Energy Secretary Wright on Power Grid, Lithium Americas Stake

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00:00between these data centers and these other sort of energy hungry businesses and at the same time

00:05make sure that people who are just powering trying to power their homes also have affordable

00:09and reliable energy as well. What progress are you making?

00:14Romain, you laid out the right issue. You know, the key thing is to stop the rise of electricity

00:19prices. About 25 percent rise during the Biden administration. President Trump got elected

00:24in large part to stop that crazy rise in electricity prices and to enable the growth

00:31in electricity supply, as you said, to power data centers. We can't have it as a tradeoff. We want

00:36to use development of the electricity grid for data centers as a way to ultimately drive down

00:42electricity prices for consumers across our country. That takes some time. We need to build

00:48new infrastructure. We need to add new power plants, make our grid smarter. But that's when President

00:52Trump got elected to move fast and move decisively against the dangerous direction we were on that

00:58was towards blackouts and more price rises. But it can be done. There was a deal. Sorry,

01:03let me just give one example. There was a deal done in Georgia between Georgia Power and Light

01:08in Google, a large data center deal. But the net result of that was Georgia Power and Light agreed

01:14to freeze their electricity rates for the next three years. We can get both. We can bring the power

01:20to data centers and stop the craziness and electricity prices. It's a challenge, but it can

01:25be done. I am curious about how we do this and more importantly, what the timetable is. When we

01:30talk about infrastructure improvements, as you just pointed out, that's not something you can just

01:33flip a switch, pun intended, and sort of have that show up tomorrow. What is the timetable where you can

01:40then start going into these communities and saying that, okay, the infrastructure is now in place

01:45or at least is on its way to being in place? Well, one is we can stop shutting down existing

01:52reliable electric generating capacity. You know, when I took office, if there was slated to be a

01:58hundred gigawatts of coal and natural gas power plants closed in the next five years, first of all,

02:03we can stop doing that. If you want to build a mountain, you got to stop digging the hole first.

02:07That's immediate. You know, we kept open a coal plant in Michigan a few months ago. We took a lot

02:13of flack for that. There was a brownout in the area a few days later. That plant ran hard all summer

02:19long. Thank God that capacity is still there today. So we'll see a lot more of that, a lot of plants

02:25that won't be closed. Then we got to be smart with our existing assets. There's backup generators on

02:31all sorts of data centers and other large facilities that right now through just some crazy rules, they

02:38only can run if the power grid fails. No, we want them to run when demand is high and prices of

02:43electricity are going up. Let's turn those assets on to prevent blackouts, drive down peak power

02:49prices. We're going to do smarter things about transmission lines to move electricity better.

02:54And of course, we're going to stop subsidizing unreliable weather dependent power sources that

02:59ultimately are the source of the rise to begin with. We'll still see additions of those, of course,

03:04because there's a lot in the pipeline. But we're at least going to stop the subsidy, stop paying people

03:09to give us the benefit of more expensive electricity. We lost twice on that one.

03:13Well, when it comes to the cost of electricity, there's a great Bloomberg News article

03:17today about how you take a look at Data Center Alley. That's a region in Virginia, of course, that

03:22electricity bills for residents have just skyrocketed over the past couple of years. And I wonder,

03:27you know, from where you're sitting, is your department looking at rules here to make sure

03:32that some of these resource demands and these costs aren't ultimately shifted onto residents of

03:37these areas? No, you're so right. There's plenty of examples like that that are deeply unfortunate.

03:43We are talking to all of the hyperscalers, all of the data center developers, and just communicating

03:49to them. If you drive up electricity prices, no one will want AI, no one will want development in

03:55their communities. We need to make this a win for America by leading an AI and a win for communities

04:00by stopping the price rises. Yeah, it hasn't gone smoothly so far historically. President Trump's

04:06only been in office for a few months. But you're right. There's dialogues. You will see some

04:10regulatory changes in FERC as well. This plan will continue to roll out. But boy, you're hitting the

04:15problem, the nail on the head. That's exactly what we work seven days a week on. How do we stop the rise

04:21of electricity prices and enable date AI and allow America to reindustrialize faster permitting of

04:28power plants, stopping the closing of power plants, more sensible rules around grid regulation,

04:33and some special things that allow us to get capacity out of existing assets. I mentioned

04:38backup generators, also increasing output from existing assets. Yeah, a lot of stuff that we can

04:44do quick. And some of it's going to take and some of it, you're building new assets, of course,

04:48is critically important. But you're so right. That takes a few years. But we got to get the

04:52shovels in the ground and get it underway. Well, Secretary, I want to switch gears a little bit

04:56here because there was reporting last week that the Trump administration is seeking an equity stake

05:01in lithium Americas. Of course, it's in discussions with the Energy Department to department to

05:07renegotiate some loans. But can you give us an update on those negotiations and the potential equity

05:13stake? Oh, I sure can. So look, out in northwest Nevada, there's an amazing lithium deposit,

05:24the biggest lithium deposit in North America, by far the biggest deposit in the United States.

05:29And there's a mine under development there. A small company, Lithium Americas and General Motors.

05:34They want to bring domestic lithium is produced in the United States. China has controlled that market

05:39for mining and for processing. And they can control the price up and down. They can they can shut off

05:45supply to the United States and hold us hostage to them. We can't tolerate that anymore. But China,

05:50of course, has driven down the prices of lithium. So the economics of that mine looked much more

05:55challenging. But yet it's in America's best interest to get that mine built. So we did was a creative

06:01deal engaged with GM and Lithium Americas to find a way to bring more capital equity capital into the

06:09mine. Yes, for us to take an equity stake in the mine and to do those things so the mine is going

06:16to be viable, economically sound. It's not going to be the next Solyndra. And then we can advance

06:21the loan capital that will help that mine get finished. Super proud of the deal and negotiation

06:26that happened there. We're going to see a huge new lithium resource come on in the next couple of

06:31years that will displace a massive amount of imported lithium, not just the lithium, but the processing

06:36of it right there in Nevada. I'm sorry, Chris, I maybe I miss misheard. But what is the stake that

06:41the government is going to end up having once this deal is complete? So the government will take both

06:48a 5 percent stake in the company, Lithium American Corporation, and also a 5 percent stake directly

06:55in the mine. That's a JV between Lithium Americas and General Motors. So we'll own at the mine itself

07:02and in the developer and in the corporate entity that is the developer of the mine.

07:08And this is just economic common sense. Lithium Americas needs to raise some more capital so the

07:13mine be financially sound. We're leaning in with a large amount of debt capital. So it's just a more

07:18commercial transaction where we're making sure lithium is going to be mined and refined in the

07:23United States. But we're treating the American taxpayers' money with respect.

07:27With regards to the existing loan that they had out there with the Energy Department, so I assume

07:31this would be a renegotiation of that or it would resolve that loan in some way or another. What is

07:37then, with regards to that stake, both in the JV and in Lithium Americas itself, is there sort of an

07:43exit strategy or is the idea that the government would just basically maintain that stake in perpetuity

07:48as long as they saw fit?

07:51No, there'll be an exit strategy there. That's not that we want the government holding permanent

07:58stakes in companies or in mines. It's just doing a commercial transaction under reasonable terms.

08:05There was a loan commitment, not a loan before, a loan commitment. But of course, all loan agreements

08:09have conditions. And the biggest condition is just to make sure the mine is economically viable.

08:15And with the decline in lithium prices, we needed to just change the conditions a little bit so the

08:21mine was economically viable. That means Lithium America raising more capital to go into the mine

08:26itself, more equity capital. And it meant with the taxpayers taking a little bit of risk on this loan

08:31to get equity upside in the project. But it's not a permanent stake. As the mine gets done and

08:37things come into commercial operation, we will seek to exit those positions.

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