Exelon Corporation (EXC) Earnings Call Transcript & Summary

Good afternoon. I'd like to thank this panel of U.S. power market experts for joining us today to examine the impacts of FERC Order No. 2222. My name is Michael Yuffee. I'm a partner with Baker Botts based in the D.C. office. And with us today are Abe Yokell, Managing Partner and Co-Founder of Congruent Ventures; Surya Panditi, the President and CEO of Enel X North America; Jeff Dennis, Managing Director and General Counsel to Advanced Energy Economy; and Mason Emnett, Senior Vice President, Regulatory Policy and Analysis with Exelon. I'm going to turn it over to each of the panelists to provide some opening remarks. Let's start with Abe.

Good afternoon. Abe Yokell, Co-Founder and Managing Partner of Congruent Ventures. We founded Congruent about 4.5 years ago to focus on the earliest stages of capital formation across climate and sustainability after a dearth of capital -- interest in the area over the previous 10 years at the earliest stages of capital formation. One of our core pillars is around the energy transition broadly. In the last 4 years, we have put together 36 companies across the portfolio. 11 of those companies are specifically in the energy transition bucket. And 6 of those 11 are squarely focused on distributed energy resources, which is obviously topical for 2222. Fundamentally, it is our view that distributed energy resources must be brought into the power markets. We had that view before some of the latest changes and FERC orders. And obviously, we view 2222 as a fantastic step forward. Fundamentally, from a technology point of view, distributed energy resources, almost all have the capability of interacting with a digital format, which is a perfect format for tech investing and tech enablement. The big miss in our mind, which I think we're going to get to talk about more, is the technological and bureaucratic and telemetry requirements as well as, of course, the market construct to enable these DERs to actually participate. Just to give you a sense of it, I'm going to name a couple of our early stage companies, some of which are now not as early as they were 3 years ago when we invested, to give you a sense of how we think about some of these opportunities. One of the companies that we were the first institutional investor in this company called Leap Energy, they're acting -- I think most of the audience here will understand that there's some nuance to this, but they're acting as an API to the wholesale market -- markets for distributed energy resources, simplifying the interaction and aggregation of DERs for power participation with economic terms. Blueprint Power, which is optimizing the economic dispatch of C&I assets behind the meter to participate into the local power markets. Camus Energy, spelled as C-A-M-U-S but pronounced as Camus, as I discovered in diligence, which is the orchestration of distributed energy resources both behind the meter and in front of the meter, utility side assets, working in concert. And that's basically a DSO in a box software platform. So this is actually -- utilities are the customers there. Some more ancillary but directly relevant companies as well. AMPLY Power, which is a fleet charging as a service business, most of their customers are fleets. But as you aggregate these large fleets, buses, transit agencies and the like, you obviously have some participation with the power markets potentially. Span.IO on the residential side is a smart breaker box natively enabled to interact with power markets with the proper integration that's pretty wired for solar, for storage, for home storage and for EV charging. And then Omnidian, which is a tech-enabled O&M provider, a physical O&M provider, not financial, for small C&I, anything below SCADA, anything with inverter data and residential assets. So even before 2222, we've invested pretty heavily across these markets. We do think from a fundamental economic standpoint, there will be a massive shift into DERs in the next 10 years, and it is obviously going to affect the wholesale power markets. We are positioning ourselves to take advantage of this shift. We're very excited about some of the developments over the next couple of years, even if they are somewhat unclear. So I'm very much looking forward to the conversation.

Excellent. Thank you. Now let's turn to Surya.

Well, thank you. Firstly, thanks for inviting me. My name is Surya Panditi. I'm the CEO of Enel X North America. By introduction of Enel, we started as a utility. So we're one of the largest energy companies in the world. In 2019, our revenues were north of $90 billion. And I believe now we're one of the largest renewable companies in the world. And we have about close to 50 gigawatts of renewable capacity globally. We've participated and are -- because of our roots, in many ways, the energy transition is something that we're not only talking about or involved with, but we've been living it. And so our learnings are what we've brought to the table. And in terms of our creation of Enel X, it was really -- as we started seeing this transition, the conclusion we came to was that we could bring together our technology, whether it's software or other product technologies as well as the ability for us to partner with various segments of the market, commercial, industrial, utilities, government institutions, et cetera. And along the way, we've acquired assets in a few different areas. So while we started with the demand response as one of the acquisitions we did, we then have since grown into acquiring other entities. And globally, we also have a very large -- we are, I believe, one of the largest owners of e-buses, primarily in South America but in the other markets as well, where we own and operate these electric buses. So when we look at distributed energy resources and the FERC Order 2222, we're making -- today, we're making investments in distributed energy resources in many different forms, where they could take the form of behind-the-meter stand-alone or PV-attached storage. We're doing distributed front-of-the-meter projects like nonwire solutions. We did that in, for example, in New York City. And with the acquisition of EV charging, we are going from residential but also into commercial. And I mentioned the e-buses. So all of these are in positions to participate as assets in distributed energy resources. And if you look at what happened even recently with the weather events in California and Texas and previously in Puerto Rico and other areas, the ability for these assets to participate in the right construct, which Abe already touched on, is, we believe, very important. It's important for resiliency reasons, for fiduciary reasons, in terms of not overinvesting or using assets that are providing kind of value today but can also provide value when the grid is running hot. And so I'm sure we'll come back to talking a little bit more about the various opportunities as well as challenges. And as a large company that's in a position and willing and able to make significant investments, we think it's important that our voice be heard. So we also have a very active regulatory arm. And so everything I'm going to talk about today is public that we've taken positions on. And I'm looking forward to the panel discussion.

Excellent. Thanks, Surya. Now we'll turn to Jeff.

Thanks, Michael, and thanks to Platts for inviting me. I appreciate the opportunity. For those who don't know Advanced Energy Economy, we are a multi-technology business association that ranges from utility-scale wind and solar really through distributed energy resources writ large. So demand response, distributed generation technologies, energy efficiency, smart thermostat, smart device manufacturers, all are part of our membership, along with large users of advanced energy technology. These are large companies that are looking to power their operations with more clean advanced energy technology. And all these companies come together with a single vision of making the energy system smarter, cleaner and ultimately more affordable. And Order 2222 is something that we have pursued really over 4 years, the idea of how do we integrate this growing set of distributed energy resources into wholesale markets. And when I think about Order 2222 and its importance, I think it's helpful to put it in some context. And both Abe and Surya referenced some of this context but maybe just to repeat it. First, DER adoption is growing rapid, and that's due to a combination really of falling costs for the technology; consumer preferences and demands, consumers want more of these technologies; and state policy incentives are really driving a lot of DER adoption as well. DER investments, according to Wood Mackenzie, are expected to eclipse $110 billion between 2020 and 2026, with distributed solar, electric vehicle infrastructure and distribution connected and behind-the-meter storage really as the bulk of that investment, consistent with what folks have already said on this panel. Microgrids, which are, in some ways, distributed energies and resources in their own right as well as collections of distributor resources in their own right, AEE's 2021 market report, which we just released about a week ago, showed that U.S. spending was over $3.1 billion on microgrids in 2020 and has grown 13% annually since 2011. And further, global revenue for energy storage has grown from just $117 million in 2011 to $3.8 billion in 2020. And in the U.S., we've seen a climb from $81 million to $1.6 billion over that time period. And about roughly 15% of that investment or so is in distribution connected or behind-the-meter storage or what we would call them DERs. So I'll just put in context how rapidly growing this market is. Put on top of those already advancing trends, the fact that the U.S. economy is rapidly electrifying. In response to desires to obviously reduce CO2 emissions broadly, folks are really focused on electrifying transportation and buildings, in particular, because those are 2 of our leading contributors to greenhouse gas emissions. So when you look at markets there, you see that the growing affordability of digital technology sensors, smart thermostats, artificial intelligence, cloud computing, all of these advanced technologies are helping to electrify buildings, make those building controls more active and turn them into assets, distributed assets in their own right. And when we look to transportation, I'll again sort of reference our recent advanced energy market report. Advanced transportation, which includes primarily -- which is primarily driven today by plug-in electric vehicle sales, is growing at a compound annual rate of 17%. And global revenue in advanced energy -- or advanced transportation reached nearly $37.7 billion in 2020 alone, so just another perspective on how this market is growing. And finally, when you look at the broader system, we know that we're going to continue to increasingly rely on variable renewable resources to generate bulk electricity. Again, we have economies that are decarbonizing, and they're looking at the electric system as the platform to do that. That's going to create needed grid flexibility. We're going to need resources that can react rapidly to changes in supply as well as demand. And so we need more flexibility on the supply and the demand side. And we have little flexibility on the demand side today. What little we have is through dynamic prices, which we frankly don't have in many places. So DERs can be another contributor to unlocking that kind of demand side flexibility. It's really having those on-site resources that can allow demand response and other kinds of responsive technologies to come onto the grid. So all of these trends and market realities kind of point to the need to maximize utilization of DERs. It's a growing resource on the grid, and it can do many things. DERs are unique in many ways, particularly when you think about energy storage but other technologies as well, in that they can really provide services on a lot of different levels. They can provide resources behind the meter, customer value benefits. They can provide resources at the retailer distribution system level, whether it's trimming distribution system peaks or other -- avoiding certain kinds of distribution investments, all of those things as well. But we have this growing set of resources. And like any other resource on the grid, maximizing the use of it to provide all the services it can provide, provides broad benefits not just to the owner of the resource but also to customers at large. And as I mentioned earlier, we can also make this resource a flexible and a dispatchable resource to meet all those new needs I talked about. But here in the U.S., we have our own kind of fractured regulatory and market landscape that makes it hard to fully utilize DERs to provide all of these services. Because the key to maximizing the potential of DERs and really to open the market for them is to allow them to stack revenues across that range of services I talked about. But of course, those services span state-regulated retail markets and retail service as well as federally regulated wholesale markets. And while state DER policies have driven a lot of DER investment in value, there is -- oftentimes, they're limited in the values they can capture. And they may not be able to capture the benefits that we can get from using them in the wholesale market. And look, just to be a little controversial, not all utilities have been quick to embrace customer access to DER technologies as well. And that's really resulted in fragmenting the value of those resources to the broader grid and to customers as well in many cases. So Order 2222 is really a response to all of what I just mentioned. And it's also a recognition by the Federal Energy Regulatory Commission, FERC, that in markets where it relies on competition to ensure just and reasonable wholesale rates, allowing a growing set of resources like distributed energy resources to participate and to compete in those markets on a level playing field to provide the services they are capable of providing, improves competition and ensures just and reasonable rates. And that was FERC's primary legal justification for taking the action that it took in Order No. 2222, which, as I think we all know, requires RTO and ISO market operators to ensure that these resources can be aggregated together and provide all of those services they're capable of providing. So what does that do? It unlocks a lot of use cases that allows DERs to stack multiple value streams like I talked about. Think about on-site distributed generation plus storage, using that resource not only to serve on-site needs and goals but also to contribute to wholesale market needs. Think about a future, business models around things like Surya mentioned electrified buses, right? You can envision a use case in which all of that infrastructure that surrounds electrified transportation, school buses, in particular, is one that I like to use, can be a really valuable resource in the wholesale markets. While distributed energy resources are used for many different things, there's really nothing more reliable and predictable than a school bus. It leaves those depots at the same time every day. It comes back at the same time every day. And so that's a set of resources that can really earn a new set of revenues in the wholesale market, use that to reduce the delivered cost of those technologies to consumers and expand the market for those technologies as well. So I think I'll stop there and look forward to the discussion.

Great. Thank you, Jeff. And last, we'll turn to Mason.

Great. Thanks. So Mason Emnett, I'm with Exelon Corporation. So for folks that aren't familiar with Exelon, we're a large public utility holding company, where we have operating companies, utilities, operating from the Washington, D.C. area to Atlantic City, so think kind of Mid-Atlantic Eastern Seaboard, as well as the Chicago land area, serving 10 million customers, electric and some natural gas. And we also have a very large generation business. The largest kind of chunk of our generation is nuclear, but we own and develop all sorts of facilities right down to the customer-oriented distributed resources as well as utility-scale renewables and have some storage actually being developed on our utility side, not on the generation side. And then we are a competitive retail provider. And so we operate in restructured states, connecting customers to competitive electric and gas supply. So we see these issues around distributed resources really from a lot of angles. I'm going to focus -- kind of wear the hat of the utility side of our business for the purposes of this conversation since I think we've got the kind of developer side well represented. And I appreciate Jeff's remarks on kind of the opportunities that are presented by distributed resources and aggregation and being able to participate in the wholesale markets. The way that we see our utilities operating in the future with an expansion of DERs is really as an enabler, an enabler of choices for the customers. And I hope that Jeff wasn't pointing kind of to our utility systems as some of the ones that are less comfortable with DER expansion. The way we see ourselves is we are trying to support the choices that our customers make and participate fully in the development of the associated market structures. But a couple of the phrases that were already thrown out of, bureaucratic -- the bureaucratic construct that Abe mentioned and the fractured regulatory landscape that Jeff mentioned, that's the world that we live in. We are regulated entities. And so as we think of ways to enable the kind of smarter cities, EV expansion, further electrification of homes, new energy management tools for customers, we come at it from the perspective of also being a heavily regulated service and trying to manage the meeting of customer needs and expectations with the expectations of our regulators and the requirements that they impose on us. And so some of the questions or kind of challenges in these conversations that we're asking ourselves fall into 3 general buckets. So first is, how do we plan our systems for future use? What are those use cases going to be that Abe and Surya and Jeff talked about and how it takes years to plan and develop utility systems? So what is it that we are planning for? How do we have sufficient information about what is needed from our customers in the future for use cases that we are not going to be providing? It's things that customers are coming up with and getting that information and being able to plan our systems for what the future needs of them. And then the second set of questions are on who is going to pay for those investments, through what rate designs? All of our investments are recovered through rates that are approved by regulators. And so we have to address the allocation of costs that -- what are the price signals that are being sent to promote efficiency in the development of resources and achieve the policy goals that the regulators have. And then from an operational perspective, we ask ourselves questions about visibility and an understanding of what's happening on our system. And so that does raise questions of kind of metering and telemetry that Abe touched on. So that as a system operator that's obligated to ensure kind of resilience and reliability, continuity of service to all of our customers, what's happening on our system and how are the various uses interacting with each other potentially so that we can ensure that continuing service for all of our customers. And so those are just some of the questions that we are working through as we kind of address the challenges of specifically Order 2222 implementation, but I think a broader conversation about this transition to a more decentralized, more customer-facing, more customer-centric electric system. So thanks. I appreciate being part of the conversation.

Excellent, Mason. Appreciate it. So -- yes.

And Michael, I should note that Exelon is definitely -- was not in the list of utilities I was thinking about for precisely the reasons that we just heard from Mason, all of those thoughtful questions that they're asking. We're actually working on a project with Exelon to work on some of those questions. So definitely did not include him in those remarks.

I appreciate that clarification, Jeff. So I think we can jump right into some questions. And let's start with each of you discuss the potential that we see coming out of bringing DERs into the wholesale markets. And everybody has raised -- brought words like obstacle or challenges, questions. So let's dive into those. And I think first question is, what does the panel see as the biggest obstacle to implementation of Order No. 2222? Is it the jurisdictional issue that needs to be overcome for the technological challenges? Or is it the economic challenges that folks are facing? I'll throw it to Abe to start on this one, provide what he thinks might be the biggest challenges that he sees.

Yes. It's interesting. There's -- technology is developed not in a vacuum, right? So when there's a clear market signal, a clear price signal, you can find tech solutions. In fact, the tech stack today exists. So the question -- and we're involved in many of these companies. The question to me is kind of the technological plus market design, rate design plus telemetry, plus bureaucratic. It's kind of a dog's breakfast. It's a -- this is the challenge. It's a big mess. But if you take a big step back, what you recognize, and it's easy to lose sight of this, is that the economic imperative of the cost of these DERs getting deployed is so extreme right now over the course of in a 5- to 10-year period. Everybody talks about the dollars deployed, but fewer people talk about the fundamental mismatch between the cost of producing the marginal electron with solar and a little bit of storage versus historical fossils, which gets into rate design. There's real value in firm provision of power to us, right? So it is a big mess of issues. I don't think there's a single answer. What is clear, though, is that if these DERS are not brought into the wholesale markets, there's going to be bigger problems. So it's going to get figured out. I don't know what it looks like, and it's going to be messy along the way. And I suspect there's going to be different solutions despite the FERC order coming down across at least many jurisdictions, not all. There's going to be some homologation, but it's still going to be all over the place. I mean, watching Leap try to integrate into the major ISOs today, as everybody here knows, California ISO is not New York ISO. It's not New England ISO. It's not ERCOT. Like this is motherhood and apple pie. But it's a mess, right? Each one is its own special kind of portion of love, and all of that's going to have to be figured out over time. It's going to take a while, but it needs to happen.

So Mason, Exelon seems to sort of -- to borrow Abe's description, seems to be at the table of this buffet of challenges. So what's your perspective? Are the -- which of these challenges probably needs to be tackled first? And is Order 2222 FERC's way of trying to break down some of the jurisdictional barriers to help foment some of the change that needs to happen?

Yes. I think that FERC's order is forcing a conversation. And along the lines of what Abe was saying is the -- I think to answer your question, what's the biggest obstacle between the 2, I think they are all obstacles that can be overcome with coordination. And so I'm not sure -- I think that coordination is itself the obstacle. You have lots of actors in terms of potential developers in this space or customers themselves, right, very large commercial customers who are developing their own resources for uses on their system -- on their own systems. And then you've got the utilities themselves, the distribution companies, right, the kind of platforms, the enablers, but some could say the gatekeepers, right? You've got the regulators that have effectively established the rules by which we all play, those regulators being both at the state and the federal level. You've got the aggregators who might sit in between the DER -- the company is wanting to sit in between the individual distributors or resource owners and these various markets. And they all have their own interests, their own needs, their own concerns, their own limitations. And those all need to be vetted and understood in order to really get to that next point. And I think that was the forcing function of 2222. I mean, it's a very simplistic way of, "Okay, RTOs, go off and develop rules by which DER aggregations can participate in the wholesale market." Okay, fine. But in order to do that, you need to answer many, many ancillary questions. And those ancillary questions is really where the rubber hits the road. And ensuring kind of full communication and coordination between all the actors and resolving those ancillary issues is, I think, the thing -- is our challenges or collective challenge.

So Surya, what is a company like Enel X doing when facing these challenges? What's the approach to try and move the needle in furthering the integration of DER?

Echoing a bit on what Jeff and then Mason and Abe commented on, let's start with the financials. So we are able -- and we do projects where we invest millions -- tens of millions of dollars in distributed energy resources. And when you look at those investments, you have to look at what is the potential return. And Jeff was talking about the revenue stacking. It becomes very important for us to be able to maximize that return on investment by participating in both the -- it could be providing services or demand charge management, for example, to the local -- to the behind-the-meter customer but at the same time, to be able to participate in energy markets and provide grid services. And so the places where we are most active in those investments are those regions, and we talked about fragmentation already, but those regions where we can find effective and sufficient return on those investments. And of course, there are also incentives like [ SGF ] or smart -- or the [ NWS ], depending on which particular region you're in. Having said that, what we do is when we look at these projects, we have to make some assumptions about time frames. And interconnect is such a big challenge for us in the sense, for anyone like us, if you're not able to have a decent forecasting of when you're able to get past the interconnect requirements. And some of these were designed when the projects themselves had a different feel to it. There were maybe solar exporting projects sitting in front of the meter and may not apply to the kind of projects we're pursuing. But -- so we're certainly very anxious to see more uniformity in different markets as well as to be able to address these -- some of these challenges. And as Abe was saying, the technology, it's not easy, but it's something that will be driven by the right kind of construct on price signals, on the right market structures. And today, we manage -- in North America, on our demand response, our portfolio is about 4.7 gigawatts. So we know how to do it. There's a software for it. We know how to do the market participation with the -- not just software, but it's people, the processes, all of that. And as you start adding these distributed energy resources, we also have to have the software that optimizes them and make sure that you're sending the right signals at the right time for that to be a load or to discharge. But it all starts with the right kind of market construct and the right regulatory framework, including -- I would put interconnect with that. And that's what we look at. And as we look at the areas that we would invest in and areas that would also be challenging from an investment.

Excellent. I want to take a quick opportunity to remind folks that we'll have a Q&A session. So please submit any questions that you might have so that when we get to the Q&A, we can start rolling right into them. I'm going to -- picking up on Surya, picking up on your discussion of interconnects, Jeff, you've been at the front lines fighting the issue of interconnection and queue backlog. So from your perspective, how can DER overcome these existing issues in the various RTOs?

It's an interesting challenge. I think a lot of what -- one thing that's interesting to note about Order No. 2222 is that FERC was very careful to lead jurisdiction over interconnections of distributor energy resources with state regulators. And that provided a measure of clarity. But what it did also was kind of add to the coordination challenges that Mason talked about and that are real when you think about distributor energy resource participation in the wholesale markets, because states are going to retain control over distribution interconnection requirements. But they need information about what RTOs and ISOs will need in order to be able to swiftly integrate these resources into the wholesale markets as well. And so that's another layer of communication that needs to happen. And so that's certainly something that we're shining a light on as well to ensure that those kinds of requirements are embedded in whatever interconnection requirements there are. So that there's -- so that we don't have to go through a second layer of interconnection at the wholesale level. That's been a concern that really has held back DER integration to date. And so that's certainly something that we have talked about. I mean, to Surya's earlier point as well, trying to get some manner of consistency between different interconnection requirements in different jurisdictions is also critically important.

Yes. I could jump in there. I think a little bit from the utility perspective, sharing the frustration, the interconnection process, the -- looking at the RTO level, so large-scale projects that are coming online, I think there's consensus among everyone, right, that the -- we need improvements in that process. The backlog that's occurring at the RTO level is -- it's crushing for developers. It's crushing for the transmission owners who are trying to run the studies. It's crushing for the RTOs trying to manage this process. And so we need to get to a better place there. But then as to Jeff's point, as you move to the distribution level for the interconnection of DERs or aggregated DERs, one concern that we would have is that you don't start to see that -- those same levels of kind of queue backlog and problems starting to materialize at the distribution level and trying to proactively get ahead of that issue not only for our own sanity, right, but for the customers that we're trying to serve. And then with an appreciation and a nod to Jeff of an understanding that it is frustrating from the developer perspective to be faced with different sets of rules, with different systems that you're connecting to. And from the utility perspective on that, so, say, the Exelon perspective where we have 6 different operating companies operating in multiple different states, that's the world that we live in as well. It might be easier to have a single set of interconnection rules across our own system, but that's not the regulatory -- our regulators haven't chosen to give that to us. And so it is the limitations that we live within. But we fully appreciate that it's frustrating from the developer perspective knowing, well, if they're talking to one Exelon company in one jurisdiction, they're going to get one set of rules. And they go to another Exelon company in a different jurisdiction, they're going to get a different set of rules. Those -- we can work with the developers to propose enhancements to our rules. But it's part of a regulatory process, which takes us back to the coordination and really the big picture of where we're trying to go and keeping everybody aligned and moving in that direction.

If I may just add to that. I do agree, and I'm encouraged by the discussions I've had both with utilities and system operators that there's a recognition and a willingness to work. And I have to give credit to Jeff and the AEE team. They're very instrumental in making the case with the different authorities in order to move this forward. So we're not expecting it to take tomorrow. But as long as we're making progress along the way, it's [indiscernible].

So from the perspective of the DER aggregators themselves, what do we think -- what do you all think is the most important thing that DER aggregators can do in the realm of self-help to help push for their implementation? So let's start with Abe.

Okay.

Jeff, if you want to chime in, feel free.

Sorry. I wasn't sure if it was directed to someone. No. One of the things I was going to start with, maybe just to tee this up, is one of the things that we do think is important to move forward is to find out some use cases. So as an industry, we've been clear that we want the rules to allow a variety of use cases so that companies can innovate and find new solutions. But at the same time, after Order No. 2222 came out and we talked with RTOs and ISOs, a lot of them came to us and said, "Give us some near-term use cases, things that we -- that your companies are looking at in the near term so we have something to envision." And we thought that was a reasonable expectation of us. And so we're trying to define out some of those use cases now, working with companies like Surya's and others to say, what are we looking at in the next year or so. I think defining out use cases, what the barriers they're seeing today in order to use those -- to put those use cases into the wholesale market is one of the biggest things that we can do. And so we're doing that now. One other thing I'll mention, too, is I think really working hard with distribution utilities and RTO/ISO market operators around the kinds of data and requirements they need in order to settle wholesale market transactions, that's a place where we're seeing some friction that we're trying to work through, where in some cases, we see a real desire to just have -- we're going to use kind of the old data formats that come off meter. And what that misses is that there's a lot of ways that we can get data through smart devices like thermostats or other things like that, that will allow for settlement quality data. And so working through some of those issues collaboratively, I think, is another way that we're going to unlock a lot of this.

Excellent. Well, let's turn to the Q&A. And we have one question. And the question is, with this order, would it -- sorry, would it impact -- I'm trying to read this. It's -- when can we -- what can we realistically expect as far as timing for the Order 2222 to be implemented? That's the first question we have.

I can go, and others can chime in. So I think there's 2 parts to this question. One is -- so technical implementation from the FERC perspective is the compliance filings are developed, submitted, made effective. And so the rules are put in place by which the aggregated DERs could participate in the RTO market structure. That's a multiyear process, I'd say. Several of the RTOs, including PJM, have come in and requested for extension of time -- requested additional time in order to complete that compliance process because of all these complicated issues that they're working through. And then it takes FERC a period of time, usually a series of orders to get through, in order to accept the compliance filings. But let's just call it end of next year that the compliance process is complete. That might be a little aggressive, but let's just say end of next year. So the rules are in place, but that doesn't necessarily -- I think what the core of the question goes to is when should we expect to see kind of the true expanded participation of DER aggregations in the wholesale market? That's a little bit more time, right? And it goes back to what Abe was saying of there are financial reasons why customers are moving forward with particular use cases based on the value that is -- that can be achieved now. But then some of the stuff that Jeff was talking about, well, it's truly the kind of the stacking of the values that's going to unlock the kind of true expansion of DER aggregations. And that, in my mind, is we're a few years off on that. We're laying the groundwork for it and certainly see it coming and are probably, from the regulatory and rules perspective, not going to be done fast enough, right? That's usually the way the regulations work. But in my mind, I think it's a few years off because we need to get these ground rules in place. But I'm curious if others disagree.

Yes. Maybe one other person could chime in before we have to close out the session.

I guess I'll chime in. I think that's right. I think everything that Mason said is right. From our perspective, we obviously are pushing for as soon as possible. This is a market opportunity we've been looking for. From the RTO perspective, we've seen dates that range from 2023 in terms of when are the market rules going to be effective, and I can start bidding all the way out to 2025 and 2026. And like everything else, I expect we'll land somewhere in the middle. One thing that we have emphasized, and that we hope folks will emphasize as we go through as well, is that there can be a phased implementation of this, where earlier use cases can be implemented earlier while we work on the more complicated things that require longer term. And I think that's a question that ultimately FERC will have to decide is how it allows those kinds of phased implementations.

Excellent. Well, we've reached the end of our session. I want to thank all the panelists, Abe Yokell, Surya Panditi, Jeff Dennis and Mason Emnett. This concludes day 2 of the conference. Please tune in tomorrow as we feature 3 futuristic discussions: EV evolution, the digitalization of energy infrastructure and the future of the energy workplace. We will also cover project finance and M&A trends as part of our day 3 coffee chats. You can access the coffee chat by clicking on the Zoom link at 10:20 a.m. The link is located in the resource list, and general sessions will start at 10:45 a.m. We encourage you to take this time to network via text chat or private video chat in the virtual platform. Thank you, everyone.

Thank you, Michael. Thank you, S&P.

Thank you.

Thanks for having us on.

Thank you.