Secrets of Powering the AI Boom: Scott Aaronson on Grid Strategy

Hari Vasudevan (00:02) Okay, here we go. ⁓ Welcome to a new episode of From Boots to Bodrum. I'm your host Hari Vasudevan, founder and CEO of Cairo AI. Previously, I was the founder of ThinkPower Solutions and I ran that company for 12 years. ⁓ The show shares the educational and entrepreneurial journeys of those who power America. Enjoy the show. ⁓ Presenting sponsor of the show is Cairo AI. Digitized work and maximized profits. For more information, visit Cairo.ai. Today we have a special guest. I'm joined by Scott Aaronson, Senior Vice President of Energy Security and Industry Operations at Edison Electric Institute, commonly called EEI. Edison Institute has had Scott for since 2009 ⁓ working on Scott has been working on everything from grid modernization and cyber security to making sure our energy infrastructure stays safe and reliable. He also serves as secretary of the electricity subsector coordinating council where he helps connect industry leaders and government officials to strengthen the nation's energy security. Before EI, Scott worked on Capitol Hill, advising members of Congress, and he brings a wealth of experience in both policy and leadership. He's a proud University of Colorado grad with a master's from George Washington University, and he calls Capitol Hill home with his wife and two daughters and their dog. Scott, welcome to the show. So, so, so glad to have you on the show and you know we're super fortunate to have you on the show. Thank you so much for taking your time. Scott Aaronson (02:11) My pleasure, Harry. With that introduction, think, are we done? Can I just call it a day? Hari Vasudevan (02:16) We're done, right? We can talk about Neon Dion, can talk about Shadrers Sanders, we can talk about the Giants football, Jackson Dart, and we can call it a day. How about that? Scott Aaronson (02:26) We can definitely talk football. You said I'm a proud University of Colorado grad, and that is true. I am more proud today, after the last few years, of actually being relevant in college football again. But anyway, and I'm a long-suffering New York Giants fan. We can talk about that too. Hari Vasudevan (02:39) Hey, you got Jackson Dart and who's that? Sketebouw and... have you tightened on my fantasy football team, so you better do up, right? All right, my friend. Thank you so much for coming on the show. What a beautiful time to have you on the show, right? Listen, ⁓ there used to be a time, I call the Euthylate industry is kind of under the radar industry, Scott Aaronson (02:44) We already broke Scataboo, so yeah, there you go. But we can't have nice things. Third. Hari Vasudevan (03:08) There used to be a time where only industry leaders like you and I so engaged in the industry, right? Now there is not a day that goes by literally that I see something on Wall Street Journal, something on New York Times, something on Washington Post. mean all the other ⁓ media organizations, everybody's interested in the utility industry, right? Thanks to AI and even... elections a couple of days back. There's something about the whole thing in the Georgia thing. Nobody really talks about those commissions and two boats flipped from what I understand. Right. So it is so fascinating time. So thank you so much for being on the show here. So ⁓ let's get right to it. ⁓ I really would love to understand what shaped your leadership style. Right. Both professionally personally. You know, I've seen you be so engaging with audiences at EEI. You're a leader in the industry. What makes Scott who Scott is today? Scott Aaronson (04:15) Well, first I'll react to what you said about the being in the utility industry right now. It's both the blessing and the curse of may you live in interesting times. We live in really interesting times. As far as about me, look, you sort of said it in the introduction, right? I worked ⁓ on Capitol Hill. Before I got to Capitol Hill, I was working campaigns, lucky enough to work some campaigns where the guy got elected, followed that person up to Washington, DC. I was gonna stay here for five years and I've been here for 25 years. So there you go. That's sort of the origin story. ⁓ The leadership style... As with everybody, it is an amalgamation of the people that you've worked with. And sometimes I've worked for leaders who have just been extraordinary people and I've learned a ton from them. And sometimes I've worked for leaders that have been less extraordinary and wrong answers are clues to, know, one of the things that I tell my team a lot is, especially when you surround yourself with good people, I play golf poorly. But one of the things I was taught a long time ago about golf is the harder you grip the club, the slower you're going to swing. Like there was a golf teacher that a golf coach I went to who's like, I have never been with a student who has gripped the club too light. And the reason why I go through that is that's kind of my management style is if you micromanage, if you over grip on the team, they're going to be very kind of stilted and they're not going to be entrepreneurial and they're not going to kind of think big thoughts. so they're just gonna do what they're told and the best leaders I've been around have been the ones who have provided strategic guidance and resources but have sort of let the team get to the goal through whichever path made the most sense to them and so that's my leadership style that's my approach and it's been largely successful I mean we've got a great team at EEI again working through ⁓ really interesting times. Hari Vasudevan (06:16) Yeah, no, you know, it's essentially you set expectations and, you know, hire the right people, give them the leeway rather to do their job. And everybody has their own unique style of getting things done. But you intervene when you think you need to intervene, but really largely very entrepreneurial way of doing things. Right. Scott Aaronson (06:37) Smart people in positions to succeed. That, to me, is the most effective leadership. Hari Vasudevan (06:42) Yeah, no, awesome. That's fantastic. Listen, I know what EI is, right? Because I've been there coming there since 2009, right? And it's been one of the most rewarding engagements I've had in my career. ⁓ I used to say this to everybody at EI, right? I built my business, first business, ThinkPower Solutions. thanks largely to my engagement at Edison Electric Institute. And it's been so, so rewarding and I encourage all the entrepreneurs to be engaged in the work of Edison Electric Institute. And you know, if you're not in the utility industry, any trade organization that is relevant to you, that's something I say all the time. But having said that, for the people out there, could you please let them know what EEI does on a daily basis, please? Scott Aaronson (07:37) First of all, I really appreciate you saying what you said and it means a lot to me and the team and the whole Institute. as you mentioned, EEI is a trade association and we are the trade association that represents all of the nation's investor-owned electric companies. So that is our core membership. That is our mission. Our responsibility is to align. wherever possible the interests of the investor-owned segment of the electric power sector to ⁓ support ⁓ the reliable, resilient, safe, affordable use of electricity. We've been around since the 1930s. We've actually been... ⁓ of course. All right, we'll start that part over. ⁓ I thought I had off all my... Hari Vasudevan (08:22) No worries, keep going, it's all right. Scott Aaronson (08:23) My notifications. right. So we've been around since the 1930s and that's since the time of Thomas Edison. I like to tell people that story. Like, so Thomas Edison was doing his work in the 1880s, 1890s. By the way, I'm going to have a book recommendation for all of your listeners. If folks have not read Empires of Light by Jill Jonas, highly recommend. It's a great discussion of ⁓ Westinghouse, Tesla, and Edison and all the things that they were doing in 1880s, 1890s to build out the electric grid. The reason that's relevant to EEI becoming a thing in the 1930s is Thomas Edison was still alive, Nikolai Tesla was still alive. This was, you only had so many humans on earth who were ⁓ able to build the electric grid. And at the time it started, you know, with just individual ⁓ cities and communities getting electrified. And then ultimately we were starting to interconnect them. And as we interconnected them up into the 1930s, then obviously we had the depression and World War II. But then as people started to move out to the suburbs and we really started to electrify more of everyday life, EEI became that place that promoted electrification, promoted safe use of electricity, promoted the safe development of the electric power sector and the energy grid started to do all that interconnection and then all the policies that were associated with it. And so that remains our responsibility today. Obviously the grid and electric companies and expectations from customers and use of electricity have evolved greatly over that time. But the general purpose of we're an industry association. We do all the things industry associations do. We do leading practices and we do benchmarking and we do publications. and we do studies and we do policy advocacy and we develop partnerships. But it's all with that eye toward reliable, resilient, safe, affordable electricity for Americans by electric companies that are uniquely positioned to serve those customers. Hari Vasudevan (10:32) Yeah, so eloquently put, honestly, right? ⁓ I've been at EEI such a long time, but listening to you just makes me understand it at a much deeper level. Historical context is there, right? So appreciate that. So now let's get to the hot topic, right? The AI piece, the data center growth and its potential impact on the grid, right? ⁓ know, data centers used about 4 % of electricity two years ago on track to double it, if not more, by 2028. I've read somewhere that I think IEI where they said the data centers in the US face a shortfall of 45 gigawatts of power, right? That's, I think, the same as what Illinois produces, right? This is by 2028, right? Generation capacity. The data center... demand will more than double by 2030, reach the equivalent of Japan, ⁓ reach the equivalent of what India uses today, which is the most populous country by 2035, right? All just, I mean this is global ⁓ power demand, right? So, you know, there's so much talk every single day. ⁓ What is EEI and what is the industry doing to, you know, ⁓ meet those demands of the thirst out there? And let me just ask you one caveat there. This is not the first time there's been a spurt. In 1969, 70 timeframe when there's a burst of air conditioning, there was a big demand spike back then. But my concern for the industry really is about overbuilding and the AI boom not materializing. So we'll talk more about it. We'll out more about it. But let's talk more about the demand now. what the industry is doing. Scott Aaronson (12:30) Yeah, so look, there are a lot of different forecasts for demand, but no matter what, it is growth, right? So for the last 20 years, we have had flat or declining growth across the country. So for basically most people's entire... professional careers, been an industry that has not had to deal with growth in any way. And now all of a sudden we're dealing with growth in like sort of, I don't know about exponential, but really, really large numbers. You one of the statistics I like to throw out there is over the last decade, EIS members have spent about $1.3 trillion in capital expenses. We're going to spend, we're on pace to spend at least, and I think this is a conservative estimate, 1.1 over the next five. So I think, first of all, people's Hari Vasudevan (13:16) is nuts. Scott Aaronson (13:18) of look at the electric power sector like, ⁓ the grid is old and antiquated and nobody's building it up. No, that's not true. 1.3 trillion dollars in the last decade. There's a lot of growth and a lot of change and a lot of evolution and a lot of modernization and a lot of more resilience and all those things, right? So the grid is continuing to evolve and it has been for last 140 years. We've never stopped that. That said, doing it at the scale that we're going to need to to meet. sure, it's AI and data centers, but it's also repatriation of manufacturing. It's also charging infrastructure. It's also electrification of fleets. It's also more electrification of other processes. It's buildings going to more electrification. It's things like heat pumps at the residential level. So there are a lot of different reasons why people are using more electricity, which is great, but It sure would have been nice if this growth had been incremental over the last 20 years, as opposed to, 20 years of kind of flat or declining to your point about not having stranded assets, not overbuilding, not overreacting to the certain sort of AI and other demand, but doing this in a good methodical way. Yes, had we had our choice, this would have been methodical, organized ⁓ growth over a long period of time. Hari Vasudevan (14:14) Absolutely. Scott Aaronson (14:40) and not just electric companies, customers would prefer that, commissions would prefer that, but that's not how it was. So now all of sudden we are effectively better too. Hari Vasudevan (14:48) Vendors, candidly vendors would prefer that, manufacturers would prefer that, right? They would have built more probably manufacturing plants in the US to service the industry a more. I mean, sorry, keep going. Scott Aaronson (14:53) right? No, no, mean, I totally don't hesitate to interrupt. I completely agree with you. And that's kind of the point, right? Like, it's not just when you think about all the different inputs that you need to be able to, first of all, spend one point one trillion dollars in five years. If folks have seen the movie Brewster's Millions, he's got to spend like 30 million dollars in a week or something like that or a month or maybe 300 million in a month, whatever it is. It's hard. It's hard to spend that much money. And it's hard to spend that much money when suppliers and vendors not just here in the United States, but globally are constrained. And so we're in a really complicated environment geopolitically. We're in really complicated environment from a trade perspective. We're trying to repatriate a whole lot of manufacturing capacity. I very ironically borrow a Chinese proverb when I talk about Chinese industrial policy. The best time to... plant a tree was 30 years ago, the second best time is today. The best time to address Chinese industrial policy was 30 years ago, the second best time is today. We do need to repatriate. We do need to nearshore and friend shore and onshore. We do need all of this material and equipment, no matter what the scale is, right? You sort of hinted at AI being. Is it a bubble? Are we going to overbuild? Are the forecasts going to materialize? Like I said, do think, you look, I listen to smart people like Sam Altman and others who know a heck of a lot more about AI than I do. I do think there's a little bit of a frothy bubble here. I think a lot of people are chasing, OK, this is the new big thing. And just like every bubble, if you think about the dot com bubble, it's it's there's going to be a sort of retraction, but it's not like the Internet went away. So the AI is going to be a thing for the foreseeable future. We are going to need to power it. I tell the story a lot. Somebody asked Amazon, what do you guys consider a long-term asset, a long-term investment? And their answer was five years. The electric power sector, right? The electric power sector, a long-term investment is five decades. So we have a mismatch of timing, but we are making really thoughtful, responsible investments in a build out of the grid. We are trying to work with all of these hyperscalers and all of these large manufacturers and all this charging infrastructure to do it in a way that meets their demand and that does it responsibly so that we don't overbuild. Hari Vasudevan (16:49) Hahaha Yes. Scott Aaronson (17:18) That's going to be a challenge and that's the challenge of the time is how do you align that need with the capacity to build it and keep costs as low as possible for customers. Hari Vasudevan (17:28) Yeah, actually, it's a very, very good point you're making, right? Because ⁓ you talk about overbuilding the dot com era, kind of jotted down a couple of notes here, right? What you said, the dot com era, what people forget is a lot of telecom companies went bankrupt because they all thought that, hey, everybody is going to have fiber optics tomorrow. All right. And they laid hundreds of thousands of miles. But, know, That error came, but slightly delayed. I mean, we're still using that infrastructure that was laid out in the 2000, right? Early 2000s, right? But a lot of companies paid a heavy price for it, right? And I love it when you say develop responsibility, especially to the hyperscale AI data centers. How do you connect them to the grid and... maybe connecting to the grid is also going to be helpful for the affordability of the average rate payer like you and I by having them on the grid as well. know if they can reduce their consumption during peak time by 50 to 60 hours. I was reading a study where ⁓ it's not going to be a big impact honestly right for the broader grid. If they're just off the grid for 50 to 60 hours of peak time a year you're going to be alright right. So this is from ⁓ UC Berkeley study that I was reading yesterday. So this is good stuff. ⁓ So let's talk about the competition for vendors, right? ⁓ Because I'm going off the cuff here because we talked about the ⁓ demand spiking up in the US, but so it is spiking up in China. So it is spiking up in Europe, in the Middle East, because You got Saudi Arabia wanting to be the AI superpower, right? Same thing with the Middle East. mean, other Middle Eastern countries rather, UAE, Qatar, Europe wants a piece of action. Ireland apparently had 20 % of Ireland's electricity is being consumed by data centers, right? So is China, so is India, right? How are we going to get our fair share of resources, Scott, from an American standpoint? all these manufacturers are going to be in great demand. How are we going to address that challenge? Scott Aaronson (19:58) So a couple of things. It is, look, you laid out the challenges and opportunities really effectively. Globally, there is global competition. And I do think the United States, 25 % of global economy has talked about... ⁓ we have to win at AI. AI is a national security imperative. AI needs data centers, data centers need electricity, electricity needs infrastructure. We've got to build. So I think there's a recognition of that. the administration has talked about national energy dominance, and we agree with that. That goes with building out the grid. one of the things, just to talk about the value of the grid from the conversation we were just having, all these AI data centers, like they may build build some of their own generation, but none of them want to do it without the benefit of the grid behind them. Because that is the resilience that does give them some of that backup. And to your point, right, that gives some flexibility as maybe they curtail or maybe they they use their own backup generation for 50 to 60 hours a year, but it's ultimately better for the entire ecosystem and the entire surrounding community. So. Yeah. Hari Vasudevan (21:10) honestly on that node if I can interject if they're using 500 megawatts of generation if they're not connected to the grid the hyperscalers they need to have 500 megawatts of backup because they need 24 by 7 of power they can't lose it. Scott Aaronson (21:21) That's exactly it. No, that's exactly like this. We've seen this movie before. It's interesting. We saw it with the military about 30 years ago. The military had land and they had demand. Like, well, we'll just get the utility business. We'll build our own stuff. a ⁓ few literally just a few years later, they're like, ⁓ this is hard. Like you're your own balancing authority. You have no ecosystem resilience. You don't have that biodiversity. Like they've got like the military. Hari Vasudevan (21:47) the knowledge, the execution knowledge, right? Scott Aaronson (21:51) Well, and so what we found as they then started to want to interconnect with the grid, our engineers would get on post and see some of the decisions and some of the engineering that was done. It's like, oh, this is terrible. And so one of the things that we're telling the hyperscalers now is look, if you buy your own stuff, if you bring your own generation, do it with an eye toward interconnecting. because you want to interconnect ultimately and there's certain engineering decisions and procurement decisions that you're gonna make now that if you're doing it yourself, you would make differently than if you do it with an eye toward interconnection. So really kind of preaching the value of the grid as this backup, as this broader ecosystem, as this enabler of resilience. But to get to your question about kind of global competition, There is a reason why companies still come to the United States. We have a great education system. We have a great rule of law. We have a great, we have great infrastructure. ⁓ That is not. Hari Vasudevan (22:48) 100%. Scott Aaronson (22:56) a universal truth. Like that is what we have now and we have to maintain it. You know, one of the statistics that I think is really interesting, I don't know the Indian grid well, but I do know the Chinese grid a little bit. They have a 100 % capacity factor, which means they've got enough electricity to provide for double what they're currently using. They actually view AI data centers as good off takers of electricity because they have so much surplus. Now, we in the United States are never going to have that. ⁓ It's amazing what you can do with absolutely no concern for human rights and environmental protection. ⁓ Hari Vasudevan (23:32) I mean it's a completely different developmental thing. mean there's no permitting concerns. say, hey somebody decides I'm gonna build a ⁓ you ⁓ know 800 kV transmission line from the north ⁓ west. That's where deserts are from there to the southeast. And it's done in two years. Scott Aaronson (23:52) You just do it. Yeah. And look, I promise we don't want that in the United States, right? And it's part of why, yes, the Chinese might have a infrastructure that is ⁓ overbuilt. Hari Vasudevan (23:56) Absolutely not. Scott Aaronson (24:06) But they also have a sort of rule of law and a contractual system that not a lot of big companies really want to go to. And so the United States still has some, you know, we have superpowers and one of them is, again, our rule of law and our ability to ⁓ attract business. so, again, we're not going to have 100 percent capacity factor, but we do have to recognize that building out the grid is a national security imperative. Also, like, yes, there are certain things that can be done elsewhere, some of the inference side of AI can be done anywhere and then you can kind of ⁓ move the learnings to data centers domestically. But there are certain things that have to be close to the end user. Like there's a reason why a bunch of data centers are as close as possible to New York City. It's because they want as little latency as possible for these, know, these quant traders and these fast trades that they need to be able to do. You need to be in the United States to support the US economy. And like I said, we're whatever, like 3 % 4 % of the global population, but we're 25 % of the global economy. The United States is going to continue to be a very attractive place to do business. And therefore, we need to keep it that way by building infrastructure that can support that. Hari Vasudevan (25:22) 100 % it's super eloquently put it's one of the reasons why there are big data centers around big population clusters like Chicago Dallas right the Valley Silicon Valley in Ohio area the Midwest is a big big cluster, Virginia, right? There's a big reason. No, absolutely. I agree with you on that. So So we know the rate pair affordability, maybe let's pivot to that topic, right? There is also a couple of days back the election results there was something about affordability in Georgia, right? So you talked about the 1.3 trillion dollars going into the grid has been invested into the grid since 2014 1.1 conservatively over the next five years, right? Reliability and resiliency definitely going to be addressed, right? We address it all the time. core goals of EEI which you so eloquently expressed which is reliability, resiliency, safe and affordable power. Right? Let's talk about affordability. mean some of the numbers are you know I was just looking at it one in five households now struggle to pay their bills. ⁓ There's you know the data center build out or some people say it's data center some people say it's not. In Ohio and some places the rates for individual ratepayers has gone up by 20 to 27 bucks a month, right? How are we gonna address affordability and keep the American dream reality for your kids, my kids, and not make them energy poor, if you will? Scott Aaronson (27:03) Yeah, no, it's a great question and it's a challenge. A ⁓ couple of things to say. The grid is a national treasure. Like it is, again, everything we've been talking about, it is an enabler of so much. you know, the... Investments that are happening both to modernize the grid, we've been doing for the last decade, respond to catastrophic events, in particular some really, really bad storms, combined with now growth and the need to meet demand. Again, yes, AI and data centers, but not just that. So. It's hard to talk about affordability, right? What's affordable to one person may not be affordable to the other. And there's not a specific policy that is going to just magically make things more affordable. We have to build the grid for national security and US economic competitiveness. We have to do it in a way that provides value to communities. And we have to make sure that everybody who is benefiting from it is paying their fair share. And so this goes to the value of the grid and value of electric companies. That's where you can do things at scale. That's where you can get more bang for your buck and therefore make things more affordable. That's where we can take some of those large customers who may be bigger beneficiaries of the broader grid and make sure that they are paying their fair share. You're absolutely right. And yes, what happened in the Georgia election, but it was a top issue in both Virginia and New Jersey and even New York City. And so a lot of people are looking at all of the costs that are that Americans are paying for food for energy electricity and gasoline for All of the things that we need, electricity remains a necessity. Electricity remains something that we, an imperative, again, as I've said repeatedly for national security and economic competitiveness, and we need to be able to share those costs effectively across all of the users of this. electricity through the years has remained a good deal. For the most part, with a couple of notable exceptions around the country you are seeing. Hari Vasudevan (29:31) In the US, right? In the US. Honestly, if you look at it, I for people have to contextualize it, let's call it as Europe for now, right? Europe and US, the affordability is that much more in the US than it is in Europe. And hence, you know, in some of the places like Spain and Italy, even today, air conditioning is not a norm, right? Whereas here, you find it rare to go into a house without air conditioning. Is that a fair way to look at it? Scott Aaronson (30:00) 100 % and look, I should have said this at the top. Like I don't want to and I'm not dismissive of average Americans feeling the pinch in their wallet for a lot of things. But if you look at America, if you look at electricity costs broadly in the United States, they have remained at or below inflationary levels. Now, That's true until it isn't. And so again, this becomes a, how do we do this, the build out of the grid for all the reasons we've been talking about, in the most affordable way possible. that shares the costs or allocates the costs to the people who are benefiting the most. And again, the grid provides that platform that enables you to do that. If you are a hyperscaler who is building AI to meet ⁓ this demand and who demand for AI and who is gonna benefit from grid growth, you're gonna have to pay for it. And you know what? A lot of those large companies absolutely understand that. They do not want to be the reason because it's ultimately for their business, they don't want to be the reason that residential customers costs are going up in an uncontrolled way. And so this is going to be something that commissions and electric companies and hyperscalers and other large customers are going to have to kind of navigate over the course of the next few years. Hari Vasudevan (31:25) Yeah, no, actually that's super eloquently put because, know, listen, you're the expert in this. Let me kind of summarize this, right? You know, the large part of the costs for electric utility ⁓ bills come from fixed costs, right? You look at poles and wires, right? Now, if more of these fixed costs can be spread across, you know, ⁓ broader base of customers, if you will, the hyperscalers, data centers, and of course, residential customers, the rates, the runaway rates could be controlled in the long run, right? Because the fundamental concern is you're right, the rates have not gone up or kept on par or below par with inflation for long time until, like you said, it hasn't since the last three, four, five years, right? But that can be addressed if these fixed costs can actually be spread out. ⁓ there's a way in which industry can work with these hyperscaler data centers, industrials, manufacturing coming back in a way that's gonna be good for the industry, for the ⁓ average rate payer, as well as for the national security reasons of America. Is that a fair way to put it, ⁓ Scott? Scott Aaronson (32:51) It's exactly right. It is important to... This sounds flip, but I'm going to say it anyway. You get what you pay for. And so in order to build the grid to meet this demand, the collective we, not even just electric companies, just the United States, is going to need to invest in this infrastructure. ⁓ We are, we have been, we know how to do it. Really what the value that you get from electric companies is that scale, is that broader ecosystem that allows you to share the costs more effectively. And I think it is a challenge. is, know, the other thing is, Electric companies also have great programs for residential customers who really are feeling the pinch. Whether it's the low income heating, ⁓ LIHEAP, low income heating, ⁓ I always get the acronym wrong, anyway, LIHEAP, huge proponents of being able to help. customers meet that, meet those costs. If you look at what we did during the pandemic, there were no shutoffs happening. Like you couldn't pay your bill, that's okay. Electric companies, because we're well capitalized, absolutely willing to kind of eat those costs during an extraordinary time when people were more reliant than ever on electricity. So these are the kinds of things that, again, electric companies as... purveyors of a common good. We all need electricity for our way of life. We recognize that role as critical infrastructure providers. We are the best place to be able to do it, both affordably, but also with that ability to allocate cost a little bit more effectively for everybody. Hari Vasudevan (34:34) Allocating costs that's that's the key word there, right? you know, so you hit upon storm I kind of jotted down a quick note here about storms, right? So let's talk about storms disaster disaster recovery if you will write so ⁓ I was just looking at some stats one in three Americans has felt ⁓ impact of storm in the last two years, right? ⁓ Severe storms have caused about four hundred and fifty five billion dollars in damages since 1980 The same time all storms put together has cost about $3 trillion in damages, right? This is overall, right? Not just the electric grid, right? So, but we all know this, right? When a storm hits, I've been part of disaster response. When the 765 KV line for AEP went down in 2009, was part of the 2010, I was part of the engineering team that kind of restored it real quickly, right? In Tennessee, that area there, there was a... tornado that area back in the day if I remember. And been involved in many storm restorations in the Gulf Coast and the Florida coast up and down the eastern seaboard, both from an engineering perspective as well as storm response construction perspective, right? It is really expensive if you think about it, right? You've got, you've got, you know, you got to mobilize crews, you got to send them out there, assess the damages, restore quickly and things like that. Is there anything that can be done to make it more efficient in the day and age of AI? Right? Because you have AI driving power demand up. I'm always looking at it as Canada also had efficiency from an engineering perspective, construction perspective, storm response perspective, vegetation management perspective. Right? What's your take on that? Scott Aaronson (36:24) So I love the question. First of all, I'm gonna go back a second, because thank God for Google, ⁓ Low Income Home Energy Assistance Program, LIHEAP. All right, I got there. So storms. And all sorts of threats to grid operations, right? Manmade and natural. ⁓ Cyber and physical threats. We're seeing an uptick in risk ⁓ since the year 2018. ⁓ The Director of National Intelligence has put out an unclassified annex to the worldwide threat assessment that says China, Russia, and other near-peer nation states are looking to hold the United States at risk at a time of their choosing. And that's through, by attacking US critical infrastructure. ⁓ Because we're not just critical because it's fun to say, we are critical to security, are critical to the health and safety of the communities that we serve. And that's most clear following storms. So I'm going to give another sort of perspective from history, which is I talked about Thomas Edison and I talked about the days of him and Westinghouse and Tesla and the building out of the city, ⁓ electrification of cities. So mutual assistance. That's the concept that Electric companies help each other when there's a problem has been around since the 1880s It was bilateral agreements between those early Edison illuminating companies in Boston and West Orange, New Jersey and Manhattan and Philly and Pittsburgh Who something would break and again Nobody knew how to fix it except for the people who were also building that infrastructure elsewhere And so they would come down and help each other and that's kind of how it was for the better part of all the way up until after World War two and then I mentioned everybody started moving out to the suburbs and we started to electrify the suburbs in more rural areas and really up until the 1970s there were parts of the country that didn't have reliable electricity. During that time we created what were known as regional mutual assistance groups or ARMAGs and these are regional groups there were nine of them for the better part of the 20th century that would help themselves when a storm came through because again there are only so many people on earth who know how to do infrastructure rebuilds in real time. And they're in the United States or they're in the electric industry. And then Superstorm Sandy happened in 2012. And that was so catastrophic. I'm from New Jersey originally, my family was without power for 18 days. Yeah, right. And I was working for EI at the time and they're looking at me like, can't we do, can't we be better? Can you help? Hari Vasudevan (38:33) Yeah. Wow. Wow. What did you do for me Scott? Why did you go to? Why the hell did you go to? Scott, you know what you're in What the hell are you doing in Capitol Hill? You're worthless. Scott Aaronson (38:59) Would you help out Scott? You this job. You've got this job, can't you help get the lights on? And EI was working and like the Armags were overwhelmed and they didn't work well together because they were designed to help themselves. And so you had the Southeast get impacted by Sandy. You had the mid-Atlantic get impacted by Sandy. You had the Northeast get, and New England get impacted by Sandy. And people forget West Virginia had a snowstorm because of Sandy. It was crazy. And so I'll tell you a quick story. For the first time, my predecessor, luminary in the industry, guy named David Owens, ⁓ David sat at the FEMA interagency task force, feeding information from affected companies into FEMA and from FEMA back out to electric companies. That was the first time ever that there was a person from a critical infrastructure private sector ⁓ helping government help us. That's crazy to me that the first time that ever happened was in 2012. So, so Hari Vasudevan (40:02) Yeah, yeah. Scott Aaronson (40:04) We looked at that and said, hey, can't we be better at this? And so we, EEI, created something that's now known as the National Response Event Framework. We still want to give, and this is true of all disaster preparedness and response, you give authority to the lowest, the smallest entity you possibly can, but if they need help, they need a way to get help. So it starts with individual companies, they self-support. Like they have storms all the time, they get the lights back on quickly, they're great. But sometimes they get overwhelmed and they go to the RMAGs. Sometimes the RMAGs get overwhelmed and then we go to the National Response Framework. And so we now have this functionality that we didn't have up until 13 years ago, where the industry and government are hand in glove partnership, where the industry, EEI's members in particular, are looking both at the local level, but also regionally and then nationally to extent that they need to. And what that's done, along with significant resilience investments, I'll tell a quick story about Florida, ⁓ because I know their statistics the best. They had four storms in 2005. Wilma, Rita, couple others. ⁓ Wilma was particularly catastrophic. About 4.6 million people without power for about 18 days also. Not all 4.6 million, but it took them about 18 days to get almost completely restored. They didn't have any storms make landfall, believe it or not, in Florida from 2005 to 2017 when Irma hit. And Irma was very similar to Wilma. Irma, 4.8 million people without power, all 67 counties, right up the spine of Florida, six days to get almost completely restored. So a 12-day improvement. Well, what happened? First of all, and think about this. Hari Vasudevan (41:51) That's a massive improvement for listeners out here. Scott Aaronson (41:56) So the statistics are the GDP of the state of Florida is about a billion or at least was about a billion dollars a day. During from 05 to 2017. FPL, again, it's their statistics, I know the best, spent about $3 billion in storm hardening. They did things like deploy smart meters. got rid of a lot of their wood pole infrastructure and they brought in composite poles and things like ⁓ concrete poles, steel poles. They undergrounded where it made sense. They put flood monitoring out there. They did all of these really cool things to get ready for the next storm. And mutual assistance has improved dramatically. And it's been improving dramatically. dramatically for years. mean, you know, the mantra is better today than we were yesterday, better tomorrow than we are today. But they spent $3 billion and the industry got better at mutual assistance and self-supporting and helping each other. And so they knocked down what would have been an 18 day restoration to a six day restoration. They spent $3 billion to save effectively, if you talk about a billion dollars a day, they saved 12. I'm not an engineer. I'm not real good at math, but even I know that that math, math. So Hari Vasudevan (43:06) Victor. Scott Aaronson (43:07) But right. So the point here is the value of resilience, the value of mutual assistance. You know, one of the things I say about all hazards, whether it's storms or earthquakes or a pandemic or, you know, cyber and physical threats is we're going to have a failure of imagination. There is going to be impact on critical infrastructure, all sectors, not just the electric sector. It's not about stopping the bad thing from happening. Certainly, we want to do everything we can to stop it. Hari Vasudevan (43:34) Absolutely. Scott Aaronson (43:35) But it's also acknowledging that it will happen. And so what do you do to respond and recover? How can you be resilient? And so that's something that we just, that is the most important thing in my view that the industry not only is doing, but that we enable. You have the expertise. You have the mutual assistance capability. You have the infrastructure that doesn't have single points of failure. It's being able to do all those things holistically that make sure bad days don't become catastrophic. obviously you struck a nerve. This is something I really care about, I'm passionate about. But yeah, the evolution of the industry and the continued evolution of the industry to do mutual assistance, to invest in resilience, to be prepared for all these that we're facing. Again, we've seen it time and again, whether it was that 2017 hurricane season, Harvey Irma, Maria and Nate, whether it was the pandemic, whether it was the 21 and 22 seasons, which were catastrophic, or whether it's looking at potential cyber and physical threats to our infrastructure, we're really, really good at being really, really resilient. Hari Vasudevan (44:38) Yeah, no, Scott, I don't know whether you realize it or not, but the passion is overflowing to me. I know you're passionate about this, right? This is really, really good, rich topic that you just talked about, right? ⁓ So, name of the game is resiliency. How do you improve the grid? How do you reduce the, you know, recovery time, resilience at the end of the day, right? So, ⁓ That's really good. So, you know, you guys also used to have, mean still have, I'm pretty sure, the spare transformer program, right? ⁓ You know, we used to have multiple EI sessions about it. Does it come under the mutual assistance umbrella or does it not? Scott Aaronson (45:27) So it's its own thing, but it's obviously very related to mutual assistance. again, learning lessons globally and applying those to prepare. So 9-11 happened. And there was some large power transformers that were really important to lower Manhattan in the, underneath the towers that ultimately were ⁓ inoperable. And so from that, the industry developed something known as the spare transformer equipment program or STEP. And what STEP does is it requires companies to have sufficient number of spares so that they can be a part of this program. And then if one of their peer company needs a large power transformer, which are really expensive, really hard to move, really long lead times to procure, at least we have the ability to move these things around. Hari Vasudevan (46:25) getting longer ⁓ Scott Aaronson (46:27) getting longer. ⁓ And for folks who don't know, these large power transformers in particular, ⁓ they are the most critical component of the grid. You generate large amounts of power from a central station, you move it over long distances, and it's these large power transformers that either step them up or step them down so that can be used ⁓ at the voltages, so you can be used at residential levels. And we need those things. And for folks who don't know, This isn't the thing that looks like a garbage can that sits on the top of a pole outside of your house. These are the things that look like the size of a school bus that sit in huge substations, ⁓ kind of all over ⁓ the country. There's 55,000 substations in North America at the bulk electric system level. So big, big pieces of equipment. ⁓ Hari Vasudevan (47:15) and it's transporting them is incredibly hard, right? ⁓ Scott Aaronson (47:20) Yes. So in addition to STEP, like one of the things that STEP does is it's a whole program and it's governed by an executive committee and it's governed by all the companies that are a part of it. And we kind of look at the allocation of transformers every year and make sure everybody has sufficient spares so that if something bad happens, we've got the ability to share. It's also then moving. So there's a working group, a transformer transportation working group under that. You need trucking, you need rail, you need barging, You need riggers, it's crazy. And I'm so out of my depth in how they do this, but I just know that there are really good people all across the industry and all across those other sectors, those transportation modes who are helping us to be able to move these large power transformers when we need them. Now, interestingly, STEP, the triggering event for sharing of a transformer is a presidentially declared terrorist incident. Again, this came out of 9-11. We've not had one of those knock on wood. I'm good with that. So we've not had one of those since 9 11 but That doesn't mean that step isn't valuable even without it being triggered. And so we also developed a program called Spare Connect. And so it's basically, I like to call it, know, like match.com for transformers. It's just a bunch of procurement leaders of people who are ⁓ responsible for inventory. So if I'm a company who needs a thing, and it might be a large power transformer, but it might be something else. It might just be, ⁓ it might be some switch gear or relays or something that I don't have right now. that I need right now, I can put the information into a query of a database. It will match me with people who have similar equipment nearby. And then we can create bilateral agreements between those two companies and they share the piece of equipment. And so these things have been utilized a number of times over the course of the last 20 plus years. So yes, we have STEP, but we also have Spare Connect. And really, to your original question, it's about this will. to help each other all across the sector because I might be the one in need today and so I'm gonna rely on somebody who is a donor. Somebody, today's donor knows that it might be their turn next to need something and so there is just this willingness to share. It's one of the coolest parts about the electric power sector. Hari Vasudevan (49:47) Yeah, no, it's sharing. It's something I've seen one industry where knowledge is shared, successes are shared, failures are shared so that others don't make the same mistake. It's the beauty of this industry that I've come to appreciate, right? Scott Aaronson (50:01) 100%. I mean, look, it's helpful for people to think about it this way. The electric grid is one big machine with thousands of owners and operators. We have to work together to keep this thing operational. So yeah, to your point, sharing leading practices, sharing successes, sharing failures, working together, sharing equipment, sharing people, ⁓ it makes... Hari Vasudevan (50:21) collaboration. Scott Aaronson (50:22) Collaboration, it makes my job as a trade association executive overseeing energy security and resilience and mutual assistance operations. It makes it so much easier because there's a community that wants to do this. Hari Vasudevan (50:35) percent. I knew about this number before but since you mentioned so many things about when you talked about the spare transformer program, the barges, the rail operators, the freight rail operators, the trucking. How many people are directly or indirectly employed by the industry? Do you know that at the top of your Scott Aaronson (50:56) I do. We did a study on this years ago. It is seven million. Hari Vasudevan (51:01) JEEZ! Scott Aaronson (51:02) Yeah, so in the sector, now this is the part I'm gonna get wrong. I don't recall how many are directly in the sector, but the related jobs that are sort of adjacent to our sector that rely on us and that we rely on, seven million. So the statistic is we are about, we, the electric power sector, are about 5 % of US GDP. And I like to say we are the first 5 % because nothing else happens without us. Hari Vasudevan (51:31) 20%. Scott Aaronson (51:32) You need electricity. So ⁓ we've been called an apex industry, which I really love. Now that misses something though. Yes, everybody relies on electricity, but we rely on water to generate steam and cooler systems. Telecom to communicate and operate. transportation pipelines, as we've been talking about, to move fuel, to move equipment, to move people, financial services, access to capital markets to able to train our product. So yes, we are an apex industry. We are truly critical, but we don't operate without other critical sectors. Interdependencies is a real thing. Hari Vasudevan (52:11) You know who are the most critical engineers in the entire world? Civil engineers, right? I'm a civil engineer. But you know, it's interesting because everything that you just said ain't possible without civil engineers. And I went to school at a time when everybody wanted to be a computer science major because you know the dot com era, Late 90s. it's like... Scott Aaronson (52:17) There you go. Thank Amen. Hari Vasudevan (52:40) You know, I'm proud to be a civil engineer, right? so let's get into, it's talking about resources, right? Let's get into linemen, right? was, again, so fascinating. Not a subject matter generally on Wall Street Journal, right? But, you know, the demand for linemen is higher than ever before, right? Supply is less than demand. You know, you know, This obviously impacts everything we do, right? We need those guys skilled trade to essentially ⁓ make the AI happen, the sexy things happen, right? How can we ⁓ attract good quality people to craft trade like line? I it pays well for starters, that's a good point, right? What's your take on that? Scott Aaronson (53:32) You hit it right. Look, it is such an important job. And as people look at things that ⁓ AI might displace, you know what AI is not going to displace? Line workers. Hari Vasudevan (53:43) I don't know what to say. Scott Aaronson (53:44) we need those people in the field, right? And yes, we may have more robotics and we may have more drone use and things like that. And it may make their job safer, but we don't need fewer of them, especially to build out the grid. And it's such a cool trade. And if folks have not been to the ⁓ National Line Worker Rodeo that is always in October ⁓ in Overland Park, Kansas, it's actually so cool to see. So yeah, just outside of Kansas City, highly recommend. It's just neat to see these people at work. And not only do they do like, Hari Vasudevan (54:02) Lord, yeah. Kansas. Scott Aaronson (54:14) the speed and like the climbing and the splicing and all the stuff that they do to put the system back together and they do this as part of a rodeo and part of a competition. But part of what they're graded on is safety and so these are really safety focused people who are out there. So what can we do to attract them? So look there are some companies that are doing great work to attract more. We have the National Line Worker College. We've got companies like Quanta who are really building out an infrastructure to attract more of these. I think electric companies are doing a great job of attracting military and folks coming out of those kinds of backgrounds, people who have a commitment to public service, people who are really good at sort of following protocols and rules, those are the kinds of people like... You don't need to have a college degree if you want to come out. And like you said, it is lucrative, man. Like these folks make really good money on blue sky days and then they can make a heck of a lot more when they're doing response to storms and things like that. And then the other thing is, look, yes, we need as many of them as possible. We need to attract more people to the industry and certainly to some of the skilled trades, but also, you know. there is a way to share that resource across the industry. One of the analogies that I use when ⁓ people ask about, why doesn't an electric company have enough people on staff to be able to handle a storm? Why do we have to do mutual assistance? Why do we have to call people from other companies? And the answer is because you don't keep ⁓ catering staff. at home for the entire year for the one or two parties that you might throw a year. And so it's having the right number of people for blue sky days and then the ability to share them between and among across companies. And then the last thing I'll say, look, we've seen things like the building of Vogel three and four in Georgia. I am really disappointed that the United States did not build another nuclear plant right after that. Hari Vasudevan (56:13) Yeah. Scott Aaronson (56:13) was, so if you go back to the 60s and 70s when we building a ton of nuclear, those people, those welders, those pipe fitters, all of the skilled trades that had something to do with building out the nuclear infrastructure of the 60s and 70s, then they went away. We didn't build any nuclear for another 30 years. We had a chance with the people who learned. by building Vogel three and four to take those people and have a roving band again of skilled trades going all across the country building out more nuclear. I am. cautiously optimistic that that will happen as we build out more small modulars and as we get closer to using nuclear again as a ⁓ really important component of our energy mix, a completely carbon-free energy source that really can meet the scale we need to. But we need the people who know how to do it. And it's a shame that we let them kind of go back to their day jobs after Vogel III and IV were built. Hari Vasudevan (57:00) RELIABLE! Yeah, I actually, know, there's some study or study reading rather about how ⁓ now China has significantly more nuclear plants or, you know, catching up with the US in terms of nuclear capacity from a power generation standpoint, right? So in other countries are also really ramping it up just because it's clean and reliable and whatnot. But it's hard to build. Expertise is hard to build. The costs, that's the key part there, the cost that the Chinese have they've brought down significantly like five times and they're building it twice as fast. Right? The numbers may be off a little bit but not too too much off. Right? So that's because they're doing it on a consistent basis and to your point about the Vogel thing, once they do it repeatedly it gets faster and the cost also will come down. Right? Because they're experts at this. Right? So that's really really good topic there. So Scott Aaronson (58:03) Exactly right. Hari Vasudevan (58:07) So let's get into one of your other pet topics. Scott, I told you we're not going to have enough time, This is ⁓ because I know you're you're such a passionate about it. Right. So cyber attacks, right. Cyber security on the infrastructure. One of the key I mean, there's so many key vector points, if you will. But one of them is vendors. You got this industry supports so many small businesses. I was a small business 10 years back, right? And so, you know, looking back, clearly from a cyber standpoint, there's things that ⁓ could have been more vulnerable, right? so how does the small business owners in these small industries that support the ⁓ big, large, know, how do they make sure that they do their part to keep grid safe. You got the big players, the AAPs, Dukes of this world, they're always going to be having hundreds of experts on staff. The concern is about the small mom and pop shops out there. We still need them. How are we going to help them help us? Scott Aaronson (59:20) It's such a good question and we could do an entire podcast on that. So I'll try to keep it super quick, which is we talked about resilience before, right? So I'll tell you a quick anecdote. One of EI's members, I won't name them, about 10 years ago now, maybe a little bit more, they did a fishing exercise of their staff, about a 10,000 person. Yeah, there we go. ⁓ Hari Vasudevan (59:43) We did one in my company two days back. I got the report too. It's interesting. Scott Aaronson (59:49) This was 10, 15 years ago, whatever it was, and they had a 30 % failure rate. So through some programs, through some education, some carrots and sticks, frankly, they got that number down to 3%, which is great, like amazing, 30 % down to 3%. Guess what? A company of 10,000 people, that still means 300 people are quite something, right? Hari Vasudevan (1:00:10) It's a lot, big number actually. Scott Aaronson (1:00:13) And so I tell that story not to be like, my goodness, they still had a 3 % failure rate. It's they did all of the right things to drive down, ⁓ to drive good behavior and better cyber hygiene. And even still, look, there's hardware, there's software, and there's wetware. We are the wetware, we are idiots, we will click on something. And so it's not about stopping everything. It's about getting that number down to 3 % or lower. It's about improving cyber hygiene. It's about prioritizing security, not as a cost center, but as a culture. And it's then also about understanding that you're going to have impact and how do you make sure that it's bad but not catastrophic. The Department of Defense has this great, they call it the boom continuum. I love it. Left of boom, right of boom. Left of boom before the bad thing happens. You prepare, you protect, you detect, you defend. On the right side of boom, you respond and recover. And if you're only looking left of boom, you're going to miss a significant portion of a resilient strategy. You want to make it hard for the adversary to to hurt you. You want to make your customers and your company and your employees smarter. And we're still going to click on dumb stuff. So let's just acknowledge that and be ready for it. Hari Vasudevan (1:01:29) Yeah, we just need to be prepared and know, we drive the human performance aspect. Hey, slow down. Think about what can go wrong for you to do something even though you're right. mean, human beings, when you're at a rapid pace, multitasking, click on something, you know what? It's the fan. Scott Aaronson (1:01:45) We're all guilty of it. And I'll add one more thing. The best way to defend against a cyber attack is to not rely exclusively on digital infrastructure. So that's one of the things I tell people is like we operate, we, had nothing to do with it, but the industry operated the grid for the better part of last century without digital overlay. So the question is, can we do that again? And actually it's interesting, the answer's sort of. I mean, there's some places it's not pretty, but you're putting people out in the field. You are putting people in central stations. You are talking to each other and just trying to keep the system in balance. And actually the Ukrainians did this, I don't know if a lot of people know, but in 2015 and 16. The Russians attacked Ukrainian infrastructure using cyber means. And most people don't know a lot of the details, but 225,000 people lost power for six hours in Ukraine ⁓ on Eastern Orthodox Christmas in 2015. That's a bad day, but it wasn't catastrophic. They were able to get the system back up and running because they put people out in the field, they put people in Central Station, they talked to each other and they restored the system. Was it pretty? It was not pretty. Did they get the power back on? They did. We need to have that capacity here in the US as well. Hari Vasudevan (1:02:41) Goddamn. Yeah, no, beautiful, beautiful. So, hey, ⁓ one final question before we get into the fun part of the interview, right? AI, we touched on this in so many different angles, ⁓ You know, some of the customers that we work with closely, right? Centerpoint, for example, not that we do the work, but I know what they do, right? It's like, you know, they use AI in veg management and they're able to predict fuse failures with almost 80 % accuracy. You may know Eric Easton at CenterPoint, he's kind of leading the chart. So we kind of talk about it offline. ⁓ So that is really good use of AI. From your vantage point, working with all these CEOs, where's their head at? Vedge management, storm response. you name it, right? So where's their head at on where AI is going to be the most effective? I always use the term 80-20, which is 20 % low-hanging fruit drive, 80%, right? Outcomes, low-hanging processes. What are the CEOs of the utility companies thinking of? Where do you think they're thinking AI in the utility industry? Scott Aaronson (1:04:18) I mean, I'll give a cop-out answer, which is I don't know, but also that it's evolving. And I'll say, look, the industry actually, I'm reminded of this all the time because everybody's like, look, AI's not new to us. We've been using machine learning for system optimization and a number of other things for more than a decade. Now, large language models and generative AI and as we go into more agent type stuff. Look, there's all sorts of obvious use cases around customer service ⁓ and really good cost savings and things like that. They're going back to things like affordability. ⁓ Certainly things like veg management and prioritization. ⁓ My favorite is preemptive maintenance, knowing when something is going to fail before it fails. There's really cool optimization out there for ⁓ Hari Vasudevan (1:05:01) Absolutely, yeah. Scott Aaronson (1:05:05) First of all, load flows today. Second of all, like, again, kind of preemptive maintenance and things like that. And then certainly around a lot of the veg and where are hazard trees? Where should we be focusing most of our attention so that we... Hari Vasudevan (1:05:20) remobilize crews to vegetation areas that could be impacted by a storm. Let's chop down a couple of branches there so that it doesn't take out that line, right? So preemptive based on the data and things like that. Scott Aaronson (1:05:26) That's exactly right. Exactly. And then people look at AI as a cyber risk, AI is also a cyber defense. so, the machines fighting the machines, effectively, in the future, the terrifying is that sound. Hari Vasudevan (1:05:48) Dominatitude! Scott Aaronson (1:05:50) I mean, look, good movies, but also we need to have humans in the loop and be thinking about not just using AI for all these beneficial uses, but in a defensive posture as well. yeah, lots of really, really interesting use cases. The last thing I'll say about this is I think people want to label AI as a good thing or a bad thing. It's neither of those. just is, right? It is coming. It is an evolution of our use of computers, how we deploy. Hari Vasudevan (1:06:13) It's a tool! Scott Aaronson (1:06:20) it is going to, that's what matters and I think deploying it for efficiencies, think deploying it for driving down costs, think ⁓ deploying it for resilience against all those different hazards, there's a lot of really cool opportunity there. Hari Vasudevan (1:06:35) Yeah, and actually what you said makes a lot of sense because it's essentially foundational elements of any utility, right? Asset inspections, maintenance, wedge management, and driving down costs, and improving reliability, resiliency, and things like that, right? So ⁓ how would you mentor and encourage kids at different backgrounds to pursue a career in this industry? What would you say to a 20-year-old? It's easy, right? We're spending $1.1 trillion. ⁓ Scott Aaronson (1:06:57) Yeah, I always. Literally you heard it like as I get animated, like I love this industry. I love critical infrastructure. It's funny, I grew up in New Jersey as I mentioned and I don't think I got it at the time, but I would drive from where I was in central New Jersey into New York City and you drive by all of this infrastructure. And now sort of intellectually, I get that stuff ⁓ that is kind of all through just outside of New York City powers and provides those creature comforts that we rely on in, in a global city, the most exciting city in the world, New York. And so I think I was always sort of attuned to that, even if I didn't get it at the time. Like, this stuff supports that stuff. Now, how would I mentor? First of all, to your point. It's a great time to be in the industry. It's growing, spending tons of money, solving really interesting problems that are truly critical to our communities, that are critical to our national security, that are critical to the health and safety of communities, that are critical to economic competitiveness. Like, cool time to be in the industry. Yes. Hari Vasudevan (1:08:04) the human species. Scott Aaronson (1:08:07) Right? Like this, this, like this, this podcast, just wave your arms wildly. All of this doesn't happen without electricity. And so you get to be a part of something that is really, really cool. And as we've been talking about the whole time, an industry that actually like helps each other. It's not, it's competitive, but it is not as competitive as some industries can be. If you're an engineer, if you are, you know, if you're, if you're a project manager, there is no cooler industry to be in period. Like, so that's, that's the Hari Vasudevan (1:08:15) Yes. Scott Aaronson (1:08:37) one part. The other is, as we talked about earlier, as you talk about people coming out of the military, people coming out of public service in different ways, this is another form of public service because we're critical. So those are the kinds of ways that I, when I talk to school groups, when I talk to people in college, when I lecture sometimes, it used to be like nobody's like, the utility industry, that's like, why do I want to do that? Now you can kind of show a very direct correlation with some really cool things that don't happen without us. And I think it's a much easier sell than it was when, hey, look, 20 years ago, like, EVs weren't really a real thing and we weren't really growing. why do I want to be a part of, like, just kind of building infrastructure? Like, that's not fun. It's fun now. Hari Vasudevan (1:09:23) Yeah, know, 20 years ago, the only thing is who killed the EV was the movie people watched, right? But now it's a real EV. And candidly, you know, this is the industry where ⁓ skills of all backgrounds are needed. I mean, you hit you hit so many different things ⁓ in your response to the transformer itself, right? Transportation, different types of transportation, barges, trucks, freight trains, and then engineers, project managers, financiers. linemen, different kinds of craft trades, different kinds of construction trades, you name it. So it's a big umbrella, big tent, if you will. So we need everybody out there. I know you're super successful in your career. I know that. What is the one single achievement that you're super proud of to this day? It kind of change who you are, Scott. Scott Aaronson (1:10:02) You got it. I'll cheat and give you two. They're related to things we've been talking about, so I can do them both quickly. EEI helped get more than 3,000 line crew and other support to Puerto Rico, our fellow Americans in Puerto Rico, after Hurricane Maria. And one of the things that really resonated with me, I was there a number of times ⁓ through the course of getting people to the island, and then ultimately getting power restored. But it took eight months from it hit in, Maria hit in September of 2017 and it was early May before they were fully restored. And I remember being there in March or April of that year and we were up in the mountains, up in the sort of hardest to reach parts of Puerto Rico. And there was a crew that was about to restore a small town up in the mountains. And this woman comes out, she had bought some cookies, she was giving them to the line crews, she had the biggest smile on her face. This was like day 200 of being without electricity. And look, I think about here on the mainland, if people were without power for 200 minutes, it's like the world came to an end. And here these people were without power for 200 days, and they're so thankful and appreciative of the crews that came to help. Hari Vasudevan (1:11:41) Yeah. Scott Aaronson (1:11:41) So that moment is just so stuck in my mind of the good that this industry can do. Hari Vasudevan (1:11:47) the human moment to be honest too, right? And it's also a moment where you appreciate ⁓ being in America, in the mainland and taking a lot of things for granted, right? And you travel outside, you see a completely different perspective and the appreciation for what we have just grows that much more profoundly, right? So. Scott Aaronson (1:12:00) You got it. Amen. Like that was so that so I mean, if you're talking about like moments in my career where kind of all came together, the public service aspect of it, the organizing an entire industry, the solving hard problems. I mean, we could again, an entire podcast about, you know, the things before, during and after the Maria response. And, you know, it was it was a challenge, to say the least. But it's one I'm so proud of. And it's funny, like early days of it. The government was trying to figure out, like, how are we going to do this? And they were talking to companies that like do kind of large logistics like no no no the only people I've said it before like on this on this podcast like the only people on earth who know how to do emergency power restoration or in this sector help us help you like we will get you the people there it's the right thing to do so that was an amazing extraordinary experience and couldn't be prouder of being a small part of what ultimately was just a herculean effort Hari Vasudevan (1:12:50) 100%. Scott Aaronson (1:13:02) The other, again, related sort of disaster response, if you will, was the industry's response to the pandemic. So look, we hadn't had a pandemic before. mean, unless you were alive in the 19 teens, you haven't lived through one of these. Amazing. Oh, that's amazing. So she wasn't in electric power sector for either of them. But if she was, like, we needed that expertise. Because look, we were Hari Vasudevan (1:13:14) Yeah, my grandmother lived to both. That's true. Scott Aaronson (1:13:28) I don't want to say making things up, but we were developing a response protocol in the middle of an incident. Now it's interesting, like a lot of the electric sectors, ⁓ business continuity plans are actually based on pandemics because pandemics are good thought exercises. All right, you don't have access to these people, these facilities, these supply chains, what do you do? It's a great thought exercise until it actually happens. And then the details of the pandemic matter. All right, it's a seven day incubation period. It is airborne. ⁓ We had to figure out how do you sequester critical personnel so that they can be available to run the grid when we have storms. we've developed protocols for mutual assistance during a pandemic, some of which actually created new efficiencies that we still use after the pandemic. So it was building out, we built out what's known as the ⁓ ESCC Pandemic Resource Guide. So the sector court, council, CEO-led body, I'm one of the secretaries, I'm part of the secretariat for it. Hari Vasudevan (1:14:26) Yeah. Yeah. Scott Aaronson (1:14:33) We developed, what started as a pamphlet, it was five or six pages of like leading practices. This was like January, February of 2020. It grew to 150 plus page document that was crowdsourced by the entire industry about leading practices for. keeping the lights on during the COVID-19 pandemic. And that was 400 plus people sharing knowledge in real time, building out this resource guide. was translated into other languages. other sectors borrowed from it. One of the coolest things that we did as a sector, and again, it's that power of EI's tagline, power by association. We all work together and not just EI's members, the cooperatives, the municipals, the independent power generators, the Canadians, we all did this together so that we could keep the lights on during an extraordinary time and we did. Hari Vasudevan (1:15:24) Yeah, no, but phenomenal. ⁓ something, right, we all have challenges in our career, ⁓ a setback or something like that in your career where you learn from what you can share with some of younger people out there. Scott Aaronson (1:15:37) I love that question too. Everybody has tough days and even tough weeks and months. I'd say the one that was maybe most impactful for me, ⁓ I worked on Capitol Hill, worked for a US Senator for seven years. And then I went over to the house to work for somebody who was ⁓ very important to me ⁓ as a Jewish American. He's the only Holocaust survivor to ever serve in Congress, guy named Tom Lantos. And so I got to work for Tom for two years, but he died ⁓ while I was working for him. And so going from a person who was this luminary, who had been in Congress for 30 plus years, who was the historical figure, only Holocaust survivor to ever serve in Congress, ⁓ He passes away. We have to kind of close down his office. We have to get his successor up and running. I got to work for her going from somebody who is, you know, number 20 or so in seniority to somebody who's number 435 out of 435 was sort of eye opening, right? Help her get her office up and running. But it was that that was a tough year. Oh, and by the way, I had a one year old. Oh, actually, I had a newborn when he died. was about six. My daughter was about six weeks old when he died. And so I have a newborn at home. I'm helping to get this new Hari Vasudevan (1:16:37) That's hard! Scott Aaronson (1:16:52) office, the old office closed, the new office opened, ultimately parted ways with the new member at the end of 2008 and then came to work at EEI. And so it was that, it taught me resilience. taught me that things happen. It taught me that you may have this vision of what your job is going to be and something may change and you just have to be ready for it and to kind of roll with the punches. And so I think there's been innumerable other examples as everybody has in their professional careers of the value of resilience. It's look, you're going to have bad days. It's what you do with those bad days that matters. Hari Vasudevan (1:17:29) Yeah, no, beautiful, super eloquently put. let's get to rapid fire. Are you ready to go, Scott? I mean, are you sweating a little bit? No, not really. So OK. All right. Pro sports, college sports. Scott Aaronson (1:17:34) Let's go. love it. Should I be afraid? I feel afraid. I'm gonna go, so I'm gonna go pro sports because I follow them more. I'm a diehard Giants fan because I hate myself, New York Giants fan, but I prefer college sports. Pro sports is too perfect. I like the messiness of college sports. just, you know, I don't have, I don't have like these deep allegiances in college. Like I went to university of Colorado, go coach prime, go buffs, but we've been so bad for so many years. I've really put my, my wife gave me a choice. Like you get to be a, I'm either going to be a Saturday widow or a Sunday widow. I chose Sunday widow for her. And then, so there we are. Hari Vasudevan (1:17:57) God. Okay, all right. So, you know, let's go to Giants, right? So in that case, you guys have had four Super Bowls, right? Two Parcells, two Coughlin. ⁓ Pick the one that really, really, you know, stays with you to this day. Scott Aaronson (1:18:35) 86, I was 10 years old, I used to go to games with my dad, like that, are formative memories, it's why I continue to be a giant fan. And look, by the way, I can't be sad about being a giant fan, you're exactly right. We've been to five Super Bowls, we've won four, every few years we're good again, there is a path to us being good again, it's just been, it's been a rough, you know, five, six years, actually, like 15 years. Hari Vasudevan (1:18:54) Yeah, now listen, mean seriously, ⁓ know, four Super Bowls, the Eli Manning two, ⁓ two of those are really stunning ones, Scott Aaronson (1:19:06) Oh, I mentioned my daughter being six. It's all tell a quick story on my daughter. She was six weeks old when when Lantos passed away. She was four weeks old when the Giants won that Super Bowl and made the and made the Patriots go 18 and won. Hari Vasudevan (1:19:22) 18 in 1. Scott Aaronson (1:19:23) She was in the hospital at the time. She had the flu and a baby at that age with the flu is super dangerous. So I watched that Super Bowl at Children's Hospital here in DC and ⁓ it was really hard to not scream a lot during that game. Hari Vasudevan (1:19:37) God, is unbelievable. ⁓ Scott Aaronson (1:19:41) That Manningham catch on the sideline, the Tyree catch, vivid memories of that one too, but no, the 86 team, man, that's where it was at. Hari Vasudevan (1:19:49) Yeah, awesome, awesome. You know, actually interesting, the 90 team that where I think Phil Simms has heard and the Jeff Hosteller, you know, I don't know if you know, but his either his son or his nephew comes to the conference next time. actually will connect you with him. His name is Jared. Yeah. Yeah, Jared Hosteller. So he's a big kid. I mean, not a big kid. He's my age, right? Scott Aaronson (1:19:56) That's Hosskettler came in, that's right. huh. I had no idea. that's amazing. I need to know that. That's great. Love it. I had no idea. Hari Vasudevan (1:20:16) But he's big, I'll connect you with him actually next time. Scott Aaronson (1:20:19) Hot Stepler, like that guy deserves a place in the Ring of Honor for the Giants because he did. Sims got hurt middle of the year that year. Hot Stepler stepped in and and won him a Super Bowl. That was amazing. Yeah. Hari Vasudevan (1:20:30) So what do you think of Jackson Doct? Scott Aaronson (1:20:33) You know what? He might be real. I'll also say I was always I stayed on team Daniel Jones. I thought he I thought he was legit. And now we are seeing that when you put an offensive line in front of him, he's actually legit. He just needed, you know, more than 0.5 seconds to throw the ball. So I think Dart is exciting. I think the fact that he can move the way you can move. I think he throws a beautiful ball. I think he's really stepped in. The team look, they're not good right now, but they sure are fun to watch. Hari Vasudevan (1:20:44) Indianapolis coach, man. Yeah, it's actually fun. So Buffs, I know you're a Buffs fan, Neon Dion. So, Shetter Sanders, right? Is he gonna take a snap in the NFL or not? you think? Scott Aaronson (1:21:08) Yeah. I don't know. know, I watched him play in college. I thought he was very good. Obviously the professional scouts know something I don't and they decided that he was gonna fall to, what is it, the fourth round or something? Sixth round, whatever it was. I think he's legit. I think he can throw a beautiful ball. I think he's got great in-pocket mobility. We'll see. Hari Vasudevan (1:21:40) Yeah, no, interesting. Who's going to win the ⁓ college championships this time, man? Two questions, actually. College championships, Super Bowl. Who's going to win? Scott Aaronson (1:21:50) It's gotta be Ohio State, right? And it kinda pains me to say that. My neighbors are Michigan guys and I've sort of adopted them a little bit. ⁓ So I guess it's Ohio State. I think there's anybody better right now. The pros, man, it is so wide open. I don't know. mean, there's a few teams that are real. I think the Bills are very real. think KC is on the back side of their dominance. ⁓ Denver, like that game last night was gross, ⁓ but they're two- Hari Vasudevan (1:21:56) Ha ha ha! But they still won 10-7, right? ⁓ Scott Aaronson (1:22:18) Their defense is so good. So yeah, I don't know. the NFL got something right. They've wanted parity and they've had parity for years, maybe with a couple of exceptions. ⁓ Maybe not the tippy top, right? Casey winning a bunch of Super Bowls, New England winning a bunch of Super Bowls. But it's wide open this year. Who the heck knows? I know who's not winning the Super Bowl, the Giants. Hari Vasudevan (1:22:36) Yeah, it's right open. I picked a ramp. Yeah, okay, good. Hey, your last question my friend. ⁓ You're a CEO for a day for a utility company, of course. All right, what would you do? Scott Aaronson (1:22:45) Okay. So lean into the value of the grid and the value of resilience. I know people sort of look at it, look at the industry as these regulated monopolies and there are only, I'm gonna say it again, there are only so many people and companies on earth with the scale and experience to run the grid. And I think the value that electric companies bring, the value that the grid brings, and the need to be resilient against all these hazards that electric companies are uniquely positioned to be able to do at scale. and therefore affordably providing that value, we gotta lean into that. So that's one, and then the two is we need more humans to be in the electric power sector. So as a CEO, try to attract as many of them as possible. And I appreciate you asking that question before. Let's really make being in the electric power sector, let's make it sexy again. Hari Vasudevan (1:23:52) Yeah, no, it's awesome. That's fantastic. How many IOUs are there in the country? There used to be 55, 56, right? Am I right? Scott Aaronson (1:23:58) 62 is the number that we use, give or take, and then with the operating companies it's about 120 or something. But yeah, 62 holding company level investor in electric companies. Hari Vasudevan (1:24:08) Scott, my friend, ⁓ one of the most competent guys that I know, such a passionate human being out there, super glad to have you the show, super glad to have you ⁓ be a leader in the industry, be a leader at EEI, you always energize me, you always energize so many people. Thank you so much for coming on the show. Scott Aaronson (1:24:34) Hari, thank you so much for the opportunity. Thanks for what you do. Thanks for all of your support of EEI through the years. And look, yeah, thanks for inviting me. I'm glad we got to talk for a while about all those interesting geek out on grid security and grid growth and AI, but talk a little bit of sports too. That was a good combo there. Hari Vasudevan (1:24:51) Yes, yes. Thank you so much. Scott Aaronson (1:24:54) That gadget.