Matt Smith: Sure. So, I would just set the table by saying that we are price takers in the power markets, and that comes with a fair amount of volatility. And so there are always going to be opportunities like they were last summer, like they were over the course of the winter to capture that pricing convexity that upside. And that’s why you invested a plant so that when you want to capture that and deliver power to the grid and reliability of the grid, you can do that reliably. And when you think about the forward curve, as price are the forward curve is between $40 and $45 in our pricing notes within PJM over the course of the next 12 months. And so that means embedded in that are going to be peak hours in July and August and December, January and February of the winter sort of end of €˜23 into €˜24, you are going to have times where you are selling as much power the good as possible.
April, May and June, September, October, November, those are the shoulder months, where seasonally demand collapses relative to the summer and winter and the power markets loosened. So, we are at the very beginning of what looks to be an incredibly loose power market in April, May and June. And so we expect to be able to import, purchase power at a very low price. The forward power curve is currently, I think high-20s, low-30s as we move into the shoulder months. The last 1.5 weeks, we have been capturing price that’s half that for a big chunk of each day. And so we actually think that we are optimistic about the ability to import power and lower our variable cost, lower our overall cost of power over the next three months and then in the shoulder.
But we still want to be prepared and able to deliver power to the grid when the power is called for via price during those peak seasonal periods. And so for us, we are in the energy arbitrage business. We are €“ we want to be able to have the lowest possible cost, and we have the ability to have two different revenue sources and optimize, and that will continue to be the case.
Greg Beard: Yes. I think just one thing to add, when the plants are running, because power prices justify it. We have the ability to very quickly, literally within a few seconds, divert power to the grid by shutting down the data centers. So, that is €“ I think it’s a more lengthy process to go from dark power plants to turn them on. But once the plants are on, we can easily and quickly divert that power to the grid within seconds, which we have applied for and received our designations from the good operator, demonstrating that we have the ability to do that one in a second, which is a very stabilizing sort of tool for the grid to have access to that power. So, I think you don’t think about it as just a binary option, it’s a multi-way option, on power, both high power pricing gives us a great opportunity, low power pricing was a great opportunity.
And then because we can toggle that data center on and off, we can take advantage in between as well. It’s happening like looking backward, the grid on a go-forward basis isn’t the same grid that we saw years ago. The trillions of dollars of infrastructure bill spending is making it into our national power grid. And it’s causing for higher power pricing on one end at certain timeframes, and lower power pricing at the other end. So in a way, our plants are perfectly situated for that in the environment that we are entering given the modifications in power infrastructure that we have. The solution for the grid would be to install like industrial scale batteries, which is really very polluting and that really a great solution or you can do things like demand response for big data centers like ours, which is what we think is going to happen more and more.
