Revolutionizing Commodity Investing: Exploring CNIC Funds' Electricity Index with Timothy Kramer

[00:00:00] The jobs report came out for February and it was blockbuster to the moon, but we saw an

[00:00:13] employment actually increase as well and wage growth very flat line actually. Then see very

[00:00:19] much Wall Street and shrunk its shoulders. We actually saw an idiot down as well, but

[00:00:24] we could just be a one off. I doubt it's going to be a trend. But regardless of that, Buy Hold Sell

[00:00:29] loves talking about alternative investments and we have the biggest alternative investment

[00:00:34] that there is right now. We're gonna tell you all about it with our featured guests. Welcome

[00:00:38] everyone. I am your trader Todd Schoenberger and I am joined by my friend and co-host Tobin Smith

[00:00:44] out in sunny and hot Scottsdale, Arizona. Don't tell me it's not happening. 55 freaking degrees.

[00:00:49] You know how much like 50 were burning right now? Jesus. Well, I'm glad you brought that up

[00:00:54] because our guest today is going to tell us all about electricity. This is the most fascinating

[00:01:00] topic one of the biggest stories that's out there. I'm surprised everybody isn't lined up to talk

[00:01:05] about it, but I'm just glad that we have we're first to really break the news with us today. Timothy

[00:01:12] Kramer he is the founder and CEO of CNIC funds CNIC funds and he's joining us today on Buy Hold Sell.

[00:01:20] Welcome to the program Tim. Thanks for having me gentlemen. Absolutely. I got to start with you

[00:01:25] though because when I looked at your pre-interview notes, you talked all about this electricity index.

[00:01:31] I'm fascinated by this because as you know, we have the Dow Jones with us here with average,

[00:01:36] the Nasdaq, the S&P. There's so many indices that are out there but I've never heard of the

[00:01:42] electricity index. Can you tell us about it? Absolutely. So you kind of hit the nail on the head here.

[00:01:48] Electricity is the most consumed commodity in the US on a retail, notional basis but up until now

[00:01:54] it hasn't been in any index, any mutual fund, any ETF. It hasn't been in anything and so what we did

[00:02:00] is we created an electricity index and it's based on six of the major electricity trading hubs in

[00:02:06] the US and that's where the electricity futures are that are on ice that are continental exchange.

[00:02:11] It is we partner with ICE to make this index and so we launched the index in January of 23

[00:02:19] and then in May of 23, we launched an ETF that's benchmarked to that. So now investors will want

[00:02:23] to get exposure to electricity as a commodity, they're not going to be able to do that.

[00:02:28] Hey so Tim, Tim, at the summer time we used more electricity. In the winter time we used slightly less

[00:02:33] electricity. I'm a simple minded person despite all the clutter back here and why would I just

[00:02:39] want to go along your index in the summer and then I want to reverse it the other way.

[00:02:45] So certain regions they'll peep, they'll have their maximum demand in the summer and certain

[00:02:51] regions will actually have it in the winter. Why did one of those regions trust me?

[00:02:56] The first $1,100 electric bill you get is more than my house payment.

[00:03:01] Yeah, they're memorable now aren't they? Yeah so what happens is with the index it's a national

[00:03:06] average and so you've got all sorts of factors that go on. So for instance we just came out of

[00:03:11] back to back El Nino, so El Nino is a modern winter and so the winter of 24 was like the December

[00:03:17] January February was like the most mild weather we've had since 1893 and the winter winter before

[00:03:24] that was also an El Nino it was very mild and so you know you don't have that much to ban when

[00:03:30] you're in an El Nino and so when we launch the index you know prices have come off somewhat but

[00:03:35] what happens is then you're looking for what's going to be a longening scenario so right now the

[00:03:41] predictions are saying that July and August are going to be blazing on an extremely dry. So there

[00:03:46] are other factors that go on this you know because it's a national average there's other factors

[00:03:51] to play in this other than just you know you think it's hot where you live we're doing this to kind of

[00:03:55] reflect an overall period here in an overall regional view. Well you know we got this

[00:04:01] report two weeks ago it just blew me away that even just today the amount of electricity that

[00:04:06] the data centers are using for particularly AI data centers use more electricity than all of Spain

[00:04:13] together right now we're I don't do an index on this but we have to follow how many data centers

[00:04:19] are being built and how many data centers are being expanded and they're expanding at a rate of

[00:04:24] about 12 and a half to 14 percent a year just in terms of size and then in terms of electricity

[00:04:30] it's more like you know 15 to 18 20 percent do we have enough electricity to power all these damn things?

[00:04:36] So if you have mild weather and you don't force certain retirements then you probably do.

[00:04:45] I love the sound bite about Spain there's another one that I like and that is the amount of

[00:04:49] like a fork for mining Bitcoin 70 percent of the expense of Bitcoin is electricity

[00:04:55] and so far like the US is about 40 to 50 percent of all Bitcoin mining in the world

[00:05:01] and the Bitcoin mining electricity use in the US took up more electricity than the state of Utah

[00:05:07] so that's another one to match kind of what you're you're staying set.

[00:05:09] You know the Mormons like candles around their house okay I mean I can understand that but yeah

[00:05:14] I mean the third you know the third issue is as I say I'm an investor in in nuclear small

[00:05:21] nuclear plants gas them are and some other companies private companies that produce electricity

[00:05:26] at a much lower cost than this traditional program does that affect your index or you can include

[00:05:33] those guys in your index separately. The index is just based upon wholesale electricity prices.

[00:05:39] When you're talking about those modular electric generators they tend to especially when

[00:05:43] you're building something for the first time they'll tend to want to hedge that so that they can get

[00:05:47] you know death service coverage ratios and fund them. And so when they when they do that hedging

[00:05:52] and they sell forward you know there's a certain price that they need in order to get their return

[00:05:57] and nuclear is not cheap and so you know people would say to us oh well we're going to be all

[00:06:02] wind and solar because the US has a goal of being 5 percent renewable by 2030 and 100 percent

[00:06:09] renewable by 2030. But like okay well you know wind and solar are free prices are going to

[00:06:13] go to the sky. The guys that build these things they'd like to get a return. Oh I know yes.

[00:06:18] Yeah and number two is the issue that you have is all these renewables are not despatchable meaning

[00:06:24] you can't control the output and so you still need to have some form of fossil fuel around when

[00:06:30] you can control the output or a significant amount of batteries and those things need to get paid

[00:06:35] to stick around. So Lazard puts out a really good report every year called the LC-OE

[00:06:40] levelized cost of electricity if you take a look at what the wind and solar costs to build

[00:06:46] the returns that they need to get and then what it costs to firm those up and then the carbon on

[00:06:51] top of that those prices are well above where the former curves are right now long dated so we

[00:06:56] just think this is a really interesting mismatch in the supply demand. All right so how do I make

[00:07:01] money in the index? Well I want to before we begin into that I do I think you glossed over

[00:07:07] something that nobody's talking about Toby and that's the amount of electricity with these

[00:07:11] server farms. I mean this could be another alternative way of how to make money with AI without

[00:07:18] having to invest in Nvidia. I mean what do you think Toby? I mean I would think this will be

[00:07:23] this is a unique approach. Yeah I mean utilities I'm the son of a utility economist

[00:07:30] from Southern California his entire job was to go figure out how to get a higher rate next year

[00:07:36] because that was that was the job basically right so utilities are a different animal in that

[00:07:45] if they're going to build a building you know another generator for a billion dollars they've got

[00:07:49] to go to the rate group and say okay we need to raise our rate to be able to you know add this

[00:07:53] capacity and we actually need to make a revenue and also by the way we take dividends because

[00:07:57] where are utility so those metrics are governed by city by state by region etc. What you're talking

[00:08:05] about is is the wholesale part correct in other words the electricity that's created in Texas

[00:08:14] and gets shipped to California right over the long haul wires at the wholesale rate.

[00:08:20] Sort of I mean we're just talking kind of the wholesale prices averaged in through the different

[00:08:24] regions. Okay so that I mean Todd it's electricity as he makes a great point is the most important

[00:08:32] commodity that we have we just take it for granted until the lights go up right and then and then

[00:08:40] you know then we got so stupid that we took up of one nuclear events in Japan decided to shut

[00:08:47] down 25 nuclear reactors and of course Germany who uses more electricity anybody shut down all

[00:08:52] of their nuclear reactors and then they're unnatural gas. So you know electrical power only gets more

[00:09:00] needed the more you you know the more you do the more you do these tell them where you do your zone

[00:09:05] so the more you charge your EVs dare I say and so how do you do the EV charging and the hybrid

[00:09:12] charging that has to add to electrical consumption right. Sure so so direct answer to about the EVs

[00:09:18] right is in 2023 electricity demand in the US 1% of the whole demand was EVs that number is

[00:09:24] supposed to grow to 5% by 2030 and to 10% by 2035 and then somebody do we have enough capacity to deliver

[00:09:32] that. No have enough capacity now. I mean so that that's just one example if you take these things

[00:09:39] individually yeah you probably do but if you take them an aggregate so you take what the demand

[00:09:44] is from the data centers that you referenced if you take the demand from the EVs if you take for

[00:09:49] instance like you know when you talk about AI the chips okay everybody is looking at an Nvidia

[00:09:54] well these chips are they draw four to five times more power than the chips that they're replacing

[00:10:01] and people aren't really talking about that if you do a Google search it takes one watt of power if

[00:10:06] you do an AI search it takes a hundred watts of power but it takes a thousand watts to train

[00:10:11] it so when you take all these things an aggregate you've got massive demand layer on top of that

[00:10:18] that as you know talked talked about in the beginning the US economy is doing pretty well

[00:10:22] and so if you weather normalize what the electricity demand has been you're seeing depending upon

[00:10:28] the region of the country anywhere from like three to 10 percent demand and so a lot of these

[00:10:32] individual regions they're called ISOs a lot of them are revising upwards what their demand

[00:10:37] forecast are going to be so for the longest period of time they're saying oh you know more efficient

[00:10:42] and we've got you know flat growth you know maybe 0.9 percent growth now they're all revising

[00:10:48] upwards is saying we've got you know three to five percent growth per year now on our forecast

[00:10:52] so when you take all these pieces together the demand is understated Warren Buffett was out two

[00:10:57] weeks ago on Twitter saying yeah electricity is grossly understated for demand while Elon Musk was

[00:11:03] in Wall Street Journal I think three four months ago and he was saying look whatever you think

[00:11:08] electricity demand is in the US take it times four and you still missed it okay well so we have

[00:11:14] the regulated utilities they can only charge so much you have the unregulated who are creating

[00:11:20] electricity selling it on the wholesale market I'll go back to my original question how do I make

[00:11:24] money on the index brother how do I you know because I can buy futures if I want to just like y'all

[00:11:31] but you know the average investor doesn't want to buy futures necessarily but does the index

[00:11:37] the numbers how does the index make an investor money that's my question sure sort of the

[00:11:43] foot to the ticket and reverse order you can buy futures if you want to but if you want to do what

[00:11:46] you need to recreate the index in order to give you what we're trying to provide so you would need

[00:11:51] to go buy the six regions and we're buying a 12-month calendar strip of these regions so that

[00:11:55] you get like a year exposure because that's how people tend to buy their electricity and then as

[00:12:00] each futures month expires we roll that to the to the back month so if you want to do this yourself

[00:12:06] you absolutely could which need to watch it every day you need to roll it every month you need to

[00:12:10] wait at every month you need to do all that right and so we did that for you guys and and when

[00:12:15] you roll it let's assume the the future price went up so you have you take a you've taken a

[00:12:21] process do I mean you have you're doing the index but how do you it mean first up can I invest in

[00:12:27] your index is there somebody who's running money and it's using your index yeah the ETF itself

[00:12:32] is benchmarked to the index so the ticker the ticker is ampedia on the New York Stock Exchange

[00:12:37] and so it is benchmarked exactly to the index and so if you want to invest in the index you just

[00:12:43] go by amp dam PD wow so with the but now the now the narrative has shifted a little bit with

[00:12:49] the electric vehicle market this was the the darling of the auto industry just I want to nine

[00:12:56] months ago now everybody's kind of pivoted away from this for a couple of reasons I know Toby has

[00:13:02] a Tesla so he could probably get into it a little bit more than I can but with that though is

[00:13:08] that impactful to what your strategy is now not all so I assume you're referencing some people

[00:13:14] talked about eve demand growth slowing I think that you've basically I think the number in January

[00:13:19] wasn't as robust as people thought in terms of what the demand would be that's one month on you

[00:13:24] know with Jan versus Jan comparison and I don't really think you can draw a whole lot from that

[00:13:28] but it doesn't matter whether you hit this you know 1% 5% 10% growth that we talked about whether

[00:13:34] you get it by 2035 or 2040 you're still having this growth and it's still occurring and so this is

[00:13:40] one of the ways that you can participate in the upside for that the other thing does supply and

[00:13:45] demand work here in other words if there's more demand then supply due prices generally go up

[00:13:51] for electricity yes absolutely yes okay wow yeah because I remember I remember Amron Ken

[00:13:56] Leigh we used to know from ask when crazy dude and he didn't understand what business he was in

[00:14:01] the other guy is see your foes the guy who actually understood the business and they made

[00:14:07] trillions getting these contracts of California and other parts that didn't have enough electricity

[00:14:12] and they would they would they would sell futures against etc I mean they make trillions on that right

[00:14:17] well they're not on your business and there's a reason so now now for the for the the the evees

[00:14:23] and they are coming we have evees that aren't like me hybrid uh number two um you know

[00:14:30] you're only charging for about 70 miles on your on your hybrid their estimate is as soon as that

[00:14:36] battery runs down then your engine kicks in and charges the battery the the tax credit service

[00:14:41] ticket list on one assumes that you know they're gonna get but it's all about range anxiety

[00:14:46] too you know that I mean nobody nobody here who drives in California, Arizona other parts

[00:14:52] in the you know world you know 70 miles to go play golf sure who cares not if you're in the freaking

[00:14:57] out of your electric vehicle man you're like and then go try to go play your test like in

[00:15:03] you know I think you you should have like boxing gloves or something or you know you should

[00:15:07] like throw money to people so they'll get up because I mean it's a pain in the ass and

[00:15:12] onto me the other story on your electricity consumption was well what happens when we have

[00:15:18] 75,000 men 750,000 charging units where's all that juice gonna come from yeah so

[00:15:24] so the range anxiety absolute I mean it's who knows how long it's gonna take to reach the goals but

[00:15:30] like your reference California so I believe California's goal is to have 35% of all new vehicles by

[00:15:35] 2026 be electric and then by 2035 I think it's 100% and whether they get there or not you know

[00:15:40] I'm not sure right um there's the range anxiety that you talked about but the second thing is kind

[00:15:45] of the pricing point so right now where you can get most EVs that pricing point they're viewed as

[00:15:50] luxury vehicles and to get these things more readily except that it hit those growth numbers

[00:15:55] you're gonna need to drop the price and you've got you know groups that are doing that so going

[00:15:59] back to talking about you know some of the the EV sales Mr. Numbers were January you know a month

[00:16:04] a month or a month January versus January comparisons a little bit difficult but I mean do you see

[00:16:10] the major automakers putting R&D and retooling on their combustion engine plants or do you see

[00:16:16] putting all their efforts into EVs right now yeah well we know we know that China is gonna ship

[00:16:23] every freaking electric car they can to Mexico and then they're building three giant plants in

[00:16:30] Mexico it even Tesla's building a plant in Mexico um I'm with I think I understand this but can

[00:16:35] you give us any numbers on you know how much the index increase in value or decrease in value

[00:16:43] we're gonna tease it let's tease to be a show business we want to tease that so we got to get

[00:16:49] into all that plus I really got to break down this scenic ETF I really got to know what would

[00:16:55] you invest in because we're talking about the index itself that's really really think deep into

[00:17:00] the what the investment actually is but with us today we have Timothy Kramer he is the founder and

[00:17:05] CEO of scenic funds in CNIC goes and CNIC funds.com for more and you'll see what I was with

[00:17:13] their offer and over there and it's exciting it's extremely exciting but we're gonna tell you all about

[00:17:18] the next box so you want to stick with us we'll be right back down to the break.

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[00:18:34] This is Barbara Durand from VD8 Capital Partners and you are listening to Todd and Toby on by hold cell

[00:18:42] Welcome back to by hold cell well our guest today is really open arise I know Toby is just on the edge of his seat

[00:18:57] because he can't get enough of this because we're making electricity sexy again and our

[00:19:02] our guest today is coming up here beer beer a box okay it's here beer black it's a great Friday show no doubt

[00:19:10] about it so what is today is Timothy Kramer he is the founder of CEO of CNIC funds CNIC funds you

[00:19:17] go to CNIC funds.com for more more information so Tim I got to ask you went to the US Naval Academy

[00:19:25] were he a lecture engineer major I was just a general engineer major general engineer it's awesome

[00:19:30] so you clear I mean you're you're very break guy you know about this your resume is very deep and

[00:19:36] you have a lot of you know it's definitely a Cadillac style resume with with your your a-list

[00:19:43] companies and the ex-girlfriend. Todd come on well where I'm going with this is that he knows what

[00:19:48] he's talking about when it comes to this stuff so let's talk about the ETF itself that you're

[00:19:55] offering because it is coming up on its one year anniversary I know the index is tracked back to

[00:20:00] 2014 but can you tell the audience get into the ETF because they want to know what they're investing

[00:20:06] in. Sure so if you invest in the ETF the ETF is benchmarked against the index so what the ETF

[00:20:13] does is it buys the exact futures that go in the calculation for the index so it's the electricity

[00:20:19] futures for the six different hubs that we talked about in the US they'll be a broad overview of

[00:20:23] what the demand is and then it's got the correct amount of carbon offsets and they're also

[00:20:28] they're all exchange traded futures. And so what happens is there's an interesting aspect to this

[00:20:33] if you buy futures if you buy a hundred dollars worth of futures you need to call up your broker

[00:20:38] and he'll make you put up about 20 bucks in terms of margin and then the other 80 bucks we put that

[00:20:45] in three months so far so if nothing happens if no power prices move whatsoever you're at least

[00:20:51] going to get the risk free rate of return so you get paid to hold this position in case it doesn't

[00:20:55] do anything. Now wait a minute did you say silver or did you say D.D. Silver, that's so far

[00:20:59] they're the liboard replacement. The liboard number okay thank you because I thought my hearing was

[00:21:05] going what's the what's the ticker on the ETF? The ticker is AMD Amt. Amt oh man that's awesome very

[00:21:12] created by the marketing team. That's a lot of creativity for a freaking engineer by the way Todd

[00:21:17] that's very impressive. So give us an idea going back to 2014 how the index has performed I mean

[00:21:25] I know that you're not one for one on it but there's probably some type of correlation there

[00:21:29] at least investors can can kind of get an idea of what it's like for you know going for a decade now.

[00:21:36] Sure so all the way back to 2014 the index averaged about we'll say 14% a year in terms of what

[00:21:43] returns are in the index. Decent wow that's really good that's right because you're using futures

[00:21:50] you know you have internal leverage in the future. Right but we're not leveraging with the

[00:21:54] future so so for instance like we talked about it if you want to buy a hundred dollars worth of

[00:21:59] the futures you put 20 up with your broker and then the 80 goes in you know liboard so for some

[00:22:05] sort of risk free rate but you could if you wanted to you could buy five of those futures because

[00:22:09] it's only 20 bucks with your hundred bucks but that's a ridiculous amount of leverage and if

[00:22:13] I want one tick against you you get a margin call and you be wiped out so we're just trying to

[00:22:18] give you direct exposure one from one exposure to what this is okay I was it let's go ahead to

[00:22:24] me. Well I say if I have younger nephews all over in the IRAs that I managed from I would put

[00:22:32] 2% yeah and just forget about it you're freaking you know 18 years old but if you thought that

[00:22:39] we were we using less electricity when you're 65 than we are today then you're out of your mind or

[00:22:46] somebody's come up with fusion and and you could have a fusion you know machine in your backyard but

[00:22:53] up until then we're going to be using de facto more electricity that the utilities have a

[00:22:59] hard time building new plants for God's sakes. We have a the worst transmission system in the world

[00:23:05] the amount of electricity that we lose just moving it from Texas to California would you know if

[00:23:11] that's a story let me talk about one day Todd but yeah that's definitely another story but because

[00:23:16] we have to rebuild the entire infrastructure just to get enough just to skip the data centers

[00:23:21] filling and you know keep the Bitcoin miners but also the new population the new areas we're going

[00:23:26] to we have less water yada yada yada I mean the case for being long electrical power to me is

[00:23:33] just compelling and to add one more point to add when you talk about you know developing new generation

[00:23:38] to try to meet the success of demand that we're talking about they they completion rate for things

[00:23:43] that are in the development queue in the US average is about 8.7 percent so you've got a lot of

[00:23:48] projects that you know oh I want to build something and it's like you know two guys in the shingle

[00:23:52] and they go file the paperwork 8.7 percent of the stuff on average gets built that's kind of

[00:23:57] the first and the second one is it used to take you know we'll say three to five years to build

[00:24:02] something now you've got the rush to like we talked about 85 percent renewal 20 30 100 percent by

[00:24:08] 20 35 and so that permitting development until it's actually done and on the grid that's

[00:24:14] four to seven years now and the government is saying we need to address kind of how long this

[00:24:18] backlog is taking but there is a backlog and it's getting longer so we even recognize this need and

[00:24:24] you want to build this there's still a lot of things you gotta overcome well also you know if we're

[00:24:28] going to do hydrogen the only way to make hydrogen in a greenway is is electricity you know

[00:24:35] so the hydrogen economy that everybody wants I have to be an investor and I'm

[00:24:39] using storage company and and I'm financing a whole bunch of carbon capture projects right now

[00:24:45] we could put 200 of these carbon of picker plants into these utilities we just don't have enough

[00:24:51] parts to build them we don't have enough people who know how to build them that you're still

[00:24:55] right on the demand issue and and because of the regulatory environment and because you know

[00:25:01] money's expensive these days why did solar fall on its ass for the last two years because

[00:25:06] you know in my house in California it would cost 1,400 bucks but all this you know the solar panels

[00:25:12] up they'd finance 100 percent of it and I'd pay $70 for my electricity where I was paying 200

[00:25:18] you know for the ones for the utility well now the math got all messed up and all of a sudden

[00:25:23] you know it was $2,500 you know it's $400 a month for your payment for your solar panels etc

[00:25:29] when that comes down I'm with you that electricity is gotta go on the grid the grids are very

[00:25:37] impractical these days and you're wasting I don't know what's up you have a good number Tim in

[00:25:43] terms of how much electricity between you know the nuclear plant we have 78 miles over this way

[00:25:49] and how much gets to my house how much slippage on that system so typically transmission losses

[00:25:55] average between 3 to 5 percent depending upon distance and some other factors like but you actually

[00:26:00] you hit on another point that I just want to come back to and that is when you talk about like

[00:26:04] building new new plants right so interest rates are up so the cost of finance this

[00:26:09] yeah the labor costs are higher there's a part shortage and so a really good example is

[00:26:13] or instead the public the European company that does offshore wind they were contracting at around

[00:26:20] will say $94 a megawatt hour for all this offshore wind they had to rip up the contracts and take

[00:26:26] a write off because that cost is now somewhere between $114 and $140 a megawatt hour so even

[00:26:32] for what things people from they think are economic right now you just got to kind of revisit

[00:26:37] because the costs are going up so even if you can get it built you can get it permitted and get

[00:26:41] it on the grid it's going to cost more than what you thought it did and that's still not

[00:26:45] reflected in where the full market's already okay let's pivot for a second on this though I want

[00:26:50] to know about the guard rails tell us what can happen maybe regulatory that could really kind of

[00:26:59] really cost some pressure on your strategy and what you're trying to do well I mean the obvious

[00:27:05] one would be is if we decided to re regulate electricity but I can't think of any example where a

[00:27:10] market that's been dereg went re-reg so I mean what's the genius out of the bottle that's it yeah okay

[00:27:15] so is there anything I'm weird we're now I mean we had to say to the Union it's stated the Union

[00:27:21] address last night you are you're in the middle of a presidential cycle is there anything that's maybe

[00:27:26] in the pipeline right now that investors need to be aware of that's you mean politically

[00:27:32] talk do you mean politically regulatory wise yeah politically yes so right now there's a there's a push

[00:27:38] for even tighter EPA restrictions and so what those restrictions would be doing is getting the

[00:27:46] coal plants offline even faster and originally the proposal was to get along these natural gas

[00:27:52] fire plants offline very quickly too and then all of a sudden it looks like people are saying wow

[00:27:57] we we have a real reliability issue so they're trying to figure out the way we do grandfather this

[00:28:01] so other than saying certain size existing natural gas plants if you're below a certain size you

[00:28:06] can stay and if you're above a certain size you got to get off and they're also trying to address

[00:28:11] well maybe it's just new natural gas plants are going to have this EPA issue so the government

[00:28:16] and kind of just you know the consumer in general they're starting to realize there's a reliability

[00:28:20] issue going on and the rules are getting tweaked to be a little bit more realistic but you're still

[00:28:25] marching towards you know being a hundred percent carbon-free generation and that's

[00:28:30] that's the goal and that's what people are pushing for well again one of the companies that we

[00:28:35] finance for about 15 million dollars builds on to an existing natural gas power plant

[00:28:41] which known as the peaker plant that runs out like Chester Street when you know people get home

[00:28:46] to turn on their TV and all that stuff and the heat from that is is used to take out all of the carbon

[00:28:52] from that natural gas plant 100 percent and if the byproduct of the way you do that is you take

[00:28:58] the water out of I don't want to get too into the weeds but obviously now you wind up with this

[00:29:03] pure water which you sell to you know a variety of companies and then you have CO2 which

[00:29:08] is a big shortage of and I truly believe I mean I've done a lot of math on this you get 500 to 800

[00:29:15] of these peaker plants that are removing CO2 from natural gas plants you're not getting rid

[00:29:20] of the natural gas plants and we have the most natural gas in the world we have the by far the

[00:29:25] largest reserve what are we not going to do this what are we going to send it all to China for Christ's

[00:29:29] say so right so so technology is coming and it's here that is going to help this significant issue

[00:29:39] on reducing carbon to zero from an actual gas power plant which means you're going to have more

[00:29:44] natural gas power plants okay okay so the Tim I want to ask you this before we close out the show

[00:29:50] so you you having this unique perspective on electricity is there a way to actually look at

[00:29:57] the consumption of electricity and how that can actually provide a proxy as far as what the

[00:30:03] US economy is doing oh yeah so the EIA if you go on their website they post what the what the

[00:30:08] demand numbers are okay this so you can just give us an idea so in terms like what actual

[00:30:15] yeah what you're seeing as far as numbers go I mean consumption numbers I mean should we assume

[00:30:20] that it's because really this winter was not it was a very mild winter coast to coast

[00:30:26] but are you still seeing people say no yeah you know what I'm still I got my EV

[00:30:30] car but I also have to charge my iPhone my iPad I got all this consumption is up therefore

[00:30:35] people are spending more money just on keeping the house with low it's on I mean that would

[00:30:41] signal to me that hey the economy's doing okay but what do you think yeah we're still seeing

[00:30:46] the predictions from the individual regions that make up the index in the ETF they're still saying

[00:30:50] right now that they think that their year on year growth is going to be 3% but for now in like the

[00:30:56] next 10 years and that's we think that's conservative yet because of the numbers that we talked about

[00:31:00] so you know the data centers are gonna they're gonna be increasing between 10 and 30% what their

[00:31:04] consumption is every year for the next 10 years the EVs are gonna be increasing up to like 10%

[00:31:10] of the overall US consumption by 2030 just so many things are on this we the chips like we talked

[00:31:16] about we don't really see anything where people are saying the consumption is gonna be down at all

[00:31:21] well Todd the only thing that correlates to our autonomy when it comes to electricity is in the

[00:31:27] you know is in the manufacturing space we can see clearly where manufacturing of

[00:31:34] your places that use a lot of electricity GDP goes up you get from you know auto manufacturing

[00:31:41] you get it from you know but it's from the goods part of the world the fluctuation and the price

[00:31:47] of electricity and our natural gas it is driven by these LDS is driven by regulatory I mean

[00:31:55] but it's somewhat correlated but the only correlation I've ever seen that anybody does numbers on

[00:32:01] is on manufacturing because for instance in Germany it's a one-to-one correlation between

[00:32:07] manufacturing and GDP and their GDP is negative 3% right now and guess what manufacturing is negative

[00:32:12] 3% so that's really the correlation and how much electricity is consumed in manufacturing

[00:32:20] is the only correlation I've ever seen as an economist not as an accountant I like it final

[00:32:27] final question for you Tim how can investors get involved with this because I know that they're

[00:32:32] probably jumping at the bit to move forward sure so that the ticker is apt AMPD and it's on the

[00:32:39] air stock exchange and then you can go to the website cnicfunz.com and we've got white papers

[00:32:44] that we post on there we tried to write like a five-page white paper on different topics that

[00:32:48] investors ask us about and so between those resources you should be able to make an informed

[00:32:53] decision and see if you think this makes sense for you Tim one final question will there everybody

[00:32:57] do you think and a chance to separate the the green energy price from the natural gas traditional

[00:33:06] type those others it would there be a what would I be willing to I'd be willing to pay more

[00:33:11] for my electricity if I do it was 100% carbon free if we ever get there there's efforts right now

[00:33:17] to come up with an all green index and all green consumption and things like that the problem

[00:33:22] that you have right is electricity flows like water so if I have a generator and I put electricity

[00:33:28] on the grid you can't say that that what you know goes through what parts green or what parts black

[00:33:33] right yeah so so there's an issue but there's an effort for people to try to be able to find a way

[00:33:38] to track that so that's probably not too far off in the future where you can actually find a way

[00:33:45] to get that accounting to say that that's done but it's not really there on a on a usable commercial

[00:33:51] scalable basis right now well here in Arizona are solar panels and we fill back to the grid

[00:33:56] and it's regulated and they have all the numbers how much energy was sold up in a back to

[00:34:03] brought back to the grid that would be and that would be interesting yeah and that's what I was

[00:34:07] kind of referring to they're getting close to being able to track that into that computation all right

[00:34:11] cool I don't know what graphic just popped up when you're screened there Toby it looked like a thumbs up

[00:34:17] I've never seen that before that's electricity was used for that

[00:34:23] that was AI by the way I sort of got you can't make the house so there you go tight all up in a

[00:34:29] that was fantastic for those listening you definitely want to check out the show which is on

[00:34:34] this top today TV BTT definitely want to see what's happening with with everything with with the

[00:34:40] ship but let's say we're gentlemen we're going to close it out right there we want a wonderful

[00:34:44] conversation so much to explore Tim you were wonderful and we definitely want to have you back

[00:34:50] I definitely when you come up when you're when you're in aversary yeah I think I appreciate you guys

[00:34:54] absolutely I'm going to be making a chart on that ETF in about three minutes okay so go

[00:34:59] like that love that and for the audience you want to go to CNIC funds cnecfunds.com we will also have

[00:35:06] a hyperlink in the description on the audio and the video site as well we encourage everyone

[00:35:12] to go check out with Tim and the crew are offering over there so on behalf of Timothy Kramer

[00:35:17] and Tobin Smith I am Todd shower burner we want to wish everyone a wonderful weekend and we can't

[00:35:23] wait to see you back on by hold cell next week take care now

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