Distinguished Speaker Series Presentation - Marne Jones (2023)

Well, thank you Kara, I appreciate that. Yeah, so Kara and I had the opportunity to meet. I was obviously in the utility and at the time Kara was at the commission, so that's where we had the opportunity to meet. So it's been great to build a relationship. Before I jump in, I want to just ask if anyone's willing to share what brought you in today. I realize there's free lunch, so we can't use that, but you know, what brought you in today? And I want to make sure that I'm going to hit on those areas for you and we cover that. This is you know, you're taking time out of your day, I appreciate that. I want to make sure we're hitting on things that you hope to get out of this. So is anyone willing to share what brought them in, outside of Jimmy John's?

Energy transition. Yes, Mary, you had something?

Great. All right, so I did prepare some slides and I intend to go through them, but most important too is that we're having that open dialogue. Appreciate if you have questions along the way, let's bring them up, let's have that conversation. As Kara mentioned, I've been in the industry for just over 21 years. My experience initially really stemmed from accounting and finance. The first half of my career was really focused in that area, the second half I've been in the regulatory side and then just recently leading our operations. So that gives you a little bit of my background. All right, now I've got two pieces of technology, so we'll see how I do here. As Claire mentioned too, I am a University of Wyoming graduate. Both of my parents graduated from the University of Wyoming, I have a grandmother that graduated from the University of Wyoming, so really proud Pokes fan. I was down in Arizona for the bowl game, it was super unfortunate that we lost in overtime, but great and still fun to see all of the Wyoming fans get together. So University of Wyoming, I did receive my Bachelor's of Science in Finance. I came to the University of Wyoming not sure what I wanted to do, ended up with Finance. Started my career in banking. First of all, I started with the State of Wyoming as a state bank examiner and then moved into Colorado working for First Bank in Vail. When they offered me the position, I was living in Cheyenne and Cheyenne's a wonderful place, but they said you could move to Vail, I was like, well that sounds fun. So I did, lived up in Vail for about four and a half years. At the time, decided that I really wanted to get back home. I was born in Wyoming here and went to school here, but in the meantime I really grew up in South Dakota, so decided I wanted to go back to South Dakota. Not sure what I was going to do, and I knew Black Hills Energy had a great culture, I'd heard good things about them as an employer, and I thought, well I'll give it a try. I think this is where I want to be, so I'll give it a try. So in 2001, I started as an accounting supervisor, and at that time it felt really a little bit of a step backwards. You know, I thought, gosh, I was at the bank, I was really growing, but I'm here for a reason, this is where my family is, want to make sure I'm getting closer with them. So I started as an accounting supervisor and what I did with that is really focus on how do I learn the business. Anyone can come in and be sort of that support system, but what's most important is going out and learning the business, meeting the people, what do we do, and how can I provide better insights. And so I've spent my career really trying to focus on being a good partner to the business and making sure I understand what we do. So you'll see from there I've grown tremendously over the course of my 20 years. Currently the Vice President of our electric utilities. You'll see on the right-hand side there a few pictures of some of the things that I've had the opportunity to do. Was able to ring the opening bell at the stock exchange a few years ago, that was a ton of fun. Got a picture of the coal mine in front of one of our diggers there. I'm also standing on top of one of our generating stations, it's our Gillette complex, taking a picture of the complex. I've been on line patrol through the Black Hills of South Dakota, beautiful. And I added the picture of Mount Rushmore, you're probably hard to see that one. But lots of fun, lots of engaging activities that I've been able to do, and that's something I continue to want to do, staying engaged with the business itself.

So who is Black Hills Energy? Black Hills Energy started business 140 years ago. In May of this year, we started serving electricity in Deadwood, South Dakota during the gold rush, so in 1883. We've grown tremendously since then. At that time we were again just a very small electric utility. We've done a tremendous amount of different business adventures over the course of the 140 years. We've had trucking companies, we have had energy marketing, we've done oil and gas, we did a telecom business as well in the Black Hills. So we've done a lot of different things. We've really laid our groundwork here over the past couple of decades on being a pure play utility. We have two segments within that pure play utility. One is the electric segment where we serve 220,000 customers in Montana, South Dakota, Western South Dakota, Wyoming, and then in Colorado. And then we have about 1.1 million natural gas customers across the remaining part of that footprint. So in our eight states, if we just go down, we've got Montana, Wyoming, and Colorado, and then we've got South Dakota, Nebraska, Kansas, Iowa, and then in the bottom right there we've got Arkansas. So how did we do that? We really did this growth through acquisition. We started our acquisition in 2005 with Cheyenne Light, Fuel and Power. We purchased them from Xcel Energy in 2005, our first endeavor into natural gas. At that time, obviously we saw the electric utility in Western South Dakota. Then in 2008, we acquired several gas properties and an electric property from Aquila, as you know they were up for sale after their energy marketing arm. This is around the days of the market fall down of that on the energy marketing side. And then in 2016, we acquired assets from Source Gas, which again increased our gas footprint. So as we look at our customers, again we serve in the eight states, majority of that is the gas side of it with the electric. But as we look at our asset base, we are about equal as far as assets go. So it gives you a little bit of insight of what kind of capital projects we do on the electric side of the business and the value that we have in that. Did I lose my speaker? I just need to hold it closer. We've got 1.5 gigawatts of generation, so 1500 megawatts of owned capacity. Our peak load is about 1100, so we're in a really good position there from an assets perspective. We're just under 10 billion in assets, and from a rate base perspective, where we consider how we earn from a customer perspective, so we're about 5.3 million in rate base. Any questions about who we are? I'm going to take a deep dive into each of them specifically, but anything on the overview to catch your eye?

So as we look at our electric system, as I mentioned, we've got about 1500 megawatts of generation. Really, we've got natural gas, we've got coal, and we've got wind. We also have some PPAs for wind, so purchase power agreements. That's how we serve our customers. We call ourselves vertically integrated on the coal side of the business. We own the coal mine, we produce about four million tons of coal a year that is directly serving our generation as well as some generation for PacifiCorp. All of that happens at our complex in Gillette, Wyoming. If you've taken I-90 up to Gillette, you'll cross right through the middle of our coal mine. Off to the side you can also see our generating facilities. So we've got that. We've got Cheyenne Prairie located down in Cheyenne, our Pueblo Airport Generating Station down in Pueblo, Colorado. We've got some small generation outside of Rapid City. And then our wind, we just constructed, I'm probably getting a little old with just constructed, our Quarrydale Wind Project has been online for about two years and that's just outside of Cheyenne. If you take I-80, you can see that project. And then we have three wind farms down in our Pueblo area as well. So vertically integrated, we find it really, really valuable that we own this generation as you talk about the intermittency of renewables and our fossil fuel fleet making sure they work really well together. So that's been a big benefit for us from the electric side of it. As I think about our transmission miles and our distribution miles, on the transmission side we are looking at expanding our transmission. We have received approval to build a 260-mile transmission line around the southern point of Cheyenne that will connect into our South Dakota transmission system as well. The purpose for that is to really stabilize rates for customers as well as providing easier access to energy markets. As you talk about the influx of renewable generation coming in, we want to make sure we've got pathways for that to get that into our system, as well as providing for additional growth. If you've been down in the Cheyenne area at all, you can see there's been a tremendous amount of growth. If you think about our distribution system, we've got just over 7,100 miles of distribution. If you straightened out all of our miles of distribution, you could go across the United States about two and a half times. So that's a lot of distribution as you think about the 220,000 customers. So lots of infrastructure to make sure that we can safely and reliably serve our customers.

Full service natural gas. As I mentioned, we've got about 1.1 million gas customers. We do not own our gas supply, we make our purchases from third parties. We typically put that either into storage in the summer months. We tend to inject into storage to be used in the winter. We'll talk about maybe some of what's happened this year. And then we use our... so we do about a third into storage, a third on long-term contract pricing, and about a third from daily markets is how we serve our customers from a natural gas perspective. We own storage in Arkansas, Wyoming, and Colorado, so we utilize that storage as well as our transmission lines and then obviously the distribution. If you straightened all of that distribution out, it would take you around the globe a little over one time. So there's a lot of distribution lines as you think about our footprint. From a gas supply, as I mentioned, we would typically inject in the summer. Historically, we've seen very, very stable gas prices. So pre-URI, we saw gas prices anywhere from $2.50 to $3.50 a decatherm all the time, every day, very stable. Made for really consistent pricing for our customers as well as our ability to think about how we strategically purchase our gas. Now as we've seen volatility, we've seen anything from certainly at Winter Storm URI we saw triple-digit gas. We're continuing to see some volatility for lots of different reasons, but at the highest level it's really supply and demand. So as we see that volatility, this summer when we were injecting, we were seeing $7 and $8 gas. Now we can look out, we can see some more economic gas purchases, so working through some of that storage. But that certainly has caused an impact to our customers on the natural gas side of the business, as well as our generation fleet, making sure that we have gas on hand for that as well.

Yeah, so great question, thank you. So as a utility, we have an obligation to serve, so we know we have to serve our customers. We do not make any money off of the gas that we serve. So if we pay $3 for gas, our customers pay $3 for gas. What's most important for our customers is stability. So that's where we enter into some of these hedgings. We're not here to market or we're not here to game the market as much as we are here to provide stability for customers and ensuring the delivery. So we want to make sure that we're providing mitigation against anything that would be non-delivered. We want to provide mitigation from volatility. Those will be our focal points. So that's where the hedging comes into play, that's where storage has historically been of value to customers with that lower prices in the summer. So as we saw that volatility, now we're saying, okay, it's winter, do we take from storage, do we take from market, and how do you blend that out? So absolutely there's arbitrage, but most important to us is not to try to game the system as much as provide the stability and the deliverability of that energy. Yeah, great question.

Yeah, I was going to say, I missed something on the previous slide that I wanted to share. So does anyone know, nationwide, what percent this was last year? What percent of our generation came from fossil fuel?

Generation energy, yes. Fossil fuel, yes, diesel.

All right, so specific to Wyoming. Wyoming is a really valuable state for Black Hills Energy as you think about the diversity that we have in Wyoming. So we've got the coal, we've got our regulated generation both in Gillette as well as in Cheyenne. So we've got coal generation, we've got natural gas generation, we have our Corydale Wind Project. So from a generation perspective, very diverse. We've got gas customers, we have electric customers, we have independent power. So we have a coal-fired generation station up in Gillette that is contracted long-term to our regulated utility, but once that contract expires, that really is, does it go to the market or do we take it back to customers? So really diverse focus here in Wyoming. As you think about our customers, we've got listed on there 178,000 customers, 56 communities, 433 employees. From an asset perspective, just over $2 billion in assets sitting in the state of Wyoming. Our largest customer on our system sits in Cheyenne, Wyoming. They've been a customer for some time and continuing to find opportunities for them to grow. So a lot of great things happen in Wyoming as we think about the importance of the diversity and what that value it brings. I was just in a conversation a little bit earlier this morning, and Winter Storm URI, everyone remember Winter Storm URI? It's something we'd like to probably erase, but as an organization, and again we're heavy on the natural gas from a customer side, but we spent about $550 million in four days on natural gas to serve our customers through the pipes as well as to fire up our generation. That amount of gas we would typically spend in about a year and a half. So we spent a year and a half of gas prices in four days. If you remember, it was over a holiday and gas markets aren't open over the holidays and weekends, and so we were buying it ahead and gas prices were anywhere from the teens to the hundreds. So very significant. So why did that matter for Wyoming? After the fact, right, everything lands in its place and you determine what really was the cost of that Winter Storm URI to our customers in Wyoming, and it was really fairly minimal compared to our other states. Especially on the electric side, because we relied heavily on our coal production and our coal generation, we didn't have any outages. So customers stayed on. If you remember, there were brownouts in the East, Texas was a mess. That didn't happen here, and it talks about the reliability of a fuel source that we have control over, as well as the generation that burns that fuel source. So minimal impact to customers, especially on the electric side, no reliability problems, and really, really cost effective at the end of the day for Winter Storm URI.

Let's see here. Oh, the other just a couple other things about Wyoming. So we purchased Wyoming in 2005, but over the last 10 years, our energy, our capacity needs for serving Cheyenne and the surrounding area right there has increased 50%. So the amount of growth in Cheyenne has been really astronomical in 10 years. So significant, and again the diversity of fuel source has been really valuable in our ability to serve that generation or serve that load.

So I would consider Dyno Nobel on the industrial side. Large commercial would be some of that data center that we're seeing. You know, as Microsoft joined us, it really has been a significant increase on the load. And Microsoft as an example, again as we get to talk about energy transition, Microsoft is a customer who has very, very lofty greenhouse gas goals. I want to say by 2030 they want to be net zero, and by 2035 they want to be zero every minute of every day. So significant goals. And we think about how do we best serve them today? They buy most of their energy off the market, so it's not all tagged, all the electrons are not tagged, but that is ultimately the goal to be fully renewable.

All right, so going into energy transition. Anything else about Black Hills before we kind of jump into the transition? So ESG. ESG really has been around for decades, and I think it continues to really focus on the ebbs and flows of where our nation is and where the world is from an environmental, social, and governance perspective. You'll see over the course of time there's been different focus points. I would say in the last five to seven years, maybe even a little bit longer, you've seen a really big focus on the environmental side of ESG. But ultimately it is a package. It's about doing business ethically, making good business decisions for our employees, for our customers, for our communities. So we do focus on this. We've also seen increased compliance reporting. There's lots of measuring sticks out there that we need to comply with, but ultimately it's about are we a good business partner. And so we've put a good focus on the ESG side of this, obviously as we think about our footprint. It becomes really a fine kind of needle to weave through all of the politics and really the assets that we have as we think about the ESG. So what is it for us? You know, environmental, it really is about the safe, reliable, cost-effective energy that we serve our customers. We want to continue to make sure those are balanced. And as I think about what others are doing, you know, saying, hey, we're going to close down fossil fuel, we're going to go 100% renewable, what a grand opportunity. But what does that mean to customers? Where are we at with our reliability? Where are we at with our cost effectiveness? And that's one thing for me, I want to make sure we continue to balance those three things. It's really important to be that good energy partner that we balance that. From the social side of it, we want to put people first. So that's our employees, our customers, our communities. As we make decisions, we want to make sure we're very centralized around the people. Without our teams, without our customers, we don't exist as a business and an organization. So it's important for us that we have the opportunity to make decisions that are focused on our employees. And just recently I had the opportunity to take on our safety department for the enterprise. So safety is also a significant focus as you think about what we do each and every day. The majority of our teams are out in the fields, they're working on the wires, the poles, they're working on the pipes. And as those come up, we want to make sure that safety culture is the highest priority for us. We're focused on diversity. We want to make sure that we look like the communities we serve, which is hard to do when you talk about some of the field, and how do we make sure that we're getting diversity in the door because we make better decisions and we're a better organization when we have that level of diversity. And then governance, how do we have processes and principles in place that we can execute that really are the backbone of our ability to be sustainable? You know, do we say what we're going to do and then do we do what we say? I think that's really key, and really a short way to say that compliance on the back end, that governance on the back end, is absolutely key to our success. And as I mentioned, there are organizations, Sustainalytics is one, Glass Lewis others, that are measuring ESG for organizations. It's become a very big piece for investors and how they think about whether or not they want to invest in your organization. Not just utilities, every organization that's publicly traded, big focus on how are you measuring up. And not just, there's not a fixed line in the sand to say when you hit this point you've won and you're green and away you go. It's a continuous movement of ESG and how are you comparing to other industries, how are you comparing to other publicly traded utilities or publicly traded companies. So the bar keeps moving, which gives us again additional opportunity to make sure that we're staying in tune with what's going on around us.

So this is our, these are our goals. This is our greenhouse gas reduction goals. I want to start on the gas side. So we've said, just recently last year we put out a goal that says we want to be net zero by 2035. And what does that mean? Basically we want to make sure that we've got about, as I mentioned, we've got about 30,000 miles of distribution line on our gas side of our business. About 10% of that is vintage pipe or it's uncoated steel, bare steel. So we want to make sure, so that's 3,000 miles of pipe, we want to make sure that we're replacing. On top of that, we want to increase our ability to have leak detection. So there's all sorts of emerging technologies from satellite visions, etc., to say how do you find leaks quicker and make sure that we're taking care of them. Our other piece of really emissions comes from third-party damages. So people planting a tree, they're hitting the pipe and creating a damage to our system, vehicle accidents will hit some equipment and cause damage. So continuing to work through both from the legislative side as well as our policies and practices of how do we reduce third-party damages to our system. And ultimately, is there a carbon or is there a market that we may have to buy some type of credits on to ultimately get there? But our main focus is preserving our system and making it as safe and reliable as we possibly can. So net zero by 2035. We've also joined a coalition called One Future. It's really a group of utilities and others in the industry focused on how do we make sure that we have that resiliency of our system and safety and reliability. So we're part of that coalition, which we continue to say is a great way to collaborate and share what we're finding. It's really for the greater good of the natural gas industry. So it's a big focus for us. On the electric side of the business, we use a baseline of 2005. So everything we're measuring is from 2005. So in 2021, we calculated really a 33% reduction on the electric side of our business with a goal of 40% by 2030 and 70% by 2040. How do you do that? So we want to again, we want to make sure that we're focusing on reliability, the cost effectiveness of our energy, and safety at all times. And so what does it look like to make this transition? We have through our long-term planning, which we'll go through in the next slide, identified the opportunity to convert one of our coal facilities, one of our older coal facilities in Gillette, into natural gas. And then we had a couple of storms. We said, is conversion to a single fuel source, which we no longer have control over because it's not just whether or not you can get the gas price, but it's really can you get the gas delivered? So creates additional risk to our system. So we've done additional analysis and said we really want to convert that to dual fuel. So we want to keep its ability to burn coal, we want to add its ability to burn natural gas. And I'm not an engineer by trade, obviously, but as you look at it, you can burn both fuels at the same time, you can transition between the two fuels in fairly quick turnaround. So really valuable asset and the flexibility. And I think that's what's really important about where we live and the footprint that we serve. It's cold, right? We need energy all of the time. And I think we've come to just rely on when you turn that switch, when you do anything, it just works. And it's important for us that that flexibility is key. And so dual fuel again, we think about the coal, we think about the control we hope we have over that and making sure that that product is delivered. Natural gas is a little different, and as we're continuing to see constraints on the natural gas system, we wanted to make sure that we have that agility with the dual fuel. Now where does the EPA come into this? As you all know, there are regulations that are coming out. We got a little bit of relief. They gave some regulations out here, gosh, late last year. Wyoming has a little bit more time before we have our full response on those, but we're continuing to again kind of weave that very fine thread of meeting our goals and meeting our customers' needs. So we'll continue to focus on that. And then by 2040, really looking at what, where does technology take us? Is it carbon capture? Is it the burning of hydrogen? What else is there that will help us? Maybe we keep those coal facilities running, but maybe they're burning off as something else, or maybe we're capturing the environmental toxins that are going in. So it's not for us about closing things down as much as how do we utilize our assets in the new environment and ensuring that we can continue to reduce our greenhouse gases. You'll see a lot of organizations have their goals set out, they have an asterisk behind them. They're very lofty goals and they have an asterisk and it says when technology comes, we will do this. That's something we're proud of at Black Hills, that we don't have the asterisk. That's not our focus. Our focus is to make sure that we're doing what we have today and we're looking at the long-term viability and flexibility of the assets we own. A couple reasons for that too. One, we have a great set of assets, but two, we have a great employee base that knows our assets well. They have a tremendous amount of expertise. We want to make sure we're continuing with that value chain.

So we, on the electric side of the business, we look out about every three to four years. We're responsible for looking out to say how are we going to best serve our customers from a generation perspective in the long term. And why long term? If you think about building or constructing new generation, it can be anywhere from, I'm going to say four to five year process all the way out to 12 to 15 years as you talk about nuclear. So if you're not ahead of the game, you're too late as you talk about permitting, supply chain, financing, all of that that needs to go into a new construction. And so every three to four years we are responsible for putting in front of our utility commissioners really our long-term plan. Out of that plan, so we filed in South Dakota, Wyoming in the 2021 time frame, and Colorado in our 2022 time frame. Both have come to conclusion, and what is determined in Colorado that we'll be adding 400 megawatts of renewable energy. So we are in Colorado, we serve our customers with natural gas and renewables today. Those are our two sources of energy, and we're going to add additional renewable energy there for a total of 400 megawatts. Colorado has by statute, you've got to be 80% by 2030 on a greenhouse gas perspective reduction. So big push on that. So what does that mean? If you think about a natural gas-fired generator, you're talking availability in the high 90s, right? So you turn it on and it's going to flow as long as you've got gas and your equipment's working. If you think about renewables, and it's going to vary by location and very slightly by your technology, but you're talking more in the 25 to maybe 45% range. So that's the reason for the 400 megawatts. You need those electrons. If you were to construct just a fossil fuel, you're going to need about half of that or less because of when it's available, right? We don't control when the sun comes out, we don't control when the wind blows. And so that's why you end up adding a tremendous amount of resources to meet the same energy output need. In South Dakota, that's our other option, our other opportunity to add renewables. And again, it's tied into the conversion of our coal-fired generation. How do we make sure we replace those electrons that may or may not be flowing? Again, dual fuel is going to provide us tremendous opportunity to operate that more cost effectively. But in those times, whether it's the EPA coming down to say you're not going to operate it in the summer months, etc., we want to make sure that we've got electrons that can do that, and we want to do that through the addition of 100 megawatts of renewables. Both of those, we want to own as much of those renewables as possible. And why is that? As you think about operating a fleet, you've got coal which can work a little bit with intermittent resources, it's not the perfect source of it, and you've got natural gas which is pretty good at ramping up and down as the wind comes on, they can ramp down, as the wind goes down, they can ramp up. So if we have control over our, the rest of all of this as a whole package, we feel like we're providing a much better cost to our customers in having that ownership and control of those assets. So big focus on we want to own our assets, we want to make sure that we're transitioning in a responsible way.

So what are some other things that we're looking at? So obviously long-term generation needs, but more important is what are some things we can do now to set ourselves up for success as what's happening in the environment, whether it's state regulations, it's federal regulations, what's going to change in our as political parties change. We want to make sure that we're not on our heels, that we're on our toes and we're proactive as we think about what does the future look like given a variety of circumstances that could happen. So hydrogen, it was great this morning to talk to the team here about hydrogen and the things that's going on. We're doing a couple of different projects. One from our coal mine, we shipped a barrel of coal to a research firm at another university and they're looking at to say can we use a chemical process that utilizes coal as a source of heat and really breaks it down into hydrogen and a really clean source of hydrogen. So we're in the midst of that process, looks very promising. We just had a team out there a few weeks ago and came back. I'm not a chemist and what they tried to share was very chemically oriented, but I think there's a lot of great things going on in hydrogen and how would we utilize that as a potential fuel source to our generation and do you ultimately could you run anything through pipeline from a natural gas side of it? We're also looking at what is the right mix of hydrogen into a generating facility. If you've got natural gas today, what is your highest potential of mix in with hydrogen? So we're working on a desktop study. If we can continue to get some funding, we'll be looking at maybe doing a small test pilot in Cheyenne at our natural gas facility in Cheyenne, Wyoming. So lots of great things on the hydrogen side. Where does cost come into play? Where does ability to scale come into play? I think are open questions that we have, but certainly something we want to keep our foot in and again use our expertise and our assets to help develop some of these areas. As a utility, R&D is not going to be our highest and best use because who pays for that? And that's every customer, and that may not necessarily be what they want and certainly may not be what our regulators want. But as we think about our diversity of assets and the diversity of our expertise, that's where we really want to focus. Carbon capture, as you are all aware, we've got House Bill 200 in Wyoming requiring carbon capture by 2030. So looking at that to say where does it best fit into this mix, how do we make this cost effective? And between the IIJA and IRA that came out here over the last couple of years, we think there's opportunities for grants to help move some of this technology along. Also want to make sure that we're thinking about it from a new fleet perspective. As we're bringing on new generation, is this an opportunity to do it really from the get-go? And the reason being is you look at some of our coal facilities, the last coal facility that we brought into service was in 2010. So coal in general is going to have a life of anywhere between 35 to maybe 45 years. Some of those are starting to reach a bit, they're getting more mature, how about that, we'll call it more mature now. You can still run them and you can still operate them beyond that 35-year time frame, but you're going to have to do some overhauls, some maybe some major construction to that. And is that where we want to put the financing for a carbon capture? Again, still more work to do and we certainly see it as an opportunity. We want to continue to focus on understanding that as well as for any new generation we bring on, what an opportunity if you can bring generation on that already has that as part of it. Clean energy ventures, this is really a natural gas and speaking, you know, really trying to defend the natural gas business. This is just an opportunity for some additional R&D, looking for ways to reduce the footprint of carbon out of natural gas, the ways that we can find best resources to mix with natural gas. If you were to do it with hydrogen, what does this look like for transport, what does this look like for our assets? We've got billions of dollars of assets and pipes, you may want to make sure that we preserve those with whatever type of emerging technology we may flow through those pipes. And then we're looking at batteries. We just issued a grant application for a battery, a lithium-ion. We're looking at this consortium here at the top that I mentioned is really a solid-state battery and looking at both short and long-term duration. You look at batteries today, most of them are four hours. Four hours isn't necessarily going to get you through a Winter Storm URI or an Elliott for that matter. And so four hours is not there, that is our best battery source today. There are some that are longer duration, but what are some other opportunities? And you think about the minerals that go into making batteries, are they viable, can we get them for the long term, are they cost effective? So lots of research on batteries. We want to make sure again that we're having that opportunity to say is it really part of our distribution system, is it part of our transmission, what's the best use of a battery, and what's the best type of battery that would really solve some of the gap as we think about that transition that's happening and how do we bridge what needs to happen to keep the energy flowing and still meet our renewable expectations, our greenhouse gas expectations?

And finally, this is a slide that I grabbed from EPRI, their Research Institute. I just thought it was interesting to look at the transition of technology. If you look at this, things that have met commercialization, you'll see that from concept to commercialization, running around that 45 years. Advanced nuclear reactors, you'll see at the top there in the beginning phases. Hydrogen, carbon capture. This is 45 years. The reality, and I think that's the question we ask ourselves, if we put the focus where it needs to be, put it in the right places, kind of get people rowing in the same direction, I think there's some real opportunity for us. You know, advanced nuclear reactors, as you all know, there's a project here in Wyoming to add nuclear. I know there was some legislation in South Dakota trying to support nuclear. I think it is part of our future, but it's not where it needs to be. And so that transition of fossil fuels to renewables is really key. There has to be some form of bridge to meet that future expectation. And I think nuclear is part of the future, but if it's where it really shows on here, we've got a ways to go and we've got to do something in between. So what are opportunities? And that's really important for us again because we're focused on that reliability and making sure that people can afford it at the end of the day. I can't determine what they can afford, but as long as I feel like I'm making the most cost-effective decisions, that's what's going to be important. And keeping the lights on, no one wants to pay when we can't keep the lights on. Any questions on this or insights? You guys probably have much more from the insight perspective than me on some of these emerging technologies.

Yes, yeah, yeah. So again, it went out to DC to a developer and it's really intriguing technology. They use these pellets that are about the size of a billiard ball and about the weight of a billiard ball, and you put them in and they just rotate around like a kind of like a gumball machine, creating the reaction that needs to happen. You've got the uranium inside of that ball, and then as they start to die, they fall out to the bottom of it and then they're stored underground for their 50 years or whatever their half-life is. Really cool technology. They build them in about 80 megawatt vessels and they sell them like in a four-pack, so you'd have like a 320 megawatt facility, but it would be in the four-pack to create some ability for intermittency management. They also construct them 100% underground. And why are they doing that? It's for security reasons. You know, how do you make sure you're preserving that energy and not having any major accidents? If you put it underground, you lose the ability to hit it with an airplane, look at it with a drone, people coming in and terrorizing our systems like they have been doing lately. So they build it really almost all underground, really effective. It's not up and running right now, the technology is there, it's working through the permitting process. And as I mentioned, when I was talking with them, they said, gosh, things are going really well, we think we can get permits in, you know, five years. Reality is we're seeing a much longer time frame to get some of that permitting done. I think it's a great future technology. Hydrogen, I think the opportunities are endless. We just got to better understand how do we scale it and how do we get it priced effectively and what else do we need to do to our systems to ensure the long-term viability of the assets we have with hydrogen in them and what are opportunities there. So certainly hydrogen, carbon capture again, I mentioned that earlier. I think it's a great opportunity for us. Where does it fit in given some of the age of our infrastructure today and how do we utilize that in constructing new facilities? I think is a real opportunity.

Right, that was all for my remarks that I have. I don't believe I have any more slides. I should just verify. Yeah.

Yes, so Regional Transmission Organization, again, so like a PJM on the East, if you've heard of PJM, SPP, MISO, those are all Regional Transmission Organizations, really focusing on, in its simplest manner, is you're more socializing everyone's assets for the greater good. And so again, in concept, I think there's a real value in it. It's just making sure that we're utilizing it in a way and we're replacing base load generation with electrons that are going to show up. And we don't want anyone to get lopsided. And I think you have that opportunity as you bring everyone together, that you may get a little lopsided if you have more renewable than you have some base load. And then oftentimes you can, some of these, and Kara, you certainly know some of the stats better, but some of them are running 90% plus renewable at times, and that's fantastic. And sometimes it's not, and you've got to make sure as that broader group that you've got enough of that base load.