The Exchanges

Q electric vehicle charging stations, and that is the demand charge. It's when a utility charges more at a certain time of the day for a lot of demand from a particular facility. It can hit commercial facilities pretty hard depending on the rate. This is a potential major problem for gas station owners, folks who want to operate these networks. How does it work, and why is it so problematic?

A Right. Well, the demand charge has been around for a really long time. It's been one of the main ways that utilities have made money off big power customers for a long time, and it's basically, from the way they look at it, kind of an equitable thing. If you're going to use a lot of power, um, doing so requires beefy electric infrastructure to provide that to you, and the way that the utility recoups that cost is by charging you this demand charge, and basically what it is is For the few minutes of the month, for the few minutes of your billing cycle, that you are using the most power, they, they add a multiplier of a certain number of dollars to your bill, and so if you use a lot of power, it's high, and if you use less power, then it's low, and it's generally not all that controversial because big power users like factories or a farm that has a lot of irrigation pumps, a data center, have the ability to kind of throttle their power use and avoid That sting of the demand charge. But the EV charging station is another thing altogether, because it doesn't have the ability to plan when its big power use is going to come up. They're just sitting there, and then at some point when they can't estimate, can't guess, it may be that every single one of their four or eight plugs gets plugged into, and their power use goes through the roof. And then at the end of the month, they wind up …

AI assessment note: “it doesn't have the ability to plan when its big power use is going to come up”

Q So tell me about this from, from the driver's perspective. How does the map impact them?

A Well, the interesting way that it impacts the driver is how invisible it is, and in the story I gave the example of Metro Denver, if you're driving north on Interstate 25 out toward Wyoming, you cross over the boundaries between five different utility service territories, and those lines don't make any sense. They're carving in and out, um, sometimes One utility has control on one side of the street, and another utility has control on the other, and there's gas stations on both sides. Um, and it's, it's not something that the, you will, we will ever expect the customer to be able to make sense of. But it creates a dilemma for the gas station, um, the gas station owner, because they want to provide the same general price For customers. So they're not complaining. You know, they don't, you don't want to charge someone six times the price for fuel in one location as you do down the street. But that's what they're having to pay. You know, like the, the, in this town of Wellington, if you go a few blocks north, it costs six times as much to charge. You go a few miles south, it costs four times as much to charge. How is the, how is the gas station chain owner supposed to make sense of that for their own Uh, for their own books and for the customer who asks how that makes sense.

AI assessment note: “the interesting way that it impacts the driver is how invisible it is”

Q I'm sorry if I ruined your nine-year-old's ability to listen to this interview, by the way. You spoke with experts after this announcement came out. What did they tell you about this risk assessment?

A Well, probably the most interesting interview I had was with this fellow named Andrew Maynard, who runs, um, the Risk Innovation Lab at Arizona State University. And he looks at how companies, that, that the different kind of more squishy kinds of risk that companies and individuals face. What his, and he's actually, um, looked at Tesla, and specifically a lot of its, um, a lot of its automated driving programs. And his thought, his thought when he first heard about Musk buying Twitter was, huh, here's a piece that doesn't fit. If he looks at the company's And the projects that Musk has taken on, he saw a coherent plan. He saw somebody who had thought through the moves all in advance. And, you know, if you look at the constellation of companies and what they do that Musk has, you have Tesla, which makes electric cars and, um, manages and builds batteries for homes and for the electric grid. You've got SpaceX, Which is, uh, getting cargo to space and building a, uh, space-based internet with the eventual goal of creating civilization off the planet on Mars. And you've got the Boring Company, uh, which proposes to, uh, make the building of tunnels much faster and cheaper in order to transport freight and people underground in order to solve gridlock and make Delivering people and things more efficient. Those are, there's also Neuralink, which is, ah, about creating a brain-machin…

AI assessment note: “most interesting interview I had was with this fellow named Andrew Maynard”

Q directions. He started a drilling company, an artificial intelligence organization, a company focused on brain implants for superintelligence, and many have wondered, what exactly is the limit? Like, at what point does this become a liability? Investors haven't really been concerned up until now, but the market and media reaction after the Twitter takeover was different. It suggested that Maybe there's more concern this time. So what's the distraction risk?

A Well, you know, you'd think that a man would be, uh, pretty well have his time split managing, uh, leading space travel company and the electric, leading electric vehicle maker. You know, we already, you already imagine there's a lot of demands on the guy's time, not to mention the other smaller companies he's associated with. So it's kind of hard to calculate when, uh, Musk gets too distracted, uh, To do something. It definitely looks like Twitter is something he really, really wants to engage in. It seems like he's obviously thinking about it a lot. He wants to engage on it. And so that means that less attention is being paid to Tesla at a time when, um, the company has just opened two enormous new factories and is engaged in the task of, of ramping them up. And that they, even before this Twitter thing came up, Tesla said that It was so, going to be so occupied, ramping up those factories, that it was going to have to put off, ah, two highly anticipated models, the Cybertruck and the Roadster to twenty-twenty-three, in order to deal with the big tasks ahead of it. So it, it seems like it can't be helping Tesla, um, to have its CEO very preoccupied with a new project.

AI assessment note: “it can't be helping Tesla, um, to have its CEO very preoccupied”

Q has business interests that conflict with Twitter's business interests? What are you going to do? And the example that he gave was, if you are trying to build factories in China and negotiating over Tesla's operations there, and then China wants to crack down on your speech, Twitter's speech policies, what does that do to the way that you are treating your speech policies on Twitter? Talk me through that.

A Well, the thing that made me think of was how Musk has reacted to COVID lockdowns. Famously, when his California factory was locked down, he called the officials who imposed that fascists, um, and really publicly bristled against it. But there's been a similar lockdown going on in Shanghai, um, at his factory, and he hasn't Pushed back against it at all. Um, perhaps because his relationship with the Chinese government is different, and he knows that he needs their approval to be able to continue to operate. And I think that's kind of, that's the fear that Bezos hinted at in that tweet. And it gets to the point that With Musk running Twitter and Musk running Tesla, one is left wondering which master he's serving. There are points of conflict, and it will be simply, even, even if we don't know what the machinations are behind it, there will be a question, a doubt, about whose interests he is forwarding at any given time, and that's going to make it a tough situation for both companies.

AI assessment note: “With Musk running Twitter and Musk running Tesla, one is left wondering which master he's serving.”

Q Why is this creating a battle zone over the future of the fueling station?

A When EV fueling started to be a thing, and gas stations weren't the first one, it's the charging networks that we already know about, like ChargePoint, Electrify America, Tesla. They had a really huge problem when they first started out, and that, that problem is, That it's illegal to sell electricity unless you're, unless you're the electric utility. The reason when you go to a coffee shop and you plug in your laptop, the reason they never charge you a fee for electricity is because it would be illegal to do so. Because the only one who's allowed to charge you for electricity is the utility. And so put yourself in the position of being someone who's selling electric fuel. You can't charge for the fuel. And so, for a number of years, it was difficult for this industry to be financially viable because they had to work through these really long, difficult rate cases and regulatory proceedings, state by state, to even be allowed to sell fuel in the first place.

AI assessment note: “they had to work through these really long, difficult rate cases and regulatory proceedings”