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It is that time of year again.

When we look back on last year and reflect on the people, some who are well-known in the Carolinas and their communities and some not so well-known, but still influence this region's development, its policy and the achievements.

For 32 years now, Carolina Business Review has talked to influential lawmakers like South Carolina Representative Gilda Cobb Hunter, North Carolina Senator Phil Berger.

But the core of what we do is to lean into the executive leadership of the region, not just because they're high profile or rock star CEOs, but because at the highest levels they drive policy, operational excellence, and either separately or as a group together can move proverbial mountains.

- [Announcer] Major funding also by Blue Cross/Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association And Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

(pensive music) - [Announcer] On this edition of Carolina Business Review, - [Announcer] On this edition of Carolina Business Review, Some classic conversations from 2023 Including Duke Energy CEO Lynn Good Charlotte Douglas International CEO Haley Gentry And Kody Kinsley, Secretary of the North Carolina Department of Health and Human Services (pensive music) Blue Cross Blue Shield of South Carolina, This is a special Carolina business review where we present a handful of last year's key discussions, and we call it classic conversations.

One of last year's standout dialogs was Lynn Good, Duke Energy boss.

but Lynn, with the advent of things like AI computing, edge computing, E-V charging, not to mention just base load growth in the Carolinas, this is my term, ma'am.

Is this a runaway train when it comes to just trying to contain what energy costs and increases look like the next 5, 10, 30 years?

- You know, Chris, what you're talking about is the good news around economic development, which has really matured in the Carolinas over the last several years.

We're ranked number one for business for a reason.

- [Chris] Yeah.

- We've been able to attract manufacturing.

The on-shoring of US manufacturing, chips makers, E-V, battery storage, and AI is driving data center growth.

And as we look ahead, we are seeing growth in the Carolinas that is beyond what we have seen for decades and I think that's a good thing.

That means the state is thriving.

- Mm-hmm.

- And I think about even coming out of the pandemic in migration, population growth, we expect to add three and a half million people between now and 2050.

All of these things are pointing to a growing future, and we're glad to be a part of it.

As an infrastructure builder, we have to keep going, building the infrastructure to make this possible.

How do you moderate growth in economic development and not become a higher priced producer of energy?

That has been, as you know, one of the linchpins when it comes to relocations and attraction to the Carolinas.

How do you keep that cost down?

- Chris, I think it's like any business issue.

It's never an or.

So, it's not growth or low prices.

What we have to do is achieve growth and reliability and affordability, because the affordability goes with making the state attractive.

It's what makes the state attractive for manufacturers and data centers and other things.

And so that's a thoughtful approach.

That's a long range approach.

That's diverse resources to meet the needs of our customers.

And I would say to you as we plan, we're always planning for and, reliability and affordability and increasingly clean, and growth is a part of that equation.

So talk a little bit about where you think really, truly the base load, the primetime energy is going to be derived from on the generation side 10 years from now.

Is it nuclear?

Are there wind farms off of North and South Carolina?

Is it going to be solar panels, you know, blanketing from here to the coast?

What do you think that looks like?

- And Chris, as you talk about, you know, Duke's strategy, it's really a reflection of the transformation that's going on in our industry.

It's not just Duke, it's everywhere.

New technology being introduced, solar battery technology, and also the fact that some of our historic resources like coal are being challenged, supply chain, transportation, et cetera, as the whole country moves away from certain resources.

So in order for the Carolinas and Duke to continue to thrive, we have to transform.

We have to change.

And so we're looking, as I said before, for ways to do that, that continues to maintain diversity and reliability and affordability.

And if you think about, what I'll call on demand resources, ones we can control, dispatchable resources.

We believe that natural gas has a role to play, and we believe nuclear has a role to play.

And as we think about the Carolinas, in particular, the incredible nuclear fleet we have here, the expertise that Duke brings to the table, we believe nuclear will play a very important role in the decades to come.

There's almost nothing better, runs almost all the time and zero carbon.

- Mm-hmm.

- So it represents a really foundational element to the clean energy transition.

what would be the perfect balance of a nuclear generation within the portfolio, Duke or any responsible energy company?

- That's an interesting question, Chris, because I think there's some geography here that we should consider.

And I think about that swath of land in the Midwest that is very windy.

They're gonna have a greater proportion of wind, they ought to take advantage of that resource.

Duke is going to have a lot of solar in the southeast.

We ought to take advantage of that resource.

But then as you think about the on demand resources, nuclear for a company like Duke in the southeast, nuclear can be a part of it.

So I do think looking at the resources that surround you from a renewable standpoint, and then supplementing that with nuclear, with natural gas, and other things will be important.

- Where's the element of something like workforce housing fit into all of this?

And I know this is a softer science, but it's clearly a science that Duke and yourself have been involved with.

How do you allocate resources to help communities around workforce housing, not just affordable, but workforce housing?

- I think affordable housing is where I would go with that, Chris.

So we are constantly looking at how Duke can be involved in the community, to help the community thrive and grow.

We use our foundation, we use volunteer work, we use our leadership and organizations that are important to the community, and it's not one size fits all, but I think affordable housing, particularly here in the Charlotte region has been really important and Duke has been a part of that.

So how do you strategize around what AI is going to do in your industry?

- We're trying to take a very deliberate approach on this.

So we have a cross-functional team from technologists to leaders in our business to identify use cases on how Duke can put it to work and how can we make ourselves more efficient, more productive, how can we use it to serve our customers better, but at the same time protect our systems and processes so that we don't create an unintended risk.

You have been a steady hand for a long time and this is gonna sound a little self-serving, but you, I think, deserve great kudos in steadying, a dramatic change in leadership.

You have done that.

How long you wanna do this?

- That's a good question, Chris.

You know what I would comment on, is 10 years when I hear that number, it's like, it's hard to believe.

In some regards, it feels like it's been a short period of time and others it feels like, wow, that's a long time ago.

But I am blessed at Duke to be surrounded by extraordinarily talented people that care deeply about serving our customers.

And to be surrounded by optimistic, courageous, competent people has made it all possible.

And so we're focused on serving customers well every day, being very involved with our stakeholders and progressing this clean energy transition.

while most of our programs involve conversations with panelists and then a special guest and cover a variety of subjects, there are topics that warrant a deeper look.

From time to time, we gather panelists with different perspectives and vantage points to unpack some of the deep layers of one specific issue.

This year, we tackled the evolution of DEI.

Untapped resources like the veterans in the Carolinas shined a light on what's really happening in the restaurant industry and looked at the importance in the future of workforce housing.

In this next conversation, we unpack changes in the financial services sector.

Jim Sills, you are a sitting CEO at a bank.

Jim, would you describe what happened with not just SVB, but just everything since then as a banking crisis?

- Chris, I don't consider this a banking crisis.

Yes, there were a lot of headlines and a lot of media attention on the financial services industry, but it was really contained to two or three or a handful of banks.

And then it spread a little bit to some of the regional banks that were fairly large.

But generally speaking, the banking market is safe and sound.

Community banks are strong.

Medium-size banks are very strong.

So I think, in my view, it's not a banking crisis.

We did receive a lot of inquiries the first couple of days, but since then, everything has been very stable for most institutions all across North Carolina.

- Yeah, Dr. Hartwig, you've got... You're an expert in risk assessment management, maybe?

Certainly at USC and beyond, but I mean, how do you unpack this idea of what happened?

Is this a banking crisis or is this bank, some banks in crisis?

- Well, I agree with Jim here, but I kind of see this as a failure of risk management.

I mean, if you look at how SVB was managing its assets versus its liabilities, this was an accident waiting to happen.

But the good news here, and what I've been saying is that this is not a repeat of the financial crisis in 2008, right?

This was not a Lehman moment.

This was not a Bear Stearns moment.

And fortunately, and I think the markets have been bought into the narrative already, that this was an isolated issue.

- Peter, Fred, so is this a crisis in confidence, maybe the way that banks are set up about lending out money, about taking deposits, et cetera, et cetera?

Either one of you.

- Peter, let me jump in first, because these three banks, and if you go back to Silver Gate, which was a smaller one that started it all, they had very, very unique business models, unlike every other bank in the country.

So what they had was a very small number of very large depositors.

Every other bank in the country is based on small depositors, small... A large group of small customers.

And so they have diversity, where these banks had virtually no diversity.

The other thing that was unique about SVB is it happened pretty much overnight, through the, I guess, technology, through the ability to move money on a keystroke on your phone is exacerbated by a social media post, "Take your money out."

And basically they were gone in less than 24 hours.

- Yeah, Fred, great explanation.

And Chris, great question.

Confidence is everything in banking.

Banking is built on confidence that a business or a consumer can put their money in the bank and they'll be able to get it back.

And what the regulatory agencies did, and you referenced this earlier, the actions of the regulatory agencies on that Sunday evening, to guarantee all deposits of the two banks that failed, SVB and Signature, calmed the markets.

It steadied things so when banks opened that Monday morning, customers were nervous but there wasn't a widespread crisis.

There wasn't a widespread run.

And that was critical that they did that.

Do you expect that there would be more scrutiny now, not on the banking system, but maybe the shadow banking system?

Is that gonna be part of the dialogue?

And we've got about a minute.

- Go ahead, Peter.

- Yeah.

Peter, I'll jump in first.

I do, and if you go back to what I said earlier about the unique business model of SVB and Signature, high concentrations of deposits from a relatively small base.

That's similar to what you have in the shadow banking world.

And their funding probably isn't as robust and as diversified as what you see in a community bank.

- Peter, last 20 seconds.

- Well, and all we ever seek, and bankers are not afraid of competition.

And we've been asking for years, a level playing field.

If you're in financial services, you need the oversight that banks of all kinds have.

And what's interesting about the silver lining, I guess, of this episode is we've been not talked about FDIC insurance for years.

Customers didn't seem to care.

They do now, and they're seeing the value that the banking industry brings because of that confidence they can have.

- Peter, last word, and it's a good one to end on.

For us, topics like education and health care are core subjects because they of course impact all of us.

All of our interviews with leaders in education like Dr. Roslyn Clark Artis, at Benedict college.

NC State Chancellor Randy Woodson, High Point University President Dr. Nita Cobain, North Carolina Superintendent of Education Catherine Truitt are on our podcast and our YouTube channel.

In 2023, we sat down with the heads of hospital systems like and MUSC and UNC Health and people leading cutting edge technologies like life edit therapeutics.

Those who shepherded our family's health in some of the most chaotic of times enter north Carolina.

Department of Health and Human Services Secretary Kody Kinsley.

Mr. Secretary, welcome to the program.

- It's great to be here, thanks.

- I know you worked very closely with Dr. Cohen, all along the implementation of whatever the policy around COVID was initially and became and one more question, Mr. Secretary, about COVID and I promise we're not gonna let it dominate because I'm sure you're ready to get past some of it, but the idea that four years now we've been living with COVID and it's become part of our DNA.

What's changed for you when it comes to just the deployment of the assets of DHHS, how you think, how you think about policy, what's forever changed?

- You know, I think we have to think back to the start of COVID and what was particularly novel about COVID was that it was novel.

We didn't have tools, resources, we didn't know what to do with it.

And there was a time when remember, we were washing bananas.

People weren't sure how to manage through it.

And, you know, we've had this time to learn how to manage it and as we came into the beginning of 2022, that was the vision that we really tried to put out for North Carolina was we had the tools to manage COVID so it doesn't manage us.

Now, one of the things that we learned along the way was that really good data and transparency around that data allows us to understand the health of North Carolina and try to organize our response.

We've tried to take those lessons learned during COVID and apply them to our top priorities now, which are reinvesting in our work force that has been hit hard through COVID, taking care of kids and their family members so they can be well for the next generation and I think job number one, investing in behavioral health.

We have all felt these last four years as if they have been 40 and I think there's a great chance for us to be better by taking care of our mental health.

- [Chris] Vicki Lee?

- Yeah, you mentioned, you know, taking care of our workforce and making it, I believe one of your goals is to make it strong and inclusive and so I wanted to hear a little bit of how the department is planning to do that, like some of these steps you all are planning to take to create a more healthy and strong workforce.

We were able to put $850 million into childcare over the last several years because of federal funds, but that money is gonna run out.

And if childcare ends, then our small businesses and other business will feel the brunt of their folks not being able to be there.

So, focusing on shoring up childcare is another to priority for us as part of that strong inclusive workforce effort.

- Joey?

- So, following up on that, looking at the labor force participation rate, which we know is at lows and has been falling over the last decade and that's especially been true among the prime working age population, 25 to 54, so we we're looking to get that up, obviously these are challenges associated with drug addiction and childcare and transportation access, so do you have specific initiatives that you're working on that are directed towards that population that we really need to grow in terms of labor force participation going forward, given its fundamental challenge, given that it is a fundamental challenge to the Carolinas over the next decade?

- You mentioned drug addiction.

I mean, unfortunately, you know we didn't spend any less money of investing in recovery resources, especially around opioids.

In fact, we increased resources over the last several years.

Yet, at the same time, we've seen a 40% increase in the amount of overdoses from overdoses showing up in emergency departments.

What we know about addiction is it's just as much about treatment as it is about all the supports that help people stay in recovery.

During COVID, people lost their social supports and they lost access to their job sometimes, which made them lose access to their recovery, so we're really invested in giving people the tools to stay in recovery, such as getting reconnected to employment, so, you know, I'm really excited about the opioid settlement money that is coming down from the various things that the Attorney General has been leading.

You know, that money can help support communities, to help rebuild connections to employment and employment supports, but in the end, the biggest thing we're gonna have to do across employment is we have got to expand Medicaid.

I mean, Medicaid is the sustaining factor that can help support, you know, workers in childcare to stay in their jobs, people that are in need of addiction treatment to stay in recovery and, guess what, when those people can do their jobs, they can, you know, support the economy overall.

I mean, it's a smart investment.

How confident are you now in this year of 2023 that you can help, that the agency can help get that over the finish line and actually get Medicaid dollars as part of the annual budget?

- You know, last year I was saying that the only thing I wanted for Christmas was Medicaid expansion.

You know, we were, as we came into December, we were closer than ever.

You know, I am so grateful for the leadership in the general assembly.

We hear loud from both the Senate and the House that Medicaid expansion is the right thing to do.

The financing just makes sense.

It's $8 billion of federal resources into North Carolina to help support that.

I think that we are closer than ever and I am committed to working closely with the general assembly to help them have whatever they need for us to work through and get this done.

It's the right investment for North Carolina.

It's long overdue.

- Is that $8 billion a game changer for you?

- It's absolutely a game changer.

In addition to the $8 billion that would just sustain people's access to care, would shore up our safety net of our hospitals.

It was also an additional $1.5 billion signing bonus as I think of.

You know, our vision for that is mental health and workforce.

I mean, imagine where we would have been in COVID if we had 1.2 million people in North Carolina already with access to healthcare.

We've got some ground to make up.

If I can take that 1.5 billion and support access to recovery programs, mental health services, placements for children that are languishing, today, there is likely 250 people sitting in an emergency department in North Carolina with a mental health concern that have nowhere to go.

- In any one ED.

- Across the state.

- Okay.

- 250 people and, you know, that's not okay.

We can do better by those folks, but we gotta build resources.

I mean, if we haven't, you know, a lot of those folks are uninsured.

If we can cover them and support building out businesses around healthcare, we can help support them better.

Finally this year we kept our finger on the pulse of those things that make this region a destination, and in some cases a final destination very attractive to outsiders as well as those who live right here.

Our parks, our beaches, the Carolina culture, the Carolinas largest airport is part of that.

Charlotte Douglas International chief who started as an intern, joins us.

Airport director Haley Gentry.

- Haley, let's start with the easy one.

Seventh busiest airport in the world.

All the construction's going on.

What's your goal?

You want to be the first busiest?

This is a lot of capacity you're building, right?

- It's great for this region, the capacity that is occurring at the airport.

And much of that is built on the fact that this region is thriving.

Also built on the backs of the growing hub.

It's really a good thing for economic development in this area.

- Do you get, for a long time, Charlotte Douglas has been an asset that the city enjoyed, the county enjoyed, and still does, by most measures.

Do you get all of the support you need for all of the growth, not just from the FAA, but local tax revenue or whatever way you seek to get that support?

Has there been one area that you could use more of?

- Well, I think regardless of whether you're on the left or the right, the one thing that everyone can agree on is a great airport and what it brings to this community.

The value of the airport is very well understood by this region.

We fly both flags out front for North and South Carolina and we really benefit from a lot of great congressional support as well as the economic developers of both states.

I can tell you that the city has been great on watching the airport grow.

They have specifically provided us things that have been unusual, particularly since Covid, that have allowed us to do our mission and really accomplish all that needs to happen.

- [Chris] What would be unusual that you wouldn't expect?

- I think, for one, recognizing that our department is a little bit different than other city departments and supporting that either through pay or structured hours differently.

It's very difficult when you have the backs of the region on you, during Covid, to try and make everything just like every other city entity.

And our city recognizes that.

Our council, our mayor, our manager, they're very supportive of what needs to occur in our environment to get the work done.

And that was definitely the case during Covid.

- [Chris] Tim, question.

- I'm curious about the competition between airports and how much that is, really.

And I live in the triangle area and it seems like there's a press release every week about one of these new budget airlines flying direct to, you know, New York or wherever.

Is there high competition between airports like that or is there so much growth that there's, you know, more on the plate for everybody than we could possibly have?

- Well, I think in terms of a hub, there are two kinds of cities.

Those that want a hub and those that have a hub.

And I think the market that you're talking about, there is a lot of competition in.

That is a non hub airport.

North and South Carolina have tremendous air service in tremendous airports.

10% of the state's gross domestic product in North Carolina is brought together by airports.

So what they do not have, though, is a hub.

And I think that's what sets Charlotte apart.

You could combine all of the air service airports in North and South Carolina and it would still not equate to what's going out of Charlotte.

So that kind of, I think, adds perspective.

I think the service model that you're discussing is extremely important.

It meets a need.

You think about what's in the triangle, there are a lot of students there.

They need low fare carriers.

It's a great opportunity to provide a service, but it is a different service.

Haley, you've also had inflationary cost, especially when you're building hard assets, which you're doing.

How have you pivoted to manage that?

And then how do you, as you try to manage the budget on the construction, how do you make sure that your enplaned cost per flyer stays competitive with the rest of the country or better than the rest of the country?

- Well, it is better than the rest of the country.

(panelists laughing) I'd be remiss if I did not comment to that while we were here.

But our cost per enplaned passenger is around the $2 mark, which is the lowest in the country.

It is really a product of our overall labor costs.

The region in general compared to many other areas of the country, as well as what it takes us to operate our facility.

And our facility, if you've been there, we are constrained in certain areas.

We do not not have trams that go from terminal to terminal.

It is a very accessible, walkable, less expensive to operate facility.

So you combine those things and that helps you get your cost per enplaned passenger.

We're proud of that, though.

We feel like there's a lot of thought, there's a lot of fiscal conservancy that goes into that and there's a long history of really thoughtful, futuristic planning that has laid the foundation for that.

So it seemed fitting here at the end of the year, we want to say Happy Holidays.

And thank you so much for the support.

And as we wrap up the year and we look forward to a 2024 year and what it brings, know that we are excited, committed to sharing more of these classic conversations.

Till next week.