Name: Advanced Renewable Energy Reporting: Prove ROI with Confidence
Uploaded: 2025-09-30T19:31:21.527Z
Duration: 59 min 28 s
Description: Advanced Renewable Energy Reporting: Prove ROI with Confidence

Transcript for "Advanced Renewable Energy Reporting: Prove ROI with Confidence": Hello, everyone. Thank you, guys. Thank you all for joining us today, for our webinar. We have an exciting topic with, great line of speakers today speaking on the ways of advanced renewable energy reporting, ways to prove our eye with confidence. My name is Joel. I will just be helping with the housekeeping items, and we'll shortly transition you guys over to Charles. So we're gonna give everyone a few minutes to hop on, and from there, we'll get started with the session. This is your guys' first time joining our Engie Impact webinars. We're super excited to have you here. We have, upcoming events that, you're welcome to join as well. You can check out our website, engieimpact.com and the events and webinars section to find more sessions like these where you get informative, insights. Great. So we'll jump into the session. So before we get started with the material, just a few housekeeping notes. The session is being recorded, and the recording will be made available following the session. So if you, you know, missed a section or have anything that you want to reference, you'll be able to watch the recording back. We also do encourage audience engagement. So we do have the chat and q and a functions on your sidebar. Please feel free to drop any notes that you guys have, any questions you guys have. And if we have the time at the end of the session, we will answer them. If we do not get to your question within the time, we will follow-up with you individually via email. So, yeah, with that, let's get started. We will transition over to Charles. Charles, the floor is yours. Thanks, Joel. Hello, everybody. And and thanks again for taking a few minutes, today to, you know, talk about renewable energy with myself, with my colleagues, George Todd, and Robert Smith. We're three members of, ENGIE Impact's renewable advisory and business operations team. All three play fairly complementary roles in helping our clients achieve their decarbonization, ambitions, their sort through their challenges. Keep the introductions pretty light, but making sure that we've included the contact information here on the slides so that way and as Joel mentioned, we'll be distributing the slides after the call. And if you wanna get in touch with any one of us, feel free to reach out directly. We've got a pretty what I think to be an exciting agenda, today. Though, in full disclosure, I'm a little bit of an energy nerd. We'll help set the table by talking about the challenges that everybody is now, well, not everybody, but many of us, on this call will be pretty well accustomed to or familiar with and thinking through the changes in the energy, market landscape, policy environment, disclosure rules, and thinking about those changes through the lens of, how they impact our businesses. We'll we'll give a nod to the ways renewable energy can help sort of insulate or, protect from market uncertainty, and we'll walk walk through, real world examples of how we've helped our clients report on their renewable energy programs, their assets, their contracts in a way that, helps unlock business opportunity. Right? Unlock new capital for solar investments, unlock new budget for, renewable or sustainability programs, or even just unlock new bandwidth. Right? Concentration or partnership with other folks within the organization where we're asking, you know, legal or procurement partners to help play a role in our sustainability journeys. And so, again, we'll make sure that we try to leave some slot or at least some time today at the end of the call for some q and a. So if there's anything that catches your attention or raises a question, please feel free to drop a note into the chat box, and we'll make sure that we circle back to it either on this call, or shortly following. So to to get started, you know, I think through the new era, for energy and sustainability programs. And in preparation for this call, we were talking with one of my, colleagues on our renewable advisory team, and he he just brought up the adage from Mike Tyson that everyone's got a plan until they get punched in the face. And I I couldn't think of a better way to characterize the environment that we're in. Right? So, many of us that are a little bit longer in the tooth in the energy, landscape or in their energy careers we'll think back to a period of with some volatility, but over the last couple decades, like, you know, pretty stable, pretty predictable budgets. You're always looking for some cost savings, cycle over cycle, contract over contract. Very often those cost savings arise, and it's the exception to the case, when they don't. Right? So thinking back until even, like, 2021, energy prices started to increase pretty dramatically for a short period of time. And it was painful for con companies that were looking at, you know, 10%, 20% increases in their energy expenditures. That paradigm is changing, and we're starting to see this, new environment. And, you know, we've been watching and waiting for these signals and increasing power demand to turn from signal, to reality. And so we've been thinking about things like the growing share of electrification in our transportation sector, like EV charging, a growing manufacturing base, and, more recently, the boom in, in data center load, and that's really starting to take shape. And so that's not only showing up in the forecast. So we give a couple examples here where ERCOT, effectively, Texas's deregulated energy market, is expecting its peak demand to increase by 60%, by the end of this decade. And similarly, PJM, the the largest ISO in in the country, representing a collection of Northeast states, in the Mid Mid Atlantic, expecting its peak load to increase 20% by the end of this decade. So we're not only seeing this start to come through in forecast but also in pricing. And so for those that are looking at new energy contracts and PJM, for example, and grappling with significantly higher capacity costs, right, we're starting to see these dynamics play out. These growing demand is happening at a time when we're actually starting for the first time to see a slowing or slowing down a new supply, a new electric generation. These headwinds are coming through from a policy perspective, from a regulatory perspective, from an international market perspective. But just a few examples here, in this, one big beautiful bill act or the the budget reconciliation bill that passed, late spring, it eliminates the eligibility for, solar and wind tax credits, beginning in January 2028. And so we do anticipate we do expect solar and wind to continue to represent the lion's share of new electric generation in this in this country. It's just gonna be 30 to 40% more expensive to build. You know, similarly, when we're thinking about the, potential other, you know, other generation technologies like coal, I don't know too many new coal fired, power plants that are on the horizon or nuclear gaps or nuclear power plants. I don't know too many new nuclear power plants that are, really slated to come online before 2030. So if it's not wind and solar, I mean, the other technology really is is a gas fire gas fire power plant. And it's just frankly more expensive to build these, than it had been just a few years ago. And so we're seeing an increase, in orders of magnitude in over just a couple years, and that's driven by a lot of different factors. Inflation, certainly, interest rates, of course, but limited, supply chains and constrained supply chains as there's a few major, gas turbine manufacturers and there's a lot of demand for new turbines. And so there's just effectively a waiting list, to get these power plants up and running, get the materials necessary to to get them in operations. And so we don't see a tremendous amount of new gas fired power plants coming on to meet this demand. And it's also coming at a time when we're seeing the federal policy slow or curtail the expansion of offshore wind and particularly across, again, the Northeast and the Mid Atlantic where federal administration has either canceled or, communicated plans to terminate, 9,000 megawatts or nine gigawatts of offshore wind capacity. And so we're seeing really significant demand growth at a time when we're seeing slowing new generation or new energy capacity, and that's creating these supply and demand imbalances. And this is coming through at a time where energy decisions, right, might look different than energy decisions had just a few short years ago. Everyone's got a plan and then the market changes or policies change. It's maybe time to take another look at that plan. Coupled with these energy market dynamics from a sustainability perspective, we're, seeing some signals that the rules for greenhouse gas accounting are likely to change in the next few years. And so the GHG protocol is considering or is is has issued, a series of proposals that would change the way scope two emissions are accounted or calculated. Those changes or those proposed changes are now going out for, public comment. But as we, you know, start to peel back the onion and and take a look at what those changes include, they represent a sea change in how organizations have largely sourced renewable power for their scope two programs. And so no longer, at least as as currently drafted, no longer can a company go out and buy unbundled racks from a merchant, you know, wind or solar farm anywhere across the Continental US or Canada and apply those across, you know, to any site. In order to use racks for, scope two emission reduction claims under the proposed changes, those racks would need to be twofold. One, they would need to be deliverable, meaning, you know, produce in a market that's where your facilities are located. So think about, like, you got a site in Massachusetts, the racks need to be produced from a wind or solar farm in Isoano, England. Or if your facility is in PJM, you know, those racks need to be produced from a a wind or solar farm in PJM territory, which, by the way, both markets are considerably more expensive because of their renewable portfolio standards. So both deliverable or local and hourly matched. Right? So there's another really significant potential change. Right now, there's a pretty wide grace period at the twenty one twenty one month eligibility window for where you can claim the renewable generation to to load, right, in your facility or your usage. If we move from, like, annual or even beyond annual twenty one month reporting windows down to an hourly matching, that certainly makes things more challenging to not only source but to account. Recognizing that that is pretty restrictive, particularly for, sites that operate in regulated markets. These proposed changes do offer, or consider options for out of market contracts. And so, like, if you're in a regulated market and you wanna be renewable, you want to, completely reduce your scope two emissions or you or to tackle a big portion thereof, but you're in a regulated market and there isn't an option for an hourly matched local rep, these proposed changes do allow for out of market contracts. The, caveat being that they need to be able to be demonstrate they need to be able to demonstrate additionality, or it's more, you know, colloquially support new generation rather than buying the, you know, environmental attributes from existing generation. Again, thinking through when wind and solar is 40% more expensive to operate to build, those wrecks, we would anticipate having a a higher cost of contract alongside. And so, again, there's a lot of things or a lot of different forces that are at play here, but, ultimately, I think what we're or the point that we're trying to drive home is that we do believe that both energy and sustainability sustainability markets are at this for a, a momentous period of change. And the best tool that our clients and our partners have in their toolkit as they look to turn the chapter or navigate this uncertainty is to be able to report to their business partners with confidence how effective their current programs have been in managing cost and, absorb insulating from very from, volatility, potentially lowering cost. So that's the focus of our conversation today. We wanted to drive home some real world examples of how our companies or how our clients are using energy data, to accelerate their programs by, again, demonstrating a line in between renewable sustainability programs and core business prop, paradigms. And so with that, I'll invite George Todd, director with our renewable practice to help us think through how our our clients are thinking about on-site solar, on-site storage, other fuel cells, other, resources that can, again, help insulate and drive home both their environmental and their energy programs. Excellent. Thanks, Charles. So jumping in, first, distributed energy resources are are one of the ways to protect against market volatility. First, what is a distributed energy resource or DER? It's it's a small scale, energy asset that's located near your electricity consumption. So that's typically going to include on-site solar battery storage or fuel cells, for a few examples. So why are they valuable? DERs have a direct impact on your energy your site's energy consumption that can significantly impact your utility bills. And that's a growing issue because, according to a report from PowerLine, the utility bills are rising report, request for rate increase are double or or more than double year over year. And that equates to roughly $29,000,000,000 for over 40,000,000 rate payers in the 2025. So that's that's a significant impact, and that's that's directly related to the current market environment. And looking at, you know, where where are these assets available? They're they're available all across the Continental United States. There are limitations, in some instances, but those are subject to regulations from local authorities. So while we know these can generate savings, the calculation of those savings and benefits thereof, can be challenging at times. We see this through two different kinds of challenges. So reporting challenges and and data challenges, and they're directly related. So one of the first challenges is tracking your we're reporting out on asset performance. So are my assets working properly? Are they subject to any, you know, performance guarantees? Are there any issues there? On the reporting savings side, you know, are my savings accurate? That is one of the largest challenges. And do they include a rack value? And am I including the rack value within those cash flows, or am I accounting for it on my carbon reporting? And then a big piece of the puzzle here, what what what is going on with the net metering rules associated with that, which, you know, as as I'll I'll show, can be relatively significant in some instances. And those directly feed into, you know, what's the overall value proposition? How am I communicating that internally? You know, what metrics or or benchmarks are being used? So on the data side, the data side really informs the reporting side. So, you know, asset performance, I'm getting hourly, monthly generation, from my assets. You know, there are issues within those datasets that can arise. And from operational issues, am I, like, triggering any contractual, provisions that would impact some of the reporting there? You know, when I'm reporting savings, the avoided avoided costs, are unique to every distributed resource. And that's that's on a side by side basis, and it's, you know, technology specific, and it's, utility specific. You know, the reps the the reps can be monetized. They can use to fund, sustainability programs. They can be used elsewhere. Am I accounting for those benefits within that reporting? And then, again, net metering rules, you know, those are different by market, by utility, etcetera. And with those two data drivers, you know, those feed directly into, you you know, am I tracking by cumulative cash flows and adequately tracking my breakevens to ensure that I'm communicating the value of the program itself. So looking at operational performance, it's data intensive. You're looking, typically, you know, at at the very least, at a monthly level, a lot of times at the hourly or sub hourly level. So that calls into question, there's there's data consistency issues. There can be differences in how some of the data is reported out between the utility, the generator itself, and and sometimes it can be hard to align. And within that data itself, you know, from an operational perspective, there may be mechanical issues, technology issues where the system loses the ability to report out how much it generated, or erroneous meter reads. There there are lots of pieces that have to be considered, when looking into the operational performance of that asset. So I already mentioned net metering rules can vary significantly and do have a profound impact on on your, your DERs. And and, you know, I wanted to use an anecdote. We we had a client who was leveraging weighted average rates by region, to calculate the value of their on-site solar, which is a really great start into understanding how the on-site generation, was driving value at their locations. But it it could lead to overstating value. And, specifically, you know, why is that? When you look at the table, and specifically at the credit mechanism, you know, you go up and down New Jersey to Texas, there is there are some words that are similar, but it's not exactly the same. So the rules do vary by program. And in some cases like Texas, it could vary by utility. So most of the major deregulated utilities are, you know, providing a retail credit. It's a one for one credit. But, you know, example of Austin Energy, all they're offering is a value of solar, which is a discounted, credit mechanism from the retail rate at Austin Energy. So, you know, all that to say, simplified calculations begin to break down because each site is unique. And that uniqueness is driven by utility, utility rate structure, site footprint, and location system. What type of design does it have? What technology is it? And even my energy procurement strategy. And, you know, when we look at why is that, if I'm using a a a average rate for an entire year, then the the summer months are are might be receiving more energy and offset offsetting more savings, or I might be overstaying the value in my, winter periods. So it's it's important to understand, you know, at a granular level what what that impact is, for each of those abilities. So on the surface, it may be it it may seem that the savings are easily determined, but in reality, it's significantly more complicated than that. So how how can I translate savings to communicate value to the organization and enable it to influence support for additional investment? One of the ways that we've supported clients to create business cases through benchmarking energy cost net of the savings against business as usual cases. So this helps demonstrate the value through time and considers the return on these investments. For example, we had a client who had several owned assets and PPA spread across multiple deregulated utility zones. Requirements to establish an effective report to demonstrate the value of their portfolio needed several internal and external data points such as invoices and generation, for example, as well as many other data points, that were born from the organization internally. Through that reporting, once developed, they were able to better understand how their assets provided value to their energy portfolio through avoiding electricity costs and taking advantage of rec arbitrages. This enabled them to drive initiatives internally to receive approval to expand their DER program to drive savings at new sites. So this this method in rolling in operational data and and savings data, this helps build a report that helps demonstrate the value through time and considers that return on investment. So I'm going to hand it off to Robert who's gonna discuss about another option within the market, called Community Solar. And he's gonna go through the intricacies of the reporting process and the value that it can provide. Robert? Hi. Thanks, George. So community solar, another valuable tool. Community solar allows companies to subscribe to off-site solar farms and therefore receive guaranteed discounts on their electricity charges. These programs can differ state to state, but it's a flexible and scalable solution that can be used to reduce energy costs, while supporting sustainability goals. It's currently available in more than 20 states and is a great opportunity to pursue, especially for those companies that are operating out of New York, Illinois, Delaware, Maryland, Maine, and California. And while community solar can be beneficial by lowering cost, it does come with its own unique challenges. Some of those challenges include performance auditing. Invoices need to be audited and reviewed, regularly to ensure that accounts aren't oversubscribed and to ensure that developers are meeting their performance guarantees. Also, there is oftentimes a delay in developer invoicing that it can sometimes be up to four months between developer invoice and utility invoicing. This can make it difficult to accurately, produce expense reports, especially since those need to be adjusted for those outstanding invoices. Those same invoices can, provide reporting issues as well because they can skew bill data, which makes it difficult to accurately report on the savings. Also, there are instances where those same invoices don't accurately include avoided taxes in their calculations, meaning they have to be calculated manually. This all can compound during invoice reconciliation, making it difficult to match up the bill credits between utility invoices and developer invoices. To further complicate things, we run into numerous data discrepancies across invoices and vendors. The number one offender we run into is nonstandard terminology. The various different vendors, providing these programs oftentimes don't have consistent terminology. As you can see on the left hand side of this slide, there's several examples there, showcasing that there is a lot of variety. That variety makes it difficult for data capture teams and processes to accurately capture this information and report on it. And then we have credit carryover to consider. Credits not used in a given month can be banked and then carried over to the next month, sometimes rolling over from month to month, Again, it's difficult to track where it originally, came from and to match it to developer invoices. Some vendors will provide summary invoices, which summarize multiple accounts and delivery periods all in one invoice. And then we run into numerous instances of misaligned service periods where there is a slight variation of service periods between developer invoice and utility, which makes it difficult to match up those credits. And then as I said before, billing delays from the developer invoices between utility invoices. Now as a leader in expense expense management, ENGIE Impact has developed numerous, numerous tools to use and has developed a breadth of expertise to approach and face these challenges. Some of our best practices and, tools we employ is regular invoice monitoring and auditing. That way we can ensure that when bill credits begin to show on invoices, they're tracked and they're captured accurately. We perform credit reconciliation. We have our own customized reporting so that we can align even when service periods do not appropriately align between developer and and utility. We can match those credits to ensure that they're flowing correctly and aligned. Accruing expenses, making sure that we're accounting for the delayed developer invoices, making sure we're accounting for that those outstanding costs and expenses. And then tracking the carry forwards. That way we can ensure that the bill credits are both tracked and monitored and don't exceed annual costs. We can pull all of this together to ensure that we're producing accurate financial reports so that we can also provide reports of the net benefits of these community solar programs to our customers. Community solar is, a great program. There's a lot of potential there. However, it is more localized. For those organizations that are interested in a larger impact, there are more powerful options such as VPPAs. And for VPPAs, I'm gonna hand that back to Charles. Thanks, Robert. Thanks, George. And everybody, I guess the the intent here just to start with, both on-site solar or distributed energy resources and virtual, and community solar agreements is is that they represent two of the tools that have been most effective in helping clients really save really just save money. And so to the extent that sustainability programs are increasingly asked to, you know, justify or defend or or demonstrate the financial value, those two tools in particular, have been, leaned upon pretty heavily. I wanna actually before we talk about virtual power purchase agreements, I wanna jump back to one slide that Robert was showing, if I can here. And it's it's this slide and the accruing of expenses is one that, you know, I I just to to share a story or for folks on the line that might operate in a similar manner, this one has been it's one of the the trickier nuts to crack for some of our corporate clients. And so, you know, I think about, organizations where, individual stores, restaurants, manufacturing sites are, they have their own energy budget or, or or cost and it's managed and and at the site level. When the bill credits from these community solar subscriptions hit their utility invoice, you can see at the top line that, like, for example, in April or May or June, it might look to the site, to the store, to the restaurant, to the club, that the utility costs are $2, $6, or $14, because that's the total expenditure that it appears on the utility invoice. And if the corporate signatory, right, the the company that's buying or entering into the longer term community solar agreement is invoiced by the developer counterparty for those bill credits separately. Right? They get the hit for, you know, the $400, $500 worth of bill credits for each period. Right? It can really screw up the accounting process. So, you know, the store, the restaurant looks like it's got a $2 invoice instead of a $472 invoice. Right? And so that's the type of, sort of, data planning that we make wanna make sure all of our clients are are prepared for as they enter these agreements that will, invariably save them money so so long as they have the the appropriate reporting processes procedures on the back end to streamline any unforeseen or downstream impacts. The virtual power purchase agreements, you know, unlike the on-site distributed, energy resources or the off-site community solar subscriptions, with both of which are are largely tools to manage cost. Virtual power purchase agreements are largely tools that are intended to accelerate decarbonization, that are intended to reduce your scope to emissions. So it's not a physical power supply or power contract. It's a financial agreement for racks. The reason why these are valuable is because as a a financial agreement, it can be untethered to your specific site. And so a single contract can buy or can source the racks for an entire portfolio, anywhere from, like, 20,000 racks per year or megawatt hours per year, all the way up to 2,000,000. They're available, a for projects that are located across The United States. So thinking back to those deliverability requirements, there certainly are options for virtual agreements in, every market. That said, they tend to be most most widely available in deregulated energy markets where there's a liquid, fixed for floating swap index. Right? So these are these are agreements that are sustainability tools more so than, energy management tools or cost management tools. That said, they absolutely need to be managed, in a in a in a business manner. Right? So we do need to be able to budget for the cash flow. So in a fixed or floating environment where we're trading a a fixed price for the REX and in exchange receiving a floating or variable market settlement on a monthly, quarterly, annual basis, we need to be able to prepare our financial partners for what that settlement should look like. And in the market where energy prices are volatile, that can be difficult. We also need to be able to audit the performance of those contracts, ensure that we're getting what we're paying for, and certain that we're we're auditing the performance of every settlement. And that can be challenging because every settlement is comprised of literally thousands of data points. It's settled in either on a fifteen minute, thirty minute, hourly interval. It might have multiple market price indices from a wholesale component, a nodal price component. These might be in zero through twenty three hour time formats or one through twenty four. There might be some daylight savings. That, like, there's a lot of just data anomaly opportunity that needs to be audited. Payments can be challenging. Virtual power purchase agreements because they are larger contracts that represent, like, typically, you know, 10 to a 100% of your, energy portfolio. There's going to likely be oversight from your treasury department, who wants to audit, wants a demonstration on every invoice that is both accurate and consistent with its budget forecast and make sure that it's being managed in a in a in a proper manner. Ultimately, risk needs to be considered. And so a virtual power purchase agreement is a market position, not unlike a hedge, on your physical power supply. However, very often, these instruments are, are managed apart from your physical energy supply. So what do I mean by that? We we tend to see organizations treat virtual PPAs in one of two ways. Either they say that they are not related to their energy market, purchasing behavior. They do not influence energy market purchasing behavior, and the two operate completely in silos, your VPPA position and your energy decision making. Or on the other hand, we start to see organizations that said the VPPA is a hedge. Right? And we don't take any fixed price contracts in energy markets because the VPPA acts as the hedge. And instead, we just float on the market. And the truth of the matter is that that VPPA is going to be a fairly ineffective hedge and so it sits somewhere in the middle. Right? But that means that there's risk that should be valued. Right, there's some scenario analysis or sensitivity analysis that should be performed, and we should be thinking about on an annual or even more periodic basis, how the energy how the VPPA performance might impact our retail purchasing behavior. I won't spend a ton of time on each and every one of these challenges and solutions because, for those that have a VPPA, the the while the the auditing process might be a bit cumbersome, it it's not novel. Right? It's it's just a matter of ensuring that the data is properly ingested, formatted, and compared accurately. So we'll we'll the the VPPA as a as a risk management instrument is a topic in and of itself, and I think we've we've actually run some webinars on, the integration of a VPPA's performance into a retail purchasing strategy or program. But I'll focus this conversation on the budgeting for the cash flow and the managing of the payments, because these tend to be particularly, acute pain points for our clients that are struggling through settlements that have been less than favorable over the last couple years. And so the first example that I'll highlight here, is around budgeting and communication with your treasury department. So we we started this call by acknowledging that the energy market is going through some unprecedented change with increased demand, slowing supply, right, and a and a and a a period of uncertainty, to say the least, that sits in the middle of that balance. And so I see actually see there's been a question in the chat. Jason is asking, is it true that data centers have bought up the natural gas turbine back line through 2030? I'd say not directly, but potentially, like, the best characterization might be indirectly. Right? Because the data center markets are absolutely, signing contracts, for behind the meter generation with natural gas power plants. Their load growth is being incorporated into planning horizons and the build out of new natural gas turbines. And what we've seen is that the, you know, the the turbine manufacturers have been, somewhat slow to accelerate production capacity having been burned in previous market conditions where they anticipated some load that did not ultimately come through and there was some price collapse. And also just the nature of, the turbine manufacturing market, more broadly where turbines are not necessarily off the shelf, commodities, but need to be developed for very specific, local conditions. And so while the data centers have certainly played a role in, helping to, you know, create the demand signal to build new natural gas generation, and we're starting to see that natural gas generation contract directly with those data centers, I haven't seen, too too much evidence of the data center market, like, they like, hyperscale is going out and buying turbines directly. Anyway, back to the to the to the chart here. The the market dynamic that we're showing on this chart is a little bit off kilter. And so what we're showing is, in the gray, the range of possible price, the range of possible prices in ERCOT North, over a period of time. And certainly for those that have experienced in Texas' energy market, you start to see these big spikes that happen in the summer months. And so that that's, the top under the gray is how high we might anticipate seeing pricing settle. The bottom part is, like, the lower price of that, scenario analysis. And so the pricing might fall anywhere in between. The pink line represents, as of just a couple weeks ago, the forward contracts that are available in ERCOT North. Right? So you can see if you were to go out and buy a a Texas snow with power contracts, what you might anticipate, for a cost per megawatt hour, available on the market. That pink line is considerably higher than that dotted blue line, which is where we actually anticipate the market settling during that period. Right. So as you can see, that blue line is pretty far below the pink line, and that's driving the deviation that a lot of our corporate clients are struggling through right now where they say, my VPPA is underperforming. They're like, I'm paying out a lot of money for my Texas VPPA on a dollar per megawatt hour basis. But my power costs are also increasing, and I I'm having a hard time reconciling those two. Like, why is my VPPA performing worse when the cost of power is higher? And the reason for that is largely that that pink line, right, what you can actually go and buy power for, is only what somebody's willing to sell it to you for, not what that cost of power actually is in that, you know, that moment in time. And so while we're anticipating this pretty significant increase in load, it's not here yet. Right? And so until that load actually interconnects, when we start to see the data centers, energize, that will create that supply demand in Dallas where, you know, the, actual market settlements may creep closer to the, traded forwards that we see today. Alright. So thinking about those dynamics that really should inform our purchasing strategy but also provide context to, our our our treasury teams as we start to wrap grapple with higher energy prices from our retail agreements and lower VPPA settlements at the same time. The point of this sort of story or this conversation, this dialogue is to, discuss for the first time with the market, a pilot that NGS sort of being forced, by the market to embrace. And so each unlike unlike your, your retail energy contracts, where it's it's pretty infrequent that somebody in your organization comes back and asks why did you enter a $50 or $40 energy contract when the market settled at $20. Right? Like, we're we're used to budgeting or marking the budget, like, how do we perform to our budget, not necessarily how do we perform to the market. When you have a VPPA, it's the opposite. Right? Like, every month, you get that settlement report card and you're graded every month on how that contract performed to the market, not just to your budget. What we've been, starting to explore with our with some of our strategic clients is a way to just simplify the process there. We've been for many years helping our clients, consolidate their VPPAs settlements just into their, their, utility expenditures, when those VPPAs are net negative. Right? And so if you get a a negative invoice in a month, it goes through your treasury department. There's a a review and approve process, and then just we'll help facilitate or streamline the actual disbursement of funds, which is helpful in some regard, but still somewhat separate. Market's been encouraging us to think about a a more harmonious or streamlined way to consolidate these settlements. And so what we've been doing for the first time is discussing and exploring with our with some strategic clients the consolidation of those VPP settlements, whether they're net negative or net positive. And so if you think about this, we've got all of our utility expenditures for natural gas and power and wastewater or what have you, telecom services. Right? And we we anticipate a a regular consolidation payment schedule for those utilities. If we get a BPPA that is revenue positive, right, we can just use that as, a a fund to offset the cost of your ordinary utility expenditures. Or if it's negative, if it's cost accruing, right, it's just an additional cost to those utility expenditures. Ultimately, just like bringing together the VPPA with your broader utility management, and and that provides some material benefits. So the the first of which is that, it's e it's easier on our accounting our our client's accounting teams where they don't necessarily need a separate account that will be both, revenue generating and cost generating. Right? It it it doesn't have to be both credited and debited. Right? We can just streamline the VPPA into a broader utility expense. It can streamline your approvals. Right? So very often our clients when they're accustomed to having consolidations that are pretty significant for all of their utility expenditures, right, if we just add the VPPA, it it's a percentage increase instead of a step change increase that Scott eyes on in and of itself. Right? And it allows for this more holistic planning. So if we have a VPPA and we're thinking about our budgets for the VPPA in relation to our energy market planning or our broader utility planning, If we're thinking about the accrual for that PPA alongside our broader utility or or or commodity expenditures, right, it can help create a a more streamlined planning process and just, just make things a lot easier in a in a corporate environment, which isn't designed to, right, to manage these large, volatile sustainability financial agreements. So, just wanted to make sure that we introduce that to the market. Happy to talk through with this audience any questions that you have on the content that we, presented today or, any questions that arise just about energy markets more broadly. Hey, Charles. I'd like to address this question here, in the q and a, if that's okay. Yeah. The question is, how can companies improve the reconciliation of community solar bill credits and developer invoices to maintain accurate financial reporting? Excuse me. So we we have, a recent real world scenario here with this. And, what I would say is any, any company that's interested in pursuing credit reconciliation with their community solar programs, would encourage them to go full suite, with services and billing. One of the situations we have encountered is we manage all the utility invoices and, not the developer invoices. That creates a disparity of information and data where we essentially only have half of the equation. And, at that point, it's more beneficial for us to also manage those developer invoices, and then we have free and ready access to them, through reporting, in our own system. The other alternative would be, if companies aren't prepared to come in full suite with their developer and utility invoices is be prepared to provide, regular, consistent, and timely and accurate recording on the developer invoices and the data that they're getting so that we can partner more effectively. Thanks, Robert. I see one, question in the chat here. How does the proposed changes to GSE protocol requirements affect the viability of new VPPAs going forward? And this one is is really interesting. So again, just table setting here, The proposed changes are not in effect today. Right? And the changes that we're discussing are, just sort of telegraphing and and helping the market sort of prepare for what might be coming around the pipe. The, the the sort of planning horizon we'd encourage everyone to think through is that the proposed changes are gonna be going through a period of a first period of public comment followed by a second revision in the draft process early next year with the second period of public comment with a third you know, another iteration of of revision with a plan to release these new, you know, accounting rules in towards the 2027. But that that said, right, so these are seed changes and it's good to be, proactive. The VPPA market, you know, this is, again, fairly speculative and somewhat hinges on how these changes take form. But it might actually grow in in some manners. Right? And so the availability of hourly matched deliverable renewable projects, or maybe I should just say, zero emission projects, will be fairly fragmented across markets. And so in some markets, it might actually be pretty prevalent. Right? Like, if I can get a contract from a supplier that's willing to just buy their power from a hydro power facility, and I actually don't care about the fact that it's been placed into service thirty, forty, fifty years ago. Right? I can get twenty four seven, zero emission power, pretty easily. Or or similarly, right, if I if if I operate in a market where there's, retailers that have access to, their own generation, like, nuclear power, and I can get a twenty four seven carbon free nuclear contract, that might be my deliverable twenty four hour, like, hourly matching requirement. That might be the easiest path, but those are, you know, not available everywhere. And we might start to see an uptick in demand for those. And so rather than stitching together, a a collection of different solutions to try to get to your or as close as you can to your hourly max and deliverable requirements. We do anticipate many companies will go the route of a VPPA outside of their local energy markets that does not have to be hourly maxed or deliverable. Upshot here is that, it might be more expensive than it is today because of, we talked about earlier, the erosion of tax credits. And, the proposed changes when we're thinking about out of market, agreements would not be an hour for hour, like a megawatt hour or a wreck for megawatt hour match. Right? It would be at least as currently proposed, the impact would be your consequential impact. So if you purchase a, a wreck in a dirtier grid, it might offset more emissions than if you purchase a wreck in a cleaner grid. And so there we do anticipate that the, VPPA market remaining fairly robust, but it'll certainly go through a period of significant evolution. We wanna make sure that our clients are starting to prepare for, what their, you know, the cost might be to sustain their emissions, not even to think about what the cost might be to accelerate their decarbonization, but just to tread water. What what might the cost look like under these different world changes? So a long way of saying, we do anticipate BPPH remaining a viable option, if not a necessary option for a lot of clients. Yeah. That's that's definitely a complex change to the market that's being proposed. Right, Charles? Wanted to jump in here. Last last question, I think, to address for today. What would be the best way to identify performance issues across the distributive renewable assets? So I think this one starts with tracking the generation. It it's all it comes down to auditing the invoices and the invoice support. Whether that's done at a hourly or monthly basis that's, you know, obviously dependent on resources. But a good generally, you know, when you contract for either a PPA or you have an asset that's built by a developer, you know, you're going to based on your performance guarantee, you're gonna get estimated volumes. And, you know, that's a good way to benchmark, your generation versus what you're what you expected to get. You know, and that helps you to identify when should I jump in and get dirty with the the hourly data. Because that that it it is quite quite a bit of data to play with. And, you know, at the end of the day, it's gonna you're gonna have o and m providers. Some are gonna be super proactive. Others, are are going to, you know, deal with the issue later if there is an issue. You know, and the depth of the analysis is just gonna vary across the market. And, you know, it really boils down to performance guarantees. More stringent performance guarantees are likely going to drive a lot more diligence, from the people who are managing your systems. And at at the end of the day, those only come into effect at the end of the year. So, you know, a a big a big gap in the middle of the year may not be addressed, as quickly as one that is prevalent in the in the end of the year. But, you know, overall, self monitoring that performance throughout the year, will help you get ahead of generation shortfalls and help you realize the maximum benefit out of the system that you've installed. Installed. Awesome. Hey. I see we're right at the top of the hour here. Big thanks, George and Robert, for, your participation. Big thanks to the audience today. We're we're gonna ask we have a short survey, I think, that will, distribute at the end of this. And, again, follow-up with any questions. We're we're happy to talk in in further detail. Thanks again, everybody.