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With more than 120 years and deep D-N-A here in the Carolina soil, it is now one of the nation's largest energy companies.

Welcome again into the most widely watched and the longest running source of Carolina business, policy, and public affairs seen every week across North and South Carolina on P-B-S stations for more than 30 years.

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For the next half hour, we will unpack things like sustainable innovation, aggressive clean energy, moderating energy generation in delivery, and what it costs us, et cetera, et cetera, and we will do that with someone who should know something about that.

Duke Energy President and Chief Executive Officer Lynn Good, stay with us.

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(pensive music) - [Announcer] On this edition of Carolina Business Review, an executive profile featuring Lynn Good, Chair, President, and C-E-O of Duke Energy.

(pensive music) - Welcome again to our program.

We are honored to have back the President, Chief Executive Officer of Duke Energy, Lynn Good, Madam President, welcome.

Nice to see here.

- Thank you.

Pleasure to be here, Chris.

- Yeah, let's unpack Duke for a second, and this won't be new, 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.

And maybe to put it in perspective a little bit, as we look over the next 15 years, the growth that we see in the Carolinas on electric usage is about the equivalent of what Delaware, Maine, and New Hampshire used today.

- [Chris] Wow.

- So just for perspective.

- [Chris] Yeah.

- A growing and thriving economy, which I think we're all proud of.

It's what we want for our state, and we're anxious to be a part of that.

- Yeah, as you, as you talked about, North Carolina had that distinct honor by C-N-B-C of being two, at least two years in a row, but also at the top of rankings for business.

South Carolina of course as well, the growth down there.

The growth not just down there, but as part of the D-N-A here.

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.

- You know, I'm, excuse me, I'm gonna have to put the readers on.

- As you should.

(Chris laughing) - You, and I want to quote, kind of quote you, you said "That your entire business strategy rests on pivoting to cleaner, not just clean, but cleaner energy."

That's a pretty big stake in the ground that exposes you to have to do that, which is changing the D-N-A of the generation side, of course, and I know you know that.

Not just from coal, but expanding nuclear.

And then for a long time you knew that there was, and I'm telling you something, but I'm really saying for the benefit of those that are watching, that there was a commitment by the states that you operate in, certainly the Carolinas here of having a certain renewable energy part of the portfolio.

Well, it sounds like you've expanded that.

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.

- So the cost of the nukes that, sorry for the short verbiage here, but the nuclear plants that you maintain now, and I don't wanna put words in your mouth, have close to zero cost from the original construction now that they've been deployed and managing, and I don't mean zero cost, but the original cost of putting that thing in the ground and turning them on, it seems like, as you said, is pretty inexpensive way to do it.

- They're low cost resources, Chris- - [Chris] Okay - For that reason.

But we have continued to invest in those resources.

You think about a plant that's been in operation for 40 years, we've been replacing steam generators, we've been replacing analog technology with digital technology.

So those assets continue to operate in a very updated way.

And as we think about the future, we're intending to extend licenses for those plants.

So they continue to operate in additional 20 years.

So we're blessed, I would say, with low cost nuclear here in the Carolinas as a foundational element on which we can build.

And as we think about new nuclear, we're delighted to be a part of what appears to be a growing interest in small modular reactors and advanced nuclear that could come into the portfolio in the 2030s and 2040s.

- So you're referring to the Stokes County in North Carolina and Al Smith that you broke cover ground earlier this year.

What, at what point, 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.

- So, not, I don't wanna drill down too far on this, but still talking about the nuclear, proposed nuclear plant in North Carolina.

When you look at Southern Company's recent commissioning and turning on of their new nuke down in Waynesville, Georgia.

When you, and not asking you to publicly comment on this because this horse has been dead pretty much a long time but, scan is a effect down at VC Sumner, how do you get to those lessons learned and what are you going to make sure that you get right with this new plant?

- It's a really good question, Chris, because for our customers, for our investors, we wanna make sure when we identify a resource that we can build it on time and on budget.

Because that's the expectation that policy makers have, it's the expectation we have of ourselves.

And so those plants, I'm proud of the work that Southern Company has done to bring Vogel into service.

But those are 1100 megawatt plants, two units, billions of dollars.

- Yeah.

- What we are looking at is a smaller modular reactor, 300 megawatts, that could be built in a quicker timeframe, smaller chunks of generation that we could add to over time.

And I believe that kind of construct would allow us to be flexible.

How much do you wanna add?

The timeframe should be shorter.

And my hope and expectation is that enough of these are built that we can get down that learning curve of cost, a supply chain that'll work, a labor force that knows how to do it, so that we can build them more predictably.

- And you get the sense that the N-R-C and the government wants to help you and other providers get to that point quickly?

- I believe so, Chris.

I believe the discussion around nuclear is really changing because as people look at this goal of net zero or a lower carbon future, nuclear has to be a part of the equation.

- Mm-hmm.

- It is such an incredibly valuable resource.

And so there are discussions going on in DC and in many states about what role nuclear can play in the future.

- You're proved yourself to be a very good strategic thinker, obviously, now in the C-E-O chair, almost more than 10 years, actually 10 years.

I wanna unpack the idea of you being a recovering C-P-A, but also the C-F-O years ago and how you bring to bear the side of the balance sheet and the income statement as a strategic thinker.

And now with interest rates higher, public utilities, and I'm not telling you anything, but again, for our viewers, public utilities go to public markets and issue debt as well as equity.

That's become much more expensive for you.

How do you balance the cost of operating with revenue that you need?

And you have to do it in a very public way, meaning you have to go to public utility staff in the Carolinas.

Help us understand, when you go in front of the staff of the public utility commissions and you're asking for a rate increase, what's the D-N-A to get to whatever that number is, and how do you balance the cost and what's fair for your users?

- It's an important question, Chris, because as we think about this transformation, we started the conversation with growth.

We started the conversation with the need to build infrastructure.

We started the conversation with the talk about all the transformation and new technologies that are available for customers and trying to figure out the pace of change, is really an important part of the equation on price.

How quickly are we gonna go?

What choices are we gonna make on technologies?

And so when I think about nuclear, one of the reasons we're being thoughtful and slower perhaps than some would like us to be is because we want that technology to develop at commercial scale.

So I know the price is predictable and I can fit it into an equation of price, reliability, and clean energy, and so the conversation around how we achieve transformation, but also how we do it in an affordable way, it's higher interest rates today.

It could be tight supply chain tomorrow.

It could be high labor costs, it could be ongoing inflation.

There are so many parts of that equation.

And we have to think about it as we go, continuing to check and adjust our plans, recognizing that the world is dynamic and it is not a sustainable strategy for Duke to continue to raise price in a way that makes the state uncompetitive.

And so that balancing equation of how quickly to go, at what price, and also maintaining reliability is part of our thought process every day at Duke.

- Do you feel like there, and don't wanna put any words or start any problems, do you feel like there's a lot less, there's a lot more tolerance with public opinion when a company like Duke asks for a rate increase?

- It's never easy to ask for a rate increase.

No one wants to pay more.

- [Chris] Sure.

- And I respect that.

I do.

We serve everyone.

An industrial customer needs to remain competitive with perhaps overseas competition.

A low income customer has a discreet amount of discretionary income and then you have, you know, other customers that may be a bit less price sensitive, but they care deeply about renewables or they may care deeply about choices.

So recognizing that we serve a very diverse set of customers, we try to be as thoughtful as we can to keep our price as low as we can keep it in light of this transformation.

And that includes us working on productivity every day.

How can I drive costs out of my business?

How can I use technology to roll fewer trucks to have a better sense of where outages are occurring so I can restore them more cost effectively?

That's part of the equation as well.

And we continue to strive to drive productivity in our business, so that we can offset some of that impact.

- How much have you learned around, you're talking about outages earlier and not the blackouts during the holidays, hurricane season, we're in peak hurricane season.

What have you learned from these rolling blackouts or maybe even some of the brownouts that go on, intended or not, how do you bring that forward in the whole idea of considering, well, part of it's demand, part of it is we weren't ready, part of it we just weren't deployed right.

What goes on in your head and within your strategic conversations about not just the blackouts, but hurricanes and those things that you don't expect?

- Let me talk first about December 24th, Chris, because that's not something I want for my customers.

I'm very sorry that we placed our customers in a position on Christmas Eve to not have power for several hours.

And that was, of course, we were planned for it.

Of course, we had prepared resources to the best of our ability, but our forecast of what customers were gonna use was not high enough, and we did not have tools to continue to flex and increase the amount of generation, and it was impacting the whole eastern seaboard.

So our ability to import power was also impacted in that timeframe.

So that event is something that we have studied very closely to understand how can we eliminate that risk going into the future.

And that's part of this discussion of how much infrastructure does the Carolinas need as we think about continued growth and population growth and manufacturers, because our customers expect and deserve reliable and perfect power.

So learnings from that, that we are incorporating even in the plans we have in front of North Carolina today.

Hurricanes, we do a lot of hurricanes as I think about from 2015 forward, the number of times we have deployed around hurricanes.

And I'm very proud of the ongoing planning work that occurs at Duke so that we are prepared to respond as quickly as we possibly can with resources, with equipment, with communication, so the customers know what's going on.

And that's our commitment as well to serve our customers as best we can when those events occur.

- You talked about, when you zoomed out a little bit, you talked about the eastern seaboard and the effects or the, what happened with that and how it input to the regional Carolinas part.

Is part of this the energy grid?

The national energy grid?

Does this spur conversations or restart conversations that never really stopped, but is there more wind behind the idea of modernizing the grid?

Do you expect that?

- Chris, the grid modernization is important to Duke and important to utilities across the U-S?

I think what we experienced on December 24th was really the impact of everyone in the U-S on the eastern part of the country.

Certainly going through this energy transformation, retiring certain assets, trying to build more renewables versus on demand resources impacting a larger swath than just the Carolinas and we're all trying to get it right.

So grid investment must keep pace and we are working actively for that to occur in every utility is doing so.

So it's resource adequacy, which means generation, but it's also adequacy of the grid.

It's making sure we have programs with customers to perhaps reduce demand, improve energy efficiency.

So it's a diverse set of activities that need to go on as we think about this transformation into the future.

- When you were on recently, you were in the middle of the pandemic, so I wanna unpack some ideas around workplace and labor.

We've heard from some employers that even something so simple as finding good daycare for children is impacting workers' ability to take full-time jobs.

When you look at your workforce and obviously a lot of technicians, but also some higher sophisticated strategic type of jobs, what do you see as the biggest headwind to try to find the people you need at Duke?

Because I know you're facing the same thing as many other employers.

- Sure, and you know, Chris, we spend a lot of time on talent acquisition - [Chris] Mm-hmm.

- Because the success of Duke is really underpinned by an outstanding workforce from our craft employees all the way to our professionals, attorneys, you know, finance people, et cetera.

And so we do identify, there are parts of our talent base that we need a bigger pipeline.

And one of the things we're experiencing right now is line and service techs and how do we find more of them?

Everyone's making grid investment, everyone's trying to figure out how to pursue this transformation.

So we have entered into partnerships with a lot of community colleges around all of our jurisdictions, where we're working on curriculum together.

We're looking at working on equipment, you know, we supply the equipment, we help them with instructors and then, you know, the idea is to create that pipeline.

So we're graduating more people with the skills that we need.

We are also doing that and thinking about that as we think about the future of nuclear, nuclear technicians, there's now a bit of a renaissance again, do we have enough interest in the universities and community college systems to provide that workforce?

And then as I think into the 2030s, the trades we're gonna need more, as you think about construction, you think about welding, all those types of trades.

So we work hard at trying to get ahead of what are the resources that we need and how can we partner with the education systems around us to make sure that we're supplying the pipeline of diverse talent that we need in order to be successful.

- So overlay on top of that, you were, I remember you talking about this during the pandemic.

You said you would leave your office and walk down the hall and everyone was virtual, so you missed the opportunity to have togetherness.

So what's the workplace now like at Duke?

And I don't mean just on the upper levels, - [Lynn] Sure.

- of where you work, ma'am, but what's the workplace like now?

What does a hybrid look like?

Do you feel like you've settled on what a good working model is or is there more to come?

- I think we're still working our way through it, Chris.

So we have gone through, as I'm sure most employers have kind of a determination of is this job a remote job?

Is this job a full-time in the office or in the workplace job?

Or is this a hybrid job?

And hybrid for Duke means two to three days a week in the office.

And we work very hard to to identify which days and how can we collaborate on those days, so that an employee doesn't find themselves just sitting in the office on teams calls because we do wanna create the environment of interaction.

And so I would say it's a work in process, but I believe having some flexibility is what our employees want and desire, but that flexibility also includes having enough face-to-face time for us to get to know one another, to onboard new employees, to develop, to network, to learn about the business.

And we're still trying to find that perfect formula.

- 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.

Also supporting our university systems, our H-B-C-Us has been an important part of it.

The Mayor's racial equity initiative has been an important part of it.

So we spend a lot of time, just really exploring how can we put our resources to work in the areas that will help the community thrive and grow so that we can continue to pursue this economic development that has been an important part of the state's background and future.

- Everyone's talking about AI, it was the hot thing, it was the hot hand this summer and it's died off a little bit, but it's far from died off.

It's clearly making a lot of areas either excited or worried because it is a game changer and that's probably an understatement.

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.

The other place we're seeing it is with data centers coming to our area, just think about the computing power necessary to support AI.

And so that's another area of economic development that the state has been fortunate enough to benefit from.

- Yeah, we've got less than two minutes left and I wanna first of all congratulate you.

You've been a C-E-O for 10 years.

That's about two X the average of an S and P 500, so congratulations.

The other thing - Thank you.

is coming out of a very dramatic period, and ma'am, this is my term, coming out of a very dramatic period of Duke's growth with Synergy and Carolina Power and Light and Florida power and light and all of the things that go on around mergers, some drama, some just business.

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.

- Madam President, you're a good sport to always engage with us on these dialogue 'cause they're unscripted, of course.

But you have been a good leader for Duke Energy and congratulations again.

Thank you for being on our program once again.

- Thanks so much, Chris.

My pleasure.

- Yeah.

Nice to see you.

Thank you.

Happy weekend.

Thank you for watching our program.

If you have any questions or comments, pretty easy, go to Carolina business review.org.

You can watch past programs, you can pull this one out and watch it again.

So until next week, I'm Chris William.

We hope your business is good.

Happy almost holidays, but we'll reserve that for later.

Have a good weekend.

Good night.

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