Thank you for joining us today. The topic on our agenda is H51, the bill related to fossil fuel infrastructure. You shouldn't feel confined to speak to that. I know that your area of expertise is certainly broader than that, but that is something that our videos before committed. It's something we're interested in digging a little more deeply on, but I appreciate you joining us today. As I said, I think we've got a couple more members that are going to join us in the process. Thank you. If you could introduce yourself. Great. Thank you for having me. My name is John Erickson. I'm a professor of sustainability science and policy at the University of Vermont. I work broadly in the area of ecological economics at UVM, and part of the DUN Institute for Environment, where I do research on climate change policy, climate change economics. And I've been doing research in this area for those counties this morning for over 25 years now. So I've been actively engaged in climate change research now since the early 1990s. So I am going to focus on, as I was asked to, on the infrastructure bill that's before you. I'm happy to take questions. I know there's a lot happening in this committee right now, so I'm happy to take questions on that bill or other things before you. I certainly understand the urgency of acting, of doing something. I certainly understand the challenges of state policy action, the challenges before Vermont, and also the pros and cons of what you might think of as market-based approaches versus regulatory approaches. So I thought just to open things up, I would limit my remarks to three themes. Number one, the notion of carbon locking. We talk about ongoing research around carbon locking and how that's relevant to the questions before the U.S. Committee here at Vermont. Number two, the financial concept of stranded assets. I think it's also a really important concept that regulatory bodies, legislative bodies all around the world right now are struggling to think about. And number three, the merits of supply-side climate policy, including the growing use of regulatory bans, which again, I thought I'd focus on this, is it 551, right? Yeah, that's bill 51. So carbon locking stranded assets and supply-side climate policy, then take any questions you'd like. So first, the notion of carbon locking. This is an idea that's been around for, oh, going on 20 years now, really started to appear in the literature around 1999, 2000. Probably one of the authors that's most cited and referred to is Dr. Gregory Unruh, who's a professor of sustainable business strategy and social innovation at George Nation University. So it's actually a concept that's really come from business schools to really understand the notion of carbon locking. He's worked on this now for nearly 20 years, and he defines it as, bear with me, because I'm going to unpack this sentence. A process of technological and institutional co-evolution driven by a path-dependent increase in returns to scale. How do you like that? So let me unpack each of those ideas for you. A process of technological, institutional co-evolution. So I'm going to unpack that first. Driven by a path-dependent, I'm going to unpack. And then the third idea is increased returns to scale. So there's a huge literature on this, but if I could summarize technological, institutional, co-evolution, a big fancy way of saying that technical systems and governing institutions interact, and they co-evolve, and they tend to create relationships. And these relationships between technology and the policy bodies such as yours starts to over time become reinforcing relationships. We get used to a certain technical system, a certain lifestyle, a certain way of doing business. The idea of carbon lock-in is that we're all, one way or another, dependent on carbon, and have carbon dependent lifestyles. And our regulatory bodies, institutional bodies, our very culture becomes intertwined with these technical systems. The second piece of that definition is the notion of path dependence. So the other fancy word we often use is positive feedback. What happens in these co-evolving systems is you get reinforcing feedbacks, positive feedbacks. This dance between the technical infrastructure and the institutions and organizations that create, diffuse, and employ them becomes a way of reinforcing these impacts. There's a lot of literature on technological path dependence or technological lock-in. Probably the most classic example is right in front of you here, your keyboard. The QWERTY keyboard, Q-W-E-R-T-Y, is a terribly inefficient way to type. However, it was designed so that the hammers on the typewriter wouldn't get jammed up. And because we all started using QWERTY keyboards and because we all learned QWERTY keyboards and our education system and our culture evolved around QWERTY keyboards, we can't get away from QWERTY keyboards. That's the idea of positive feedbacks. That's the idea of path dependence. And you can probably, in your own head, think of path dependence within our carbon-based society. And the third part of carbon lock-in is this notion of increasing returns to the scale. And this is really a challenge for us to move away from a carbon economy and to get onto other paths, especially as Vermont aspires to be 90% of renewables by 2050 to limit our greenhouse gas emissions according to our statutory goals, et cetera, et cetera. Increasing returns to scale has to do with a number of things. First is scale economies. So the idea comes straight from my own discipline of economics, right? That as you scale up, as you get to larger and larger scales, the unit costs keep going down, right? So for example, in the case of carbon lock-in, there are big costs to building carbon infrastructure, as you know. There are big costs to building pipelines to road networks, to transportation systems, to electrical systems. The big upfront cost, though, tends to create a lock-in to those systems, right? Because then it becomes really cheap on a per-unit basis to run those things. Once the road's in place, it's cheap to drive. Once the electric lines are in place, it's cheap to run those electrons. Once the pipelines in place, it's cheap to run the new gas. That's the notion of increasing returns to scale. And it creates huge, huge barriers to entry. We also see learning economies as part of increasing returns to scale. Very simply, once you learn how to use a technology, once you learn the QWERTY keyboard, it's hard to change, right? It's hard to get off. So that also creates this notion of lock-in. Also, as we get used to working with new technologies or used to being part of the carbon economy, it reduces our uncertainty. The biggest challenge, for example, right now in electric vehicle markets is uncertainty, right? Like, you know how to run a gas-fuck-fuck-fueled car. You know where the gas stations are. You know if you run out of gas, there's lots and lots of options. The biggest challenge is adaptive expectations for moving, for example, our transportation system over two electric vehicles. And another aspect of increasing returns to scale is what we call network economies. These are, again, the interrelationships between technical systems and their users. So all of these things, technological and institutional co-evolution, path dependence, increased returns to scale, create a kind of lock-in, right, to a technical, cultural, institutional system. And this idea of carbon lock-in that's been studied and empirically measured for well over 20 years now is a dominant part of what you all are trying to figure out. Like, how do you unlock the lock-in, right? All those things that are locked out are because of, for example, increased returns to scale. Right? Huge, huge barriers to entry to other kinds of technologies that in the case of things you're considering that are carbon saving and often more economic, right, actually cost saving. But because you're locked into that system, you can't surpass the barriers to entry. So this carbon lock-in, to quote Dr. Unruh, creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages, right? So that's the rub. Again, I've been working on this for 25 years, and it's kind of like, when are we going to make a dent? When are we going to make a dent? When are we going to finally turn the greenhouse gas curve? And despite all the great ideas, all the great technologies, all the cost-saving technologies that are out there, we can't seem to bend the curve because we are locked in. The market failures are very clear. I believe this community is also looking at carbon pricing as an option. It's something that I've studied for just this long 25 years. That's a kind of market failure when we don't price the external costs to this lock-in, right? Certain sectors get a pass and others get tenorized because of that lack of pricing, what we call an economics externalities. The policy failures are very clear. There are powerful lobbies that are working against carbon pricing, working to keep our system in place because they've got a lot invested in it. They themselves are locked into the system. We have, in the case of carbon lock-in, persistent fossil fuel subsidies that are, again, tilting the plane, tilting the advantage towards keeping us on these carbon pathways. So that's this notion of carbon lock-in, just from a conceptual point of view. But a lot of work has been published and inspired by Dr. Underwood's work in empirical studies that I think are very, very, very relevant to the questions that are before this committee on the question of carbon lock-in from fossil fuel infrastructure. The International Energy Agency. They're the agency that's responsible for the coordination of all the energy systems, energy data, and energy regulators, and energy agencies and ministries all around the world. They have concluded that continued near-term, so near-term through 2020, this study was published a couple of years ago, it's only a year from now, investment in conventional technologies instead of low-carbon alternatives would increase investment costs four-fold in the long-term. And the long-term for them was out to 2035. So they were saying if we stand, if we continue to make investments, continue to stay locked into a carbon economy, the investments in the alternatives will be four times as expensive in the future by 2035 if we don't start turning the shit now. Pete Erickson, who's from the Stockholm Environmental Institute, he's published extensively on the idea of carbon lock-in. He's probably published some of the most detailed studies looking at a combination of one equipment lifetime that's part of the lock-in.  Once it's in place, it's really cheap to operate it, right? So that's part of those economies of scale. He's looked at the scale of the increase in carbon dioxide emissions, financial barriers to subsequent replacement with low-carbon alternatives, much like the International Energy Agency did. And then what he calls no institutional mechanisms that further strengthen this high-carbon technology is at the expense of low-carbon alternatives. So I am... Please, interrupt me anytime. Okay, quick question for clarification. You said it would cost four and a half times more after how many years have we... So they were looking at if we continued to invest in conventional technologies from 2020 to 2035, a 15-year period. Okay, 15 years. The cost of doing a shift at 2035 would be four times as expensive. And why is that? Can you explain that a little bit? Yeah, I'm going to explain that right now with this graphic. So I am an economist, so I'm required to use a graphic at some point. Or an equation, your choice. Would you rather have a graphic or a graphic? Okay, that's all right. So this is a graphic that takes some unpacking from Dr. Erickson, his work, P. Erickson from Stockholm at Brown Mell Institute. So on the x-axis here, the horizontal axis, this is equipment lifetime in years, okay? So these are literature estimates of how long this kind of investment will last. So you see the big circle there is coal power. So if we make... If we continue to make investments as China has in coal-powered electricity, right? Our country is actually not going in that direction right now. We're retiring coal-powered electricity. The equipment lifetime by their estimates is in that 40 to 50 year time frame, right? These are big investments. I don't see pipelines on here. Where would they fall? Yeah, I get to that. But they didn't specifically look at pipelines, but they looked at end uses of pipelines, right? So once you're using natural gas, for example, from a pipeline, the pipeline is just part of the transportation infrastructure to get it to you. But up here, gas heating, furnaces, gas water heaters, these kind of... these circles at 20 and 10 along the x-axis, those are equipment lifetimes. So they're looking at average lifetimes of your house, your homeowner, and you put in a gas furnace, right? You're hoping to get 20 years, if not more. Gas furnace.  Yeah, so over the weekend, I looked for a good literature estimate of the best I could find was 50 years. Now, of course, that's going to require maintenance and leakage is a major issue of methane leaks or pipelines and everything else. But the best that I can see is 50 years. The other thing I don't see on here is oil heaters. Yeah, so this is not meant to be an exhaustive of everything. They did a number of case studies, if you will. If I could just unpack this a little further. The x-axis is equipment lifetime. The y-axis, the vertical axis is what they're calling financial barrier to unlocking. This is really key. This is what they estimate the carbon price would be needed for early retirement, right? To make these things uncompetitive, right? So you wouldn't wait to their full lifetime. You would retire these things sooner than the end of their lifetime. So you can see when you get up to gas heating for furnaces or gas water heaters, you're getting upwards of a price on carbon of something north of $500 a ton of carbon dioxide to force an early retirement. No legislature in the world is talking about price and carbon at that high, right? But that's the kind of financial power that you would have to have to unlock an investment that's already been made, right? Because of these economies of scale. That's why I wanted to spend some time on the scale idea, because it's so, so important when we're thinking about technological lock-ins, or in this case, carbon lock-in. The colors are these technical institutional effects, and I will share these papers with you if you want to get into the weeds of how they measure these things. But for example, black is high, gray is low, and white is medium, and white is low. So you see ice passenger vehicles, internal combustion engines have really high technical institutional effects, right?  So that's a really high kind of combination effect that keeps those things in place even if they have shorter lifetimes. And then lastly, the size of the circle, and this is really, really important. What they've done is they've said, how much carbon could we admit, okay, this is a global study, to stay within the 2°C limit, right, that all governments, ours included, have agreed to, in principle, want to stay below at most 2°C warming. How much carbon could we admit to stay below the 2°C? This is all the carbon in business as usual that we would burn above that, right? So roughly, to stay within 2°C, we've got about 400, 500 gigatons of carbon that we could still put into the atmosphere. These circles, so the coal alone puts an extra, an extra 200 into the atmosphere. If we stay locked into carbon on business as usual. So this is exactly the question that's before the world's governments, right, and the US government and our state governments, right, is when do we say no to new carbon infrastructure that can last anywhere from 10 to 50 years, right, that won't be retired early unless there's a huge future carbon price, which I'm doubtful that we're going to get a carbon price north of $100 a ton. And that would have to unlock everything else that's part of the socio-technical transition. Please, yeah. If we were to stay under, within our carbon budget, this page would be blank. So what they've done is they've compared two pathways. One is, which we all do when we model, I'm a modeler, business as usual. What have we been doing? What if we stay on that pathway? The other pathway says what would we have to do to get to 2°C? These circles show the difference only out to 2030. If we stay in business, if we blow past 2030, then we're in big trouble. But again, when you're talking we, you're talking this is the world, this is the world, absolutely, yeah. So that's the challenge for state policy initiatives, right? Like, what's our share of the problem? What are we going to do as a state? How are we going to take leadership on this? So I want to take this down to a very rudimentary level for somebody, you know, looking at this. I'm going to unpack this even more. Okay, so I'll ask a question and if you want to get to it in five minutes, that's great. But, you know, when I look at graphs like this, I kind of look at it in the context of do I want to be in the Northwest? Do I want to be in the Southeast? And what does it mean, you know, if I'm on that curve, if you will? So now you're thinking about climate change impacts? Well, you know, I look at coal and I say a huge amount of carbon pollution there and, you know, one of the lowest cost impacts to take out of service. I'm not sure if that's a correct interpretation. Then I also look at internal combustion engines for passenger vehicles, cars. And it looks like it's really expensive to take that out. The lock-in is really strong. Right, but they're, you know, actually I'm driving a car now and it's been around for 10 years. I don't know how often cars stick around for 17 years. Maybe it has used vehicles. These are all average estimates. Average estimates. I'm most interested in, you know, the internal combustion passenger vehicles. What does it say that that circle is up on kind of the northeast quadrant, if you will? And what does it mean that techno-institutional effects are high? That's the only black circle? That means these increases in returns, these lock-ins are really strong, right? Because the technical, the cultural, the governmental are so, we often use the word entangled, are so entangled that they are reinforcing in a transportation system built on internal combustion engines, right? So we got gas stations, we got roads. It's all there. Once it's built, it's really low cost operating. That's the question before you guys, right? And once it's built. So to take your example further between cars and coal, we know that coal plants are being retired, right? We know that coal companies in the United States are going bankrupt. We know that coal use in this country has peaked and isn't declining in the U.S., in Europe, and most of Central and Latin America. The big exception for coal is Asia right now. And this graph would predict that. This graph here, most of that circle right there is not the United States. Most of that coal circle is China and India. No, but I need to predict it in the context of if you, if your goal is to reduce carbon emissions, it's less expensive to take carbon, to take coal offline. Absolutely. Absolutely. So the way I read this is that this is the, on the vertical scale, this is the carbon price that would make it economically feasible to retire those resources early. Right. So if today I bought a gas fire heater for my house, right?  I'm going to retire this and do something else. So it's not feasible to actually use carbon pricing as a mechanism to drive down our greenhouse gas emissions. I'm going to come back to that because I really think it's going to take a combination. What I'm going to do with this is that we shouldn't be doing carbon pricing. What we should be doing is attacks on fossil fuels that we could then use to invest in other technologies that would leave some of these technologies in place but not use them as much. In the sense of weatherization electric vehicles on the road it's not going to displace all the internal combustion engines but as you know that quantity you're going to reduce the amount. Same thing with oil furnace or gas furnace, you can keep that in place and back up heating, but if you transition to climate heat pumps or something like that you're transitioning the energy source from fossil fuels to something more renewable. Call what you want what you just described to me is carbon pricing. In one case tilt the marketplace tilt the incentives so that I still have the choice of doing what I want but I've just made one...  So in that case you get what's called in Mark and Sena Blige or a double dividend right? The first dividend is the price partly corrects behavior but then what you do with that money is the second dividend. How do you invest that? You invest it to further reduce carbon as part of what I'm talking about here. Yep. Great. I'm sorry for that painful graph was that helpful, useful? It's really one of the sort of I would love to see a graph like this done for Vermont so we have not a global graph it doesn't exist yet. One small question is a little dot next to the ice. Is that really a dot? So that is gas road vehicles so that's natural gas vehicles. Yep. Now one misleading part of this graph is it's only at the burner emissions. So it's CO2 emissions at the burner, right? This analysis is now being corrected for what you would call life cycle greenhouse gas emissions, right? It would make natural gas if you looked at life cycle emissions because of methane leakage would look much, much worse than this graph. There was a study done at Cornell University that compared natural gas, an energy system based on natural gas versus energy system based on coal. Natural gas was worse than coal even at small leakage rates of methane because methane is such a potent greenhouse gas but that's a side story that we can come back to if you'd like. Just going back to the small doubts you have on there for cement kilns and in the building trades we talked about the high embedded energy and concrete but it looks like relatively speaking it's relative to use, right? So on a per unit cement is really greenhouse gas intensive but the amount of cement being produced and this is usual is certainly a whole lot less than the coal power for example. So these are scaled to use and carbon dioxide impact. Unfortunately they're not scaled to a full life cycle impact of greenhouse gases, right? Each of these. But they all note that in their articles that what was not included in the analysis. So if I could the conclusion from the carbon locking literature is that policy makers and investors because a lot of their target is the business community policy makers and investors should assess carbon locking and then quote, this is quoting Dr. Andrew. Focus intention on investments that rated highly in all our most indicators so say those with lifetimes longer than a particular planning threshold so what's the planning threshold? Is it 10 years? Is it 20 years? If you're planning thresholds 5 years then it's bring on the coal. If you're planning threshold like the IPC says in their latest 1.5 degree report that we've got 6 years to turn these curves around, right? Then anything that has a carbon locking beyond the 6 year period under this logic wouldn't be such a good idea. So the focus attention on investments that rated highly in all our most indicators lifetimes longer than a particular planning threshold so I think that's something the rest of it, what's your planning threshold for which the cost of unlocking is beyond reasonably foreseeable carbon prices because that's the other mechanism. If energy gets really expensive, the unlocking will happen by itself in which are subject to high technical institutional effects so think of all the cultural and institutional and government and that whole entanglement, right? If that's really strong then that's also a really tough to unlock. So you're saying sorry, were you saying that would be a recommended investment or not recommended? So policy makers should assess carbon lock-in based on those three dimensions, right? Lifetime what kind of economic climate would be required to unlock things and then this entanglement of technical institutional effects, right? So if you're considering a pipeline or a new highway or I don't know an investment in a Vermont aerospace industry, right? These are all carbon lock-in questions, right? And we have to ask what's the lifetime what's the economic climate, right? The cost of carbon and what's the kind of technical institutional effect of the lock-in. Now the IPCC the International Energy Agency would all say that we're already past that point, right? New investments in infrastructure that lasts anything beyond five years is too much in terms of lock-in. So I want to pivot now to escaping and introduce my second idea which is this idea of stranded assets which I think is the financial argument, right? So the challenge is that the beneficiaries of climate action are billions of the world's citizens, right? But we're diffuse we're uncoordinated we lack political power the that's the benefit side the cost side of climate action is immediate and it's focused on a highly coordinated powerful few. So all the carbon lock-in literature usually ends with that in the conclusion, right? That like the benefits are diffuse but uncoordinated and unpowerful the costs are concentrated coordinated and quite powerful and that's part of the technical institutional kind of entailment. So therefore, the reason that a lot of this work is coming out of the finance industry, the insurance industry the economics of discipline is because of this idea of stranded assets so this is kind of like the flip the other side of the coin of carbon lock-in, right? So this literature is making the case of carbon lock-in and how difficult it is to get out of a locked-in system once you've made the investment the stranded asset piece says well once you've made the investment or the investments that are currently in place what would determine if they were stranded meaning you couldn't use them the financial definition of stranded assets or assets that have suffered from unanticipated or premature write downs devaluations or conversion to liabilities so these are assets owned by a government by a company or by an individual person that are stranded they can't be used so again it's the sort of other side of the coin of the notion of carbon lock-in so reasons for stranded assets and they're often framed as financial and a kind of financial risk assessment the biggest reason for thinking about stranded assets is investment risk so again if you do the math and you look at what is currently on the books in terms of coal oil and gas on the books not stuff that we're hoping to discover someday right but the coal oil and gas reserves that are on the private books or public books a lot of oil gas and coal is owned by state governments what's currently on the books and what's left that we could burn to stay below the 2 degree threshold 60 to 80% is the number that would be unburnable it's on the books 60 to 80% of the carbon that we know is in the ground unburnable if we were to stay below the 2 degree Celsius threshold so another way to think about this is if the global policy community got serious and actually started ratcheting down climate risk from greenhouse gas emissions that one way or another all of these investments in oil, gas and coal 60 to 80% of them would not be brought up and spewed into the atmosphere the regulatory risk therefore is huge again either through international arrangements national arrangements or state arrangements if we actually take seriously what's left to put into the atmosphere the climate impact assessment would say we have to leave most of it 68% in the ground we're starting to see case law develop around national environmental policy act for example that's expanding the idea of what an environmental impact assessment is to include climate risk we're seeing insurance companies move in this direction a lot of this research on unburnable carbon is actually financed by the insurance industry there's also market risk we are seeing that already some renewables are out competing new fossil fuel investments not the locked in stuff because it's already built it's really cheap to run but new wind installations out competing natural gas fired electricity new wind electricity is already out competing new natural gas electricity so there's a market risk too by getting too locked in by making new investments in fossil fuel infrastructure so there are still active lease auctions sounds like by this analysis that's just a bad business investment well let me jump ahead here my notes here investments in coal, oil, gas so what you're referring to exploration, extraction transport all those investments globally are averaging a trillion dollars annually and are poised to exceed 20 trillion dollars from 2017 to 2040 in the international energy policy scenario that scenario so call that like a business usual scenario according to climate science is going to blow us way past the threshold those are the investments because of all the luck that I'm talking about these investments are teed up and are fighting this kind of investment risk regulatory risk, market risk to stay in a carbon economy to stay in a carbon economy now we know that there's some attempts to untangle that the divestment campaigns is one attempt to tangle that, the divestments the divestment campaigns are now low trillions of dollars but who knows if it's going to be enough to untangle these and we know that there are climate risks themselves on these very assets the big stink over ExxonMobil was that while they were funding the kind of anti-climate science in this hand over here they were funding climate adaptation strategies and they purposefully raised the level of their deep sea oil platforms in anticipation of rising sea level so they know what the climate risk are to their very infrastructure this is well documented yes so just jumping ahead in the scenario if we were to burn up all these locked in locked in assets or on the books assets how much of an increase in global temperature would we be looking at beyond two degrees two degrees is bad enough two degrees means no Arctic ice right we're already a little bit below one degree in terms of what the warming has been and we were already seeing the impacts of that two degrees even by the end of the century sooner is the reason why we have an international agreement to stay below two degrees if we do this kind of thing and burn the unburnable the biggest fear is I talked about feedbacks earlier is that we get into positive feedbacks so runaway effects so the latest literature on this is called hot house earth and it sort of tries to estimate the probability of passing thresholds where you'll start to cycle into a positive feedback right and by then all bets are on so when you heat the world it creates feedbacks that create more emissions that create more heat there's simple social feedbacks we have a farmer in Vermont we all turn on our air conditioners longer it used to be really have to air condition your house for maybe couple weeks a year now it's a couple months a year that's a feedback but you mentioned the methane that's trapped in the permafrost that's kind of the worst case scenario if that were to be released yeah so that's being measured now and that's why the Arctic is warming the fastest so the farther you get away from the equator the higher the warming rate is so understanding those feedbacks are really important happy to get into lots of climate science 60 minutes had a segment yesterday of a scientist in the Siberia in Siberia who has been working on it he showed that it used to be that you couldn't get a shovel into the ground or he's at and now he's down about 6 feet before you get the frozen frozen ground so you've got 6 feet of soil that is now capable of melting and releasing that thing so I've been working in climate science and policy my whole professional life and climate sciences believe it or not a very conservative bunch they will not publish stuff unless they are pretty damn sure that they've got a leg to stand on I can tell you from experience the peer review process is absolutely brutal right? sometimes it can take me 2 or 3 years to get a paper out because it's been through rounds of peer review and revisions and you finally get the paper out and you're like ok wish I could have said this 3 years ago but it's a very conservative process and so a lot of this is what the state house what folks in Vermont do kind of believe in science that creates microphones and computers and lights and everything else or do you not but didn't prepare a testimony on that but we could go on that tangent if you'd like I just had a quick clarification 60 to 70, 60 to 80 percent of unburnable current is actually also what the fossil fuel companies list on their books as assets so this is not even taking into account probabilities of new explorations these are just book values fossil fuel companies and state governments so a lot of fossil fuels are state owned so Norway's fossil fuel Nigeria's fossil fuel Saudi Arabia's fossil fuels are all state owned so either on private books or public books but this is all accounted for in book value and in the case of private companies it's actually the value of the company so a lot of this stranded asset literature is in hand coming from finance cause it's saying there is regulatory risk here there is climate risk there is market risk what is the risk of all of that and then there are a few attempts to kind of get right at the heart of it the divestment campaign is exactly that insurance companies are investors insurance companies are financing the bulk of this research but what I mean is they're investors in the market they're looking at what's trying to yield a return because that's what they have money they collect and they invest it so they can you know are they divesting their private insurance companies beginning to divest them they're becoming way more conservative that's good with that way especially in coastal communities well that's in terms of policies I guess I'm thinking about the investment side I don't know the answer to that I know that a lot of the legacy money from the carbon economy for example Rockefeller Brothers Fund, the Rockefeller Foundation they got all divested and their money came from fossil fuels they're foundation side yeah so and then there's you can kind of rank oil companies from conservative to more progressive some of the more European based oil companies like British Petroleum are actually releasing reports that mirror a lot of this ExxonMobil tends to be a little more on the conservative side you can basically answer the question I had in that so what insurance companies are we talking about what do you mean what kind of insurance companies you can think of so ensuring real estate value ensuring the companies themselves ensuring I mean I think there's not a too distant future where oil companies are going to have a hard time doing high risk investments like deep sea drilling because of the exposure in the insurance insurance industry at what point will insurance industries say I'm not insuring your platform so therefore they've already seen the kind of impact of the divestment community and the activist community you know the companies that ship from the Seattle Washington area I've lost millions of dollars because of fossil fuel activism how does that insurance piece or intervention compare to the insurance companies now that aren't wanting to insure a house because it needs a new roof but the people can't afford a new roof how are we I don't know the answer to that so if you think of insurance of the carbon locked in the economy it's billions of dollars right if you think of insurance in the economy that climate can impact so the fact that the statistic on how many what percent of the world's population live within 10 miles of coast it's huge so if you think of that as an insurance liability it's huge as well so that's why insurance companies for example funded the the stranded assets analysis the unburnable carbon question one perspective is the similarity to interest in tobacco class action suits interest in the same petroleum industries known about this for decades and have been providing information from us which affects everyone as a class so in that respect it involves everyone that's why I don't know the statistic about how many attorney generals are included I have filed suiting insects on mobile for exactly this reason of you knew this, you buried it you yourself made investments to adapt to climate change that in one hand you were preparing for and the other hand you were denying so that's a stranded asset question right so my last theme so carbon lock-in stranded assets which is largely a financial question right and then supply side climate policy which is before you in bill 51 so there was just a special issue in the journal climatic change which is an excellent journal on climate change research published this past September that it just discovered over the weekend of preparing for this testimony on fossil fuel supply and climate policy and the lead article in this issue talks about the so-called road less taken of supply side policy for the most part most work on climate policy has been on the demand side how do we use market instruments how do we use market incentives how do we use carbon pricing to incentivize the shift to incentivize the move away from carbon lock-in and towards a different kind of energy path because of the urgency now of climate action there has been a sort of market shift in the economics literature to say yes we need the incentives yes we need to change the prices yes we need to get rid of subsidies of things that we don't want anymore rethink our taxation system rethink our pricing system encourage consumers to make different choices but that's only one part of it we're at a point now where we have to really think about regulatory instruments so they lay out the following rationale and this is I'll end here and we can keep talking applying supply side and demand side measures together according to this analysis would increase the scale of emission reductions so the idea is if you are combining rising carbon prices with regulatory efforts you kind of a double double whammy you get the opportunity at each mitigation cost as you're creeping up as you're creeping up the vertical axis here changing the economic climate of the decisions that are being made especially infrastructure decisions and at the same time you're trying to reduce these lock-in effects through regulatory measures they talk about how supply side policies and actions will tend to slow investment in fossil fuel production and trade infrastructure limiting the extent of carbon lock-in so if you will also limiting the extent of stranded assets financial risk the whole other part of literature talks about the carbon bubble if we really all of a sudden get serious about this the stranded assets piece starts to look like a carbon bubble just like the housing bubble this in turn can lower future mitigation costs I already talked about that the sooner we do this the cheaper it is to make the transition if we continue to be locked in the more expensive it gets out into the future of making the transition reducing stranded asset risk which I've talked about and reducing carbon entanglement this sort of socio-political influence of fossil fuel interests that we see as a predominant feature of carbon lock-in they also talk about how supply side policies may increase moral pressure and public support for climate action and I think this is important because action is more readily observable the closure or avoidance of a coal mine or a gas pipeline is so much more observable than the thousands of energy efficiency actions that are spread across individuals so that's an important aspect of supply side policy actors are more readily identifiable again coal industry, oil industry investors are identifiable in a supply side policy and the consequences are relatively certain and exact as much as I talk about carbon pricing the consequences are not exact we don't know what the incentive will do especially at the very very very small incentives that are being discussed in the state house and how these incentives will ramp up slowly over a 10 year implementation period we know because of carbon lock-in that it takes a huge incentive to really change people's minds fewer projects and facilities produce fossil fuels than use them supply side policy who you're focused your policy on is fewer granted they're more concentrated and more powerful but there's far fewer of producers than there are users demand side policy puts the emphasis on changing the users behavior supply side policy puts the attention directly on the producers or the transporters or the fossil fuel infrastructure so and then finally they mention that supply constraining policies may help to counteract the potential for resource owners anticipating increasingly stringent future carbon policies and prices to accelerate production in the near term has been called the green paradox that part of the kind of financial assessment is that this stuff is in the pipeline and there's regulatory risk or there's new laws coming down or potential infrastructure bans we've seen in other situations that that accelerates the kind of last dying breath of an industry tries to for example get all the fossil fuels to market before they know that the party's over that's another aspect of supply side policies sooner so I know you're considering infrastructure ban and I think that in combination with demand side policies is an example right one example of many of breaking this kind of carbon lock in and it's one of the few examples that I can think of that has certainty right ban is certain yes so one of the questions that I struggle with John is in not just creating in not just creating the same situation but with different products you know and in the same way you know one of the things that the free market such as it is does really well is innovation and if we choose to incentivize lithium ion batteries and we lock into lithium ion create the same situation it's a policy maker choice versus a market choice right and I'm wondering how we can capture that the dynamism of innovation free market and the supply side guidance and demand side both of policy well I think for that reason you can think of a regulatory approach that would require a new infrastructure or a regulatory approach that would ban infrastructure right there's far I hope you're convinced that there's a lot of certainty from the scientific community that we've got this unburnable carbon problem and the more we invest in carbon locking the farther and harder it's going to be to change right so I feel there's great certainty around regulatory reach right to ban a pathway that we're on that we know is a losing path right there would be far less certainty to then the flip side of that would be then to mandate a new technology and you use the new battery technology or new driving technology or new power technology right that's where the flip side of the market market pricing mechanisms that would say we're just kind of discouraging this choice and encouraging this whole suite of choices over here but market based instrument still allow the user through all the lock-in reasons for their experience the culture the networking all of those things keep things cheap that's why lock-in works it keeps things cheap right so you can imagine keeping things cheap in a renewable energy economy by providing more choice across that so nowhere do I see that you're considering legislation that is requiring alternative A by banning alternative B you're just saying let's ban alternative B because we know a lot of certainty about that and then let's see what happens over here yeah and I looked at another study for example of other countries or regions that were kind of at the end of the pipe if you will and like I mean transition fuel narrative of natural gas and this state is if you mind my saying is kind of ridiculous that narrative was maybe valid 20 years ago but in the kind of carbon lock-in that we see now transition like no I mean the lock-in the numbers the unburnable carbon there's no time for any sort of transition from carbon fuel A to carbon fuel B to a non-carbon fuel Vermont just happened to be kind of at the end of the road in terms of this natural gas transition that the United States has seen there's an interesting study that I looked at in Ireland same question Ireland was kind of at the end of the pipeline and there's a whole infrastructure study on Ireland to say should we at this point in 2019 invest in huge natural gas infrastructure as the transition and they did all this kind of scenario analysis and costing it all out and their answer was it's too late for that kind of transition Ireland needs to take a different path and again in the case of Ireland the a new investment in wind power is actually cheaper than new investment in gas-powered electricity that's sometimes driven by it's got to be a good wind resource in the Scottish National Power company's own value grid roll on so they made the transition from cold wind without a bridge driven by self-interest that's that kind of techno institutional entanglement piece who are the owners, who are the investors in our case the discussion is around expanding pipelines with remark gas owned by gas metro major investor gas metro is the pipeline companies that are expanding there's a lot of kind of locking part of that story and this kind of analytical analysis is done for exactly that reason so in terms of combining pricing and regulation our ability to regulate is kind of limited because we only regulate electricity and natural gas so you need something about that on the natural gas side but in terms of fossil fuels these little things like that gasoline we're kind of limited so something like the transportation climate initiative or the western climate initiative where you put a cap on the amount of carbon that it can be generated and keep rationing that down it might be a way to regulate the unregulated fuels the problem that I see with those kind of initiatives though is that they are too gradual and they take too long to implement and the time frame that we have to avoid this two degree Celsius temperature increase so given that what are the strategies can we use and again I'll send you there's about five or six key articles that I've referenced here but one is the special issue on supply side policies I did and they show there's a whole suite including regulatory fans of economic instruments on the supply side and their point is exactly yours the vast majority of the climate policy and climate literature has been about demand side approaches but the context in 2019 versus 1993 when I first started doing this work is dramatically different so the supply side approaches now are including regulatory bands banding new pipeline infrastructure is being used banding new oil or coal exploration is being used around the world these kind of moratoriums so King County Washington put a moratorium on all new gas infrastructure it's exactly similar to the band that you're considering but focused on natural gas infrastructure they're currently within a moratorium and again economists argue that that's an inefficient way to intervene in a marketplace but when you're talking about a stranded asset that we know is an inefficient both an economic and environmental terms to continue on then it kind of becomes an efficient way it becomes the targeted for a certain way versus market approaches the nice part about cap and trade is that there's a lot of certainty over the cap but little less than certainty over the trade so we can ratchet the cap down but unless we ratchet it quickly we won't get as far as we need to according to the whole stranded assets ideal great question the reason I mentioned the insurance for anything again looking in reality have reality for for monitors that I know if they have to spend eight or ten thousand dollars on putting a railing around their deck and securing a part of the foundation have insurance that eight thousand dollars or ten thousand dollars isn't going to go towards an electric vehicle or maybe a new heating system then you talk about okay that's where the state or the government steps in for incentivizing or helping out or whatever but I guess my looking at it is where is this money coming from I mean you just can't I don't see that amount of money being out there to do everything you're seeing we should do well if you look at just the pipeline expansion into Addison County if you look at the amount of money that was put into that that comes from the Vermont rate payer imagine how those millions of dollars could be put towards weatherization they could have been put towards moving towards electrification of heating they could have put into high performance wood heating right there are other things that don't contribute to the carbon walking millions of dollars right could go towards a different pathway so it's all about a regulatory choice you know this bill doesn't propose you intervening everyone's household and saying you must put in you're no longer allowed to use propane to heat your home right this is at the point of regulation which is at the public service public thank you public thank you public utility commission right which is at the scale of big projects with public interest right I can't think of a bigger project with public interest than climate policy in fact I provided testimony during the hearings for the pipeline talked all about the full cycle cost assessment that should be done considering natural gas talked about stranded assets and carbon lock in but the regulatory kind of question that they were asked as you know they decided to expand to grant permission to expand the pipeline so I feel like now you're sort of saying okay public service commission we're going to give you a different chart you are or you aren't whether this bill is out of your community or not it may as to be seen right but it's all at that point there will be a time if we continue on this trajectory where regulatory bodies are going to start to dictate what can and can't be used at the household level that's going to be a way more costly form of regulation than at this moment right now where the little tiny state of Vermont is starting to say do we want to continue investing in the public interest right that's the mandate of the department in the public interest in continued carbon lock in or are we going to draw a line to say the evidence is clear we can't continue down this road the market forces aren't enough by themselves to do this carbon price has been talked about in this building for at least three years right that's not coming out anytime soon so you kind of got your hands tied at this point I have one more question so take a country like Venezuela for example right now are they part of the Paris climate agreement and if they are do you think they're trying to at this point meet any goals around climate change I believe the only two countries that we're still a part of the Paris climate agreement so there's a process to back up obviously President Trump has signaled a back up but the only two countries that are not part of the Paris climate agreement the United States and Venezuela that's a good example they have subsidized the heck Venezuela there's only a few countries in the world that have cheaper gas prices than the United States they're all either developing countries very poor countries or OPEC countries like Saudi Arabia and Venezuela Venezuela is one of just a handful of countries that has cheaper gas at the pump oil prices, natural gas prices than the United States I'm going to prepare this for my testimony but our average price of gasoline right now I'm going to get this wrong is something like I have my notebook here it's well below the world average and again the only countries that are below us is a handful of very poor countries and the oil exporting countries and the differences is not the commodity price because the commodity prices is fairly stable differences is how governments treat it whether they're going to tax it or subsidize it so every other country in the world has raised almost every other country except for Venezuela has raised their gas taxes from 1993 till today incrementally over time so these differences in prices are almost entirely due to gas taxation the United States federal level we haven't raised our gas taxes since 1993 Bush 1 raised it, followed by Clinton and it hasn't been raised since the rest of the world continue to try to use the market to wean ourselves from carbon locking happy to come talk about carbon pricing anytime that's another favorite topic so if you've already I apologize for being late I'm happy to talk to you afterwards anyway with regard to thinking about carbon tax and thinking about what's needed you know if we accelerate getting off of fossil fuels do we have do we have the production capability for like transportation so more electric vehicles like where would we need to focus yes yes so we were talking we were talking about I don't know when you came in but the pros and cons between market based instruments like carbon pricing or regulatory instruments like infrastructure bands and I was trying to make the case that the combination of the two are going to be required the pricing strategies try to kind of change the marketplace and the kinds of decisions that the individual makes versus the companies make infrastructure is more of the kind of company and targeted more of a targeting approach it's kind of I mean with significant carbon pricing we'll see changes in behavior so we saw this with the gas price bikes in 2008-2009 we saw huge surge in bus ridership in Vermont where we have buses especially in Chittenden County which I don't live in by the way so but we also see big changes in infrastructure investments so ridership it's not just because this is part of the carbon locking story if I just bought a car or if I bought a car in the last 10 years it's going to be really hard for me to get off the car and get into something else so I have to think about rideshares carpooling I think it's really interesting to see the private car companies like is it enterprise that's now going into these car share programs going from a two car family to a one car family so that's a big part the big part we can have a whole conversation about carbon locking transportation sector a very simple thing is just linking your trips so if you leave your house and go to work and come home leave your house and bring the kids to the soccer game and go home if you link those trips we see huge reductions in greenhouse gas emissions Vermont has a big challenge in transportation sector something like 41-42% of our greenhouse gas emissions come from transportation which is way higher than the national average by census definition we're the most rural state in the country by so we've got some challenges we drive a lot per capita so I think a lot of the policy attention that's where carbon pricing as a strategy is really important for that sector for transportation in particular unless you guys want to start banning internal combustion engines I don't think that'll go over well I would love to follow up with you actually we have a couple minutes I think one of the things that you said around supply side versus demand side was by for example banning new pipelines I think what you said was that you build public support that is you you get a focused public support did you say that? I did this review of supply side policies one of the points they made is that supply side policies supporting from them may increase moral support more pressure and public support for climate action because climate action is more readily observable actors are more readily identifiable and consequences are relatively certain and exact there's not a lot of mystery of what the effect is going to be but I'm just thinking about examples of the demand side of the public not supporting government action on this issue as for example in France when they tried to raise the price demand side and they had to speak huge protest movement the target in that case was on the consumers themselves versus the target on the producer I guess I'm just wondering whether the idea that targeting by targeting a natural gas company by targeting a natural gas company and remind that that is a popular thing versus being the kind of thing that also triggers public outcry you can look at the kind of way of the testimony regarding the hearings that the public service commission put together it's pretty diverse group of constituents that were arguing either for or against but I guess there's no answer I was just going to make sure that I heard you correctly it's that point that the carbon locking literature points to are you going to design your policies on the beneficiary side and that's really difficult because the beneficiaries of climate action again are billions of us and we're scattered and we're uncoordinated and we lack political power but on the cost side it's concentrated it's only a few actors but they got a lot of political power because of this carbon locking because the entanglement of government regulators there's a whole nother talk I could give on it's like a regulatory lock in regulatory capture thank you that's the word I was looking for I don't often use that word with policy makers but regulatory capture is a really important aspect and we know regulatory capture exists in spades in the fossil fuel industry because of carbon locking so it's like it's the bold choices before you are do we we're going to act on climate or not and if you're going to you have to break carbon locking can you do it with incentives absolutely it takes it's a longer process it's a little less certain it's part of definitely unraveling entanglement of the transportation sector and other things in terms of big infrastructure investments that are in the pipeline so to speak it's a whole lot less it's a whole a lot more obvious that supply side policies like restrictions or bans their time is here unfortunately so nice question it's very provocative this chair it's a courage mage what would your thoughts be on banning the sale of gasoline well I think it's we've got this six to seven year window the IPCC claims to bend the greenhouse gas curve beyond that it kind of depends on what kind of world you want your kids and grandkids to live in right because we're looking at serious climate disruption according to all the according to what I'm going to say in terms of science because all of the predictions so far have blown past the conservative science in terms of the impacts the climate system is a very delicate balancing act with us loading the physics of us loading the system that we are to take carbon that took millions of years to lock it up and then to put it back in the atmosphere over just it's not even for a few centuries and ever releasing to the atmosphere has happened since 1990 1990 that's the momentum of carbon locking up till 1990 half since 1990 29 years half it's incredible since the beginning of the industrial revolution has been put in the atmosphere so it's a lot of momentum that we got to overturn in a very short period of time whether we ever got to a gasoline ban or a car ban I don't know you're welcome so we're going to shift gears pretty quickly here thank you thank you for joining us thank you for joining us do you mind just opening the door just for a minute just a little bit more oxygen we have a lot of CO2 want to make sure you've got enough oxygen thank you thank you for joining us so Stacey we record all our hearings so if you can introduce yourself for the record and then welcome thank you Stacey Briggs senior manager state legislative affairs T-Mobile and I am here from Tennessee I have 14 states 14 able lobbyists John being one of my most capable so I'm very happy to have her here in the state for me covering everything and I'm delighted to be here I've been trying to get here and it didn't snow so I really remember did we today I was smart and brought my family last time because my husband's from Michigan and I did snow it was about this time of year too I really appreciate the opportunity I think we've emailed the presentation that I have but I've got extra copies if anybody wants to is it on our website? it is and it's much like I emailed you in January February but it's been updated but it's very similar to that do you want it on the projector? that's fine yes I'm probably not going to go word for word but it has then we can just do it exactly how we're doing now it's fun to look at it's colorful we like pictures it has lots of pictures it really just goes through the company history and I think John probably gave you all of the good background but we have 80 million customers on T-Mobile really started in earnest after AT&T tried to buy T-Mobile in 2000 I don't want to miss that 2000 anyway it's been about 6 years since we've been on our own really deciding and determining to go out and do everything we can to get new customers in order to do that we are now in customer care those are the two things that and in doing that we are hopefully we are now up to the third largest provider and with 80 million customers we've grown about 50 million customers organically over the last 5 years 22 quarters in a row with over a million new customers so it's a robust company and we're building very fast the way we're keeping our customers is through network and customer care so our network that we're building is 5G, we're merging with Sprint and we're trying to purchase Sprint Sprint is the fourth largest, we have the third largest they have about 50 million customers that would put us at still number 3 but not too far behind the others so we would be number 3 still this would allow us we think to elevate our deployment and to elevate our customers to deploy especially in rural areas which is hugely important to Vermont I am sad to say that Vermont is one state I think maybe the only state where we don't have any stores and that's hopefully I know I talked to the sales VP not long ago and I know they're in the works I know where they're going and it's coming because the network is really tested and you know there's no problem any problem with the network so if you see a store I haven't had any problem I dropped one call since I've been here and that's been the same every trip I've had here we used to run on AT&T's network and we are building out into rural areas with our own network and our vision for that is to use 600 megahertz spectrum to get there this 600 megahertz spectrum will allow us to get into rural areas but also will allow us to have 5G coverage in those rural areas and please do stop me with any questions so just with regard to the first net project which we know is being built out in that spectrum are you expecting that you're competing head to head can you compare and contrast I would say that we are building out our network in a different way because we've got this new spectrum let me just tell you how we got it and I'll pass around a map that shows you where a 600 megahertz spectrum is going in the state of Vermont and like I said we've been roaming on AT&T's network and this would allow us to have the same customer you can pass that around you can have the same customer experience anywhere you go in the country so you'll be using our network and it is broadcast spectrum so it travels about 25 miles and we're putting it in strategic areas so that hopefully we won't have to fill in with any additional spectrum in order to get to those 5G speeds because it's a brand new network it will be very very fast and it will allow for us to compete with landline cable with all kinds of lightning speeds 10 times faster than you see today and that will be in whole areas so your build out is that to do you plan to continue roaming on AT&T and filling in gaps with your own or creating your own to get off roaming no more roaming to use US cellular and some of the rural areas but I don't think they're here in Maine they have a really great network so to be cynical because that's part of my job what we see is carriers duplicating coverage in population areas and not getting out into the rural areas for all of the reasons that they're not there now and I'm wondering how this will be different well it is a role play it is our intention to make it available in rural areas and because we have this I think part of the technology that's been missing is you don't have this for us is broad coverage spectrum so we haven't been able to get there on our own so if you have more it's kind of a chicken and egg you have to have the network and then you get your customers and then you expand the customer base you have the more competition yes you go to the same dense areas first but we are intending to be available in a role if I may follow up is there as a rural state is there a customer base to carve off a chunk from AT&T and Verizon sure I think that's the short answer you've got not only do we want the same experience everywhere in the country because we would be a brand new provider brand new stores low prices yes we would be a very robust competitor and we've managed to take all of the growth in the industry just marketing customer care and network yes when you talk about the 25 mile range does that take into effect the illness valuation if you think about a broadcast you know antenna that you can put up and you can grab programming from the air that's the whole idea of free tv it's the same idea that's available and it penetrates walls and it goes in valleys and deep depths so will your network antennas be at high elevations say for instance okay I can get channel 3 over the year on my tv because they're broadcasting from Mount Mansfield but I have a hard time getting channel 22 from across the lake because I don't really know why yeah I wouldn't be picking up the video feeds yeah so it would be really a different technology but yes we would hope that it would be absolutely available no matter you know the elevation and estimated timeline for this build up we purchase the spectrum and then it takes about 36 months to clear but we are robustly getting that you'll see on that map that I just passed around it's got different timelines and I do have without giving you too much information here I do have a map that kind of shows you the difference between our projected 5G coverage in keeping this place in my map this is 2024 but that's our standalone if we don't buy Sprint here we go and if we do buy Sprint we expect that T-Mobile has purchased the spectrum or is T-Mobile 600MHz is fully purchased and being deployed at a rapid rate ahead of schedule but then the 36 month period was started about 18 months ago so we expect to have it fully deployed in the next probably I think that's 2020 this is our coverage in 2021 projected we are to buy if the Sprint no-jerk goes through and the timing is we hope that to be finished by the end of this quarter we're in the second quarter now so we hope that to be complete by the end of the second quarter and the heat is on we've been going through it for about a year and it's been through many of the regulatory hurdles has to be approved by the Department of Justice and the FCC so those are the two institutes I think that the partnership could have been a big problem at best for companies so I have a quick technology question I'm a little embarrassed to ask it with stuff in the room but I read ahead to your fifth slide and there's a I guess I'll call it a graphic about your deployment of 600MHz broad that can be bandwidth and underneath you got LTE and 5G so LTE and 5G are two technologies that you would utilize in rolling out forward using the 600MHz broadband bandwidth currently I'm guessing you're more focused on LTE your current structure and in the future the focus will be more on 5G exclusively on 5G LTE you're kind of leaving behind I'm just kind of curious about that it's a great question actually and unlike the other generations we wouldn't decommission the network that we have now which is the LTE 4G LTE that's the competitive networks that we're all building right now this enhances 4G LTE 5G is really a speed and so you're really getting to those 10 times the speed because you're building capacity but the underlying network would still be the 4G LTE network we're building on top of that so we don't have to replace the network that we've been building and 5G would be using the term loosely urban infill well and that's I think my mission is to make sure we're actually rural 5G so it's a speed so in the urban areas in order to get to those speeds where you have a dense population you might need a small cell 5G technology so that we would have that as well but Sprint has mid-band spectrum you'll see in that map the dark pink is where we would expect to take their spectrum and reform it to handle the capacity or between the towers if you will in the distance between the towers the small cell technology 5G technology is very limited in how far in the range that it can go but the speeds should all be the same so it's just how much capacity you have on your network whether it's urban or rural does that make sense it's uh I wanted to mention our customer care and a couple of innovative yeah I didn't mean to take that oh no no this is happening quickly and I think the good news is Vermont is on the map and we're trying to build it out as fast as we can I think we can expect to see a store any day really I think it's absolutely coming I'm not ready to win that but I will try to find out I wanted to mention two things that are sort of revolutionary at T-Mobile's care arena and one is the team of experts we actually have 17 domestic call centers with the merger we're going to add five or more call centers we just announced one would be potentially in Rochester, New York and we also have a call center in Oakland, Maine, north of near Waterville Waterville, thanks Waterville what we've done with care is we think we're going to change and we've been doing it for a couple of years we just announced it last August called team of experts so instead of calling and the phone call goes anywhere to a first available rep your number will be associated with the same 50 reps at the same cost in every time you call just think about that so every time you call hey it's so and so there and they might actually be there or they went somewhere or they're on break really a much more personalized experience but also the ability to integrate with network operations as well as retail to have a much more seamless I mean they have something called the Rage Study and Telcom is right up there every single time apparently since the mid 50s Telcom is the number one thing to make people mad in fact my daughter says mom I respect you until you get on the phone with Comcast Customer Care I had one problem and now I have 10 let me spell it out for you but it just seems to get the run around quite a bit and we've got great marketing around it with the team of experts the customer resolved their issues quickly there's no more automated system there you can choose to go through the automated many I don't know why you would do that but the idea is to also elevate the care representative knowing that you own the customer that you can do the job and you can get that resolved we take great care of our care reps in fact when we became a public company we all got stock in the company and for many of the care folks that was the first time we ever unstocked in their life and we keep getting stocked every year so that part's been a pretty nice thing it keeps going up starting at 17 we're on a 70 today that's not a stock 10 but it's a good project to rate where people take it the other thing I wanted to mention was our ability to stop robo calls we're sort of leading the pack robo call arena I know it's a huge issue for everyone it's a drain on everybody's network it's a terrible thing for customers nobody likes it at all so we are we've been very active in DC developing a new standard that the FCC is likely to make a mandated standard and it's called stir shaking and I'm not exactly sure how technically works but we can pick out a number and verify the number before it's sent through in an instant so we are able to verify that the caller is legitimate or it comes up scam likely and you can block that person forever all that is no charge to the customer we just announced last week we blocked 10 billion calls in 10 years blocked 10 billion calls in 10 years how do they get your own number right it's a spoof angle it's I know that is creepy so as the when you do this verification is the ability the ability decision to block that number at the user end or is that the it's verified before when you complete the call it's verified before you continue to call so we would never get we would never get the call you can block it completely but it will come up scam likely I guess what I'm wondering is you decided it's spam and that gets blocked and I never get the call the call gets verified the call gets verified the number gets verified and then it goes through you can take it if you want you can take it if you want something comes up scam block and scam ID it's very simple to use and customers really really do like it we can't catch everyone they're using algorithms they're international bad actors I think if you answer the call it's a scam block it allows you to say if anything's identified as scam likely don't even give it to me stop that one from now you could spend a lot of time blocking several of them get blocked but that's called shaken and star and we do think that that will be the standard that all the providers will move to within the year but likely to be mandated can I ask a side question on that if a call comes through and you think it's a scam or spam and you don't don't have to answer it but it goes to voice mail is it them like answering it? I always let it go to voice mail and they are always we need you to call right now somebody does the voice mail it's the same thing as answering in terms of confirming that the numbers fly a lot of times they'll actually leave the voice mail is the recorded call side question well thank you for your time today I've got some other handouts we have two great websites that will really I go on there I can't believe we have so much information on some of these websites howmobileworks.com I've left a few of the popular did I give those to you? the more popular explainers there we go thank you going through the anatomy of the network just kind of the basics of how the network works how we get this 600 megahertz spectrum all the stuff I said you can go back and read more about it we also have more information about smart cities and launching some of those technologies as well as preparing for the internet of things and personal safety and all of that we will have a competitive product launched soon but not yet a first responder product similar to first net it's a priority network for first responders the way I understand that it works is every first responder has to have to file their number with the Department of Homeland Security and we must provide priority for that number so we all have that in other words you can put them through it first that's our sales division and we're getting there we have a guy we have a sales guy I have a lot of cards here that I can leave in case anybody has any questions and handouts but I know we're almost paperless practically paperless trying trying sometimes I like the paper thank you very much appreciate it so we're going to pray for 19 minutes and then Becky is going to join us to go through a senate bill Becky Walsherman Legislative Council I am going to walk through S12 which is an act relating to the state energy management program this was language that was put into the 2015 budget bill and what it's doing is extending the length of the preliminary period of the state energy management program from 4 to 8 years and this is a program that's within the Department of Buildings and General Services that addresses energy management measures implementation of energy efficiency and conservation and the use of renewable energy resources for state buildings and facilities and the way the language from the 2015 budget was drafted was that during this preliminary four-year period the program was supported by efficiency of remote supported by meaning they pay for it yes and they will continue to for the renewal period as well I can walk through that in section 1 in subdivision B1 this is where you'll see the change that is extending the preliminary period of the program so it's saying that the department and efficiency for remote will have the program for preliminary four years so this is extending it to eight years to do this preliminary program and then in subdivision B2 is language relating to is language relating to efficiency of remote's provision of support for the program so this is saying that efficiency of remote will support provide support for the personnel to implement the program and so the language was from fiscal years 2016 to 2019 so this is extending that period to 2023 and then on page 3 at the top of the page there's also language with respect to the building project manager position so this is extending that support from two year two four year should be to eight year limited service or consulting positions two eight years I think there's an error in the way well there's a space in the way the language is I'll see if I can get that fixed so two eight year limited service or consulting positions and then there is also language in subdivision B where it says that efficiency of remote shall provide up to 290,000 during the fiscal year 2016 and this new language says that for the remaining seven fiscal years from the program efficiency of remote shall provide an additional amount sufficient to support the annual salary and benefit adjustments for these positions so this is where the language is that saying that efficiency of remote will support these positions through the term of the preliminary period so I don't have to count on my fingers I just want to clear that all these numbers take us out through fiscal 23 that is the goal hopefully they're all correct it should be changing it from a four year period to an eight year period which should be fiscal year 23 this fiscal year right in subsection question page 3 subsection B under the subdivision EBT shall provide up to 290,000 dollars through fiscal 2016 for the remaining seven fiscal years EBT shall provide an additional amount 290 as a base all the way through and then two salaries on top of that um I my interpretation of that was that shall provide the amount that is needed to support the annual salary and benefit adjustments that's why there's not a set amount there there's another word additional shall provide an additional amount necessary but did additional amount sufficient to support that says to me it's on top of 290,000 right I think but I don't know that it's a set amount every year so perhaps GFO can come in and talk about if that could be the language could be clarified to speak to a specific amount of money I'm not trying to pin it to it I'm just so that 290 is an annual allocation and then there are two positions on top of that two positions to work it says salary and benefit adjustments so any raises those salaries so the additional I was not I can look into this further I was not reading that to be the that is the amount of the okay I was reading it to be an additional amount to support the adjustments not the amount of the right not the amount of the salaries the bottom of page 3 in subsection D this is adding this is extending the there's an annual reporting requirement that was in the original language this would be extending that reporting a requirement until 2023 on page 4 as part of that report in the in 2019 which was the last year of the preliminary period there was a requirement that the the report contained an evaluation of the program and in any recommendations including whether or not to continue the program so this is adding that this these recommendations would be included in the final year of the program in 2023 when was the 2019 was it yes it was I think it was in December of 2018 or early January I can look it up and have it sent to the committee I have no questions I wonder if we can receive that report I know it's on the legislative page I just have a general jurisdictional question I know that the house government operations committee is doing some work in this area and I'm fine with this building here certainly an energy but are you familiar with any jurisdictional things that they're working on kind of in the management of state buildings and energy efficiency I'm actually not aware of what they're working on is it a specific bill that they're working on just generally speaking talk to the chair of that committee about energy efficiency in state-owned buildings that the government operations committee was interested in so I will talk to her about this I was just curious I think there's probably some overlapping jurisdiction other you know for example institutions I don't know the specific issue they're looking at so didn't we put money in the budget for these positions I'm presuming we did this is saying that we should but I don't know the answer I thought there was a line right in there I'm not a line right here but didn't we fund 350,000 or something like that for efficiency we want to help the general services oh you were looking at from when you had to recommend the memo that you were recommending to the appropriations committee there was I believe there was something related to this program well thank you you're asking about the appropriations the appropriations I do remember there was something in the appropriations letter about this too but this is not I mean it's not out of the budget that is that's right I'm puzzled about that I don't know what actually ended up in the appropriations but I do think this committee was asked to comment in your memo it would be under Allen's name on our website I think she was the primary director of the appropriations letter I'm thinking about the bill out of the past appropriations bill 542 yeah, extensive agreement with Efficiency Vermont to support efficiency staff and BGS that was from our this is from Keith's hand and what does he say and does he say something about this so it's extensive agreement with Efficiency Vermont to support Efficiency staff and BGS sounds like this my recollection is that that language mirrored this language there was no appropriation I would have to go back and look at it but I think it was taking it was essentially just doing the same extension of the preliminary period that this is so if it's Efficiency Vermont money it wouldn't be in its allocation I was going to ask if if it stays in the if that language stays in the budget is this necessary or this bill isn't appropriating money but I think that I just have to check what's in the budget my recollection was that it was similar language that it was doing essentially the same thing so I just have to double check that and I can give back to you on it this book just authorizes the program for years and that we heard from Efficiency Vermont that the idea was I don't know if it's in here somewhere that the program would continue beyond that but it would be self funded it would be funded by savings right so this this language is saying that at the end of the 2023 fiscal year there would be another report just to give recommendations on how the program could continue so I think that could include recommendations for how it would be funded in the future but there's nothing in here about setting aside the savings or earmarking the savings somehow so that they could continue to fund the positions to continue to so I would say as an aside and a stage whisperer that Sarah that I would be interested I don't think we need to have a lot of time but if we could have someone from Efficiency Vermont and just kind of give us some background and feedback on this program and you know to the extent BGS would like to weigh into doesn't have to be extensive but just understanding part of the space BGS is here it's like magic I'm Dan Edson for the record of the State Energy Program Do you want to pull up a chair? Sure, BGS certainly would love to weigh in on it I think I'm trying to remember that all the questions that were asked but let's see the program is a preliminary program it is funded three positions, three full-time positions are funded by Efficiency Vermont the 290 was for the first year and then in subsequent years we needed to know exactly what the cost of those employees would be and that's why it's not an established dollar amount and Becky was accurate in her assessment of that language the rough annual spend is $320,000 for those three positions we're asking to extend it for an additional four years the reason that it sets us for two four-year periods is because we can't have a year of limited service positions so we can only have four-year limited service positions and two of the positions are limited service and our recommendation is that the end of the second four-year period that we assess or evaluate how to fund this program how to continue to fund it I recall hearing something somewhere online I think it was from Efficiency Vermont that the idea was that the same would fund the positions for the next four-year period is there anything in your mind about that I can't speak for the position of the commissioner on that topic we do have significant energy savings associated with this program well above what the the statutory requirement of savings is how we fund these positions is through a or how we fund these projects that we implement is through volume loan funds and so they are loans internal loans and we have to pay back those loans and our average loan repayment period is ten years can you give us some examples of some of the projects that are finishing with more obvious ones sure in this building we've done LED lighting replacement we've done HVDC upgrades things like demand control ventilation where we monitor the CO2 in this room and then we can ramp up the fan speeds or slow them down based on how many people are in here so we don't have any excuse for all the sleeper absolutely no and we've done extensive amount of insulation in the attic space as well how about ice dams any ice dams there are ice dams that's Vermont I can't fix those so you've done a lot of work in this building can you just speak at a very high level kind of generally about state buildings around is it mostly electric efficiency work is there any thermal work that's being done thermal work we've done 52 projects since I've been on board all but two counties and a huge aspect of our program is also our solar program as well we currently offset roughly 18% of our electrical and state buildings that's been done in four years that's been done in four and a half years since I was hired correct? um so the efficiency of Vermont has a requirement that their actions have a return greater than the cost of them and they're somewhere around 2-1 right now for the cost-benefit ratio this looks to me like $300,000 for the positions and then there's the cost of well, so $320,000 for the positions and it has to return at least $300,000 value which is a little under one to one is this in the same the annual returns that is the requirement last year we saved $384,000 and that's that's one year so next year we will save an additional $380,000 plus whatever we at least yeah so yeah I've grown some numbers from a taxpayer's perspective efficiency for Vermont has to worry about ratepayers a significant amount of our energy consumption is in Washington as well and so Fish and Sea Vermont can't count those savings they are able to count the some of the thermal savings as well associated with our projects but not all of them and so from Fish and Sea Vermont's perspective it's primarily a dollar value on the kilowatt that they save right but from the state's perspective and those you know smart to we save a significant amount of greater on the dollar spend do you restrict your spending by efficiency utility territory so it just goes in the pot and you spend it on state buildings so we evaluate all of our assets all of our buildings what buildings are performing the worst on a per square foot basis and cost per square foot basis and then we have a prioritized list from one to 270 and we start with one and we evaluate that building to do an energy audit on it and then we implement the recommendations of the audit how far down we'll start that's a great question we're getting down there some buildings it just doesn't make sense to do as much as building so I believe we've done 50 deep projects so far does efficiency Vermont also provide staff support? they do in the agreement they provide the equivalency of one full-time staff member they're providing that support regardless multiple people but in effect one FTE so in addition to this program for our state buildings do we have any program that is looking at resiliency and mitigating threats from climate change I'm not sure do you know what I mean? so we had a pretty significant impact to the water very complex so in terms of the rest of our state buildings do we have a program that is also looking at have we mitigated any kind of flooding or I think that's probably the agency of natural resources would be better equipped to answer that question with regard to the state buildings with regard to all buildings we would rely on them in terms of those for sure so you're not aware of the program that looks at that but again I'm not the person that would be equipped to answer that thank you so the types of buildings that the state owns you've got big buildings like the tax building there and you've got the state house and you've got buildings that are basically old residences like the pink lady over here which ones which ones require the most efficiency require the most efficiency improvement categorize the tax buildings I mean all of our buildings require a significant amount of maintenance and I could look at every single building and say there is energy efficiency improvement potential there we look at it in terms of what buildings are if we expend money on them are going to have the greatest impact to our entire portfolio and those buildings have been the larger energy consumers like 108 Cherry Street and 32 Cherry Street Brompton or 109 State Street or 133 State Street those larger ones courthouses are big consumers our correctional facilities are probably the largest consumers following upon Laura's question I guess one fairly simple metric around resiliency would be the ability of buildings to coast without power is that a metric yes I'm very aware of that metric and we look at flexible load management partnering with GMP and other utilities to look at how we can when they're monitoring the grid have identified peak load periods how we can during peak load time as I'm sure you know has now shifted to 48 o'clock due to the amount of solar that's produced in the state we can be notified of when a peak period might hit and then offset our buildings to set them back temperature wise so that they're coasting for that time period and reducing the amount of energy consumed that's one thing but the reason that we can do that in particular buildings is because the air sailing installation has been upgraded we've also spent significant amount of money on the building automation system to be able to schedule the controls there that is something you're looking at specifically yes absolutely I know that the Water Grayset Office of Complex was also built to be flood resistant up to above the 100 year and somewhere in between the 500 year and I know that that definition has changed but that's certainly something that occurred during the rebuild at the Water Grayset Office of Complex and was a FEMA requirement I'm glad you could make it


Welcome folks, we have the Dow Industries finished down 185, NASDAQ off 35, SAP is down 37, highly volatile, no doubt about it folks, bottom line, you have lower prices and we have volume behind the move once again. If we take a look at the industry volume out here, inside of the NYSE, we just did 1.4, it's going to be 1.5 billion and the composite was banging out 6 billion here at 6.5 billion, so lower prices, bottom line, higher volume and lower prices, once lower price. Gold contract up $62 trading at that 2058, gold's on a confirmed ABC structure up approximately $26 to $2700, it broke the B point today, the GLD had the volume on the break of the point, that's where I'm getting the volume, I'm using the GLD for the volume because future wise, you know, don't have the volume going back that many years, bottom line, ABC structure up, silver is up $21, $26.93, that wants to run to $30, oils at up $475, $124.15, lights, notes and bonds, a 10-year note, down $27 ticks, $127.08, 30 years up a full two points, plus $15 ticks at $157.10 and $king dollar, $king dollar goes down $247 ticks, trading out at $99.04, years at $109, he ends at $115. We take a look at the S&P folks, what you have in there here, you have a market that can't hold a bid, that's the bottom line, because you don't have a bid, bottom line you close it to lows, it's going to go after this swing low out here of $410 tomorrow, you have $416, we look at the NDX100 which is weaker than the S&P's, bottom line the NDX that closed down $151, the low is $318.26, we closed at $323.35, went to $319.94, bottom line this is going to blow this away too, let me just see, so the next move in these cues, oh I see, so the next move $297, $297 you can see this, $297 is a high volume low and if that's where we go, we should check this out, that's going to bring us all the way back to September of 2020, yeah, just like that. Bingo, takes the escalator up and the elevator down. Have a great night folks, have a safe night, come back and visit Tommy tomorrow morning, kicks us off 9am, have a great one folks, thanks for being here.