CEO Of Electric Power Giant Criticizes Trump Decision To Withdraw From Paris Climate Agreement
LULU GARCIA-NAVARRO, HOST:
If you are just joining us, we are reporting this morning on a terrorist attack that took place in London last night. London police now say 12 people have been arrested so far in raids. Seven people are dead. Dozens are injured. But Britain's prime minister, Theresa May, says Thursday's elections there will take place as planned. We'll have more throughout the program.
Now to the Paris Climate Accord. This past week, President Trump pulled the U.S. out of the landmark global agreement made in Paris a year and a half ago to combat climate change.
(SOUNDBITE OF MONTAGE)
UNIDENTIFIED REPORTER: President Trump says we're out.
PRESIDENT DONALD TRUMP: The United States will withdraw...
TRUMP: ...From the Paris Climate Accord.
JOHN KERRY: He's made us an environmental pariah in the world. And I think it is one of the most self-destructive moves I've ever seen by any president in my lifetime.
TRUMP: I was elected to represent the citizens of Pittsburgh not Paris.
BILL PEDUTO: Pittsburgh is the poster child of showing why the Paris agreement is good economics for the United States, and what we did today sets us back decades.
PRESIDENT EMMANUEL MACRON: France will not give up the fight. I reaffirm clearly that the Paris agreement remains irreversible and will be implemented not just by France, but by all the other nations.
GARCIA-NAVARRO: In a moment we'll hear from a city that's been working toward the ideals of the Paris Accord and plans to continue. It's in Indiana, and it's led by a Republican mayor.
But we'll start now with Nick Akins, the president and CEO of American Electric Power with 5 million customers in over 11 states - one of the largest electric utility companies in America. And he's not exactly cheering the president's decision.
NICK AKINS: Yeah. I think - obviously, he withdrew. But I think the positive is that there is some indication that he would reengage in the process. I think it's really important for us to stay engaged from an international community standpoint, particularly addressing large issues. And not withstanding that, we're continuing on our path of moving to a clean energy economy.
GARCIA-NAVARRO: Right. Since you took over AEP in 2010, you've moved aggressively into alternative energy and away from coal. Why?
AKINS: Yeah. I think there's a couple of reasons. One is our investors certainly expect us to really focus on sustainability and de-risk our business. So we continue to focus on that. Secondly, from a customer standpoint, there's an expectation that we move to that cleaner energy economy.
And I also should add that the economics themselves have changed dramatically in that if you think about new coal generation or new investments in coal generation, you're measuring that against what's going on with shale gas, with the lowering cost of renewables, with other technical options that are available today that weren't available just a few years ago. So you're seeing a rebalancing of the portfolio as a result of these new technologies.
GARCIA-NAVARRO: What percentage of the power that you supply is based on clean energy?
AKINS: So we have certainly changed. We've reduced our carbon emissions by 44 percent since 2005. So if you look at our resource plan for the next few years, it certainly is driven by renewables, in particular related to solar, wind power and then backed up by natural gas-fired generation to the extent needed. And keep in mind, too, that we still believe that coal should remain a part of the portfolio but, certainly, a smaller part of the portfolio so that we can manage risk and have a multiple set of solutions available to us.
GARCIA-NAVARRO: You keep on using this word risk. Are carbon fuels risky?
AKINS: Yeah. I think you have to look at it in terms of the risk profile of a coal-fired generation facility versus renewable and other forms of generation. Coal-fired facility is much more costly. And then, secondly, with natural gas prices coming down, renewable price is coming down on an energy standpoint. It's becoming competitive. So if you want to de-risk the company going forward, you'd focus on these other technologies. So that's really driving this to solutions that, really, are coming about in the future.
GARCIA-NAVARRO: Why is coal expensive?
AKINS: Well, any large capital investment like that - a coal-fired station and, for that matter, a nuclear station is just a huge capital investment. So if you build a new coal unit in today's order, it would probably be in the four to $5 billion range. That's a lot of capital because you're not only building the generation facility itself, but you're building all of the environmental equipment attached to it, which is substantial. It actually is a chemical factory that happens to produce electricity.
GARCIA-NAVARRO: You have holdings in Appalachia, where, obviously, coal is important to the community. What is the future of those folks? And do you think what the president has done will help those people?
AKINS: When you think about the coal-mining areas, there's studies that we have done that show that the people in those regions - their mechanical aptitude is eight times the average in the United States. And it's because they work with machinery all the time. They've lived that way from a mining perspective. And so that really lends itself well to other forms of manufacturing like defense, aerospace engineering - that kind of thing. And so we're trying to locate facilities at these regions to not necessarily put coal miners back to work in the coal mines but make manufacturing incentives to put people back to work. I think that's really what we need to be focused on.
GARCIA-NAVARRO: You're saying these people can be retrained to do other things because they have aptitudes - mechanical aptitudes that could lend themselves to other industries?
AKINS: Yeah, absolutely. We have an opportunity, really, to put people back to work quickly if we focus on it.
GARCIA-NAVARRO: Nick Akins is the president and CEO of American Electric Power. Thanks so much.
AKINS: Thank you.
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