Volts published eight conversations in August — with two Idaho state legislators, a grid cybersecurity expert, the architect of Uruguay's energy transition, an EV charging exec, and more — which is a lot for anyone to listen to. We've rounded up the highlights into a single hour. Enjoy!
So last month, we tried something new around here, a compilation of clips from the month’s episodes strung together in a single place so that listeners could scan and see what they might have missed. I asked at the end of that one whether you found it worthwhile and useful, and many of you wrote in to say that you did, so we’re going to make it a regular feature.
Here’s how it will work. Every month there’s a best of episode. Paid subscribers get early access, and when the next one comes out, the previous one opens up to everyone. The July edition is open now, so if you haven’t heard it or you know somebody who’s been meaning to check out the show, that’s the one to send them.
As for August, it was wide-ranging, which is how I like it.
Data centers twice from opposite ends, including state lawmakers dealing with them and companies trying to improve them. Grid cybersecurity, public EV charging, a surprising run of bipartisan housing bills out of Idaho, why utilities can’t seem to adopt anything new, what a future administration ought to do with the tools this one is busy beating us over the head with, and a listener favorite out of Uruguay.
As always, I deeply appreciate all of you who support this work by becoming a paid subscriber. This podcast is 100 percent listener supported. I could not do it without you.
Chapters
00:00 – Introduction and how the best-of series works
01:59 – Saleem Chapman on why every market design fails ratepayers the same way
07:51 – Patrick Miller on Chinese inverters and commodity boards
12:22 – Ben Toews and Megan Egbert on how Idaho's housing bills happened
18:34 – Seth Cutler on why an IONNA site is technically a bakery
22:52 – Ramón Méndez Galain on getting every Uruguayan party to sign one plan
28:00 – Quinn Nakayama on why a utility would adopt something that saves money
34:16 – Varun Sivaram on workload tiers and who pays when flexing goes wrong
38:44 – Todd Tucker on the Defense Production Act precedent
44:20 – Closing note and what to send in
Resources
People & Organizations
David Roberts (Substack - Bluesky)
Volts (Apple Podcasts - Spotify - YouTube)
Saleem Chapman
Patrick Miller (LinkedIn)
Ampyx Cyber (Website)
Ben Toews (Idaho Legislature)
Megan Egbert (Idaho Legislature)
Seth Cutler
IONNA (Website)
Ramón Méndez Galain (Climate Breakthrough)
Quinn Nakayama (LinkedIn)
PG&E Research & Development (Website)
Varun Sivaram (LinkedIn)
Emerald AI (Website)
Todd N. Tucker (LinkedIn - Roosevelt Institute)
Company & Industry News
Books & Articles Discussed
Patrick C. Miller - Written testimony before the US-China Economic and Security Review Commission
Roosevelt Institute - Building Up in 2029: How to Make Green Statecraft Durable
Roosevelt Institute - Trump Wields the Defense Production Act to Promote Fossil Fuels
Related Volts Episodes
Grid cybersecurity: how big is the threat & what should we do about it?
He helped Uruguay decarbonize. Can he help other countries do the same?
Making data centers flexible so they can serve the grid rather than stress it out
Text Transcript
David Roberts: All right then, with no further ado, we begin with Saleem Chapman of Climate Cabinet on why a variety of electricity markets are failing on data centers and how states could do better.
One point that I think is important in the paper, and that is interesting to me, is that these risks, they’re not necessarily unique to a particular kind of market design. You know, as Volts listeners know, there are vertically integrated utilities some places. There’s what are called restructured markets. There’s ERCOT, whatever ERCOT is. One of the points you make in the paper is that people are making kind of mistakes. There’s this kind of the same failure pattern shows up in all kinds of market designs. Can you walk through that a little bit? Maybe some examples of, like, the different places that are, that are messing this up.
Saleem Chapman: Sure, yeah. So we, in this part of our paper, we looked at three different markets, that operate within three different states. And so if you start with, Georgia, which is the example of a regulated energy market-
David Roberts: Right. Old school, vertically, old school, vertically integrated ...
Saleem Chapman: Old school, vertically integrated, I think those of which most people would sort of be most familiar with and think about when they think about, utility structure. And so what we saw in Georgia is that the, Public Utility Commission approved a major gas expansion really built on justification that was derived from developer supply forecasts. And so in that instance, the process worked exactly as it should. There was nothing sort of bad faith about it, but it still, created a situation where ratepayers had significantly exposure, cost exposure, if those demand projections ultimately fell short.
David Roberts: Right. So the ratepayers are paying for the gas, the gas plant build-out, and if the demand doesn’t show up to absorb all that gas build-out, it’s the ratepayers who are paying for the stranded assets, basically.
Saleem Chapman: Exactly.
David Roberts: And then PJM though, PJM is a, is a competitive market, restructured market. Talk through that one a little bit.
Saleem Chapman: Yeah, so what we are seeing in a state like PJM is that you can have a single hyperscale, campus being brought online. At the cases that we looked at, it was 30% of local peak, demand within that particular region. And that triggered a capacity market event which ultimately resulted in, as you’ve-- if people have been following the PJM sort of issue, that you’re seeing sort of historical capacity prices year over year. And so what we are seeing there is that similar, the process worked exactly as it should, but by triggering that capacity market event, you had states all across the 13-state footprint that PJM covers having to take on some of the cost, that was associated with bringing that new facility online when they had no say in actual the decision-making around whether or not that facility would be approved.
David Roberts: Mm-hmm. Yeah. Who pays? This comes up again and again. And then there’s finally ERCOT, which people, you know, I think which people think of intuitively as, like, sort of the most free market, closest thing to a free market type of system. And they might think, well, in that kind of market, surely, you know, it’s the developer who takes the risk if it’s, you know, really working like a free market. But it’s, turns out there’s failures there too. Talk about that one real quick.
Saleem Chapman: Yeah, exactly. I mean, what we also know is as we are confronting this new period of technological innovation, we are also operating within a much more volatile climate than what we have historically had. And so in the ERCOT case, we saw hyperscale growth, colliding with extreme weather events. And so some of the emergency programs and gas dispatching that had to be put in place to meet that emergency event added billions in surplus charges that really surfaced as price volatility, but wasn’t actually visible as a line item on any individual ratepayer’s bills that said, you know, “This was driven by hyperscale growth.”
David Roberts: Right. Right. It shows up as price volatility in the market, which is absorbed by everybody who’s involved in the market.
Saleem Chapman: Exactly.
David Roberts: And so all these kinda come down to who is taking the risk and who is paying the price. So in all these cases, you take data centers’ demand forecasts, these developer demand forecasts, translate them into a bunch of costs, right, to anticipate meeting that need, and it is the ratepayers ultimately who are paying those costs to prepare. And so in other words, it’s the ratepayers who are taking on that risk. It’s the ratepayers who are paying. And then if the developer forecasts don’t pan out, the ratepayers are stuck with it. That’s like, that’s kind of the core theme through all those market, despite the market structures.
Saleem Chapman: That is the core theme, that ultimately this comes down to who’s taking on the risk and who’s capturing the value.
David Roberts: Next up, we have Patrick Miller, cybersecurity expert on the Chinese inverters that everyone is worried about.
As I think people probably know, most inverters, you know, we’re talking about inverter-based resources. Most inverters come from China right now. There was this big Reuters investigation in 2025 which said that inspectors found all kinds of little undocumented communication devices inside solar inverters and batteries, and I guess, like, t-two questions. A, what do you do about what I imagine are now hundreds of thousands, if not millions, of those Chinese inverters that are already installed somewhere and running? Like, you can’t yank them all out. You c- there’s no practical way to audit them all. What do you do about those? And then what do you do about the new ones? You c- as you say, we have no jurisdiction over China. Like, how do we exercise any control over what China puts in those inverters?
Patrick Miller: Yeah. I’m gonna keep this at a non-technical level ‘cause it gets really technical really fast. So in general, you’re absolutely right. There’s a, there’s millions of these things out there, and they do have a lot of undocumented communications components in them. But I wanna make sure we’re really understanding what that means without any hype whatsoever. When China manufacturers a lot of this equipment, they literally do it on what’s called a commodity board. So you can imagine in your mind like a motherboard, right? It’s a- you know, it’s a, it’s a computer component where the chips and the memory and all those things sit, and they’ll buy literally millions of these at once. Mm-hmm. And they’ll buy them, you know, from a commodity manufacturer that just makes, you know, boards, literally, like generic board. And on that board, it’ll have all the things just in case you need them, whether you use them or not. They don’t buy specific boards with just these components. So when they g- uh, I mean, 99% of the ones I’ve seen that they’ve gone out and found stuff, it’s just been the commodity board. Yes, it came with a radio, it came with a modem, it came with a place for a SIM card. There wasn’t a SIM card inserted, but it has all those components on there in case the buyer of these commodity boards wants to use that functionality.
David Roberts: I see. I see. So not nefarious inclusion of these, right?
Patrick Miller: Not necessarily. So whenever you see those, you kinda have to take that with a grain of salt and think, well if there’s millions of these things out there, did they just use commodity gear and they’re just not, you know this is just part of the board that maybe it’s used, maybe it’s not. Now, they have found some of these things phoning home and, you know, the routing traffic through China, so that’s a different discussion. That’s at the software level, you know, up where the applications that you’re using, to manage these devices and that kind of stuff. So those are, those are different components, and we, there’s some supply chain there that we can impose because it’s software, right? We can inspect code. We can enforce certain rules, on how code is developed and what’s, you know, certain, like, transparency of the code. We need to look at the code before we’re willing to allow it, these kinds of things. And we’re not just gonna let updates from China happen without someone taking a look at it before it goes in, those kind of things. Well, yeah, I mean, you- So there are some gates we can put in place...
David Roberts: Well, yeah, I mean, you say there might be these elements on the boards just because the boards are sort of generic and created for maybe lots of different purposes. Could those, could those components of the board that aren’t being used be activated later? Do you know what I mean? Sort of remotely activated. Like that’s, I guess, is the worry.
Patrick Miller: Yeah. They’re there, and they could be activated. But they’d have to have... I mean, you could activate them, but you’d also have to configure them. Like, it’s hard to explain, but when you, when, just because you turn something on doesn’t mean it’s ready to be used. Like even a phone, you can turn a phone on, but you have to give it a SIM card that’s got an activation code, that’s got, you know, all these things have to happen before it’ll actually work on a cell network. I mean, you could get a phone out of the box and turn it on and it just doesn’t do anything. So those pieces of gear are there. That doesn’t mean even if you did enable it, that it would automatically work. So it does, it ups the ante in terms of just like flipping a switch and getting this like rogue network of these things to go do stuff.
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