Leaders of utility discuss challenges
Business Writer jmoney@oklahoman.com
NORMAN — Tom Kuhn, president of the Edison Electric Institute, said he sees a challenge “as an opportunity in work clothes.”
Wednesday, he shared that observation with hundreds of employees who make up the leadership team of Oklahoma City-based utility Oklahoma Gas & Electric.
His comment came in the midst of a talk with the group where he discussed a closet full of opportunities faced by investorowned power providers.
Those issues include changing trends in power generation, ongoing work to upgrade and improve the nation’s power distribution system (both nationally and on regional and local levels), and on his thoughts about power providers’ relationships with their customers.
He also brought up tax reform, which at least has the potential to become a hot-button topic in a variety of different ways.
Kuhn said he believes Congress is moving toward passing tax reform that doesn’t take away the ability for investor-owned utilities to deduct interest from debt they acquire to upgrade their power generation and delivery systems.
“It is the most capital-intensive industry in the country,” he said. “It spends $120 billion annually to keep its systems up and running. But at the same time, it must keep rates for its product affordable.”
Kuhn said he also expects the reform won’t take away utilities’ ability to deduct the property taxes they pay.
That’s critical to keep the nation’s economy moving, Kuhn continued, observing that the industry employs 7 million workers and has a $5 billion annual economic impact.
“It will be a net revenue gainer for the Treasury. It is good for our customers, too, so the bottom line is, it is good for the nation as well.”
Generally, Kuhn observed the nation’s investor-owned utilities are going through a major transformation.
He said the transformation is being prompted by changes in technology, changes in public policy and changes in expectations from markets and customers.
Kuhn said the industry has used technological advances to improve the environmental quality of its power-generating systems, to modernize its grid and to provide more individualized power delivery programs for its customers.
“As an industry, we have reduced our carbon emissions by 25 percent since 2005. We will exceed what the Clean Power Plan called for,” he said, noting increased use of natural gas, wind and solar generated power. “I think that is something we can be very, very proud of, because it is important to many of our customers, and important to the nation.”
Kuhn said the use of smart technology is helping utilities manage power systems using real-time data, enabling them to recover from outages more quickly.
As for utilities’ customers, he said they are increasingly looking both for environmental responsibility from power providers and for affordable products.
He highlighted OG&E’s wind power and Smart Hours programs as examples of useful tools utilities can use to positively engage their customers.
Kuhn, a former commissioned officer in the U.S. Navy, became involved in power issues as an investment banker. In 1975, he joined the American Nuclear Energy Council, becoming its president in 1983, and he joined the Edison Electric Institute in 1985 as an executive vice president before being elected its president in 1990.
After addressing the group, Kuhn said environmental policies and plans from previous administrations have affected many different industries.
While he said an easing of those policies under the Trump Administration will help, Kuhn also said that change won’t prompt an abandonment of ongoing efforts to produce cleaner power.
“These diverse options (natural gas, wind and solar) allow us to keep the power reliable, affordable, and increasingly clean,” he said.