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Leyline Interview with Karl Rábago, Principal, Rábago Energy


Leyline enjoys interviewing clean energy thought leaders across the country and bringing those interviews to our readers. This month, we sat down with Karl Rábago who has worked more than 30 years in clean energy, electricity regulation, and sustainability as a public utility commissioner, federal R&D executive, utility executive, advocate, and attorney. Most recently, Karl contributed to the successful book, Climate Change Law: An Introduction.

Question #1: You have had quite an energy career in different sectors and positions: as a utility regulator (Austin Energy), a nonprofit leader (Rocky Mountain Institute), a private-sector consultant and clean energy developer (AES Corporation), an R&D professional (Houston Advanced Research Center), and a higher education professional (Pace Law School). How do these perspectives come to bear when thinking about tackling climate change and/or our country’s transition to clean energy?

I have always sought impact-driven work, and more specifically, work that helps accelerate clean energy deployment. I had the luxury and support to go to the places where I think the most important clean energy action was happening at that time. For example, I worked at the Environmental Defense Fund when the work was about policy and deregulation; then I went to Texas as a utility commissioner to see the first wind farm built in that state; and then when sustainability was a next big thing on the horizon, I got to help make plastic out of corn. When the sustainability conversation broadened to societal transformation, I joined the Rocky Mountain Institute as we promoted the thinking behind natural capitalism. In all these places, I ended up where I thought I could make the biggest difference, given my personal capabilities. And it means that I see things from different perspectives. 

I learned two things from my career trajectory: (1) Systems thinking is important, especially when thinking about the climate; and (2) solutions must work for a broad range of constituents. Multi-attribute optimization means solutions must be good for developers, regulators, and the community. I don’t believe in trade-offs, because when someone says that they are willing to make sacrifices to strike the right balance, it shows a failure of imagination. 

Taking it one step further, I think it’s important to encourage and appreciate multiple perspectives. The echo chamber is the problem; we see it when the utilities form an echo chamber around requirements or expectations of financial performance. We see it when regulators narrow their perspective and come up with unreasonable expectations of what’s in the public interest. We need to figure out how to diversify our experiences, the people we talk to, and the communities we interact with, so that we can make a good impact. 

Question #2: What do you think is our nation’s most intractable problem in the transition to clean energy? And what do you think we should do to overcome that problem or set of problems?

I believe the most intractable problem in the clean energy transition is salience and inertia. Salience means people have an actionable concept in their mind, and they feel compelled to do something. With respect to climate change, salience is getting solved, because more and more people experience the impacts of climate change each day.

Climatic shifts are like the shifts we have seen in technology, but they are deeply unsettling for parts of the country. We must make our way through the climate transition in a way that’s peaceful and just.

Climatic shifts are like the shifts we have seen in technology, but they are deeply unsettling for parts of the country. We must make our way through the climate transition in a way that’s peaceful and just. By inertia, I am referring to the fact that we are all busy, and there is competition for our attention. Some people are coddling that inertia at a time when we could be taking climate action. One small example is not using LED lighting. We should be encouraging people to make changes before the changes change them. 

Question #3: Leyline Renewable Capital is a renewable energy capital lender and in a unique position with senior leadership who have all worked as clean energy developers. There are several intractable problems with getting clean energy projects on the grid with transmission and interconnection queues lasting months if not years (think of PJM). This makes the role of a lender challenging. What thoughts do you have on this?

Reliance on markets will move us to these environmental outcomes. Market forces will accelerate this [clean energy] transition, but we bring a lot of unsustainable thinking into our markets, especially on the lending side. You must construct and manage portfolios for the future and not for yesterday’s expectations. This includes the portfolio of fund sources as well as projects. 

Overall, it just comes down to constructing and managing your portfolio in a way that matches your values. Don’t just try to have a single product line of lending, add some diversity. Find people who are clever and can help you get around some issues from the direct markets. A whole lot of developers I’ve worked with have regulatory risk as a check box on their spreadsheet; is it good/bad, and that’s it.

Here’s the thing: Regulatory environments can change, and I’ve made a career of being involved in changing requirements. Lenders and developers should explore spending more time investing in those changing environments where they aren’t doing so already. Think of it as a dynamic strategy.

The more successful players tend to make an investment in people who can help them move the levers of policy and the regulatory environment.

The more successful players tend to make an investment in people who can help them move the levers of policy and the regulatory environment.

Question #4: You were recently invited to write a chapter on energy law in the Climate Change Law book. It has been widely popular, and your publisher in fact had orders backlogged. What did you learn from writing the details of the nation’s energy law?

This book is designed to fill a gap – the lack of a good gateway book to climate change law. At the same time, it is a great refresher for experienced practitioners. In writing the energy law chapter, I was struck with how energy law is all about the climate, so you can’t do energy law without having an impact within the climate world. And so with this book – in a conversational tone – we wanted to explain this and other key aspects of climate change and climate law. We wanted the book to cultivate an awareness of climate issues being everywhere – to make our role in the climate more salient and break through the inertia.