Welcome back to Right of Way.
In this episode, we discuss:
Why DOE is financing reactor parts before reactor builds
The nitty-gritty of the recent EDF loan — the SPVs, funding splits, and beyond
What Congress still needs to do to help make new nuclear happen, from normalization to transferability and direct pay
If you prefer to listen on Spotify or Apple Podcasts, click the links here or here.
Thomas Hochman: Welcome back to Right of Way. I’m Thomas Hochman, director of energy and infrastructure policy at the Foundation for American Innovation — and you may note that we’ve just skipped the typical permitting-related introduction this week.
That’s because we have a very special episode today. Perhaps the only issue that we spend as much time thinking about as permitting reform is nuclear – and in particular, efforts to jumpstart the nuclear renaissance here in America.
It’s an exciting time to be in nuclear. Public opinion has turned firmly in favor of the technology. Palisades, the first nuclear plant in America to restart from decommissioning, is set to come online this year. New reactor designs are reaching criticality at the National Labs, and states across the country have declared their interest in pursuing nuclear as part of their energy portfolio.
But the big question remains: How do we actually get new, commercial-scale nuclear underway – and how do we do it in such a way that creates momentum not just for the next few reactors, but for the next hundred?
Well, last week, DOE’s Office of Energy Dominance Financing (or EDF) took the biggest step we’ve seen in several decades to realize this nuclear renaissance, announcing a 17-and-a-half billion dollar loan to kickstart the construction of ten new large reactors.
So what does this loan actually do? Perhaps the biggest hurdle to building nuclear in this country is time — reactors take years to construct, and a lot of that delay comes down to procuring what the industry calls “Long Lead Items”: the massive components like containment vessels and turbines that are in short supply globally, and even shorter supply here at home. If you can get these pieces ordered and built early, you can start the clock on construction that much sooner. So that’s what this money is for — financing the procurement of those long lead items across all ten reactors, which DOE estimates could shave as much as three years off the time it takes to bring these plants online.
This is a huge step. But it is also, admittedly, a somewhat confusing and technical one. And so we wanted to dig into the nitty-gritty of this loan — why it focuses on what it does, how it’s structured, and what comes next.
Joining us to discuss all of this today are Greg Beard and Julie Kozeracki. Greg is the Director of the Office of Energy Dominance Financing. He comes to EDF after more than three decades in the energy investment space, including as senior partner on the management committee at Apollo. Julie Kozeracki is acting Co-Chief Investment Officer at EDF, as well as the office’s nuclear sector lead.
Greg and Julie, thanks for being on Right of Way.
Greg Beard: Happy to be here.
Julie Kozeracki: Thank you. We’re super excited.
Thomas Hochman: Okay, let’s do some quick table-setting to start. Greg, at a high level, how does this administration view the role of nuclear energy? What has it done thus far, and what’s currently underway?
Greg Beard: Abundance. That’s one of the themes of the administration. Energy abundance will give us cheaper, more reliable energy security, and that will give us more national security. Nuclear is one of the key components of that. As a global superpower, to not have an active nuclear sector is a mistake. It puts us at risk, which is part of why we’ve seen President Trump and Secretary Wright aggressively leaning into driving the nuclear renaissance.
I’m just coming back from a few days in Idaho at the national laboratory, where the first nuclear reactor was built — that’s where nuclear power lit the first few light bulbs. It became a very fast-growing industry a long time ago. We have the largest nuclear fleet in the world, and we need to remain the leader in this space. It’s essential for our baseload power. The Secretary has talked a lot about it: firm baseload power is the strategy to help make energy more affordable, reliable, and secure.
While we had a renaissance post-World War II, we’ve been largely dormant for decades. The last reactors built were Vogtle 3 and 4; that construction started in 2013. And before that, Shearon Harris started in 1978 — 35 years earlier. So it’s fair to ask: what happened, and how can the administration help get the sector going again?
A few things happened. We had what would be described as troubles in the industry, like Three Mile Island — where no one died. So even when you have what’s deemed to be an accident, it’s still a very, very good safety record. But as a result of that, and of the 9/11 attacks, we red-taped the industry to death.
So what you’ve seen this administration come in and do — really across the board, but in the energy sector in particular — is restructure the NRC. We’re now attacking permitting reform. Even in our own office, we’ve looked at NEPA and Davis-Bacon. We’re trying to do what we can as a government to partner with industry rather than slow it down.
John Wagner, who runs the lab in Idaho, said it’s really invigorating for the thousands of lab workers there to partner with these entrepreneurial microreactor companies. That’s a total shift in the space, and the equity markets have noticed. We’re now in a place where — while we still need government support on the regulatory side, and capital from EDF to restart the supply chain, which I know we’re here to talk about — the entire industry, and the whole country, will benefit from this shift in regulatory policy and focus. So it’s a very exciting time, with the most hope the industry has had in literally decades. We’ve learned from the industry’s mistakes, and we now have a government that’s out of the way from a red-tape standpoint and acting more as a partner for entrepreneurs and utilities. We know those are the needed first steps to implement this renaissance.
Thomas Hochman: This podcast is primarily a permitting reform podcast, so I appreciate the NEPA shout-out in your first answer.
Julie, the President issued four major nuclear-related executive orders last May — Greg just briefly mentioned them. Perhaps the most notable, at least in my view, was the one that called for 10 large reactors under construction by 2030 and specifically named EDF as the office responsible for effectuating that goal. Can you explain, broadly, what EDF’s role in nuclear is and why the administration views it as such an important lever?
Julie Kozeracki: Absolutely. But first, a quick moment to reflect on how much has changed in a very short time. Two years ago, even talking about new large reactors in public was impolite, bordering on unprofessional. Palisades shut down for decommissioning in 2022. So an enormous amount has changed in a very short amount of time.
As the executive order recognizes, EDF is an incredibly powerful tool for nuclear deployment, because nuclear needs a lot of capital that has generally been unavailable from private sources. Low-cost, long-term debt is essential for nuclear, because interest can be a disproportionate expense given the amount and timing of capex during construction. For example, EDF provided $11.5 billion in loans for Vogtle Units 3 and 4, and those loans saved Georgia ratepayers over $3 billion in interest costs alone.
I also want to reflect on the power density here: with just those four reactors now operating at Vogtle, it’s the largest generator of electricity in the United States. It’s incredible that there are only 54 nuclear sites — many of which we can name — and those provide a fifth of the electricity for 340 million Americans.
That same EO set a target for 5 gigawatts of power uprates to the existing fleet. Our $26.5 billion in loans to Southern Company included over 300 megawatts of uprates for Vogtle Units 1 and 2, as well as their reactors at Hatch and Farley — and we have more in the pipeline. We’re also working with our friends in the Office of Nuclear Energy to maximize uprates. Those are pre-2030 new nuclear megawatts, so we should be doing absolutely everything we can to accelerate them onto the grid. Ask your local nuclear operator how they can go faster.
We’re also supporting restarts. Palisades is on track to be online later this year, Three Mile Island should be online next year, and Duane Arnold will be the third and final restart. We’re currently at 94 large operating commercial reactors in the US, and when those three restarts are complete, we’ll be back up to 97.
Thomas Hochman: Makes sense — and super exciting to hear about the Duane Arnold loan as well. So Greg, EDF is a new-ish name, about a year old at this point, with a different strategy for loans compared to the earlier iteration of the office, and it seems to be working at an accelerated pace. What makes this version of the office different?
Greg Beard: Yes, Energy Dominance Financing is the new name. We rebranded because our focus is so much different from what it had been. We have the benefit of a couple hundred billion dollars of appropriated capital — more than $250 billion. My goal as director is to get that capital deployed into the economy in ways that help make energy more affordable, reliable, and secure. It’ll help with the re-industrialization of the country, and this long-lead-item program in nuclear is a great example of that.
As an office, our focus now is nuclear, critical minerals, utilities, certain types of hydrocarbons, grid and transmission, and manufacturing and transportation. We’ve reorganized into what we call priority verticals. Within each of those, for every potential deal, we measure the impact relative to the amount of money we lend. The biggest impact we can have is reinvigorating the nuclear supply chain to allow for the construction of these large-scale reactors. So you’ll see more money go to nuclear — not that we’re ignoring the other areas, but because the impact will be so great.
And we’re having success. We’re fully in business now. As of last week, we had more than $60 billion of capital committed or closed across about 16 different projects. Every one of those we measure by impact on the American people. We’re excited to be deploying in nuclear, precisely because we haven’t seen enough activity there, and because the energy abundance from large-scale reactors — and all the ancillary benefits — will flow through the whole energy ecosystem.
Thomas Hochman: One more question on the EO, and I think it’ll help us transition into talking about the loans themselves. Notably, the EO doesn’t just say 10 new reactors, but rather 10 large reactors with complete designs. That addition doesn’t seem random. Why is it there?
Greg Beard: It’s not random. There are a variety of reasons we support the EO reading as it did.
Number one, we’re at a point in our society — maybe in the world — where there’s an almost insatiable need for additional electricity. Energy prosperity will give us affordability, which will give us national prosperity. You could contrast us with what’s happened in Europe, where one of the detrimental side effects of tripling your cost of energy — which happened for a variety of reasons — is the associated job losses and loss of industry. It’s really tough to run an economy that needs to be globally competitive if your electricity costs are triple the global average. And the data supports that energy abundance leads to affordability.
We’re also in a world much different today than even five years ago, where energy demand growth is largely driven by AI. We want to support that — we think it’s essential — but the need for AI doesn’t come one megawatt at a time. It’s measured in gigawatts. We literally need hundreds of gigawatts, and it’s tough to imagine a world where we need less electricity rather than more.
So if you’re looking for gigawatt-scale operations, economies of scale can give you real benefit. Starting a large-scale reactor program in the US is about as big a task as you can come up with — we figure it may end up impacting something like 40 states and adding close to 100,000 jobs nationwide. This is not something the private sector can do without our push. And keep in mind, we’re talking about loans, not grants, to help restart a supply chain. We know these large-scale reactors can last as long as 100 years, so by focusing on them, we’re changing the energy landscape for generations.
Why 10 reactors specifically? Ten probably isn’t enough, but it’s enough to get started. The only way to drive down cost is to repeat the same thing over and over again. My favorite example: if you go to IKEA and buy three cabinets, the time it takes to interpret the instructions and build the first one is basically an afternoon. By the second and third, you don’t need the instructions anymore, and you’re down to 20 minutes. If you repeat the same thing over and over and build that muscle again — which means having a labor force accustomed to doing the same thing repeatedly — you have the potential to drive down cost. That’s what the nuclear space needs: enough scale. Ten is a good start, but the point of 10 is the potential for economies of scale from building the same design.
Julie Kozeracki: The quantitative example I’ll add to Greg’s IKEA analogy: hot functional testing at Vogtle Unit 3 took 94 days, and it was down to 42 days for Unit 4. So there was material improvement just between Vogtle Units 3 and 4.
The executive order really calls for complete designs. While we’ve seen tremendous support for every segment of the nuclear space, if you’re in the lending business as a senior lender, you really can’t do venture debt. If you need capital to complete your design before you can build it, that’s probably not appropriate for a taxpayer-funded lending office to lead — that sounds like an equity solution.
It might be said that we’ve chosen a technology, but I think the industry chose it for us. We’re creating this long-lead-item program, and we already have interest from more potential buyers and users than we have capital for. But if there are other designs that the industry and potential users want to support, we want to lend to those as well. This is not an exclusive idea. And for those that are pre-design-complete, still call your DOE, because we have grants to help support those endeavors, and we want to see those projects succeed too.
Thomas Hochman: For the true nerds out there, there’s a great paper on your IKEA point from Arnulf Grübler, which looks at the French experience of scaling up nuclear — how costs came down as they built more of the same reactor, but spiked every time they switched designs.
Greg Beard: I’d just add, Thomas, that we’ve studied — and it has been studied — the cost to build, say, the first reactor once we get this program going again. It should be as much as 30% more than what the fifth, sixth, or even seventh reactor will cost. So we’re anticipating a very meaningful move down the cost curve as we repeat the builds.
Thomas Hochman: And from Vogtle 3 to 4, there was a pretty significant decline in the cost of Reactor 4 compared to Reactor 3 — which brings us to the big news from last week. EDF announced a conditional commitment for $17.5 billion across five loans. These loans are for long-lead items, which we mentioned in the intro.
Two questions to start. First, it might be helpful to share a few examples of specific long-lead items and what makes them “long-lead.” And second, the bigger question: there’s a straightforward logic that if you’re going to do a loan in multiple parts, you start with the stuff that takes the longest to get going. But why do this in multiple parts at all? Why not just do one gigantic loan for the full start-to-finish construction of the reactor?
Julie Kozeracki: We’re so excited about this project and the way it’s structured, because this approach for long-lead items will accelerate commercial operations dates by three years versus the normal course, where utilities go through FID and wait to place these orders.
To be clear, long-lead items are complex components that require years-long manufacturing — things like containment vessels, steam generators, reactor coolant pumps, and prefabricated structural modules. These loans cover 14 big-ticket items, plus about 140 smaller-ticket items. Procurement is about 25% of the total cost of the overall projects; most of the cost is construction labor.
It’s important to remember that the AP1000 is modular — it has over 300 modules — and that the “A” in AP1000 stands for “advanced.” Apart from Vogtle 3 and 4, all the operating commercial reactors in the US are Gen 2 light water reactors. Compared to older designs, the AP1000 has a smaller footprint, fewer valves, fewer pumps, and fewer labor hours to put together versus older stick-built designs.
As Greg mentioned, our analysis as the lender for Vogtle — which aligns with Koroush Shirvan’s great work — indicates that most of Vogtle’s cost was structural, first-of-a-kind cost underestimation rather than cost overrun, because the design was not complete and there was no supply chain infrastructure. Now that the design is complete, it’s much easier to put cost and schedule parameters around future builds.
Figuring out the investment tax credits, hyperscaler PPAs, EPC contracts, and construction loans is going to take a bit of time. So we might as well be making the steam generators while we do that work, because we’re so confident these reactors will get built. And to Greg’s point, the way to drive out cost is to standardize and repeat the build. The items funded by these loans are so standardized as to be completely interchangeable between projects, which hugely increases the value of our collateral: if one utility changes course, another can take its place.
Thomas Hochman: So given the AP1000’s size and its 300 modules, is it fair to characterize it as a “large modular reactor?”
Julie Kozeracki: It is a large modular reactor, for sure.
Thomas Hochman: Perfect. So it’s pretty clear that these loans — even compared to your average EDF loan, which already isn’t well understood by the public to begin with — are uniquely complicated. So give us the full readout: how are these loans structured?
Julie Kozeracki: I’d say uniquely special, uniquely wonderful. First, it’s important to emphasize that these are not loans to Westinghouse. Most of the coverage got that right, but it’s really important to emphasize: these are not loans to Westinghouse. They’re going to be loans to special purpose vehicles, or SPVs, and those SPVs will have equity contributions from both Westinghouse and a utility customer.
So there will technically be five loans, structured for five utility two-packs, for a total of 10 reactors across the program. Both Westinghouse and their partner utility will have to put up $500 million each for each of the five two-reactor projects — so that’s a billion in equity contribution per SPV. The number from the announcement was $17.5 billion of principal across five SPVs, so that’s about $3.5 billion each — roughly $4 billion when you include capitalized interest, which is how we get to the 80-10-10 structure for total project costs. The total project costs across all 10 reactors are expected to be up to about $25 billion, with a good amount of contingency.
Thomas Hochman: Okay, so Greg, there are five utilities that will partner with Westinghouse across these five SPVs. Who are the five? Are you picking them? When will we know?
Greg Beard: We’ve got seven signed letters of intent from both regulated utilities and independent power producers — and that doesn’t count one more who hasn’t given us a signed letter but keeps us posted on their board-level activity and says they’re keen to move forward in an expedited fashion. So we think we’ve got eight, let’s call it, and room for five.
Who gets the five? The utility and/or independent that moves the fastest — the one that gives us confidence that, once they take the loan, they’ll meet their mile markers to get this power built and online the quickest. The intent is not to lend for long-lead items and then have the parts sit around in a warehouse. The intent is to spur the industry to fast-track and give this country access to the power we need. So that’s the primary differentiator: providing us confidence that the borrower — the utility or IPP — has the site at the right location, has a plan for the build, and has the support of their state and local communities.
We think we’ll have announcements about who and which locations in the coming months and quarters — but certainly by the end of the year. That’s probably an outside date; I’d hope we’ll have announced all five by then.
You asked me to name names, and we’ve been deliberate in not doing that yet. There are many misconceptions about why Vogtle was so expensive and why things didn’t work, and we don’t want to prematurely announce names that might negatively impact the public market, or regulators’, or others’ perception of what those utilities or IPPs are doing. But having personally looked at the financial math, I can say all the pieces to make these projects work — for equity owners, for ratepayers, for hyperscalers, and for the government — are on the table and known.
We’ve met with a few of the credit rating agencies and gotten very positive responses about the potential lack of impact this long-lead-item program will have on potential borrowers. As soon as we can, we want to get that same message out to the equity research community, to explain why these projects will have a very favorable impact on all the aforementioned parties.
These are not going to be going on balance sheet, which is how Vogtle was done. They’ll have very long-term PPAs — 25-year PPAs from hyperscalers. We’ll have 30–50% ITCs. And we’re working with you to get direct pay and a few other nuanced changes to legislation to clarify some things that need clarifying. So stay tuned for the naming of names — but know that when we make these announcements, it’ll be after the equity research community understands the direction. And if you’re named, that’s going to obligate that utility or IPP to move swiftly. So that’ll be the differentiator.
Thomas Hochman: To put that last piece in slightly more layman’s terms — correct me if I’m wrong — I think what you’re saying is this: historically, because of the Vogtle experience, there’s been some concern among utilities that being announced as a participant in new nuclear might lead to a downgrade in their credit rating. And given the tools on the table today, the difference in the current environment, and the conversations you’ve had with rating agencies, that concern is likely overstated.
Greg Beard: Yeah, and here’s why. If you have a hyperscaler willing to sign up for 25 years of power — 1.1 gigawatts at a $125 base price — that’s $30 billion of contract protection. And the way we’re structuring these loans, if we do end up with a cost overrun, that $125-per-megawatt-hour deal can flex upward — say, to $150 per megawatt hour — which would add another $6 billion of revenue. That’s a giant buffer for any potential overrun.
As a reminder, we expect the next reactors to cost $10 billion. So if you’re getting $36 billion of revenue protection and your operating costs are famously low, that’s a lot of margin for a potential cost overrun — margin that benefits both the equity owner and the ratepayer. This is what we’re expecting to happen. The hyperscalers are there, and they’re supporting these programs and this technology. That manifests as a hyperscaler PPA that really acts as the bedrock that makes all of this happen. I think the equity research analysts probably don’t yet understand the power of that PPA when they do their analysis — but they will.
Thomas Hochman: Okay, super helpful. I think most people, when they think of an EDF loan, imagine something like a mortgage, where you get all the money up front at financial close. EDF typically doesn’t work that way, and these loans certainly don’t. So can you explain, under this structure, when the money actually gets spent?
Julie Kozeracki: I’ve said this a lot in the last week, and I’ll say it again: we are not wiring $17.5 billion to Westinghouse. All EDF loans have conditions precedent, or CPs, for first and subsequent advances. We occasionally do “wet closes,” where the first draw comes immediately after financial close, but that’s pretty unusual. In this case, DOE will largely be reimbursing purchase orders as they’re made.
As we discussed, before any DOE money is available, both Westinghouse and the utility customer have to post a billion dollars between them. So to unlock that first SPV, the utility has to post a $500 million letter of credit — they’re not wiring us the money, but posting that they’re good for it — and Westinghouse has to do the same. Then, when Westinghouse places purchase orders on behalf of the utility customer, they submit those invoices to DOE for reimbursement. For every $100 of equipment, it’s roughly $80 from DOE, $10 from Westinghouse, and $10 from the utility.
Thomas Hochman: Makes sense. There are many Hill staffers, policymakers, and others who interface with Congress who listen to this show, so this may be relevant as they think about the various programs they touch. EDF has two programs capable of supporting nuclear projects: 1703, the Innovative Clean Energy program, and 1706, now also known as the Energy Dominance Financing program. For this long-lead-item loan, which bucket is this coming out of, and why that one?
Julie Kozeracki: These loans have been obligated under 1703, which actually has about $30 billion of authority expiring this September — so stay tuned for some other projects that might be in that bucket. “Innovative,” in that context, means there are fewer than three deployments in the US, so the AP1000 still qualifies as innovative under that program.
To your point about credit subsidy: from Congress, we get two things — loan authority and appropriated credit subsidy. Credit subsidy is the cost to the government of making the loan. Last year, in 1703, we were appropriated $150 million of credit subsidy specifically for nuclear, and we’ll be using a good chunk of that to support these loans. To be clear, long-lead-item loans are just the first step. We very much intend to be the construction lender of choice, and we expect those construction loans to come from both 1703 and 1706.
Thomas Hochman: Got it. So Greg, walk me through the timeline moving forward as EDF sees it. You have this long-lead-item loan, with utilities partnering with Westinghouse to buy the items. What’s coming next? What are the various players — EDF, Westinghouse, utilities, hyperscalers?
Greg Beard: We’re pretty far down the path. We’ve already got interest from these eight utilities and IPPs, as I described. We’re now engaging with all eight, with the goal of identifying the five sites and five partners that give us the highest probability of restarting this large-scale program as quickly as possible. Hopefully we’ll have announcements around that by the end of the year.
The executive order stipulates that our goal is to have 10 large reactors under construction by 2030. We think that’s a goal we can meet, but we can’t delay. When we succeed, that means we should have power from the first builds by 2035. Sitting here in 2026, that still seems like a long way off — but starting the long-lead-item program now will expedite, de-risk, and hopefully lower the cost of the whole endeavor.
Thomas Hochman: Got it. So it sounds like there’s a clear pathway — you mentioned hoping to have news about these five utilities by the end of the year, which is super exciting — to getting these LOIs purchased. As we’ve discussed, the next step is building the reactors themselves. What bottlenecks are still out there? You mentioned direct pay and the ITC. What should Congress be thinking about?
Julie Kozeracki: As I’m about to say this, I’m surprised and disappointed I don’t have a hat or poster for it, but: a 50% ITC is “buy one reactor, get one free.” And a 30–50% ITC already serves as cost-overrun insurance — it’s the federal government committing to pay 30 to 50 cents of every overrun dollar.
But we’ve consistently heard there are a few things that need adjusting to make those ITCs fully usable, and a lot of that is addressed in the draft legislation proposed by Congressman Harrigan of North Carolina.
The first thing is allowing utilities to opt out of normalization, which lets them recognize the benefits of ITCs early and up front.
Thomas Hochman: Quickly — give us two or three sentences on what that means, the normalization piece.
Julie Kozeracki: Everything I’ve learned about utility accounting has been against my will. But there’s a rule where they have to recognize the benefits of the ITC over 40 years or longer, which makes it difficult to recognize all the benefits up front — benefits that should get passed straight through to the ratepayer. So it’s in everyone’s interest to amend that, so ratepayers benefit right up front.
The second piece is transferability of qualified progress expenditures. A common misconception about the ITC is that it’s only available once you’ve hit COD, but the 48E ITC actually has qualified progress expenditures. The key to making those usable is that they be transferable to other parties, because there are very few entities with the enormous tax appetite to absorb the billions of dollars of ITC proceeds, even from a single reactor.
The third thing, which Greg mentioned, is direct pay. That would help us meaningfully stretch our loan authority so we can lend to more reactors — because if you’re effectively receiving those billions of dollars of ITC proceeds during construction, you have to borrow a lot less to complete it. So it’s really important to make sure the ITCs are fully usable, and that we pair them with our lending authority in a way that stretches it as far as possible.
Thomas Hochman: Got it. The bill Julie mentioned is the Harrigan bill, HR 8482, which looks to solve some — but I think not all — of the problems Julie just listed.
Greg Beard: And Thomas, can I just add something about the risk we’re taking as stewards of a taxpayer-funded loan program? Julie described the concept of credit subsidy, and that really is the measure of how much Congress is allowing us to potentially lose. So I want to make sure any listener or taxpayer understands that while we are lending up to $17.5 billion for the purchases of these long-lead items, we’ve done a thorough credit review, and every potential borrower is contributing a billion dollars per SPV. We’ve combed through every potential scenario and convinced ourselves that, based on that analysis, our risk for potential loss on any of these loans is extraordinarily low.
So when we do our own credit metrics and allocate our potential loss — our credit subsidy — I’d just tell you, as a deal underwriter, we’ve done our job. We are risking nowhere near $17.5 billion. In our expected case, all of these loans will be repaid for the benefit of the US taxpayer, with interest. The idea that we’d lose money on this would be draconian.
Thomas Hochman: And it sounds like the borrowers aren’t only putting up a billion dollars in total between Westinghouse and the utility — they’re also uniquely creditworthy themselves, right?
Greg Beard: They are, and they’ll be incentivized. A billion dollars is a big incentive to follow through.
Thomas Hochman: Got it. Well, thank you — this has been super helpful.
We like to end each episode by asking our guests for an energy policy hot take. We’ll go with Greg first, then Julie. Greg, what’s your hot take?
Greg Beard: My hot take is that data centers and the accompanying power-supply growth will decrease power prices for ratepayers — not increase them, as has been reported and is hitting many of our social media feeds. Look at actual examples in Indiana, Arkansas, Louisiana, and Mississippi, which have welcomed data centers and the accompanying power as part of the “fair share” pledge the President has asked hyperscalers to agree to. We’ll see rate decreases, or at worst a slowing of rate increases — if rates must go up, they’ll go up less than they would have otherwise — for the states and jurisdictions that allow data centers and the accompanying energy supply increases.
Thomas Hochman: Julie, close us out — what’s your hot take?
Julie Kozeracki: My hot take — and literally everyone is unhappy when I say this — is that solar is not firmed by batteries. Solar is firmed by gas. So solar plus batteries is never the right comparison for nuclear. Take a look at Texas: go on the ERCOT website and look at their generation across the day. They have an enormous amount of solar, but what really ramps up at night is gas — not batteries. They do have batteries, but there’s so much gas that really firms the solar and lets them take advantage of it. Even in CAISO, you can do a similar study: the pesky imports into California do a lot of the heavy lifting, and that includes a lot of nuclear from Palo Verde, hydro from the Northwest, and, yes, gas.
Thomas Hochman: Well, if nobody were mad, then it wouldn’t be a hot take, right? Perfectly done. Greg and Julie, thanks for joining Right of Way.
Greg Beard: Thank you.
Julie Kozeracki: Thank you.
