Profile XIII: Ms. Arushi Sharma Frank, Ex-Tesla, Luminary Strategies LLC
In this issue, The Daily Dynamo met with Ms. Arushi Sharma Frank, a pioneer in energy policy across the nation. She has worked in various roles, most notably as Tesla’s Senior Counsel and its Energy Markets Policy Lead, overseeing Tesla’s market entry into Texas, and is now working as the founding Principal of Luminary Strategies LLC, which provides strategic consulting for companies across the global energy infrastructure resilience spectrum. Throughout her career, she has blazed a path of innovative market strategy and policy, most recently in 2021, spearheading the introduction of virtual power plant policymaking infrastructure (VPPs) into Texas’ energy markets.
Despite her seemingly natural knack for energy, it was actually a sector that she stumbled upon inadvertently. By virtue of a law school scholarship, she began working for a trade association representing the energy-adjacent marine manufacturing industry. During her time, she gained valuable skills that allowed her to seamlessly transition to the energy sector. “They were training me for something else, [and] I just wasn't sure what it was,” Sharma Frank recounted. For her, those initial experiences taught her an invaluable lesson, one she shares with the many students she mentors: “Most people who do great things almost always fall into that thing by accident, by happy accident.”
Since entering the energy sector nearly two decades ago, she has accumulated a treasure trove of knowledge, particularly technical knowledge. However, it does not merely suffice to be a subject matter expert in ‘one or two fields’, according to Sharma Frank. “An absolutely critical skill is being a hound for information,” she stressed, adding that acquiring and possessing deep knowledge of multiple disciplines is invaluable in today’s energy sector. Yet, she believes it is equally, if not more important, to be able to communicate that knowledge to a wide breadth of audiences. “The people who walk in the door on day one with [that] skill will be triply successful as compared to those who have not taken the time to develop it.” In the energy sector in particular, such a skill is of even more importance, “whether you're shaping it as a commercial participant or from the policy side or somewhere in between.”
Throughout her career, Sharma Frank has embodied the attribute, employing it in the most important of projects. While she was tremendously successful in her time at Tesla and now at Luminary Strategies, her much earlier work enabled her to set the foundation for all that followed. “My first wins in the energy industry [were] not at Tesla,” Sharma Frank recounted, “They were fifteen years prior at two other jobs at two different trade associations.” In those positions, she was able to effectively communicate her subject matter expertise to parties far less knowledgeable about the industry. In educating such parties including Congress, the White House, and regulators, she learned that a lack of genuine interest in the issue is just as formidable of a roadblock as a lack of expertise. “Don't ever assume that everybody else around you thinks that the issue you think is important, is important to them. That is a massive footfall for anyone trying to be in this space,” she stressed. When working with audiences with different priorities, she believes communicating with humility and tenacity is of paramount importance. Oftentimes, one must have the hard conversations that are needed to get parties on board with an issue they perceive of with far less clarity or significance.
At both trade associations, she ran into such an issue. Then, Sharma Frank was tasked with working on proposed regulations by the Commodities Futures Trading Commission (CFTC), who had initiated new statutes after the passage of the Dodd-Frank Act, which sought to regulate security and commodity-based swaps. However, the new regulations, which she characterized as ‘draconian’, threatened to undercut the progress of a burgeoning energy industry as it underwent a transition from coal to natural gas. “It became my job to work on several of those proposed rules [and] final rules from the CFTC which pulled in far too many different types of physical transactions around electricity and gas, procurement, sale and delivery,” Sharma Frank recounted, lamenting that the Commission sought to regulate much more minor transactions as if they carried the sophisticated risk of a major commodity swap. Through her time on the Commission’s advisory committee and her work at the trade associations, she was able to help create clearer rules by which the CFTC administered regulations. “We essentially creat[ed] hard lines between what is regulated, recorded, and reported a certain way… and that only very large sophisticated financial swap market participants should be responsible for complying with [those rules].”
To Sharma Frank, the revision of those regulations was crucial. “[They] would have been the reason for a massive standstill in the industry,” she stressed, adding that the transition between coal and natural gas would have been catastrophically hampered. “To have so much unclarity [at that time] could have cost small utilities and independent project operators millions upon millions in compliance, redirecting investor attention and risk valuation to the wrong issues, and even higher costs passed on to consumers – energy ratepayers.” For that reason, she views her achievements at those trade associations as ‘one of the most important things’ she’s done. For Sharma Frank, it was also a quintessential example of why communication in the energy industry is invaluable. With the CFTC having greater purview over energy-based commodities and swaps at a time where the sector was undergoing a profound transformation, it was up to subject matter experts like her to communicate the gravity of the situation and craft acceptable proposals for fine-tuning complex rules.
“You have to be capable of talking to a new audience that may not think what you believe is important is actually important and communicating that to them. If you're talking to an agency whose conventional bread-and-butter is the CME [Chicago Mercantile Exchange] and onions, and now they're regulating energy transactions, you better be ready for a long hard conversation,” she underscored.
Her time at Tesla proved to be equally challenging, though for different reasons. As the energy market strategy lead for the company in its entry to Texas, employing an arsenal of legal analysis and a litany of hard skills was crucial. With complex regulatory structures across the different markets that Tesla hoped to enter, Sharma Frank found ‘the patience and desire to dig deep’ into such structures incredibly important. Without considering the various grey areas or potential roadblocks that can arise, market strategies could stall or even fail. “The thing that's really missing in climate tech investment is that there isn't enough upfront focus on underwriting for that risk and hiring people to do that deeper, unglamorous work,” she stressed. The issues she faced in navigating policy at Tesla were incredibly complex, requiring what she calls ‘integrative problem solving’, a skill set she asserts is invaluable in any policy leadership position. “You need to apply your hard science, mathematical, qualitative, quantitative and social reasoning disciplines with equivalency and nearly every day, together,” she said. “There are very few moments where you can act in one of those areas without thinking about the rest simultaneously.” For anyone, even Sharma Frank, such a task is difficult to accomplish; consequently, she learned how important proactive delegation and crowdsourcing information can be. She used the following analogy to describe such a situation:
“Imagine yourself standing in the middle of a set of suspended buckets. They're all filling with water at different rates and you're in the middle and it's your job to get all of the buckets filled, but three of them have small holes and they're on different sides of the circle you're standing in. You can't approach each bucket yourself personally, as much as you want to and know quick action is necessary everywhere at once: you're going to need help.”
For her, being aggressively interested in seeking help and co-ownership was incredibly important in achieving success at Tesla, particularly in the virtual power plant initiative she pioneered in Texas. In the wake of Winter Storm Uri, which decimated the state’s energy infrastructure, Sharma Frank saw an opportunity to remedy many of its inefficiencies with a novel solution, which integrated distributed energy assets into the state’s grid. In her mind, it was a solution built on common sense. “There is no future in which we do not benefit from a society canceling single points of failure in energy reliability and resilience by distributing risk and distributing reward,” she stressed. True to form, she rallied other companies, namely David Energy, Shell, and Sunnova, to help push forward a new mindset to enable these solutions at ERCOT. Four years later, grid condition-responsive virtual power plants have become a vital part of the state’s infrastructure with multiple providers announcing large demand response and grid export programs. As an advisor to Base Power and an independent advisor on the Texas Public Utility Commission ADER Task Force, she has continued to impact the state’s energy landscape.
In the midst of that weather-induced catastrophe two years ago, Sharma Frank found an opening to introduce a solution that has now been an amazing success. While it’s frustrating that similar solutions in Louisiana, Puerto Rico, and other states have only been adopted in the wake of such catastrophes, she believes such events create those opportunities for tremendous economic, social and technical upheaval. “I think it shows you why you should always take advantage of a big moment in a crisis to do really good, important things.”
In the midst of a highly charged political climate which ‘prioritizes politics over fact-based’ information, a key complaint of Sharma Frank’s, solutions like VPPs are proof that market initiatives can be successfully executed from the ground up regardless of what is happening at the state house. “VPP policymaking has got little to do with federal law or federal policy,” she stressed, “It is a community driven and technology driven, state and local solution: when people are impacted by the problem they will line up to be the first to solve them.” While she contends slow policy and regulatory action is the reason why the United States’ energy infrastructure is ‘fifteen to twenty years behind’ where it should be, she has worked tirelessly to counteract such inefficiency through such community-driven solutions.
Wherever she is, Sharma Frank will continue to shape the industry in every way she can. As a one-woman wrecking crew equipped with an arsenal of subject matter expertise, skills, and unwavering passion for energy, she is sure to be a leading figure in the sector for many years to come.
Ms. Sharma Frank’s first ERCOT presentation introducing grid-integrated VPP concepts into Texas, is available here and includes the collaborative heft of all four companies with a shared vision:
https://www.ercot.com/calendar/event?id=1653064107447.
If you’re a student looking to get involved in policymaking, Ms. Sharma Frank wrote an amazing article on the skills you need to succeed below:
