineer, I'm a, finance person, I'm an accountant, those lines are becoming a little bit more blurred, and you're beginning to see folks who are what we call great athletes, you could do a lot in the workplace, and your skills are easily transferable, but also you have a core skill, those things make it easy for us to begin to think about, okay, in the future, we may need to ensure that You're picking the best athlete, someone who's coachable in all of these forms, while also sticking to your traditional folks. So the reason I point all of this out is we're doing a lot of work with Notre Dame on innovation. The work that you're actually assigned on the day that you come in is a traditional job. The work that you may need to do five, 10 years from now could potentially be a non traditional job. Which would you to actually think differently about the work that you're currently doing.