EMP S2E21: Rep. Sean Casten "nerds out" on electricity regulation, FERC, permitting reform, subsidies, emissions trading, energy productivity, COP27 and climate change

Rep. Sean Casten, D-Ill., is undoubtedly the only member of Congress ever who has run an energy company with a business model built around energy efficiency. Here he talks about how being an advocate of pro-competitive reforms in the electric industry is "the absolute loneliest position in Washington."

Transcript

S2E21 Rep. Sean Casten, D-Ill., transcript
(edited for clarity)

EMP: Welcome to the Energy Markets Podcast. I'm your host, Bryan Lee, and our conversation today is with Congressman Sean Casten, a Democrat representing Illinois’ 6th district. Congressman Casten was just reelected to a third term of office. He sits on the House Financial Services Committee, the House Science, Space and Technology Committee, and the House Select Committee on the Climate Crisis. Congressman, welcome.

SC: Nice to be here. Thanks, Bryan.

EMP: So I know you were in Egypt for COP27, and we definitely want to talk about that. But we invited you onto the podcast because you and two of your colleagues sent a letter to the Federal Energy Regulatory Commission in support of a proposal that would limit the ability of utilities to use ratepayer money, in support of things like trade association dues and political activities. You call the issue in the letter a “grave concern.” You said utilities are using constituents’ money to fund trade associations and political activities that lobby against climate change and clean air and water and the clean energy transition. You said “we strongly believe that ratepayers should not be saddled with paying fees to support industry groups that work against the public interest by actively fueling the very energy crisis we find ourselves in.” Tell us more about that and why you think it's important.

SC: Sure, so one of the things that I'm struck by - and as you know, Bryan - I came here from 20 years in the private sector. One thing I was struck by in Congress is that the absolute loneliest position in Washington is to truly be pro-market. There are people to my political left who see a profitable company as an opportunity to take some taxes away from  them - take money away from them in taxes. And there are people to my political right who see Atlas Shrugged as the, you know, the Third Testament of the Bible. But no one comes to Washington and says, what I need is a more competitive market. We built out our electric grid in this country faster than anybody thought was possible way back in the beginning of the last century by giving - by creating regulated monopolies with an obligation to serve. We never could have built an electric grid as quickly as we did without that. But we now have this mix of regulated and unregulated structures and we still have an awful lot of people who, businesses who don't know how to compete in a competitive market because they've never really had a competitive market. And so when you have upstarts coming in who are saying, I want to build solar, I want to build wind, I want to build efficiency, and yet if I do that, I'm going to run into a utility rate that's actually designed to reduce the amount of value that I can realize. Or, you know, a lengthy interconnect process or I'm going to be stuck in a queue at your local neighborhood RTO that doesn't let me get through the process. And all of that comes because power does not concede without a fight. And folks who have a lot of capital tied up in the in the energy system, understandably want to make sure that they provide stable returns and to do everything they can to keep the doors open and increase the barriers to entry to their business. And if they want to do that they have a right to do that. But my goodness, they should be using regulatorily guaranteed profits in order to do that. They should be using those dollars the same way that the truly competitive businesses do, saying, I got limited resources and infinite needs, how am I going to prioritize these resources knowing that if I take the dollar away as one last hour after on the purpose and so it's basically about being pro market and in making sure that we, we we give consumers the benefit of competition.

EMP: Yeah, but it's also about political influence, right? I mean, around the same time, you and other members of Congress called on large financial institutions to stop funding so-called “dark money” groups that you said were spreading climate-related misinformation. That's certainly something utilities do quite well as well - fund anonymous front groups to advance their self-interest that's maybe in the benefit of shareholders, but not their consumers.

SC: Look it's, it's all part of the same hole, right? Do you use your influence in order to change the rules of the game so that your competitors can't play? And these are all different parts of the same hole. You know, we don't and never will have a perfectly competitive system. We don't and never will have a perfectly equal society. We don't and never will have a perfect democracy. But goodness sakes, we’ve got to strive for it. And so when you see folks pushing back, I think those of us with the regulatory role have an obligation to say no, we want to expand the scope of equality and opportunity and competition, not constrain it, and so we're pushing back on those where we can.

EMP: An overarching theme of this podcast is that climate change is real. It's happening now. We're seeing it on the news every night. And we've wasted too much time and need to act pronto. So given that, how do we decarbonize the grid at least cost to consumers? What are the best policies we should adopt to get us through this transition without imposing a lot of unnecessary costs on consumers? Do you have any thoughts on that?

SC: Sure. So I've been saying for a long time that there's only three things we have to do to give a stable planet to our kids. Number one, we have to at least double the energy productivity of our economy, our energy productivity, I mean, how many dollars of GDP do we generate per Btu of energy? That's number one. Number two is we have to figure out how to decarbonize the really hard to decarbonize sectors. We don't know how to make steel without metallurgical coke. We don’t to make fertilizer without natural gas. That's an R&D problem. And then number three, we have to stop emitting CO2 by about 1995. That's not a slip of the tongue. That was the last time we were at about 350 parts per million and that's what we have to get back to in the atmosphere. On that first piece, which is the easiest piece, the reason why I say we have to at least double our energy productivity is because the United States has about a $20 trillion economy that uses 100 quadrillion Btus of primary energy a year. That means that we generate about 20 cents per thousand Btus. That is half as much economic productivity as the UK produces. It's a third as much as Switzerland produces. And the reason why we're so distorted is because we have provided such huge subsidies in our economy to fossil fuel extraction. And that's hugely distorted [connection interrupted] economic activity . . . So if we can get rid of those subsidies, that is not hugely disruptive to those communities that have come to depend on those subsidies.

EMP: Again, you just returned from Sharm al Sheikh where you attended the 27th Conference of the Parties. You said we should have stopped emitting carbon as of 1995. And that's been a criticism of the COP process. It's been 27 years now. Each time they come out with a grand pronouncement, but it doesn't seem to move the ball forward. So was COP27 a failure?

SC: Well, I think we've got to be realistic about what COP does. The there is no international body that has jurisdiction over all the countries in the world. What COP is a chance for the leaders to come together, for goals to be set. And then if we're doing it right to come back at the next COP with some degree of accountability. Did you or did you not do what you said what you were going to do? Let's just take the U.S. because we've got experience there. In Glasgow at COP 26, we went as the United States and said, we're taking our commitment seriously, we're going to pass Build Back Better, which is going to make sure that we meet our end of the deal to get CO2 down by 40%-50% by midcentury. To be candid, the rest of the world didn't believe us. They’d heard that song before, We then came back to this one, having passed the Inflation Reduction Act, having had a path to do that. And we were, you know, the rest of the world was to some degree envious and to another degree angry. They were envious because we're now doing this and we’re leading. They were angry, because the United States is now sucking capital from around the world to invest in energy projects in the United States that are now not going to some of the developing world. And we weren't doing that because COP had some supervisory authority. We're doing it because we made a promise. And we have to deliver on the promise. And so I think, you know, COP keeps those promises going and keeps the ambition up. I think by definition, if COP is not pushing for ambitions that are beyond what's currently politically possible then COP isn't doing their job, because what’s scientifically necessary exceeds what's politically possible right now. And we need to push for that ambition. As my friend Ali Zaidi said, this is sort of like Schubert's Unfinished Symphony. It’s pretty good, but it's not finished. 

EMP: Well, let's talk about the outlook in the House next year. Congratulations on your successful reelection campaign. You had some redistricting and had to compete for your seat and you prevailed. So congratulations. I think clearly this is the best midterm election result for a sitting president in decades, even though the Republicans did eke out a razor thin majority in the House. Many Republicans are climate deniers, as well as election deniers. Will they stymie efforts by Congress and the administration to address the urgent climate crisis that we're confronting?

SC: Well, look, we already know that they're getting rid of the Select Committee on the Climate Crisis that I serve on. And so I think you can draw reasonable conclusions from that. I think it's useful I find it useful to frame this not as a Democrat versus Republican issue. But as an energy consumer versus energy extractor issue. And I say that to go back to what I was saying before about the ways that our subsidies have distorted our economy. Take that the U.S. could double our energy productivity. That means we can either double our economy with just as much energy use or we could cut our energy use by a factor of 50% with the same standard of living that we've come to rely on. That's pretty awesome, right? And that's an aggregate net benefit. But if you start getting granular, that benefit is not equally shared in our society. Think about what we've done in the last 15 years. We've gone from an electric grid in the country that was dependent 50% on coal to one that depends 25% on coal. That's come not because of some top-down mandate, but because combined-cycle gas turbines were cheaper, and then solar was cheaper and efficiencies cheaper, and geothermal is cheaper. And these assets that are all cheaper are being built on the grid and displacing the more expensive stuff. That's really good for consumers. It's really bad for folks in Appalachia who are dependent on coal mining to keep the food on the table. We're now seeing huge surges in electric vehicle penetration. Because they're cheaper to operate. They, for all practical purposes, don't have any maintenance and oh, by the way, they're really fun to drive. That's really good for consumers. Not so good for folks on the Gulf Coast who depend on oil-and-gas production. And, so I think, when you look at the Democratic-Republican divide in the country, it maps pretty closely to the urban-rural divide, which also maps fairly closely to the places where people consume energy to turn it into higher-value goods and services, and places where people produce raw energy to get shipped off to the productive parts of the country. And I don't say productive and in a judging way. I'm just saying, that's the reality. And some of the most constructive conversations I've had with my Republican colleagues are around the challenge that I can write bills all day long that cause the economy in my district to grow by $10 billion a year and the economy in a Republican’s district to shrink by a billion dollars a year. And I'm under no illusions that we would not both go out and celebrate creating $9 billion of wealth for the American people in that scenario. And so, I think that's at core like, yes, there is climate denialism there, yes, there is some, you know, antidemocratic impulses, but I think as human beings there are people who represent communities where the future does not look very bright for the way of living that they know - that they're familiar with. And we have to find a way to make sure that as we create this bigger pie, everybody gets a slice.

EMP: What do you think the biggest issue’s going to be next year in terms of these issues? Climate change, the electric industry, clean-energy transformation. Do you have a crystal ball you can look in and tell us what to expect?

SC: Well, you know, I think you can see some of these issues already playing out in the fulcrum that I described. Look at the permitting reforms we have to do. We know that we have to make it massively easier to build transmission in this country. Of the thousand gigawatts of generation that's currently stuck in interconnect queues around the country, 950 of it is zero-carbon generation. In other words, it is way harder to get the permitting to build a transmission line to connect a solar panel to the grid, than it is to get the permitting to build a gas line that brings natural gas to a gas turbine. Trying to find a way to do that permitting reform, bringing people together who, on the one hand, want clean energy, and so you've got a lot of Dems who support the electric transmission reform. And on the other hand, people whose communities have historically depended on the continued subsidies of fossil fuels. And so they want to say, let's take off NEPA - let’s ease back on NEPA provisions. Let's make it easier to permit the dirty stuff. Because otherwise we don't know how to compete. And so you're seeing that tension play out, can we do permitting in a way that brings that along? And doesn't you know, throw out too many babies with the bathwater. We'll see. The second big place where you're seeing it play out is in how we respond to the flow of capital in our financial markets. You know, as crazy as Elon Musk is nowadays, Tesla is still running at a price-earnings ratio that is, that is eight or nine times as high as the price-earnings ratio that ExxonMobil's earning. So capital markets are saying I fundamentally trust one of these companies to invest and build things that people want in the future. And the other company you know, what's Exxon earning right now - eight times price earnings, something like that? That's a price-earnings ratio when your capital markets are saying I just want to strip cash. I do not want you to invest. We are seeing a response to that now with a lot of this backlash against ESG investing with folks saying, you know, this is “woke capitalism.” Woke capitalism is just a way of saying I don't like what capitalism is doing to my community. And so we're seeing the same tension of saying, if I'm honest - and if I represent one of those communities - I can legitimately say if I was representing, you know, the Gulf Coast, you know, Cancer Alley down in Louisiana, I may not want that to be the future for my children. But I can also look at that and say, I don't know how to make sure that people stay here and still have an open grocery store and a movie theater and a diner in town unless we keep these businesses here. And when I see capital running away from these businesses, I want to fight that. So I think that tension around blocking financial firms from investing freely in a capitalistic society, the tension around are we going to make it as easy to permit electric transmission as it is to permit oil and gas, is that tension between energy producers and energy consumers playing out? And I don't anticipate it getting easier in a divided Congress.

EMP: You mentioned earlier competition, right off the bat. So in terms of responding to the climate crisis, do you see competition as having a role?

SC: Absolutely. Now, if you and I were to sit there and say we have no tax subsidies, we have no differential permitting. And you're just sitting there and saying, Well, what would you rather own? Would you rather own a generator that costs you $1,500 a kilowatt to build and has no marginal operating cost? Or a generator that cost you $2,000 a kilowatt to build and has a $20 a megawatt hour operating cost? I just described the difference between a solar panel and a coal plant. In a competitive market, it's clear what you're going to build. What if I said there's one that costs you know, $300 a kilowatt and has negative operating costs? Well, that's energy efficiency. So, in a rational market, we're going to deploy a very different suite of technologies, which are going to be the cheaper ones, that are going to be the cleaner ones. And, you know, if you don't believe me, just look at the history. When we opened up competition in power markets in the U.S. with the ‘92 Energy Policy Act and FERC Order 888, we built 200 gigawatts of combined cycle in a decade. We didn't build that because government said, thou shalt build combined cycle, we built it because all of a sudden, participants in a previously noncompetitive market said I'd really rather build the 50% efficient generator than the 30% efficient generator. Right? And, and that's how we got there. So competition’s got a huge role. Having said that, I think we also have to be honest about the fact that none of us want a totally free-market energy system. Because none of us really want to live in a world where some vagary of supply and demand means that all of a sudden grandma's insulin can't stay cold in the fridge. And so we're always going to have a structure in our energy markets, as we have in our food markets, as we have in our healthcare markets, where there has to be some social safety net - for lack of a word - that stabilizes at the extremes. And my friend, Hal Harvey at Energy Innovation, has a very nice way of putting it that he says you know, we need - markets are really good for 90% of the scenarios. And government's job is to protect against the other 10%. And so I think we need a little bit of both, but we've been much longer on the absence of competition in the energy industry for far too long because of all those subsidies and with that gives us an opportunity to fix it.

EMP: You mentioned the wholesale market restructuring that FERC engaged in, in the ‘90s, and the boom in gas that occurred in the ‘80s, and then the building of large regional markets that saved consumers millions, tens of millions, hundreds of millions of dollars. You're from Illinois, which is one of a dozen or so states that have ostensibly opened up their retail electricity markets to competition. Is retail competition in those states working out in the best interest of consumers? 

SC: I think what we call retail competition is not really competition in the way that like, you know, Adam Smith would use the term. We still have regulated monopolies over the last mile. The prices that you pay as a retail consumer are not set by your ability to freely shop and negotiate with an infinite number of suppliers. They're set by a utility commission who’s got a monthly charge, and a demand charge, and a ratchet, and an energy bill, and a time of use, and whatever other things we put in there - system benefits charges. And so you know, when we talk about retail competition working, as you know well, Bryan, it's that little margin of the wholesale piece that we're shopping for, we're not we don't really have competition for the bulk of our building the bulk of our supply. And I'm not sure we want to, right? I don't think any of us want to live in a world where I've got 15 wires coming into my house and I can choose which provider or poles at any given time. So I don't know that those benefits of competition can ripple all the way through. But I think there are things that some of the best state regulators have done to better connect decisions made at the local level into wholesale power markets. You know, I'm a huge fan of FERC Order 2222 that says that if you if you are going to reduce your load at the point of use, that should be able to be monetized in wholesale capacity markets, and in the states that have done it best, you get to monetize it at multiple because, if I cut the megawatt at my factory, that probably saves 1.2, 1.5 megawatts on a hot summer day upstream at some remote power plant because of all the line losses in the system. And so there are things that can be done at the state level to make sure that decisions made at the retail level can fully participate in wholesale markets. But I think true retail competition, like you have at the farmers’ market for eggs, it's never really going to happen in an industry is capital intensive as the electric sector is. 

EMP: I knew your dad, Tom Casten, when I was a reporter covering the electric industry back in the ‘90s and we had all the initial foment over restructuring the electric industry and introducing competition. He had a company called Trigen Energy, which had a business model involving what's called combined heat and power, or cogeneration. He was an advocate of capturing waste heat from the electricity generating process and directing it to constructive use, such as industrial processes or district heating and cooling. Coal-fired plants were still the largest source of electricity supply then, and he managed to encapsulate the problem neatly by noting that for every unit of coal burned to produce electricity, two-thirds of that energy was thrown away as waste heat. You know, many people drive by a power plant, they see steam rising from the smokestacks and think that that's smoke. But it's steam. Wasted energy. So coal has shrunk to about 20% of electricity supply since then, you said 25%, I'll defer to you. But I think his arguments still have merit. Are we doing enough in this area in terms of making energy more efficient?

SC: No, we have a ton more that we could do. Ask yourself why it is that Switzerland who has the same access to technology, the same access to talent, the same access to capital as we do - maybe not even as good as we do - generates three times as many dollars of economic activity for every Btu they use. And, I'm an engineer, we you know, when you talk to electric people, you tend to think about that and technology choices, whether it's you know, co-gen or load shifting or whatever else. But the truth is, it's this whole litany of decisions that we make. It’s zoning rules, you know, when we decide to subsidize the your ability to live 10 miles out of town on an empty dirt road, that causes certain decisions that we don't have ,you know, in an area with different zoning rules. There was a study that Harvard did a number of years ago, when Massachusetts was trying to shut down what they called the filthy five - the last five coal plants in Massachusetts - and Harvard School of Public Health measured the differential rate of premature fatality and asthma downwind of those plants. And then they worked backwards to look at the economic cost. And the economic cost worked out to, if memory serves, about $30 or $40 per megawatt hour of generation in those moments, which means that effectively those plants were getting 100% subsidy from Medicaid, if you think about it that way. And now ask yourself, would we have built more nuclear if the coal industry wasn't getting a $30 per-megawatt-hour subsidy? Because the nuclear plant has to figure out a way to put money aside for their own waste disposal and the coal plant has their waste disposal paid for by the healthcare system. And so we have all of these huge distortions that have caused us to differentially reward energy extraction and differentially disincentivize efficient energy utilization. And if we, if we get those rules right and change some of the rules we’ll go a long way towards fixing it. Another example, if we were to really embrace biofuels in this country, we should probably have a conversation about why it is that we use so many income tax dollars to protect oil and gas shipping lanes around the world. Because that gets paid for out of income tax. You don't pay for it at the pump. And yet, if I'm going to pay a price where biofuels are going to be competitive, I've got to pay a price that ripples all the way through the system down to the fertilizer that the farmer paid to, you know, to get that in there. And we can have a rich conversation about the you know, the environmental benefits of biofuels. But all of these choices we've made where we don't let people see the true price of energy because we pay for it in other parts of our society have caused us to build a much less energy-efficient society than we would have if we were just committed to building the most reliable, low-cost system.

EMP: You talked about economic externalities, protecting shipping lanes. When we burn coal, there's no economic cost assigned for the carbon that goes into the atmosphere. Should we have a tax on carbon? Should we have a cap-and-trade program? Have you given any thought to that? How do we address that economic externality problem?

SC: Oh, I've thought a lot about it. And I've got a I got a bill that I'll be happy to plug. The - and I gotta remember the name for it if I'm going to plug it - the Tradable Performance Standard Act, I think. What we did in that bill was we actually modeled it on the bill that the Reagan and then the first Bush White House put together on what became the Montreal Protocol, and then later the acid rain trading program. It was a cap-and-trade program with a declining cap. Both of those came in way below the price that any economists thought was possible. I mean, you remember Bryan, when that acid rain program was first coming out, people were saying that it was going to cost you know, $500,000 a ton, right? Those credits trade in single-digit dollars now. And the reason that those worked was not just that they had a cap-and-trade, but they had a cap-and-trade, in my opinion, where your allowance was tied per unit of production. So you got an allowance of sulfur per megawatt hour that you produced, not based on your historic production, which I think is where a lot of cap-and-trade - carbon cap-and-trade - have gone wrong, but you have allowance based on your unit of production, and then buyers and sellers could sell around that point. So if you need $50 a megawatt hour in order to make your reduction, and I can reduce and I've got I got $50 that I'm willing to give up because I'm so much cheaper, we can meet in the middle and ratepayers are not affected by that because we're using a per-megawatt-hour denominated unit. And that's essentially the way that the acid rain program worked, and what we've done - my friend, my good friend, Bill Reilly, who was the former EPA Administrator, in the first Bush administration worked closely with us to help develop this structure as a way to use carbon. Now the reason that I say we got to do it that way, is I think, in the intervening 30 years, we've largely forgotten about that. We've had the, you know, once Newt Gingrich came in the Republican Party really stopped pushing for cap-and-trade of any variety even though it was a Republican idea. It came out of the Reagan White House. It was Ruckelshaus and Riley and Reagan and Bush. But then the political left came to see carbon payments as a source of revenue that could be used for other purposes. And so, you know, so we have these ideas like cap-and-dividend. Wouldn't it be great if we put a price on carbon pollution and then gave a check to every American? Well, that's a great way to raise the price of energy. It's not obvious to me how that changes the incentive to build a clean-energy plant. Because you don't get an extra revenue stream for doing that except for your little, small pro rata share of a dividend. So there’s just been a gap, and I come back what I said at the start of our conversation, actually being pro-market is an extremely lonely position.

EMP: You noted that cap-and-trade has sort of fallen out of favor in the last several decades. I've had several on the podcast question whether cap-and-trade programs even work. Now, I covered the 1990 Clean Air Act amendments and covered very closely the implementation and the phenomenal success of the acid rain program. Why? Why is there a perception that cap-and-trade for carbon emissions isn't working?

SC: Well, that's a rich question. I think my short answer is that there's a lot of flavors of cap-and-trade. You know, it's like, our tax is good. Well, it depends on which one. Is inflation good? Well, if my prices are going up now, if my wages are going up, yes. Yeah. And I think in the same vein, there's a lot of flavors of cap-and-trade. It's probably a longer conversation. It would be fun to get a bunch of smart people to ask why is it that the, the structures we agreed on for the Montreal Protocol for ozone-depleting compounds and for the acid rain programs were largely abandoned in the Kyoto discussions. You know, we once we got into Kyoto, we got into all this question of, of grandfathering old plants on board, issuing you know, flooding the market with allowances that distorted the initial supply. There were all these things that we didn't do in those other programs. And I think, you know, I mean, what Kyoto was, finally the Kyoto-compliant markets are only finally starting to trade at a price that's high enough to change behavior. You know, for a long time, those markets were trading at $2 or $3, largely, I think, because the initial regulators had so flooded those markets with free allowances that you were just always in a supply-long market. And, you know, it's taken this long for economic growth to grow up to catch up with them. RGGI, arguably made the same mistake, you know, the Regional Greenhouse Gas Initiative in New England. And I think there was a pressure both in Kyoto and in RGGI on the part of the incumbent players to convince regulators it was going to be way too hard to come into compliance and you needed to flood us with allowances. And in hindsight, they oversold their case. We didn't do it in the Acid Rain program. And, you know, I think that history is probably part of what's turned some folks off from cap-and-trade because most people's understanding of cap-and-trade is something in a Kyoto or RGGI context. And people forget that we have these other two programs that have been around for a long time, and have worked really, really well, but they had some key distinctions with the way that the carbon cap-and-trade programs have been set up.

EMP: Let's turn back to your dad. I came across the other day a book your father wrote back in 1998. “Turning Off the Heat, Why America must double energy efficiency to save money and reduce global warming.” And I didn't have time to read all of it because I just found it the other day, but he was advocating back then many of the points that we try to emphasize on this podcast: unleashing market forces to limit carbon and other harmful emissions from fossil fuels, ending monopoly protections for utilities, and eliminating barriers to greater energy and economic efficiency. So unfortunately, very few of his policy prescriptions have been adopted and atmospheric CO2 levels have increased from around 360 parts per million then to around 415 ppm today. We're on a "highway to climate hell," as I think you heard in Egypt. But I want to focus on his idea that monopoly utilities are a barrier to getting where we need to. He said, “Let no one think monopoly utilities are slow and lumbering in all things. When it comes to preserving the monopoly, they have shown ability to act fast and savagely.” Not that there's any political feasibility of doing that, but are monopoly utilities a barrier to getting where we need to go here?

SC: You know, it's funny, you're giving me flashbacks. I remember when my dad was writing that book and bringing it home. And so you know, kept saying, can you throw some red ink on some chapters before I take them to the publisher? And sometimes I think in my current line of work, I'm just repeating conversations I had the dinner table 20 years ago, and somehow it still sounds prescient. So and I don't remember what my dad had to say about this, but it strikes me that we - I don't think we have a single capital-intensive commodity industry in the world that we've ever built without granting some kind of monopoly. Whether it's the electrification of the country, to the railroads, you know, or even like, you know, you know, the steel mills, okay, we didn't grant them a monopoly, but there were such big capital barriers to entry and patent protection that effectively we had monopolies there. And so, I'm hard-pressed to think of how you build out big capital-intensive sectors in commodities with an undifferentiable product without providing some kind of government revenue guarantee. Having said that, once those assets are built, the same regulatory model that made it possible to build them gives you no incentive to efficiently operate them. And so it's the transition for once those markets are built grateful to the people who did it. We did in the company that I ran before I came to Congress, we, for a variety of reasons, ended up having to become a regulated utility. And I didn't want to be a regulated utility, but I had to be one. And we ended up convincing the state of New York to invent an entirely new regulatory model for us. It's called a lightly regulated monopoly. And under that construct, we set ourselves up as a for-profit co-op. So we still had an obligation to serve in our territory that allowed us to attract capital, but we obligated ourselves to give 50% of all our profits back to our customers at the end of every year after we hit a target capital return. So we were still a for-profit entity. But it gave us a way where we had an incentive to invest in energy efficiency and conservation and a disincentive to do things that would work against us because we couldn't pass things through at an infinite level. And that proved to be really good. I'm not saying that's the only way to do it, but I think we need some creative thinking around, how do you maintain a regulatory structure that attracts capital to build a reliable grid while still providing the incentive to always be ensuring using the lowest-cost technology, dispatching the lowest cost assets? I mean, when we talked about the ‘92 EPAct, in addition to building all that combined-cycle, the nuclear fleet which by rights should have been running 24/7 went from running at like 60% capacity factor to 90% capacity factor in 10 years. It was the same plants, right. It was the same operators. There's no way that suddenly something magically happened. It was just that all of a sudden you had an incentive in the system that said, why don't we run our cheapest assets first. And we would never have gotten there purely with a regulated monopoly. But competition worked. At the same time, I don't think anybody outside of a regulated monopoly has ever built a nuclear plant, so we had to have those assets there in the first place.

EMP: Well, we've got a whole host of companies lining up trying to develop the next generation of nuclear. It'll be interesting to watch that. Congressman Sean Casten, Democrat, Illinois, thank you.   

SC: It's fun to do podcasts where we get to nerd out on energy policy.

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