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THE FRONTIER LINE
Hosts Wayne Aston and David Murray explore the critical global pillars of infrastructure development and energy production, from traditional methods to future-forward advancements. The Frontier Line covers the latest industry news, energy innovations, and sustainability trends that are shaping the future. Through expert interviews with industry leaders in renewable energy, utility-scale battery storage, and waste-to-energy technologies, the podcast provides insights into the evolving landscape of energy efficiency and sustainable infrastructure. By focusing on the intersection of innovation and the politics of energy, The Frontier Line highlights transformative ideas and technologies poised to deliver cost-efficient, resilient, and sustainable solutions for global industries.
THE FRONTIER LINE
Google Agrees to Throttle Back During Peak Hours Amid the National Power Pricing Crisis, Assembling THE All Star Team for the Sentinel 1 Power Complex
Welcome back to the studio. Friends of the Frontier Line, dave hello.
Speaker 2:Hello, Welcome, welcome everyone.
Speaker 1:Today, guys, we're covering headlines.
Speaker 1:I think, man, it's hard to say what my favorite type of interaction we have for the show, because the interviews are so darn fun and our company spotlights are so dang insightful. They're so darn fun and our company spotlights are so dang insightful no-transcript. We've got enough insight for our own endeavors that we can be ahead of the curve as developers and what we're actually trying to implement with Valley Forge. So today we're going to be talking headlines and I'm going to let Dave kick this off first, because we've compared notes. Typically, what we do is we'll go and we'll do our homework and then we'll you know, we'll compare notes before we fire up an episode and we've got some really interesting stuff to talk about today. Dave, do you want?
Speaker 2:yeah, I'll kick it off and know it. It is fun. I mean, we're doing our best to, you know, curate the news so you don't have to. Yeah, uh, because there is so much in this space, you know again, from the from the days we started doing this to now and the sources we're following, I mean it's six and seven times x the amount of articles and information and people writing about, you know, energy and infrastructure in general. Um, so you know, we we're curating, we're saying, okay, this is the stuff that caught our eye. That is very attention getting to us because of our time and space.
Speaker 2:So the first one I'll kick today off with is this was announced, you know by the time I guess this airs, this was announced on August 7th. So Alphabet's Google strikes deal to cut AI data center power use during peak demand. That is the first time I have ever I have seen yet, uh, a major hyperscaler like alphabet agree to say, yep, during peak time, we'll, we'll'll, throttle back. That's intriguing on all kinds of fronts of what it means and what it's indicating of how the lack of power, lack of good infrastructure, all the things we talk about, this is one of the first signs I've seen that there are lots of negotiations going on to try and mitigate some problems. That's interesting. That could have implications on.
Speaker 1:You know potential storage that they're working through Could have implications on. You know them leveraging their diesel. You know backup gen sets I mean how they're going to go about that. And then you know it's interesting because you know we're aware of what Mr Paul Browning is out there doing with. You know Generative Reason, which is a new business that he's developed with his son. That is a startup but it's got a lot of promise around an algorithm that can be implanted into data center operations that would help steer around the power curves. So all kinds of possible solutions that could help someone like Alphabet actually throttle back and peak. That's remarkable.
Speaker 2:It is, and it's a short read, so let me read it for our listeners, because I think it's worth hearing what they had to say. This is actually it was Insider Monkey, written by Ghazal Ahmed Alphabet. It's one of the AI sects gaining attention on Wall Street. On August 5th, reuters reported that Google has announced that it has signed agreements with two US electric utilities to curb AI data center power consumption during times of surging demand on the grid.
Speaker 2:Artificial intelligence demands huge amounts of power, which we all know, which is why utilities throughout the country have been flooded with requests to meet the energy demands of big tech's AI data centers.
Speaker 2:The increase in demand for power is not only leading to supply concerns, but also raising worries about rising prices for everyday homes and business and potential blackouts. As a result, google is now in agreement with Indiana, michigan Power and Tennessee Power Authority. The agreements involves scaling back power use of the technology giants data centers when called upon by the electric utilities to free up space on the grid. The agreement marks the first formal agreement of its kind by Google to temporarily cut down its machine learning workloads, and then it just goes on to talk a bit more about uh, a bit more about google as far as the investment side of it. But you know of things we, most of us, already know. So, uh, first of its kind and I it. It would stand to reason that there will probably be other utilities and other conversations with other hyperscalers trying to do the same. Whether or not the hyperscalers will agree to do it remains to be seen.
Speaker 1:Yeah, it's really interesting. It's an interesting dynamic to consider because you know, Google's got to be measuring. Do we lose a competitive advantage if OpenAI is not throttling back? And we are, you know, and how do we hedge that? That'd be the first thing. On my mind is everyone is in that race right to stay ahead of the game on their development and advancing their models, training the models.
Speaker 2:So that's, that's really interesting you know I was gonna say go ahead, but I want to. You know the other second story I had is actually related. Yeah, let's cover that um in a different way, but nonetheless related. So this is out of Utility Dive, which is an online thing that I know, wayne Falls, I follow. They've got great commentary on what's going on.
Speaker 2:The headline is the grid's hidden asset is your customers. The FCC just unlocked access to them. So you wouldn't normally hear about the FCC in terms of what does that mean for power. But something interesting happened and this goes with unlocking or accessing power that might be there and untapped or available. So with the new FCC guidance, utilities can now reach millions of customers directly, unlocking demand response at unprecedented scale.
Speaker 2:A new ruling from the Federal Communications Commission makes it easier for utilities to help customers lower energy bills and reduce grid strain. The FCC ruled that utilities may send automated calls and text messages to customers about demand response programs without needing a separate opt-in, as long as customers have already shared their phone number with messages with the messages aren't marketing products, uh, this clarification unlocks one of the most powerful yet underused tools in the energy transition demand response. It puts utilities in a better position to engage customers at scale, shifting usage during peak periods and easing stress on the grid. Backed by industry data and real-world success stories, this ruling positions utilities to put customers at the center of a smarter, more flexible energy system. Basically, as we've all been marketed to and they're opt-in and opt-out and all of the rules that have come around being able to market to us individually, this is what's you know. At a fundamental level. What's really happened is, you know, they had to follow the same rules. You can't just send something to somebody you know without having them opt-in. This allows them to say look, we need you to do this, so again, to do this. So, again related but unrelated to the alphabet story with the utilities, they're looking for other solutions. So we're not talking about new generation. Let's solve the bigger thing hardening the grid. What we're saying is okay, we have an existing thing. How do we work with what we have? And this is the FCC responding to, obviously, something that's going to be needed as it's coming up.
Speaker 2:You know and I'll give a shout out once again to Utah, utah back in the late 90s and I was, you know, tacitly involved with a little bit of this they kicked off a program led by Governor Leavitt at the time you know, for our listeners who are here in Utah might remember it where the governor wanted to work with local media to say, hey, every day, like a, like a you know air forecast, can you do a green, yellow or red as far as the energy demand that they were experiencing, so that, so that you know, utah wouldn't have to go to the spot market in order to cover those shortages in power?
Speaker 2:And the goal was to let people know where we were. So is this a day where they can just keep that AC running, or is this a day where they need to maybe throttle back on the AC, let their house go up to 74, 75?, because we were right on the line of going into that? And so that's what the governor's office did, is they set up this program and every day the media across the board reported what was going on and it worked actually. It actually was very effective. And so 25 years ago, utah did this and it worked really well in bringing down the need for utilities to go to the spot market and buy power. So maybe this will work too.
Speaker 1:Great precedence. Great precedence to know that Utah has already experimented and made it work. It feels like we talk about generation a lot. We talk about transmission a lot. It's obvious those have to be resolved, but in a broader sense, efficiency is going to be one of the core verticals of solving the equation. How can we make things more efficient? We've talked about data centers getting more efficient in chip power consumption and things like that, and that seems natural. So, going out to the broader markets and creating efficiencies like that, we've we've already, you know, seen this in water markets, water metering, you know, in Utah recently, water metering on ag uses. It's a big deal that. That's a bill that we actually covered. That, I think, was a 2023 bill here in Utah. It's all about the efficiency, so I'm supportive. I think that's great. The FCC is collaborating to find new efficiencies.
Speaker 2:I think so too. I think it's a good fix. I imagine we all love getting our texts and our calls, but at the same time, it's got to be what it is. That's where you can reach people, and the fact that they can do that is going to speed it up. And you know, I think for most people, if they get a reminder saying, hey, I need to, you know, push my thermometer up a couple of degrees to help. You know, in my in, if my prices stay lower because of it, Um, fantastic.
Speaker 1:Yeah. So you know, dave, it's felt like the last maybe, well, maybe all of season two. Since we kicked off season two, pricing has been like in the target, in our crosshairs, right, talking about pricing for power rates that I was able to find that I thought was great just published yesterday, also from Utility Dive, and this one was a Q&A article and I wanted to get into the details because it outlined several ways that utilities several things utilities and independent power producers are facing to meet all these demands. And the headline here is Independent Power Producers Hit Back at Utility Critics Over the PJM Price Surge. Producers are facing to meet all these demands and the headline here is independent power producers hit back at utility critics over the PJM price surge. Now, guys, for the listeners out there that don't know about PGM, pgm is a, a grid operator and their their purview they they cover over 65 million consumers in like 13 states, so they're among one of the largest grid operators in the US.
Speaker 1:There's a quote here. I'll get to the quote in a minute, but right out of the gate, the opening piece here talks about how, a year ago, capacity prices spiked in the pjm interconnection service area. Last month so july 2025 they hit another record high of nearly 330 a megawatt. Okay, and so to translate that into you know price per kilowatt, that's roughly roughly 33 cents a kilowatt. Contrast that with where we are here in Utah, we're at like an 11.8 cents a kilowatt, so three times the rate of what we're enjoying here in the state of Utah. And the reasons why these price spikes are coming was actually pretty eyeopening to me, because you you'd naturally hear about that and you'd think, okay, well, um, we need more generation, we need more transmission, right? Or?
Speaker 1:or they because a utility has to pay for a new multi-billion dollar transmission line. They're going to. They're and this is what they're doing they got to put in, you know, 500 miles of new transmission. They're going to do it. It're going to put in 500 miles of new transmission. They're going to do it. It's going to be call it $20 billion, $40 billion, and that's going to be distributed over the rate payers. The rate payers are going to pay that through the rate increases.
Speaker 1:But this article it underscored a few other things to consider that I just thought was interesting. And so Todd Schnitzler is actually Todd Schnitzler, I think, is the CEO of the Electric Power Supply Association and this is an interview with him and kind of a Q&A with this reporter. And this is an interview with him and kind of a Q&A with this reporter. So the first thing that they're covering and all of these have impacts on us. I'll just give some context. The reason why it's so contextually relevant and interesting to me, why this caught my eye this morning, was because Rocky Mountain Power right here in Utah, has requested three rate hikes from our Public Utilities, energy and Technology Interim Committee that Senator Darren Owens chairs, and I believe all three of those rate hike requests have been denied. And you know, hearing from certain legislators and kind of, the reasoning behind the committee is like look, there's no new generation being funded or built out, there's no new transmission to speak of, and so because of that, we're saying no to these rate hikes. Well, this throws some nuance into the equation here.
Speaker 1:So one thing he brings up his question is if somebody was to order a new gas turbine today, how long would it take to get it? Now, dave, you and I have a finger on the pulse here. We understand the need times here. Tom's response is it varies, but conventional wisdom right now says it's probably five to six years. Says it's probably five to six years. Okay, so you put yourself in Rocky Mountain Power's shoes and you've got legislators saying, okay, you need to build more generation. And they're looking at this and they're saying, well, we'd love to, maybe we have funding to do so, but we couldn't get the turbines to do it if we wanted to right now, until after 2030. So that's a serious supply chain issue that utilities are grappling with right now. So it's not even an intentional we don't want to do more generation. It's a we couldn't if we wanted to.
Speaker 1:The next thing he brings up is what about getting fuel supply for a gas-fired power plant? I've heard pipelines are very tight and storage is tight, and his answer was interesting. He says you know it varies by region. If you're in New England you've got a different set of issues than if you're in central Pennsylvania or Ohio, where you're sitting on top of the gas where it's being produced. It's much easier to move around. Now I feel like here in Utah we might have some advantages because we are on top of gas. We've got a lot of gas coming out of Utah and a lot of gas coming out of Wyoming Right and particularly Valley Forge, being able to feed off of the Kern River pipeline. Out of Wyoming, we've got ample access to gas capacity to feed the gas-fired plant that we're designing.
Speaker 1:Okay, next question what about the cost of building a new gas-fired power plant? I'm seeing roughly $2,200 to $2,500 per kilowatt. Okay, so put that in terms of megawatts, that's basically, to put one new gigawatt of generation capacity with existing gas technology, roughly $2.5 billion per gigawatt. Okay, just so our listeners have a sense of what's really at stake and what's really, and I'm just going to call it an impediment and what's really and I'm just going to call it an impediment an impediment to utility providers just coughing up $5 billion new dollars to put two new gigawatts. It's just not happening.
Speaker 1:Okay, they touched on some other things. How are they navigating new import tariffs? Import tariffs are having a definitely an impact up to 40 percent increase in bringing things from you know other countries where we're having some tariff issues. And then you know he he digs into the further in the article he talks about you know. Do you have any concerns about politicians feeling pressure around affordability and asking themselves if restructuring is getting us more needed generation? Now, that's a fun one, dave. I'm going to let you chime in on your knee jerk to that question, because we're seeing it play out in Utah and the question he states it are politicians asking themselves if restructuring and I'll just add my own word in deregulating in order to meet the demands. What are your thoughts, dave?
Speaker 2:Well, my thoughts are that small D or big D deregulation in this space. Are that small D or big D deregulation in this space, especially when we're talking about private market? The possibility of private market is, I think, going to help push prices in a different direction. I think there's, obviously, we think you, and I believe that there's, an opportunity to service companies, clients, differently. So rate payers, your, your tip, your, your homeowner, shouldn't be paying or shouldn't be burdened with some of the infrastructure costs that come along with, say, having to build uh, major, you know, capacity for hyperscalers? That's they, you know they're benefiting.
Speaker 2:I mean, the ask, the ask to build that kind of infrastructure is a lot and then to then pass it along to your average rate payer, I think most would say it's probably not a Rate payers probably get a raw deal. And are they really upgrading your local grid? Or are they just they're building for one client but everybody else is paying for it? And and I think, and I just don't think, the incentives are aligned and they have been aligned. I mean uh, uh, utilities that are, um, you know, regulated monopolies, they're, they're just they're. They're not incentivized like the private industry there, it's just a whole different model, and I think of different model. It's, it's, it's the, the uh on the private side. You know we're incentivized, you know, obviously, to make money but also to balance it out and say, well, we also want to, you know, make sure the consumers aren't paying.
Speaker 2:You know I'm talking about consumers, meaning the homeowners aren't paying, uh, an exorbitant amount and they're not feeling the costs of having to pay for all those other infrastructure items, because there are other groups that can and should and will pay for that, because that's where the real infrastructure costs are coming from. This is all playing out in real time right now and it's fascinating, obviously, for us, and I think we're going to see a continued deregulation. We're going to continue to see where others other groups like Invictus, have different ideas about how to solve this. That protects consumers, your end consumers, not the bigger industrial consumers, not that they don't need protection, not that that you can just charge them whatever, meaning they can pay what they pay and you can structure it properly to where they cover the infrastructure costs and those costs aren't being shouldered by your average consumer.
Speaker 2:And there are ways to do this. And just in the systems that exist today, there aren't really ways to do this, and so the utilities have said, oh no, we don't pass that along. But you know, investigation after investigation after investigation, and politicians who've watched this happen in their districts for a long time and said no, we're frustrated because our consumers aren't getting what you promised or you said and they're paying more. And so without, without any enhancements, and so Make us help us understand how this is working for our consumers. Yeah, it's not, yeah, and so it us help us understand how this is working for our consumers.
Speaker 1:Yeah, it's not yeah.
Speaker 2:And so it's not, and they're getting pressure from their constituencies to say well, you know, we need you to fix this or we need you to help out, help us fix this. And that's what we're seeing. We're seeing them now going OK, we got to step in.
Speaker 1:Tom's response to the question about the politicians around affordability was interesting. Yeah, he says. You know, we're always mindful of the need for people to do something. Sometimes it means doing something that's not necessarily good policy. We're trying to educate policymakers and legislators about what markets are actually doing and what they've delivered. And this is the kicker I'm still hard pressed to find one example where a vertically integrated utility has actually delivered new generating project on time and under budget and had any accountability in the way that wholesale power generators do.
Speaker 1:Okay, so very, very cynical response, but I think he's spot on. In fact, there's some states that are prohibited from owning generation, so of course you're not going to look to a utility that by law isn't allowed to own generation. They're not going to foot the bill to have it built right. So you talk about these incentives, dave, here in Utah we know Rocky Mountain Power. The way I understand it is, there's actually bylaws that prohibit Rocky Mountain Power from charging different rates to different consumers. The way I understand it in Utah is it's one rate for everyone, and so when you get a big you know 50 megawatts and up hyperload consumer coming into the market and really creating a scenario for new demand, a new transmission and all of these things. It's really not a fair circumstance to consider spending, let's just say, $5 billion, and what we're talking about is way more than that. But let's just say, to put on a standard new gas plant for new generation, a $5 billion proposition. If you can't adjust the rates to the consumers creating the need for that, then you have to distribute that across your rate base and everyone ends up getting the shaft. And I think this is why we're seeing so much pushback in some of these big communities like Pennsylvania and Virginia, ohio. You know they're saying look, 30%, 40% rate increases. It's getting really out of hand. And again, very proud of our Utah legislators. You know SB 132 passed this year. That's a very helpful provision in our energy landscape, legally speaking. To start to mitigate that Now we've been putting together our own kind of altruistic power pricing plans.
Speaker 1:And you know, dave, you're right you can't also just say and you know, dave, you're right you can't also just say you know to the data center guys, if they're a hyperload consumer, you can't just say you're going to pay, you know, $500 a megawatt. You can't do that. There's still pricing sensitivity in their models. So part of what we're solving in Valley Forge and I'm so excited to see this play out as things go is how can we get a hyperload consumer to sign a PPA that is a much higher rate than the residential rate payers are going to pay, a much higher rate than the residential rate payers are going to pay, but somehow, through a holistic approach of subsidizing infrastructure, bonds, the whole capital stack of creating the new generation and the new transmission, would it work for them to pay the higher rate on the PPA if we can get the overall cost to them lower than what they would pay in a neighboring state? And that is an equation I think we have solved.
Speaker 1:So that's very exciting and we've got some early buy-in on that and I think that has really exciting implications for the state of Utah. It has really exciting implications for the residential rate base because you know in central Utah we're talking about being able to really slash some prices for central Utah dramatically by getting some of these rates subsidized by hyperload that we are providing power to. So this means there's you know what's in it for Utahns. Everyone wants to know what's in it for Utahns. Everyone wants to know what's in it for them if we can cut that power bill in half or cut a fraction off of it and go in the opposite direction of you know the grain, go against the grains, so to speak, while all the utilities nationwide are doing these rate hikes like PJM.
Speaker 1:Wouldn't it be cool in Utah if we could reverse that? And you know the scale at Valley Forge has a lot to do with that. When you try to model things, there's certain economies of scale. Economies of scale on generation and transmission, but economies of scale that are direct correlation to location size and scope of an actual project. Correlation to location size and scope of an actual project. How much infrastructure goes into it and what kind of benefits could you actually convey to a data center developer who's looking at another project in Arizona, potentially? So there's a lot of gears, a lot of cogs in that machine to get the equation right.
Speaker 2:Absolutely. You've said it well and you know we, you know there's obviously there are traditional utilities and and we applaud them, I mean they've built the infrastructure of this, this country, on undeniably um, yeah, undeniably, and that I don't think anybody's, you know, begrudging them that it's. It is shifting. They are regulated monopolies, they have their own constraints, but there are new types of ways of doing things emerging and arguably better, more efficient, and I think there's a place for everyone to exist. And, in fact, actually, I think a traditional utility existing with a private power producer that is a substantial private might actually end up being the best kind of like a hybrid model, to where it's almost the best of both worlds.
Speaker 2:Where you've got traditional utilities that are regulated, monopoly, rate-based, driven, you could have private power producers that are going to be private, market-driven, investor-aligned. That's different. Where utilities are making their money off of cost recovery, return on regulated CapEx. We're going to be making our money on long-term PPAs, infrastructure leasing, energy sales, different kinds of things, energy sales, different kinds of things. Some overlap, sure, but but not entirely so we're making money different way, which allows some freedom and how we approach this. Um, and I just I think you know it's just they, just they've been doing this a certain way and it's worked, and it's worked well until the market shifted, until that's a man exploded.
Speaker 1:I mean, that's the whole key, dave, that's the whole key, like the legacy grid, and you know, blue chip legacy utility companies were never built for ai. They they not only were they not built for it, they could have never imagined what it could look like it's, it's, it's, we've. You said this. This is a bigger transition than going from, you know, not having the internet to having the internet. All this. This ai transition is a bigger jump than than you know, the inception of of the internet, and I just want to share a story that I shared in one of our meetings this week, because it's so applicable.
Speaker 1:I had an equity, a potential equity provider, recently make the very naive comment and question to me hey, so you've never done this before, you've never developed a power plant or a big. I mean, this is a multi-billion dollar project. You've never done this before, have you? So what qualifies you to do this if you've never done it before? And I said I punched back pretty hard. I'm like listen, do you think OpenAI has done this before? Do you think Google and Alphabet have actually done this before? Do you think Meta's actually bought a nuclear power plant before? The answer is no, you're a fool.
Speaker 1:Everything happening right now to accommodate AI is a we're doing something that's never been done before. It requires an entrepreneurial, trailblazing attitude and having the balls to actually do it, to do something that's never been done before. And so how do you hedge it? How do you hedge something you've never done before? Well, at Invictus Sovereign, it's come down to people. Well, at Invictus Sovereign, it's come down to people. It's come down to building a. It's like building the NBA All-Star team. The NBA All-Star team may have never won a game together not even one game, but what qualifies each of those players to be on that team? That's the magic. What we've done is nothing short of creating our own NBA all-star team.
Speaker 1:Gensler Architects, largest architecture firm in the world, huge companies like Floor Corporation building a natural gas plant among the biggest in the world, nace, the arguably largest power plant operator in the world, and the list goes on. We've talked Westinghouse, the 1,000-pound gorilla in nuclear and long-duration storage. So how do you do something that's never been done before? You bring folks who have 100 years each into an equation that can collaborate together. And the strength is in the collaboration. But make no mistake about it, the listeners out there. We are absolutely designing and developing something that's never been done before because, for the first time in history, it is being designed and developed as a bespoke solution, a custom-tailored solution, to meet the demands of AI, and that's never been done before. So it's very exciting to be a part of that.
Speaker 2:Absolutely the demands of AI and the future infrastructure of this country. In many ways, in many regards, I mean, we've envisioned that's where we envision this. This isn't just solving power that is a huge equation but it's also what comes after that. What's the infrastructure look like? What does the community look like after that? Because, because this, this space, is changing and evolving, there are jobs that don't exist today, that will exist in five years there, and we know we, we know that again. We know that because we're talking to each of these professional organizations that are incredibly experienced. Each of them come with a wealth of knowledge and understanding in the market space and when you get to bring them all together and talk to them and understand and get this bigger picture, we see where the possibility goes. And really, it's about creating new types of communities that really don't, that don't exist right now, but these are new communities built around significant power. What does that mean? Well, that means that you attract different kinds of industries. You attract highly technical industries that consume a lot of power. What does that mean? That means you've got a lot of really high-paying jobs, not only on the, if you will, quote-unquote white-collar side of this, but also on the quote-unquote blue-collar side of this. Also, high-paying jobs, absolutely, because you've got to build out this infrastructure, yeah, and so there's a new opportunity for you know, if I was young again, I mean this is where I would want to be. I'd want to be going into some, some somewhere in the electrical space, I believe, because, yeah, it's not going away, it's going to provide so many opportunities for so many people, uh, going forward and so it.
Speaker 2:You know, to just underscore everything you said, it's it. I mean, there's just so much happening and no one's done this and that's, but in parts everybody has, you know. You know, westinghouse, they've done nuclear. Yeah, they've done nuclear for a long time, right, they, you know they are responsible for 65 percent of all the nuclear in, I think, an operation the world is westinghouse, yeah, do they know that really well? Yes, yeah, uh, dude, does an architect who's designed some of the biggest projects in the world is Westinghouse? Do they know that really well? Yes, does an architect who's designed some of the biggest projects in the entire world and currently, do they know a lot about how to plan communities and understand the cutting-edge technology? Absolutely, so it's bringing all the best together and managing that, and that's what we've been able to do, and you know what?
Speaker 1:One of the coolest've been able to do and, you know, one of the coolest insights into like being in some of these boardroom meetings that I'll share with the listeners that we've got to experience is, you know, as we've built our dream team including Quanta electrical services Quanta, arguably the largest transmission developer in North America a largest company.
Speaker 2:You probably never heard of $29 billion. I think that $29 billion is expected this year in revenue. They own 200 companies Huge company, but most people haven't heard of them.
Speaker 1:But one thing I love so much about meeting with the executives of Quanta and enrolling that enthusiasm for them to come and do this with us at Valley Forge and the Sentinel-1 Power Complex is there's a big contrasting distinction between the entrepreneurial-focused companies that are exploding and the legacy blue-chip companies that are unwilling to accept AI is here to stay and unwilling to make the adaptions. I won't name by names, but we were dealing with a power plant builder over a year ago. We thought they were one of the biggest, we thought they were going to be the answer. And they end up telling us that they're focused on their utility base, their utility customer base, and they really don't have time to do this independent power producer thing. And it was such a not a fit to do this independent power producer thing and it was such a not a fit. And then, contrasting that, you've got Quanta.
Speaker 1:Like you said, dave, they've bought up over 200 other companies recently and they're just sharing with us just last week how they're bringing on another like a critical facilities division, that's like vertically integrated, as another bespoke solution to the data center situation. So they're not just a transmission line developer but they've got a workforce that comes, you know, of linemen and journeymen, electricians and folks who put the stuff together and manufacture stuff too. So it's a very integrated thing, and there have been a number of businesses that we've met with and we've brought onto the team and it's almost become a qualifier for us. It's like if you're going to be part of this dream team and you're going to work with Invictus Sovereign, then you must by nature embrace this ambitious, entrepreneurial attitude of buying other companies and integrating yourself into the opportunity, rising into the. That means you look totally different than you did last year. That's what that means. It means you've never done this before but you're willing to invest the time and the energy into into becoming that to meet the need, and that's all Invictus Sovereign has done here.
Speaker 1:You know, we didn't start this journey when we did, thinking that this is what we were going to do. It was a totally different mission and, yes, we were focused on creating jobs. Yes, we wanted to create opportunities. We wanted to provide, you know, some very high-level opportunities for our veteran community. All of those kind of core ethos, tenets of Invictus Sovereign still remain, but the modality and how we get there and that path to delivering it. It's unrecognizable. It's unrecognizable from what we were three years ago and that's very exciting, but it's also a nice sanity check to see these huge companies go through the same evolution.
Speaker 2:Doing the same thing.
Speaker 1:It's like well, I guess we're not insane. We're actually over the target, because all the relevant players are also over the target. We see it the same way, so that's really refreshing to me.
Speaker 2:It is. It is, and when you do get to meet with big companies everybody's heard the name of it but then the palpable excitement about doing something that hasn't been done before or this kind of stuff, or just the excitement that, even internal to their own businesses, even though from the outside we don't see those big businesses shifting, they are moving. At least the people we've met with are moving those companies along and they're trying to reposition and position and saying, and they're not resting on their laurels, they're not just saying, okay, we'll just let it go. I mean, not a lot of the ones we're meeting with aren't. There are those we've met with that are absolutely happy to be where they are and they don't want to, that's, they're happy just servicing and not really growing and not taking advantage of this, and they're just going to be the steady eddy. We'll see if they, you know, we'll see what they, you know, if that's the, if that's the right approach to this come, you know, a decade from now.
Speaker 2:I don't think it is. I think I think lots of things are shifting and I think the companies that you know, some of the companies we've mentioned, are going to be the ones that really do survive this and are able to outlive this and create a culture to where this is just that's who they are. It's constantly evolving, growing, changing, trying to position themselves in the market, so it's been fun to have those conversations. So, on the news stuff, I have a Utah-centric story that I know you haven't seen and I hadn't seen it.
Speaker 1:Okay.
Speaker 2:It's actually out of Axios. It pushed this morning. Okay, awesome. And this is actually on. Utah's power costs spike 15% Change in average residential electricity prices from May. This is from May 24 to May 2025.
Speaker 2:Now some of the and I don't know if they've updated this some of these rate hikes that we talked about you discussed, haven't actually gone into because they got denied, but that's not to say that other. You know, they're looking at kind of the macro thing and so I'll read this and it's very interesting. But they just the May. The numbers just dropped for this last year, so that's why they're just coming out now. They're a few months behind.
Speaker 2:So Utah saw one of the nation's highest jumps in electricity costs in the past year. The big picture power costs are rising nationwide and even higher for some, amid an explosion in data centers, powering, ai and more. Why it matters high utility bills could further stress many Utahns' budgets, as pretty much everything else gets more expensive too. High utility bills could further stress many Utahns' budgets, as pretty much everything else gets more expensive too. The state's consumer sentiment dropped almost 5% last month per the University of Utah's Kem Gardner Policy Institute report. By the numbers the nationwide average retail residential price for one kilowatt hour of electricity rose from $0.1641 to $0.1747 between May 2024 and May 2025, per the latest available data from the US Energy Information Administration, that's a gain of about 6.5%. Utah's power costs climbed 15.2% during that time, the third highest spike in the nation. Maine, plus 36%, and Connecticut, plus 18.4%, saw the largest increases. Just five states experienced a decrease, including Nevada and Hawaii.
Speaker 2:With electricity costs on the rise, rocky Mountain Power, the state's largest utility, is seeking to hike residential rates. The company proposed a 30% rate increase in July 2024, citing inflationary pressures. The request was later revised to an 18.1% uptick. After drawing a sharp criticism from state republican leaders, including governor spencer cox. Last month, utah public service commission reaffirmed its approval of a modest 4.7 rate bump after utility requested a review. Um, and I thought that was denied. I didn't need to double check on that. So, um, oh yeah, rocky mountain power filed an appeal to the utah supreme court in june. Uh, electricity prices vary regionally and have many influences, from basic supply and demand to fuel rates and infrastructure costs. Yet many analysts point to power-hungry data centers as a driver of rising rates, especially in hotspots. And then it goes on. It says what's next? President Trump's administration is pushing coal, natural gas, nuclear and hydropower plants to feed AI. Demand. Axios Daniel more reports. This is his report. He's got more on that, so anyway. So there you go, there's an Axios report.
Speaker 1:That's awesome. That's really great real-time data.
Speaker 2:Real-time data you know this last year covering what's happening.
Speaker 1:You know, it actually reminds me of something that happened to us last week, and we're coming up on the hour, so maybe are we already.
Speaker 1:Yeah, let me submit this final thought. Let's chew on this for a second for the listeners, dave. So so dave and randy and I were in the car headed to meet with some city officials last week. Randy moore, one of our partners. Randy moore, shout out to randy, you can go listen to his interview that we did in season one. Great guy, um, I just you.
Speaker 1:You know I love Grok, I love AI. I am such a. I am a daily user. Some days I spend over eight hours in AI in just doing research and putting models and putting you know plans and things together. Grok's one of my favorite.
Speaker 1:I like perplexity and it's funny because everyone on the team is using like three or four different types for different uses. But I did a Grok query the other day. I'm like what are the top? Give me the top 10 markets for data center development. You guys would be shocked. Do you remember this, dave? And I was quizzing Dave and ran him. I got let's see if you can guess the top. You know five and they nailed the top two right out of the gate. It was Virginia data center. Alley is top in the world, followed closely by the Phoenix area in Arizona. But guys on the top 10 globally. You had Shanghai, china, you had Sao Paulo, brazil. You had like a handful of these international. Singapore was one, a handful of these major MSAs identified in the top 10. Guess who was number three? Salt Lake City, utah.
Speaker 2:Salt.
Speaker 1:Lake City, utah, and I was shook. I couldn't believe it because look, we've got Meta in Eagle Mountain but that's only a 300-megawatt facility. We know of plans. We've heard some big plans and we've heard reading the tea leaves like what could happen in Utah. We know our legislators have set a legislative precedence for the appetite to support it. But I was just shocked because Utah is not known as a major data center market yet and we are certainly committed to changing that with Valley Forge. But that was pretty cool to see Salt Lake see that, to see Salt Lake show up.
Speaker 2:Number three Caught me completely off guard. I mean it's like, well, what do you know? I'm like, well, we know what we know here and it I still don't understand. But you know the expectations there. Obviously I want to, but there are. I mean there are some very, very substantial projects coming in and you know and and we know that, um, it's just very, very substantial projects coming in and we know that it just was great to see us on the list.
Speaker 2:So I did quite like that. That was a good one. I do have a couple little quick headlines that I think we should probably get in now because I think it's interesting.
Speaker 1:Okay.
Speaker 2:Did you see the thing about Denver International Airport? So our neighbors, utah, colorado, so did you see they're what they're talking about? No, I didn't. Dia is eyeing nuclear energy. Oh boy, interesting, okay, uh, and they announced it and they think they're they're, they're seriously considering nuclear because they're using uh right now like 40 or 50 megawatts uh, and and they want to get up to, they think, by 2050, or I think it was like 2050 they're they're expecting 400 megawatt for the airport wow and so here you have one, just one thing, one, I mean.
Speaker 2:And they're saying we need, we need, we need our own plant, wow, uh, just for the airport. And so I think it underscores a lot of things we talk about, about how energy is shifting, and obviously they're on the grid right now and we'll see. That one stood out to me, that's why I wanted to get it in. I thought that was an interesting headline.
Speaker 1:It's sure, a case study as an example for the legitimacy of SMRs entering the market. I mean, if you could stand up an AP300 and get 330 megawatts with one kind of modular unit, you could darn near solve the problem. And you know, we recognize that SMRs may be eight or 10 years away still, you know, from licensing perspective, but what an awesome example of how things will look in the future. Fast forward 10 years. Smrs are, you know, a common thing. Oh man, what a boom.
Speaker 2:I don't think anybody had anywhere on their bingo card that an airport in the US is going to want its own nuclear reactor.
Speaker 1:No, I mean I'm just sitting here scratching my head wondering what the consumption is coming from, because it's not the planes. I mean, that's really interesting to figure. What would an airport use 400, 400 megawatts on that's? That's, it's incredible it's.
Speaker 2:Yeah, I guess they have big plans to expand that air. I, you're right, I don't know, I don't know and I maybe it's worth us, you know, reaching out to somebody from, uh, someone from the airport, and that'd be, that'd be a fun interview, right, yeah, they'll walk us through. Walk us through why they're. You know the, the, you know how. Walk us through why they're. You know the the, you know how, their thought process, why they're doing this, why they're looking at this and how they see their growth. And I'd let you I mean, it'd be good, it'd be good to learn how they're doing, because it's going to be a good learning lesson probably for you know, any company or any organization or municipality, any anybody looking at future growth.
Speaker 2:Yeah, it's been a great episode. Yes, thank you, wayne.
Speaker 1:Thank you guys for joining us today. Thank you, dave, for your contributions. As always, it was a fun time today, so we'll catch you on the next episode.
Speaker 2:Okay, no-transcript.
