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Disrupting the energy industry
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Michael Lee shared thisUtilities sell an invisible product. That means they sell trust. And trust is at an all-time low. Yet utility stocks are near all-time highs. That divergence is the entire problem. Post 6 of my Distributed Grid series makes the case that transparency is not a regulatory obligation. It is a business strategy. And it is the foundation for everything else the grid needs to become. You can read the article below - or visit substack for a cleaner view. https://lnkd.in/gWicPQmk - Please like and repost for increased visibility (it's an algorithm thing). - Subscribe to the free substack so you don't miss the last articles. - And send me a DM or comment if you agree or disagree. I'm open and curious.Radical Candor: The Grid of the Future Runs on TransparencyRadical Candor: The Grid of the Future Runs on Transparency
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Michael Lee shared thisI spent years at Octopus Energy convinced that distributed energy resources would transform the grid. I still believe that. But after a year of meeting with utility executives, operators, PUC commissioners, and DER developers, I'm increasingly bearish on how much of that value actually surfaces with today's infrastructure. Post 5 of my Distributed Grid series is out. The assets are ready, the ecosystem around them isn't. And the DER + Solar communities need to get good at grid physics in order to get to their next chapter. Read and subscribe on my substack for all the posts. https://lnkd.in/gnF_gE8r Like and repost here for increased visibility.I'm Bullish On DERs. I'm Bearish On the Infrastructure Around Them.I'm Bullish On DERs. I'm Bearish On the Infrastructure Around Them.
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Michael Lee shared thisWe built a $66 billion annual infrastructure program around a handful of hours. Summer heat events. Winter cold snaps. Maybe 100 hours a year where the system is actually stressed. Every other hour, the grid is running well below capacity -- and you're paying for all of it. It's the distribution grid. We could rethink this asset as a central layer for a platform and get more reliability at a fraction of the cost. But it would require the utility to be radically different.
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Michael Lee reposted thisHere is the thing most people miss when they debate data centers and electricity costs: The grid that exists today is largely adequate for the people who are connected to it. The substations, the distribution lines, the transmission corridors, the transformers, all of it, were sized over decades to serve homes, commercial buildings, factories, hospitals, and schools. Those customers are already there. Yes we have maintenance and normal replacement, but the infrastructure largely works for them. The reason utilities are announcing capital plans in the tens of billions of dollars each is not because the existing grid is broken. In aggregate, utility capital plans across the sector now exceed $1 trillion over five years according to Morningstar. It is because an entirely new class of customer is showing up. Customers that in some cases consume as much electricity as a mid-sized city, and want to be served at the same rate structure designed for people who run dishwashers and air conditioners. We are not debating whether to modernize a failing grid… we are debating who should pay for the new grid infrastructure that needs to be built to serve new customers. The answer is not complicated. The new customers should pay their own way. Read my post about choices we can make to have a low cost and abundant energy grid here: https://lnkd.in/gVYg_Vqp
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Michael Lee shared thisHere is the thing most people miss when they debate data centers and electricity costs: The grid that exists today is largely adequate for the people who are connected to it. The substations, the distribution lines, the transmission corridors, the transformers, all of it, were sized over decades to serve homes, commercial buildings, factories, hospitals, and schools. Those customers are already there. Yes we have maintenance and normal replacement, but the infrastructure largely works for them. The reason utilities are announcing capital plans in the tens of billions of dollars each is not because the existing grid is broken. In aggregate, utility capital plans across the sector now exceed $1 trillion over five years according to Morningstar. It is because an entirely new class of customer is showing up. Customers that in some cases consume as much electricity as a mid-sized city, and want to be served at the same rate structure designed for people who run dishwashers and air conditioners. We are not debating whether to modernize a failing grid… we are debating who should pay for the new grid infrastructure that needs to be built to serve new customers. The answer is not complicated. The new customers should pay their own way. Read my post about choices we can make to have a low cost and abundant energy grid here: https://lnkd.in/gVYg_Vqp
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Michael Lee reposted thisA hundred years ago, paying utilities to build made perfect sense. It does not anymore. Ask a lineman what matters in his job, and he will tell you: keep the lights on, get them back on fast when they go out, go home safe. They work through hurricanes and heat waves and ice storms. The grid they maintain is the foundation that society sits on. Ask the CFO at that same utility company what matters, and you get a very different answer: deploy capital, earn a return on it, repeat. Why are these thing so wildly divergent? This is the original sin of our expensive electricity prices today. We need to align profits to outcomes. This is better for shareholders and for customers. If the grid we have today works for 99% of hours, then the marginal utilization rate of the tens of billions of dollars is around 1%. This is hyper inflationary and needs to change. ("oh, but the data centers" - this will be addressed in the next post) Utility Transformation Series, Post 2 of 10 Full version on my Substack here. https://lnkd.in/gcjumpajPerformance-Based Regulation: The Incomplete Fix and What Should Come NextPerformance-Based Regulation: The Incomplete Fix and What Should Come Next
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Michael Lee shared thisA hundred years ago, paying utilities to build made perfect sense. It does not anymore. Ask a lineman what matters in his job, and he will tell you: keep the lights on, get them back on fast when they go out, go home safe. They work through hurricanes and heat waves and ice storms. The grid they maintain is the foundation that society sits on. Ask the CFO at that same utility company what matters, and you get a very different answer: deploy capital, earn a return on it, repeat. Why are these thing so wildly divergent? This is the original sin of our expensive electricity prices today. We need to align profits to outcomes. This is better for shareholders and for customers. If the grid we have today works for 99% of hours, then the marginal utilization rate of the tens of billions of dollars is around 1%. This is hyper inflationary and needs to change. ("oh, but the data centers" - this will be addressed in the next post) Utility Transformation Series, Post 2 of 10 Full version on my Substack here. https://lnkd.in/gcjumpajPerformance-Based Regulation: The Incomplete Fix and What Should Come NextPerformance-Based Regulation: The Incomplete Fix and What Should Come Next
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Michael Lee shared thisProud to have been on the founding member team of ADER and excited to see BTM batteries taking off!Michael Lee shared thisEffective today ERCOT is increasing aggregation limits from 200MW to 500MW for the ADER program. Turns out distributed capacity additions are fast or something. https://lnkd.in/gfw7tXD6
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Michael Lee shared thisI left Octopus Energy last year, where I served as the US CEO and where we worked on some of the industry’s most innovative rate designs to promote flexibility. Throughout that work, I kept running into the same question: why are utilities, the companies best positioned to lead the energy transition, the ones least able to move? We could optimize how energy was consumed for power plant efficiency. But we could never optimize customer usage to reduce localized congestion on distribution or transmission networks. We could only work within the competitive markets tied to power plants. Poles and wires costs are now more than 50% of total costs in many markets, and we were blocked from creating efficiency on this side of the bill. What I found is that the people running utilities are not the problem. The incentives and economic model are. The way utilities earn money actively discourages the investments needed to create a low cost and customer-centric grid. The incentives point in the wrong direction, and almost everyone inside the system knows it. But it’s how the industry and all of its vendors make money in the status quo. And nobody has an incentive to change it… yet. That research led to this series, which are my learnings and my thesis to unlock a low cost power grid. Click the picture below for an article on my summarized thoughts. or this link for my full thoughts on substack. https://lnkd.in/gX2X7PZ9The Utility Business Model Is Built for a Different Era. Regulators Are Starting to Notice.The Utility Business Model Is Built for a Different Era. Regulators Are Starting to Notice.
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Michael Lee liked thisMichael Lee liked thisYou can tell by the look on my face that one of my favorite moments last week was when Damian from Pacific Gas and Electric Company asked me an important question (only indirectly related to my EPRI IEL pitch): is there anything that utilities can do to facilitate the secure transfer of data to third party solution providers (like Piq) to accelerate the interconnection process? Tl;dr Yes! This is a ripe area for business model and regulatory innovation that centers on solid data governance foundations. We discuss these questions a lot at Piq--- and it's even more important as cloud and AI adoption is growing across utilities. So important that we even started an IEEE Task Force for Data Governance under the Working Group on Cloud for Power Systems. Reach out if you want to get involved in the task force, working group, or just want to learn how to connect to the grid faster. Thanks to EPRI for organizing the great Incubatenergy Labs (IEL) program and pitch day. And thanks to Southern Company for hosting us in Atlanta!
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Michael Lee liked thisMichael Lee liked thisA massive thank you to everyone who was a part of last Thursday's evening event and panel discussion on Transmission! Thank you to our amazing panelists, Barry Smitherman, Jason Ryan, Michael Lee and Frank Kreikebaum for a conversation that was not only educational and technical, but full of empathy, humor, vision and optimism. Thank you to Patricia Zavala, Anagha Uppal for all the great work y'all are doing at PowerHouse Texas, at the Texas Energy & Climate Caucus, and this growing collaboration. To Robert Gayle and Pour Vous Entertainment; Marina on camera, and the team at East End Ball Room. Tess, Tripp, Dustin, and my dear friend Nitasha Chopra getting behind this. To Ramon Betolaza and Alex Szewczyk at BP Energy Partners for hosting the "after party" dinner, with so much laughter and (increasingly fuzzy) connection. And to Smart Wires Inc. for helping make this event possible as sponsors. And most of all - to everyone who showed up - from the grid operations wonks to the ranchers and land owners, to the founders and the investors, developers and academics. As we approach our third year anniversary of working to build community and collaboration across Texas's diverse ecosystem, its this feeling of connection and authentic relationships that makes all the work behind these events so rewarding! THANK YOU! Feyijimi Adegbohun, PhD Jonathan Scharf, PhD Drew Scheberle Kiersten Saathoff Luke Draffen Brent Smelter
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Michael Lee liked thisMichael Lee liked thisAmerica’s highest electricity rates are about to jump 30% higher!!! This is what happens when you have a monopoly that has been burning oil for 135 years. HECO blocked my effort to break them up, so they can maintain the status quo. #heco #hawaiianelectric #nuffalready https://lnkd.in/gv_sHSVrHawaiian Electric bills to soar up to 30% due to higher oil prices | Honolulu Star-AdvertiserHawaiian Electric bills to soar up to 30% due to higher oil prices | Honolulu Star-Advertiser
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Michael Lee liked thisMichael Lee liked this💰🏗️ Nationally, total IOU distribution system spending grew at an average rate of 5%/year from 2019 to 2025 (in real dollars)—and growth in distribution costs contributed to retail electricity price increases, especially in California, New England and New York. There are significant differences across regions in how much customers pay for these poles and wires (8 cents/kWh average in California, 1.4 cents/kWh in Texas!), and in the change in those distribution-related price impacts over time (see California, again!). Why are these costs rising? In part because the bill is due – assets are at the end of their useful lives and are being replaced (and hardened) while supply-chains remain crimped. Wildfire mitigation costs out West (especially California) and storm cost recovery are also major factors, for some states and utilities. For more on the myriad drivers of recent price changes, see: https://lnkd.in/gDn4gXwZ
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Michael Lee liked thisMichael Lee liked thisToday, we’re releasing something I’m really excited about. Electricity prices are one of the most important prices in our economy. They shape household budgets, industrial competitiveness, and the politics of the energy transition. But our byzantine electricity system has meant that granular, local information about them has been hard to come by. Not anymore. Today, Heatmap News and the Massachusetts Institute of Technology are releasing the Electricity Price Hub. It’s a new public data platform that provides monthly, utility-level estimates of residential electricity rates and bills across the United States going back to 2021, broken down by generation, transmission, and distribution costs. Want to see how much power prices have gone up in your zip code? We have that. Want to see the average size of power bills for a congressional district? We’ve got that, too. Want to see how *volatile* bills in a state are? We have that too. And we’re going to keep updating the data every month, so you can track the changes over time. To celebrate the launch, Brian Deese and I have an intro piece about how the hub works, why it’s needed, and what we’ve learned from it already: https://lnkd.in/e5mTbrp5 Brian and Lauren Sidner also joined me for a special Shift Key episode today to discuss how the hub came together: https://lnkd.in/ejwCZEm5 You can read and listen to that. Or you can cut to the chase and explore the hub right now: https://lnkd.in/eN7UYU7D My colleagues at Heatmap News have also already written about the data; I’ll be posting their stories over the next few days. Let us know what you think! And thank you to the Heatmap, MIT, and Clean Economy Project teams for making this possible.
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Michael Lee liked thisMichael Lee liked thisLast week, Kurt Rhee posted about the rise of AI slop in our industry and asked people to signal-boost the voices that actually say something worth reading. It got me thinking: how would you actually measure that? We can measure popularity: Followers. We can measure volume: Posts. We can measure prestige: Titles. But who are the people whose ideas actually propagate? Whose thinking gets picked up, discussed, and built upon by other people who matter? So I built something. #Power100 is a purely algorithmic ranking of the 100 most influential voices in clean energy. No editorial board, nominations, or voting. The AI agents gathered and analyzed 17,000+ recent interactions across Twitter, LinkedIn, Bluesky, podcasts, and conferences - who retweets whom, who replies, who comments, who invites whom to speak. The underlying algorithm borrows the same logic as Google's PageRank: the more that influential people engage with your content, the higher your score. Influence, measured by influence. One thing I was surprised by: While there's a clear correlation with seniority, it's far from a perfect predictor (hello Aniruddh Mohan, PhD - I'm sure I'll be reading more from you soon). Fair warning: it's a v1, it's free, and is guaranteed to make someone(s) mad :) https://lnkd.in/gBvjVr5ePower 100 — Clean Energy Digital Influence RankingPower 100 — Clean Energy Digital Influence Ranking
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Distributed Grid
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President
Toastmasters International
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Served as President and Treasurer of the Boston Toastmasters, a non-profit organization.
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