Proposed Rate Increase Faces Opposition in Texas: Reading & Podcast Picks, November 2, 2025

Human-centered AI; Hayek's knowledge problem applied to electricity; Oncor's massive rate increase proposal; Bill Gates' note; why Texas keeps building wind and solar; and much more

Reading and Podcast Picks is a collection of what I’ve been reading and listening to over the last week or so about energy topics.

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The Worlds I See: Curiosity, Exploration, and Discovery at the Dawn of AI | Fei-Fei Li

This book isn’t about energy per se, but it’s deeply connected to energy. I get asked this question all the time: Why are we going to use so much power for AI?

What’s the point?

Dr. Li, Stanford, a computer sciences professor at Stanford and former Chief Scientist for AI at Google Cloud, provides some answers to those questions wrapped in a beautiful story of her experience as a Chinese immigrant to America in the 1990’s and beyond. Dr. Li’s work on ImageNet and neural networks led to some of the biggest AI breakthroughs.

Similar to Bill Gates’ note on climate (see below), her call is for a more human-centered AI: “This is the next North Star: reimagining AI from the ground up as a human-centered practice.” As an example, she worked on improving outcomes at hospitals where 100,000 people die annually of preventable infections.

Though she doesn’t talk about it, one could imagine AI helping the millions of Americans who put their thermostats at unsafe levels to save money on their bills: could AI run air conditioners and heaters more efficiently to achieve comfortable temperatures at a lower cost? Of course, this already exists, it’s just not widely used. And the technology is rapidly improving; there are all sorts of ways AI is already strengthening our energy systems and lowering costs. We need to, as Li’s subtitle implies, be curious and explore additional ways AI can help people.

This is a deeply moving personal tale and a good starting point to answering the fundamental question of what AI can do to improve quality of life.

Hayek: A Life, 1899-1950, Caldwell and Klausinger

I talked with Lynne Kiesling about this one on the podcast and she encouraged me to read this biography; I’m glad she did.

Why the Old Utility Business Model Doesn’t Fit Anymore with Lynne Kiesling (Part 1)

Hayek was one of the most influential thinkers of the 20th Century: a defender of classical liberalism and conservative economics. His Road to Serfdom, published in 1944, struck a deep cultural chord in his time — and through the next several generations — as he warned of the dangers of central planning and the benefits of markets.

His life was fascinating: he was born into fin-de-siecle Austrian society in 1899, fought in World War I in Italy, dealt with postwar hyperinflation as a young man — all of these things shaped his thinking and Caldwell and Klausinger do a great job showing the connections between his life experiences and his thinking.

But most importantly to me are the exploration of his ideas, and I’m looking forward to part 2 which will go beyond 1950 and hopefully include a much deeper exploration of those ideas.

There are many connections between Hayek’s thought and electric markets. Hayek focused on “the knowledge problem”: no central planner can have sufficient knowledge to make decisions about allocating resources as well as markets.

But planning was viewed in his time as a panacea. As Caldwell and Klausinger put it: “If there were two propositions that nearly everyone, and certainly virtually all intellectuals, could agree on in England in the mid-1930s, they were that liberalism was well and truly dead and that some form of planning was needed to take its place.” Hayek disagreed with both. (Goodness doesn’t that sound like the mid-2020s?)

There are important connections here to electricity and power grids. Some central planning is necessary for a grid, particularly in transmission and distribution, but how much?

And how can we balance the socialized costs of the grid — decided through central planning — with competition? How do you balance centralization and decentralization was a fundamental problem Hayek wrestled with. He wrote that “the particular circumstances of time and place” could never be sufficiently integrated by central planners.

Now consider that Oncor — asking for nearly a billion dollars more in socialized costs from ratepayers for their centrally planned system “does not consider [distributed energy resources like] demand response in its planning process.” That’s a direct quote from a filing in their rate case. Further, “Oncor’s distribution load forecasting process… does not explicitly account for changes in load from specific end-uses of electricity.” What?! In the age of AI data centers and rapid electrification of industry and transport, they don’t consider vast amounts of decentralized information.

It’s no wonder T&D costs are soaring. This is the knowledge problem par excellence.

The inability to have any sort of price discovery on the distribution grid makes customer prices much higher than they need to be… which leads us to:

North Texas cities vote to reject Oncor request that would raise rates, residential bills, Dallas Morning News

Oncor is asking for a massive rate increase of 12% for residential customers which would likely mean about $10-$20 per residential customer per month. The increase would be nearly $900 million annually over the next four years.

But Oncor does not systematically look at distributed energy resource solutions that could reduce customers’ bills. That’s understandable given that it would reduce their revenue and profits but the Commission needs to insist they consider lower cost options.

In light of the proposed rate increase, the Texas Advanced Energy Business Alliance (TAEBA) recently commissioned a study. The organization found that Oncor customers could save $8.5 billion over the next 10 years, if the utility integrated more distributed energy resources into its system planning and operations, the group announced last week.

The study concluded that including customer-owned technologies such as household solar and battery storage, electric vehicles and smart appliances in the utility’s grid planning and ERCOT’s market operations could save every Oncor customer roughly $279 per year

“For Oncor, the message is open in the playbook,” [TAEBA Director Matt] Boms said. “Share your grid maps, show us where local energy can connect efficiently to the grid and where it’s needed the most. Let local energy compete with traditional spending on poles and wires, where it might be cheaper or faster to integrate distributed resources and then streamline the approvals.”

Trump Renewables Crackdown Tests Texas Energy Market Resiliency

Some of the Trump Administration’s actions to slow down renewable development are making it more difficult to build in Texas. But Texas is still building regardless.