Kevin Tracey: I’m talking related to the 68% of capacity that you don’t need to sell who are you able to fully I guess, bid that into the auction that’s happening shortly.
Brent Bilsland: Well, first of all, let’s not confused capacity with energy, right? So if a utility out there wants to buy a gigawatt of power from the grid at any given time, any given hour of the year. They have to supply MISO either in-house or purchasing from a third party like us a gigawatt of rated capacity. And this year, by so went to a seasonal construct. So our plants accredited capacity has various accreditations for winter, spring, summer, fall. And we sell — we sell a significant portion of that to third parties. And then what isn’t sold typically will go to the MISO auction, which is March 28. And the results of that will be announced a week or so thereafter. Whatever you didn’t sell in the third party, somebody will essentially buy small amounts there, right?
But capacity has been — is the thing that is — because the accreditation has been reduced on a lot of the renewables, right? They haven’t performed well in these particularly winter events and something — wind hasn’t performed well in the summer and solar hasn’t performed that well in the summer. And now we’re seeing where gas is not performing well in extreme cold events. I mean the Clair Moeller of MISO, who is the President and Chief Operating Officer of MISO, his comment is in regards to the last two winter events, extreme events is gas is now zero for two, right? And so we’ve seen PJM come out and their market monitors say, hey, we don’t think we are recommending the gas plants that don’t have now two transmission lines, should not be — unless they have two transmission lines, it shouldn’t be accredited any capacity.
So that could be that could substantially change how tight the capacity markets are, which improves those pricing, which we’re using that to cover our fixed costs. Now on the energy side, that’s not for my knowledge, it’s not typically sold in the MISO auction, the MISO auction is the capacity auction. The energy side, you can either sell — first of all, every electron has to be sold to MISO and every electron in that region has to be purchased from MISO, but you can have essentially a side letter agreement or contract or a PPA with like we do with the seller of the plant where we say, look, you’re going to buy your electronic turbine. So, we’re going to sell our electronics to MISO, but we’re going to true up with each other adding Because back in October, the PPA was underwater.
Today, with natural gas prices much lower, I imagine the PPA is much closer to market prices. So am I right in thinking that? And could you share maybe what the price — what is the price in the PPA for Hoosier? And is that price fixed through 2025?
Brent Bilsland: Yes, we’re not disclosing that price. And we have confidentialities in those agreements where we cannot at this time. Maybe once we have more of those, we may choose to aggregate that. But at this time, it would be too obvious. So, you’re absolutely right, right? So you set a price, quite frankly, the price was set prior to even signing, right? I mean, that contract was negotiated for quite some time. It was announced right around Valentine’s Day, we closed October 22. So in the meantime, we had an invasion of Ukraine, which said kind of trigger — somebody said, did it trigger the energy crisis. I would say it revealed the energy crisis. We think the energy crisis has been building for quite some time. We don’t think that has changed.
