EEI conference: CEOs remain vested in America’s energy future
ORLANDO — Transformations impacting the nation’s behemoth public electric utility industry are happening so quickly that modern-day decision-making from the top chief executives must occur practically at the flip of a switch.
In fact, several CEOs considered the present and looked toward the industry’s future as they considered a variety of adapting strategies for moving their companies forward during the Nov. 6 opening panel discussion here at the Edison Electric Institute’s (EEI) 52nd Annual Financial Conference.
“This is the most exciting time I’ve seen,” said Patricia Vincent-Collawn, chairman, president and CEO of PNM Resources Inc., as well as chairman of EEI. “We have positioned ourselves to be in the center of these changes.”
The all-female CEO panel wasn’t scheduled by accident. With Vincent-Collawn becoming EEI’s first female chairman in its 52-year history, part of the organization’s plan was to highlight for conference attendees — who included global utility representatives, analysts, investment and commercial bankers, and other investors — the industry’s efforts toward becoming more diverse across numerous areas.
“We’re diverse and inclusive, we serve our communities, and we need to make sure people know it,” said Patricia Kampling, chairman, president and CEO of Alliant Energy Corp.
In large part, it’s about changing the message. And the CEOs said they’ve had to make novel decisions about changing aspects of the business so that they could change perceptions about the industry.
Mary Kipp, president and CEO of El Paso Electric Co., said one of the areas in which the disruption caused by transformation has forced her to reevaluate how business-as-usual gets done regards communicating with customers.
For instance, despite the utility’s customer base in west Texas and southern New Mexico being 87 percent Spanish-speaking, it wasn’t until recently that the company began using the language to reach customers. And because customers expect near-constant engagement from companies, Kipp said it only made sense to start reaching out to people in their native language.
Similarly, Vincent-Collawn said she’s seeing more progressive and aggressive messaging from utilities about “the great environmental strides we’re making.”
Additionally, exiting coal “really improved our customer relationships, too,” Kipp said.
Overall, “I’ve learned not to take our customers for granted,” Kipp said Monday.
Speaking of coal, Kampling said she has learned to let go of the past and in 2009-2010, when looking at the company’s assets, decided to put some plants on retirement plans. By the end of this year, she said, 40 percent of coal-fired plants will be retired.
“It’s the right thing to do and customers want it,” Kampling said.
She advised that if a plant is down, decommission it and repurpose the site so that customers don’t have to look at a tired, dilapidated and no-longer-useful reminder of a past employer.
“Look to the future; don’t get stuck on one technology and take care of your communities,” said Kampling.
Technology, of course, has been the main driving disruptor for the industry.
“The technologies applied today in the industry are amazing,” said Constance Lau, president and chief executive officer of Hawaiian Electric Industries.
Lau noted advancements in batteries, storage, data, data analytics and automated smart devices, among others.
Selling kilowatt (KW) hours, for instance, “doesn’t work anymore” when considering new business models aligned with technological advancements across the industry, Lau said. And while KW hours drove company growth in the past, there are other ways electricity can help in that area, she added.
It’s about understanding what electricity can do in a utility’s communities, especially since customers have so many options for obtaining energy, she said.
“So you need to know what customers want and data analytics can help you … pick a technology that works for who the average customer is and what is wanted and needed,” explained Lau. “It will help get you to where is that sweet spot to pick the technology that works for the bulk of my customers?”
Lau also said that with sales low, but demand up, a traditional rate design would need to change and “we need to work with regulators on how to serve that load.”
Meanwhile, electrification will create ongoing opportunities for the industry, Vincent-Collawn said, such as electric vehicle charging stations, the electrification of shipping ports and transportation, and the smart cities movement.
“It’s about creating a better quality of life for customers and who better to be in the middle of that than your electric utility company?” she said.
The conference, Investing in America’s Energy Future, runs through Nov. 8.
