Latest / Energy Empire / Bonus Episode: Tom Fanning on 43 Years at Southern Company (recorded at UNC Clean Tech Summit)

Transcript

Bonus Episode: Tom Fanning on 43 Years at Southern Company (recorded at UNC Clean Tech Summit) · Energy Empire

0:00
Hello, It's Jigger Shaw. Welcome to Energy EMPIRE.
0:04
This week, we're bringing you something a little different.
0:07
The first of three special episodes recorded live at the
0:11
UNC Clean Tech Summit in Chapel Hill, NC.
0:15
These episodes were produced in partnership with our friends at
0:18
Suncast, Nico Johnson's podcast. And I think you're going to love
0:22
them. We're starting with Tom Fanning.
0:29
If you want to understand where we are in the current moment,
0:34
the power industry, who better to speak to than someone with
0:37
four plus decades running one of the most influential power
0:40
companies in the US, perhaps in the world.
0:43
Tom Fanning recently retired from his 43 year journey as
0:47
Southern Company, 13 of which as the CEO, arguably making some of
0:53
the most critical, important decisions in energy
0:56
infrastructure, not to mention clean energy infrastructure
0:58
depending on where you sit with nuclear energy.
1:01
Today on this collaboration episode between Suncast and
1:05
Energy Empire, Jigger and I are going to sit down with Tom
1:09
Fanning and ask him some questions about his perspective
1:13
on how we achieve affordability and what he learned over 4
1:16
decades of the power sector's evolution.
1:19
Jigger toss it over to you. Tom, hey, so good to see you
1:22
again. I think you were my very first
1:27
meeting in my job as the head of the loan programs office because
1:31
we were fully remote. And I've always enjoyed working
1:33
with you. You're one of the smartest guys
1:35
I've ever met in Washington. And what was so great about that
1:39
meeting was we started firing off ideas about, hey, we could
1:43
do this and do this. And hey, let's call a car a
1:45
storage facility. I can remember how that's right.
1:48
That's right. We had a great time and always
1:50
appreciated your work. Well, thank you.
1:52
I want to start on your journey. I mean, you had 15 different
1:58
jobs at Southern while you were there.
2:02
Before I became chair. Before you became chair, talk to
2:05
me about your journey and you know, like, So what is what is
2:09
it like going through the entire HR chain at Southern?
2:14
Yeah, it was so weird even my time before Southern I was a
2:19
National Merit scholar coming out of high school.
2:21
It was Yale, Georgetown, Virginia.
2:22
I mean, and and West Point dad convinced me to try and play
2:26
football at West Point. I I get hurt five days for I'm
2:30
supposed to report for beast barracks.
2:31
Georgia Tech turned me on and I took doubled up in Russian and
2:36
then I got reappointed West Point got hurt again.
2:39
State at Tech graduated with my four years now of Russian.
2:43
I go work in the 1980 Moscow Olympics that gets cancelled.
2:49
Son of a gun. I go back to Georgia Tech
2:51
Graduate School. I leave Graduate School, going
2:53
to go work in Jeddah, Saudi Arabia, with a company called
2:56
the Bar in Zany, live in Jeddah, car, apartment, food paid for
3:03
and Son of a gun, the Iran hostage crisis said Oh my God.
3:06
And so I just say, OK, I'm out. Yeah, And the.
3:11
World is telling me something. Well, here, here's the thing.
3:14
Life isn't linear. Yeah.
3:15
And, And even when you tell the story, when I tell a story of my
3:19
career at Southern, I thought, oh shit, God, I was there 43,
3:22
you know, no, it wasn't linear at all.
3:25
And in fact, my 15 different jobs, you know, so I changed
3:29
jobs and you know, round numbers, 15 top mean.
3:33
And I, I moved, I, I forget what it is.
3:35
I think I moved eight times and had six different business
3:38
units, lived in Australia, New York, blah, blah, blah, was all
3:42
over the place. The whole point in having that
3:46
kind of diversity of career, even though it would appear at
3:50
the outside to be kind of linear, yeah, is that you get
3:53
all these different experiences. Yeah.
3:55
Like what brought me into what I'm doing now, this national
3:58
security work, was I spent three years as the chief information
4:03
officer, CIO, right, Jigger. Most days I thought CIO stood
4:08
for Career is over. It was a disaster.
4:13
But here's the thing turned out to be one of the most enjoyable,
4:18
interesting learning opportunities.
4:21
What we find is that everything you do in life is a learning
4:24
opportunity. And I think as you go through
4:27
your career, you you want to have what we call in Southern a
4:31
major, my major was finance. You know, I was CFO of the
4:34
international company, CFO of Georgia Power, CFO of
4:37
Mississippi Power, CFO of Southern, but I was also all
4:41
these other things, strategy, CIO, blah, blah, blah.
4:46
You really get a chance to test yourself in unfamiliar waters.
4:50
And I think every bit of stress, if you will, whether it's
4:55
personal stress, experiential stress, etcetera, not knowing,
4:59
not being the expert. Very often when you live in a
5:02
linear organization, you grow because you know more.
5:06
One of the things I give Southern a lot of credit is they
5:10
move people up not based on what they know, but what they can
5:13
know and how they can build personal networks and really
5:17
expand their horizon. So, so I think that's really
5:20
important. And, and, and let me give you
5:23
one other thing. When you live in an environment
5:27
that continually challenges you, you learn to recognize people
5:31
like you and that is Southern Company.
5:35
Clean, safe, reliable, affordable stock price that
5:38
looks like this over 50 years, highest customer satisfaction.
5:41
I said boom, boom, boom, highest reliable.
5:44
We are terrific, but the greatest harbinger of future
5:49
failure is past success. And what you always have to do
5:54
in my view, and this is you, is celebrate the revolutionaries.
5:59
Look at people that will always ask why and why not.
6:03
When you're in an organization that is a high performing
6:05
organization and you have such great results, people would try
6:09
to kill the revolutionaries. They try to say, hey, wait a
6:12
minute, what are you? What are you trying to change?
6:14
Look how good we are. You see how we're doing?
6:16
You always have to attack your conventional wisdom, my words,
6:20
creative destruction. You always want to test the
6:23
boundaries and you always want to ask why and why not.
6:26
So I think those are things. And in fact, it was funny.
6:30
In my career, the most important thing that happened to me during
6:36
my career was not some great brilliant strategy or whatever.
6:41
It was a moment where I had an ethical dilemma that was
6:45
enormous. I was effectively the CFO of our
6:50
international company and a president we had hired from AES,
6:55
Applied Energy Services. Jeff Hamburg, in my opinion, but
6:59
there's lots of case law here, tried to pay a bribe and to
7:05
receive a favorable treatment on a deal in Portugal.
7:10
And I was the only guy that stood up to him.
7:12
And of course, we stopped it. We didn't pay the bribe and
7:15
ultimately Jeff Hamburg left the company.
7:18
At that time, I was newly married.
7:20
I had a 2 1/2 year old, a six month old, and I even one day
7:27
resigned from the company because of this.
7:29
And they taught me to come back. But that was the most important
7:32
thing I did. And I can remember after it was
7:34
all over, they invited me in. I was just a young kid, I forget
7:37
what I was probably 26. Nah, Nah, I was 30, but I was
7:43
30. And they bring me into the board
7:46
meeting and it caused a lot of turmoil inside the company, as
7:50
you can imagine. Board gave me a standing
7:52
ovation. Wow, that to me said a lot.
7:56
So, and I know, I know, I'm going off with this simple
7:59
question. No, it's really interesting.
8:01
Jigger the The issue is, as you think about your career, there
8:06
are the what's. I agree.
8:08
But there are the hows. And in my opinion, long term,
8:12
the hows are way more important than the what's you do.
8:16
And if you can demonstrate, you know, this idea of cultivating
8:20
talent, this idea of ethical behavior during the worst of
8:24
times, I think that really shows a lot.
8:27
Well said. A lot of folks have had an
8:29
opportunity to experience sort of who you are through your
8:33
leadership. If you're very well spoken and
8:36
have been covered a lot extensively through your career,
8:41
what do you think would surprise folks about you who kind of only
8:44
know you through that lens of CEO of Southern Company?
8:47
I am a classic dumb guy. No, I mean a dumb guy in the
8:52
best sense possible. Yeah.
8:53
I always make a joke. I say, what is it?
8:56
Women start out smarter than men, and men catch up.
8:58
Men never catch up. Yeah.
9:00
So. I tell my wife that my my wife
9:03
Sarah is the youngest chief counsel in the history of the
9:05
United States Senate. She was the senior vice
9:08
president of the Washington Officer Travellers and all this
9:11
other stuff. She's just brilliant.
9:13
She's like, she has a law degree, a photographic memory.
9:17
She's like every man's nightmare.
9:22
But I am, you know what? And I've made a lot of money
9:28
over my years. What is it?
9:30
The theory in economics about the permanent income hypothesis?
9:35
I act like any guy that just graduated college.
9:39
I I worry about my personal budget.
9:42
I, I love sports. I just do dumb guy stuff.
9:48
I love being a parent. I love hanging out with my wife.
9:53
I am not some guy that puts on airs.
9:56
I'm just as normal and blue collar as they come.
10:00
My parents, my mom was really smart, full scholarship to
10:05
Smith. My dad never went to college,
10:10
enlisted in World War Two in the Marine Corps.
10:13
He was a really tough hombre. And I think he instilled in me
10:18
this idea of being completely blue collar and maybe you're
10:22
smart, maybe you're not, but by God, you're not going to get out
10:25
work. So the idea of personal
10:27
sacrifice, having a a calling that's bigger than than tactics.
10:32
It's funny. I I tried to turn that into a
10:35
funny story in my life. And it's like thinking about
10:40
companies, but it's also people. Yeah, there's three kinds of
10:44
companies in the world. There's birds of prey, moving
10:49
prey and roadkill. Yeah, fundamental to your
10:54
persona. It's kind of your ethics and
10:56
your just fundamental beliefs. That's roadkill.
10:59
If you can't abide by something that other people can rally
11:03
around terms of values, the the hows, not the what, then you're
11:07
roadkill and wrong. OK.
11:10
And then the fun thing is what's different between a bird of prey
11:14
and moving prey? And I think it's how you define
11:18
success. I always, both personally and
11:23
and as CEO of a company, define sex in the long term.
11:28
So I always aim at that North star and I can massage, you
11:32
know, near term what we need to do.
11:35
But yeah, I never lose sight of that.
11:37
Too many companies in America define success by hitting next
11:41
quarter's earnings or by hitting some short term light post.
11:45
My view is if your long term strategy is resilient and
11:49
correct and you can change it every now and then, it doesn't
11:52
mean you're stuck with it, but you can move around in the near
11:56
term in order to stay faithful. But get there.
12:00
I think people that set short term objectives as their North
12:04
Star imperil their long term and really hurt their shareholder
12:09
base or their long term personal outcomes.
12:13
Well, and that that's a great segue into Vogel.
12:19
Somebody shoot me. Just did that.
12:22
I, you know, I, so I remember all of the few charitable trust
12:28
meetings sort of in that 2007, 2008 time frame around the first
12:32
nuclear renaissance. And, you know, I think when you
12:35
think about all of the different, I mean, there were
12:38
over $100 billion, if not, you know, $200 billion with the
12:41
projects proposed back then. And you know, yours was the one
12:46
who really got started, right? I think there was the single
12:49
largest training of workforce in the country, right?
12:52
I mean there's probably over 10,000 people went through that
12:55
training program and they got their peaked at 9000 people.
12:59
That's on site. That were on site at Vogel.
13:01
With COVID. You had to go through the COVID
13:02
process too, bankruptcies, etcetera.
13:06
But you know, I think part of, you know, when you think about
13:09
what we're doing right now with the nuclear renaissance, when I
13:12
was there, we were doing a lot of that work right, as you know,
13:14
with the restart of the Palisades nuclear plant,
13:16
etcetera. But the Trump administration is
13:18
doing a lot of stuff too, and reassuring the the fuel supply.
13:21
Clear is a dominant solution in America.
13:24
It's how do you get there? But what is it that you learned
13:27
through that entire experience around what it's going to take
13:33
for America to do big things again?
13:37
2 words Vision and courage. No one would build a nuclear
13:44
plant on the basis of a short term perspective.
13:49
You've got to have a real vision as to what you want to be.
13:56
And I see we can get, I'll let you guide me how far you want to
14:00
go on this. But there's really two kinds of
14:02
energy markets in the United States.
14:04
There's the integrated regulated markets that are generally seen
14:09
in the Southeast and in the West.
14:11
Southern Company is one of them. Then there are the so-called
14:15
they're not organized markets, PJM, New England, MISO, Texas,
14:21
California that I think are kind of a disaster.
14:25
Nobody's going to build long term assets in those markets
14:29
without changes. So let's kind of start there.
14:34
So when we think about new nuclear, we think about a
14:37
commitment. You've got to have a long term
14:38
view. If the market doesn't avail you
14:41
a business imperative that provides a long term view.
14:46
In other words, if the markets are always short term, energy
14:48
driven, blah, blah, blah, lots of volatility, you ain't going
14:51
to build a long term asset there.
14:53
It won't happen. Right.
14:55
Capital won't flow to those places.
14:57
So we're going to start with half the country and if you have
15:01
the right market, then you have to go to that I think are a lot
15:05
of the challenges. In fact, I, I was on squawk box
15:08
now about two months ago when the big announcement came out.
15:12
Was it ChatGPT or somebody want to build 10 gigawatts of nuclear
15:17
to support their? Meta OK in Ohio.
15:20
And, and the guys at Squawk, who I've developed a friendship with
15:25
over the years, called me and said, would you please come on
15:28
and talk about what it's going to take to build new nukes?
15:31
Somebody a lot more serious than meta.
15:33
Well. I mean I think AAP could do it,
15:37
but I don't think meta could do it.
15:39
Nobody is going to build 10 gigawatts by themselves.
15:43
Well, certainly Southern won't. Certainly not Terra power in
15:45
Oakland. No, Hell no.
15:48
So, so here's here's what you got to do in my opinion is you
15:53
got to set a standard in which somebody will be able to execute
15:58
on a long term vision, right. So I think we need revenue
16:03
assurance, we need protection during construction.
16:05
Yeah, but let me interrupt you for a second.
16:07
Like, I, I hear you. But what I'm saying is that,
16:10
like, is it when you think about the fact that you've got, I
16:13
don't know, 30 different reactor design companies now, right?
16:18
You and I both know that all 30 of them are not going to scale
16:20
up and be successful. That's right, right.
16:22
Someone's got to pick some winners, right?
16:24
So you've got the large reactor format, right, The EP 1000, then
16:28
you've got the small modular reactor, right.
16:30
So you got X energy and Tera power and and G Atashi BDX 300
16:34
and you got the you know. Hold Tech 300.
16:37
Totally. And then you've got the micro
16:39
reactors, right. You got Hollow and you know
16:41
Radiant and all those folks, right.
16:43
My point is that the government plays a big role and did play a
16:48
big role with Vogel in having this public private partnership.
16:52
I think you're right that the integrated utilities have more
16:55
of a permission structure by which to think long term.
17:00
But you also need to do big things in our country, right,
17:04
whether it's on nuclear or whether it's building out all
17:06
these data centers or whatever it is that we're doing.
17:08
There has to be a rational use of 10,000 scientists, experts
17:14
and engineers at the national labs use.
17:16
Of super. So wait a minute.
17:18
There's a partnership here, right?
17:19
That's all I'm saying. Partnership is a little scary
17:22
word to me because at the end of the day, somebody holds the
17:24
bill. Unless for sure, what I said on
17:27
Squawk was that we need everybody in the boat.
17:31
Yeah. The federal government, the
17:34
private sector, maybe even some funding sources we haven't
17:37
thought about sovereign wealth funds and a variety of other
17:39
things. And then the states.
17:41
Yeah. And maybe the states should
17:42
think about not only their state, but a region.
17:44
Right now, Southern, we have this dogma and it is religious
17:49
and it's. It is.
17:51
And but what we believe is you keep every problem inside one
17:55
state jurisdiction. Vogel was a Georgia problem.
17:58
It was never a system problem. Oh, there, I think there's an
18:00
entire like Office of Academics at the University of Georgia
18:05
that do nothing but publish papers on how you should think
18:08
about things in a Georgia only context.
18:10
Wouldn't it be cool? And I started thinking about
18:13
this, and this is heresy to probably most people in the
18:17
United States. A great friends with Ernie
18:19
Moniz. Yeah, when he was energy
18:21
secretary. Brilliant guy.
18:22
And in fact, he joined my board. Yeah, fabulous.
18:26
Wouldn't it be great if we had a national energy plan?
18:29
And wouldn't it be great if we said, you know what, we got to
18:31
build as a matter of national security this kind of portfolio
18:36
of generation across America. We tried to reflect that
18:41
interestingly, on one of the Obama initiatives where he was
18:45
going to control the emission of, you know, Knox Sox
18:49
particularly matter CO2 is. That clean power plan.
18:53
Yeah, so, so and EPRI responded with something called PRISM.
18:59
And then PRISM 2.0 was the idea that there are regional
19:03
solutions to a national energy portfolio.
19:07
That's not a dumb idea. And So what if the United States
19:11
said we need to add 20 gigawatts of nuclear?
19:16
We need to get it built by 2040. Now let's work with the states,
19:21
let's work at the private sector to figure out what are the
19:24
things that we need in place. What are the, I'll tell you 2 of
19:28
the big inhibitors right now, But we need national solutions.
19:31
It's going to work there. We were the only game in town
19:35
after SCANA went bankrupt. I know.
19:37
And 9000 people, we couldn't find enough electricians and.
19:43
Now they're all working on data centres.
19:45
Yeah, OK. Instead of nuclear.
19:47
Plants, pipe fitters, welders, Right.
19:51
We need to reinvigorate the development of skilled labour in
19:54
America. That should be a national
19:56
imperative that both parties can get into.
19:58
I agree. And we need to align ourselves
20:01
not only with independent workers but with the labour
20:04
unions, I can tell you. A great partner in the work that
20:09
we did at Vogel with Sean Mcgarvey, US Building.
20:11
Trade. That's right.
20:12
Guy is fabulous, 100%. And so this idea of somehow
20:15
union labour is terrible and that is the dumbest thing I've
20:19
ever heard on the planet. We need everybody in the boat
20:22
next. Everybody in the boat.
20:23
This again is going to be, I think bipartisan.
20:26
We've lost our production, industrial production capability
20:30
in the United States. When we were getting large metal
20:32
forgings, we had to go to Mangiarati in Italy and IHI in
20:35
Japan, big equipment from Dusan and blah.
20:39
It doesn't exist here anymore, right?
20:41
Well, we need to develop that. And so now here's your idea.
20:45
Big beautiful Bill. Hey, let's start strategically
20:49
investing in industrial production capability in the
20:52
United States and growing that again.
20:54
And now when you think about the coming buggy whip impact to
20:59
labor that AI will give, we have an Ave. for people to leave and
21:05
go into some growth area, right? All this makes sense.
21:09
But that's where we need everybody together thinking and
21:11
agreeing to pursue. But if industry wants to give
21:16
the government the Heisman, if the states don't want to work
21:19
with the federal government, we'll never get anywhere.
21:22
Well, now they're forced to, right.
21:24
I mean, and so just like, I mean, I know we could talk to
21:27
you all day, but I know he we all got limited time here.
21:29
But like, but now we get into the place that we're at now,
21:32
which is that, you know, we've got record amounts of data
21:34
center load growth, right? And then you've got all the load
21:37
growth we had before from new manufacturing facilities and EVs
21:41
and and all sorts of other stuff, right?
21:43
You've got a situation where it seems like the playbook that
21:48
most of the utilities are going down are old and tired
21:52
playbooks. Some of them are new, like
21:54
Georgia Power, did you know, like line vision across the
21:58
entire state, they're doing, which is grid enhancing
22:01
technologies. They're doing a ton of battery
22:03
storage deployment, right, to get more out of the grid that
22:06
we've already paid for. But I think there's a lot of
22:08
other utility companies who are a little scared and you know,
22:11
they're they're just going back to old playbooks and you're
22:14
seeing double digit rate increases every year, right?
22:17
I mean so. Wait a minute, The organized
22:19
market, Georgia Power just agreed I think and I don't want
22:22
to speak for Georgia or Southern.
22:23
Oh, no, I wasn't suggesting. Yeah, yeah, yeah.
22:24
Yeah, yeah. But they just agreed to a
22:26
three-year rate freeze. PJM.
22:28
The organized markets are seeing they.
22:30
Did they did but but I think when you go broader through the
22:33
entire United States, EE is official position is not that.
22:38
And one of the challenges that we have right now is you've got
22:41
a bunch of governors who do not have a PhD in how electricity
22:44
works, right. But there it's become a
22:46
political issue. For well, but, but in these
22:48
organized markets, I think I'm in PJM now it's I've moved to DC
22:53
to help birth my national security business.
22:56
I think we're seeing rate increases in the 25 to 35%
22:59
range. So it's happening.
23:01
Right. So what do we do about that?
23:04
Well, that I mean what what kind of leadership should we expect
23:07
today from the investor owned utilities broadly in this moment
23:12
of I think crisis, right. I mean people, I think believe
23:15
that. I mean, even the president
23:17
talked about it in the State of the Union.
23:18
Yeah, yeah, yeah. Listen, I I think we need, you
23:22
know, it was funny when I started talking about this.
23:24
It was all the arrows in the quiver.
23:26
And that got Obama took that over as all the above.
23:31
I should have trademarked. We need everybody pulling
23:34
together with a national energy strategy.
23:36
And it, it, it is a national security imperative to build
23:39
this stuff. Look, this work I'm doing right
23:41
now when you think about, and I hate to talk about it, but
23:45
weapon systems and national security systems that are going
23:48
to be driven by AI and quantum computing and all that's behind
23:53
that. We can't afford as a nation not
23:56
to supply the power necessary to get to where we need to be.
24:00
I mean, this is not, this is not like I need another
24:03
refrigerator. This is matters to the sanctity
24:07
of our nation. Well, I mean, Wilson Rickerson
24:09
wrote a report called Powering the Fight, and he, he talked
24:13
about how, you know, like in wartime, like that's when we
24:16
created sort of SPP and the Northwest Power Pool to try to
24:21
get a lot of that stranded capacity in to be able to build
24:25
wartime mobilization. Yeah.
24:28
Listen, there are lots of ways to get this done.
24:31
And that's when I kept telling everybody on Squawk was to say,
24:34
look, this is a hard problem. Smart people, if they're working
24:39
together, can figure it out. And if we get everybody in the
24:41
boat, it was my kind of metaphor, then I think we can
24:45
get through this. We can do it, but it's going to
24:47
take check your ego at the door, vision and courage.
24:51
Some of this idea about courage isn't some, you know, I'm
24:54
Superman. It's more courage based off the
24:57
fact that one of my little value equations in life and in
25:03
businesses, value is a function of risk and return.
25:06
If I can think through preserving returns but reducing
25:10
risk, I create enormous value. And I think acting in a way now
25:16
when you reduce risk in a company or in a industry or in a
25:20
country, it isn't like you put a skin on the wall and say, look
25:24
what I just did. It's a lot of hard work behind
25:28
the scenes changing the way we think.
25:31
This idea of having courage to change a winning strategy
25:35
heretofore or creating something new.
25:40
This is where we're going to get the job done.
25:42
And I think we got to get the, the, the CEO infrastructure in
25:47
the utility sector. We got to partner with the
25:50
people that are going to be the huge consumers of energy.
25:54
And we got to partner with federal and state governments.
25:57
I'm speaking at a conference tomorrow, mostly state and local
26:02
people. They have a huge role to play.
26:04
And we've got to have a human strategy and industrial
26:06
production strategy. We can get this stuff done.
26:10
But in fact, I'll bet you you and I could sit down this
26:14
afternoon and come up with a plan.
26:17
I got time but. But it isn't our plan.
26:20
It's got to be their. Plan.
26:22
No. It's got to be their plan.
26:23
And we and we. Need to get them on board.
26:24
So this is this is politics in the best sort of vein.
26:29
Yeah. This is getting people together
26:31
to accomplish something big. It's a moon shot.
26:34
And that's what we need to do in America today.
26:36
That's right, Tom, I, I hear you saying that.
26:38
And the question is, is in the back of my mind is where does
26:42
the leadership come from? Who's going to Marshall all of
26:46
the stakeholders? How do we get them all in the
26:49
boat? It comes at all levels.
26:53
More stuff, leadership at all at every level.
26:56
So what we need are smart people talking and listening.
27:00
The problem with this divisiveness we have in America
27:03
is the fact that people stop listening.
27:05
People are more inclined to raise their voice when they feel
27:08
like they're not being hurt. And so one of the talents of
27:12
leadership in America today is stop talking and listen.
27:16
And then let's figure out where we agree and start working on
27:20
those points of intersection to build something valuable.
27:24
We can do that. Last question, give us a give us
27:28
a few minutes of what you're doing now.
27:30
So for nine years, just under a decade, I was the chair of the
27:35
ESCC electricity sectors. What is that sub sector
27:40
Coordinating council? I can't remember this.
27:43
And very quickly as I was helping lead the electricity and
27:48
energy sector, it became very clear to think about, well,
27:52
every sector in our economy has a really pretty decent silo.
27:56
Like Waters isn't very good, energy is really good, finance
28:01
is really good, communications pretty good.
28:05
But what we don't have is somebody that can figure out the
28:10
interconnectedness of industry today.
28:14
And that's where I just became consumed it.
28:17
It's a laughable idea now, but back then I called it dinners
28:20
across America. I tried to seek out leadership
28:24
to would say, hey, we've got to redefine, reimagine what
28:29
national security is now. And because in a cyber sense, 85
28:36
plus percent of the critical infrastructure in America is
28:39
owned by the private sector. In the old days, you know, we
28:42
were protected by the Atlantic Ocean, Pacific Ocean and
28:45
friendly neighbors North and South.
28:47
And we were safe and the government handled national
28:50
security. Well, that ain't the case
28:52
anymore. Southern Company gets attacked
28:55
in a cyber sense during my time. I don't know what it is today, 3
28:59
million * a day. JP Morgan way more than that.
29:04
And So what do we do? How do we work together?
29:07
What are they after? We know with exercises, with the
29:10
intelligence community, with government broadly, when the
29:13
others, if there is an attack by a bad guy, they're going to hit
29:19
us not just in a silo, but think about if we lose part of the
29:23
grid, what are all the interconnectedness points and
29:27
what do we do about it? So this idea of knitting
29:30
together created a group called the Tri Sector Group and it
29:33
became electricity, I mean, energy, finance, communications.
29:38
And so we've been working as a Tri Sector Group, a coalition of
29:41
the willing asset owners and operators.
29:44
It's not an association that lobbies, it's people that try to
29:48
understand problems and solve them.
29:50
Very practical. Recently this year with the
29:55
second Trump administration with a lot of stuff he was trying to
29:58
do, we and they decided it would be great for us to formalize.
30:04
And so now we have something called the Alliance for Critical
30:07
Infrastructure. And what we try to do is kind of
30:11
four things Illuminate the battlefield.
30:14
So we collaborate is the magic word that came out of my
30:18
participation as the only private sector guy on the
30:21
Cyberspace Solarium Commission. We collaborate.
30:25
It's not share, it's not cooperate.
30:28
It's collaborate. We have a joint accountability
30:31
for illuminating the battlefield.
30:33
What are the bad guys trying to do?
30:35
What are we seeing on our servers?
30:37
What's the government seeing? Intelligence community,
30:39
everybody else? How do we work together to
30:41
eliminate what's happening? And then it's almost like the
30:44
old 60s lava lamp where the, you know, the thing always moves
30:47
around and it's always doing that.
30:50
The attack vectors change, the attack surface changes.
30:55
How should we evaluate those changes and start to do systemic
30:58
approaches to skating to where the pup will be?
31:02
So let's take action now to lessen or eliminate the threats
31:06
we're seeing develop. That's thing two.
31:09
Thing three, if there is an attack, see Colonial pipelines.
31:15
Yep. Think about it.
31:16
Isn't just a gasoline pipeline. There are so many interconnected
31:20
issues that came out of that. How should we respond as a
31:23
nation in a systemic way? We were chaos for a while around
31:28
that. So we're trying to knit together
31:30
industries that will understand the impacts and then get America
31:35
back faster, more effectively. 4th thing Cote, every
31:40
administration has an accountability to provide a plan
31:43
in the event America gets knocked to the canvas.
31:45
And that's called continuity of the economy.
31:49
So we work very closely if America does get knocked to the
31:52
canvas. And let me just pull out what we
31:54
call this a Poly crisis. Let's just say a bad guy takes
31:59
out GPS. Say they take out part of the
32:02
grid. Say they hurt the Fed's ability
32:05
to help digital commerce. Say they infect our
32:09
communication systems. Maybe they already have.
32:12
Say they impair our ability to move in a supply chain way, big
32:16
equipment, railroads, trucking, things like that.
32:19
Say they take out a port, port of Long Beach.
32:22
Say all that happens at once. Who stands up first?
32:26
Where do we stand up? The government doesn't know how
32:30
to run the 85% of critical infrastructure.
32:33
So we flip. The government no longer becomes
32:36
a regulator. They become the enabler.
32:40
And the private sector must lead the recovery of America in those
32:44
kinds of times. That's the coat plan.
32:46
Yeah. And that's something else.
32:47
We. Work not new to the economy.
32:49
I mean truly breathtaking. It feels like your retirement is
32:54
very busy. Yeah, I don't.
32:56
You know, I'm also, I'm also doing Moniz keeps grabbing me to
33:00
help with nuclear and I'm trying to help people think about how
33:03
to build new nukes and stuff. So there's a lot to keep me
33:07
busy. It's fun.
33:08
Yeah, well, it was a real pleasure to have you on.
33:10
Great to be with you always. Good seeing you my friend.
33:12
Thank you. Take care, Tom.
33:14
Thank you my friend. That was Tom Fanning.
33:24
We recorded that at the UNC Clean Tech Summit and I hope you
33:29
found it as valuable as I did. Tom Fanning and I worked closely
33:33
together when I ran the DOE Loan Programs office on Plant Vogel
33:37
and so seeing that project get done and all of the work he had
33:42
to do to get that done was truly impressive and it was glad.
33:46
It was great to go over that with him again.
33:49
Over the next two weeks, we'll also be dropping conversations
33:53
with former EPA Administrator Michael Reagan and Dan Sugar,
33:58
founder and the CEO of Nxtpower. And if you want to hear the
34:03
other conversations we recorded at UNC, including John Shoka
34:08
from the Conservative Energy Network and investor Ahmad
34:12
Shatila, those are dropping on Suncast.
34:15
Go find Nico and Suncast Media wherever you get your podcasts.