WEBVTT - Developing A Secure Nuclear Energy Strategy In Middle East: IP3 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:27.639 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. You 0:00:27.760 --> 0:00:31.560 often don't hear the word nuclear in tandem with the 0:00:31.600 --> 0:00:34.080 idea of peace in the Middle East, and yet here 0:00:34.120 --> 0:00:37.520 we are. We are joined by retired General Keith Alexander 0:00:37.600 --> 0:00:39.640 of the U S Army. He is a retired four 0:00:39.720 --> 0:00:42.720 star general who joins us. He's also the co founder 0:00:42.760 --> 0:00:45.960 and director of I P three Corporation, also chief executive 0:00:46.159 --> 0:00:49.080 and president of iron Net cyber Security, and he joins 0:00:49.159 --> 0:00:53.120 us here at the Bloomberg New Energy Summit. Thank you 0:00:53.200 --> 0:00:55.120 so much for being here. I want to start with 0:00:55.160 --> 0:00:58.840 this idea that an increase in nuclear development in the 0:00:58.840 --> 0:01:02.080 Middle East could somehow foster peace. A lot of people 0:01:02.080 --> 0:01:04.960 think of nuclear weapons is being very close to nuclear 0:01:05.080 --> 0:01:08.600 power plants. Explain how this, how this could be? Well, 0:01:08.640 --> 0:01:11.520 that's a great question, and thanks for that, because you 0:01:11.560 --> 0:01:15.160 see that the Middle East is getting nuclear power. They 0:01:15.240 --> 0:01:17.920 won't have oil and gas forever. They've got to make 0:01:17.959 --> 0:01:22.199 a transition for their economies. Several of us got together 0:01:22.240 --> 0:01:23.959 and said, how do we help do this in a 0:01:24.000 --> 0:01:28.640 way that ensures security, not only future energy for both 0:01:28.680 --> 0:01:31.760 of those Because at the end of the day, that 0:01:31.920 --> 0:01:34.640 security is something the United States is going to be 0:01:34.640 --> 0:01:39.240 involved in. It's a vital national interest to our country. 0:01:39.319 --> 0:01:41.080 So how do we work with the Middle East to 0:01:41.120 --> 0:01:47.360 get good nuclear power that works, that is secure, and 0:01:47.400 --> 0:01:50.440 that we know will not be used for weapons. So 0:01:50.480 --> 0:01:53.800 those are the key ingredients that we brought in the 0:01:53.840 --> 0:01:57.080 Middle East. There are allies. What goes on in the 0:01:57.120 --> 0:02:00.480 Middle East will effect the rest of the world. We 0:02:00.600 --> 0:02:03.840 can't back off on. And from my perspective, the United 0:02:03.880 --> 0:02:06.840 States has to be involved and how they build their 0:02:06.920 --> 0:02:11.040 nuclear plants, how they secure them, and how we work 0:02:11.120 --> 0:02:15.000 with them. The greatest concern is somebody builds it and 0:02:15.040 --> 0:02:17.919 walks away. This would be a disaster for the rest 0:02:17.960 --> 0:02:21.280 of the world. So we see this is a great opportunity. 0:02:21.800 --> 0:02:25.239 You could look at things like wind solar, but those 0:02:25.520 --> 0:02:28.160 come and go with the sun or with the wind, 0:02:28.680 --> 0:02:31.880 and so you need a durable energy base. I think 0:02:31.880 --> 0:02:35.359 for the future that's going to be nuclear for us. 0:02:35.680 --> 0:02:37.880 We see this as a great opportunity not only in 0:02:37.880 --> 0:02:40.760 the Middle East but globally because the rest of the 0:02:40.760 --> 0:02:43.399 world is going to have to do the same. So, now, 0:02:43.440 --> 0:02:46.359 how do we take that step to ensure you have secure, 0:02:46.919 --> 0:02:50.800 safe nuclear power? And we see the Middle East as 0:02:50.800 --> 0:02:55.040 the starting point. General Alexander uh you're one of the 0:02:55.080 --> 0:02:59.079 world's experts on cyber security. Not only have you head 0:02:59.080 --> 0:03:03.200 a distinguished you're in the military, but now to your retirement, 0:03:03.720 --> 0:03:07.160 uh in founding your company and the president of IronNet 0:03:07.639 --> 0:03:11.560 cyber Security. And I'm wondering would you offer to people 0:03:11.639 --> 0:03:15.800 listening to this about their own security online in the 0:03:15.800 --> 0:03:17.920 wake of We're going to have Mark Zuckerberg that we 0:03:17.960 --> 0:03:22.600 testify before Congress tomorrow and and on Wednesday. And this issue, 0:03:23.160 --> 0:03:27.880 while perhaps not financially as a huge as some may 0:03:28.080 --> 0:03:30.680 describe it to be, has certainly touched a nerve with 0:03:31.040 --> 0:03:34.840 people who can trust their information to a social media site. 0:03:35.080 --> 0:03:37.520 What what has been your experience and how what would 0:03:37.520 --> 0:03:40.160 you say to people that are concerned about this? Well, 0:03:41.400 --> 0:03:44.680 this is a tough question, and thanks for bringing it up, 0:03:44.680 --> 0:03:48.200 because I'm sure Mark Zuckerberg he's at the center right 0:03:48.240 --> 0:03:51.360 now of all that attention. The Wired magazine had a 0:03:51.360 --> 0:03:55.600 great picture of him uh and it highlights the issues 0:03:55.680 --> 0:03:58.840 that he and other companies that use data like that 0:03:58.880 --> 0:04:03.520 for marketing face. Having said that, I think what's required 0:04:03.560 --> 0:04:06.920 for our country first is to have a public discussion 0:04:06.920 --> 0:04:09.400 on what can and cannot be used, and how you 0:04:09.440 --> 0:04:13.040 can opt in and out and how you ensure your privacy. Now, 0:04:13.080 --> 0:04:15.720 there's two parts to what you brought out. One is 0:04:15.800 --> 0:04:19.440 what what can companies use for the good of their 0:04:19.480 --> 0:04:24.279 company update about you that they can resell like ads. 0:04:25.320 --> 0:04:31.520 The second part, what happens to our cybersecurity online and 0:04:31.560 --> 0:04:34.640 how do we protect that? So things like you're personally 0:04:34.680 --> 0:04:40.360 identifiable information, your credit card information that's wholly different from this, 0:04:40.480 --> 0:04:46.080 but that will touch this discussion on cybersecurity, privacy, civil liberties. 0:04:46.839 --> 0:04:50.720 I think our country is in a good place with 0:04:50.839 --> 0:04:54.040 the general population. That is, we want to use this 0:04:54.200 --> 0:04:56.160 data for good man time, but we don't want it 0:04:56.200 --> 0:04:59.720 to exploit us personally. And that's where people get into 0:04:59.760 --> 0:05:02.120 this discussion. What are you doing with my data that 0:05:02.279 --> 0:05:05.520 you didn't tell me about? So I think that transparency 0:05:05.600 --> 0:05:10.479 upfront will go a long ways, and my my personal 0:05:10.760 --> 0:05:14.159 opinion is Facebook, we're trying to do the right thing. 0:05:14.640 --> 0:05:16.640 I don't wish him any harm in that. I think 0:05:16.640 --> 0:05:18.800 he was actually trying to do the right thing. I 0:05:18.839 --> 0:05:21.600 think what they do with Facebook, my wife, my children, 0:05:21.640 --> 0:05:23.960 they use it. It's been a good thing and a 0:05:24.000 --> 0:05:26.960 good way for people to communicate and very helpful. I 0:05:26.960 --> 0:05:28.800 think now we have to help that game and explain 0:05:28.800 --> 0:05:30.800 where the data goes. I have I have two questions 0:05:30.800 --> 0:05:33.400 for you. First, are there currently any plans in development 0:05:33.480 --> 0:05:35.840 to create nuclear plans? And then at least that are 0:05:35.880 --> 0:05:40.159 not currently there. Um well, the Saudis have asked for 0:05:40.360 --> 0:05:44.320 bids from companies to actually build nuclear power plans. In 0:05:44.440 --> 0:05:47.480 their vision twenty thirty, they talked to building up to 0:05:47.600 --> 0:05:51.359 sixteen in Saudi Arabia. And if you look at the 0:05:51.360 --> 0:05:53.880 rest of the region, you have plants right now being 0:05:53.880 --> 0:05:57.680 built by Russia in Egypt and in Turkey, or at 0:05:57.720 --> 0:06:01.039 least the initial phases of it. You've got four plants 0:06:01.120 --> 0:06:05.080 right now being built by Korea in the United Arab Emmis. 0:06:05.440 --> 0:06:09.240 So it is going nuclear. So you have that already 0:06:09.240 --> 0:06:12.480 on the table. So in just thirty seconds, I'm wondering 0:06:12.880 --> 0:06:16.760 what you think of the cybersecurity of nuclear power plants 0:06:16.920 --> 0:06:18.680 both that have been created there as well as in 0:06:18.680 --> 0:06:22.279 the US. Are are we at risk there? It's absolutely 0:06:22.360 --> 0:06:24.400 vital that we get that straight. So one of the 0:06:24.480 --> 0:06:27.000 things that I P three has brought in is this 0:06:27.200 --> 0:06:30.520 concept of not just putting in nuclear power, but ensuring 0:06:30.560 --> 0:06:34.040 it's secured not only in cybersecurity, but in physical space 0:06:34.080 --> 0:06:37.720 as well. And for us that means working with our allies. 0:06:38.920 --> 0:06:40.400 I want to thank you very much for coming in 0:06:40.480 --> 0:06:43.520 and spending time with us here at the Bloomberg New 0:06:43.680 --> 0:06:48.760 Energy Finance Summit. Entire General Keith Alexander of the U. S. Army, 0:06:48.800 --> 0:06:52.400 co founder director of I P three Corporation, also the 0:06:52.480 --> 0:06:56.280 chief executive and the president of iron Net Cybersecurity, and 0:06:56.279 --> 0:06:59.000 of course, thank you, General for your service to our nation. 0:06:59.080 --> 0:07:04.719 Much affreciating Chris Ailman, who is giving us a round 0:07:04.760 --> 0:07:07.440 of high fives right now, chief Investment Officer of California 0:07:07.480 --> 0:07:11.560 State Teaches Retirement System, known for riding that bicycle to 0:07:11.920 --> 0:07:15.880 work and listening to us on his UH phones while 0:07:16.160 --> 0:07:18.840 while he does so. We can't wait to speak with you. 0:07:18.880 --> 0:07:21.360 Thank you so much for being here. Uh. Chris almen 0:07:21.440 --> 0:07:24.240 overseas cow Starde, which is two thirty one at point 0:07:24.280 --> 0:07:27.160 six a billion dollar pension fund, the second biggest public 0:07:27.760 --> 0:07:31.400 US pension in the country. UM, I want to start 0:07:31.440 --> 0:07:36.000 with attention between we're responsible investing and the vast move 0:07:36.160 --> 0:07:39.239 toward indexing. And this goes to sort of this profound 0:07:39.400 --> 0:07:42.040 question of how do you pressure companies to behave well 0:07:42.480 --> 0:07:45.720 when you can't really sell their shares? And Facebook is 0:07:46.240 --> 0:07:48.680 a prime example of this. You yourself have deleted your 0:07:48.680 --> 0:07:51.960 Facebook account and yet your your pension is not selling 0:07:52.280 --> 0:07:54.320 uh their shares? How are you going to make them 0:07:54.320 --> 0:07:57.000 more responsible when it comes to data security? I think 0:07:57.000 --> 0:08:03.240 indexing and responsible investment or actually perfectly aligned because it's 0:08:03.280 --> 0:08:06.320 a long term investment. I would say to Mark Zuckerberg, 0:08:06.400 --> 0:08:08.440 as long as they are public school teachers in the 0:08:08.440 --> 0:08:12.200 state of California, we're going to own that stock. So 0:08:12.360 --> 0:08:15.600 we have a long term focus, much longer than than 0:08:15.680 --> 0:08:18.920 really even some of his employees do. So we want 0:08:18.960 --> 0:08:22.000 them to perform. We want companies to do well, not 0:08:22.120 --> 0:08:25.040 for the next quarter or even year, but for the 0:08:25.080 --> 0:08:27.560 next twenty and thirty years. Okay, But just to push back, 0:08:27.640 --> 0:08:29.960 if you're not going to sell your shares, how do 0:08:30.000 --> 0:08:32.640 you pressure them to do something that might work out 0:08:32.679 --> 0:08:35.400 for them? In three years time, but will cause a 0:08:35.480 --> 0:08:38.000 hit to their bottom line in the next year. That's 0:08:38.000 --> 0:08:40.200 where we talked to the board of directors and that's 0:08:40.200 --> 0:08:42.440 our only influences to get the Board of the directors 0:08:42.480 --> 0:08:46.040 to realize we don't really just we're having a longer 0:08:46.080 --> 0:08:49.600 horizon than even management does. And I've talked to CEO 0:08:49.720 --> 0:08:51.520 is it's so hard for them to get their head 0:08:51.559 --> 0:08:53.360 around that that we're going to be involved in their 0:08:53.360 --> 0:08:56.760 company longer than they will be there. So we have 0:08:56.840 --> 0:09:00.040 a broader perspective. We want them to make decisions. We 0:09:00.080 --> 0:09:03.079 don't care about the next ninety one days earnings. What 0:09:03.120 --> 0:09:05.120 we really care about is how they do over the 0:09:05.120 --> 0:09:08.440 next twenty and thirty years. So were the ideal long 0:09:08.559 --> 0:09:11.480 term capital that that they really want? And they want 0:09:11.480 --> 0:09:14.360 patient capital. They're tired of people flying in and out 0:09:14.400 --> 0:09:18.480 of their stock. They they themselves since they've they've invested 0:09:18.480 --> 0:09:21.360 their personal lives in their company. Think that they want 0:09:21.360 --> 0:09:24.960 investors who are invested for their lives with their company. 0:09:25.040 --> 0:09:27.960 Do they want patient capital that don't have any voting rights. 0:09:29.000 --> 0:09:31.880 I think management would absolutely love that, and I think 0:09:31.920 --> 0:09:36.960 that's just offensive. That is just absolutely right. Yes, it is. 0:09:37.160 --> 0:09:42.160 Unfortunately Silicon Valley. As I said before, they like that model, 0:09:42.200 --> 0:09:44.800 and we just that's got to stop. If you want 0:09:44.960 --> 0:09:48.000 use of other people's capital, you have to give them 0:09:48.040 --> 0:09:50.800 some rights. But to Pim's point, if you don't have 0:09:50.840 --> 0:09:55.240 the rights, you can't vote the board of directors kind 0:09:55.240 --> 0:09:57.960 of office. That is correct. Do you find that they're 0:09:57.960 --> 0:09:59.600 receptive because I know that you did send a letter 0:09:59.600 --> 0:10:02.400 to Facebook? Have they responded? They do care about what 0:10:02.440 --> 0:10:06.280 people think because they have reputational damage, and those individuals 0:10:06.840 --> 0:10:09.560 care about their perception. I mean, there's a hospital in 0:10:09.600 --> 0:10:14.480 San Francisco named Zuckerberg Hospital. He cares about his public image, 0:10:14.480 --> 0:10:17.800 so he wants to listen to people. Because at some point, 0:10:19.240 --> 0:10:21.839 companies have got to realize that if they're going to 0:10:21.960 --> 0:10:24.880 use other people's capital, they're going to have some shareholder rights. 0:10:24.920 --> 0:10:27.880 They've got to have some ability to have a dialogue 0:10:27.880 --> 0:10:31.920 with that Uh, with that board of directors. Uh. That's 0:10:31.920 --> 0:10:34.800 been a tradition in America for over two hundred years 0:10:34.840 --> 0:10:39.040 and it needs to stay in place. Well, is there 0:10:39.080 --> 0:10:42.520 any way that you could actually put that to a 0:10:42.640 --> 0:10:47.640 legal test, Because unless you have a situation like a 0:10:47.720 --> 0:10:51.600 breach of security, or unless you have poor performance of 0:10:51.640 --> 0:10:56.320 a stock. You don't hear many investors say that almost 0:10:56.360 --> 0:11:00.120 on a moral basis. If you take my money, at 0:11:00.200 --> 0:11:03.760 least want to vote in how my company operates. I 0:11:03.800 --> 0:11:06.640 guess i'd argue we do. We don't do it in headlines, 0:11:06.720 --> 0:11:08.680 we don't do it on radio. What we do it 0:11:08.760 --> 0:11:12.080 isog to the Council of Institutional Investors, though, but we 0:11:12.200 --> 0:11:15.040 do it in a constant dialogue with companies, which is 0:11:15.240 --> 0:11:20.680 to the Chamber of Commerce, into the business roundtable. We 0:11:20.800 --> 0:11:22.920 are the ones that elect the board of directors. We 0:11:23.040 --> 0:11:27.240 want more independent border directors, not selected by management, people 0:11:27.240 --> 0:11:29.880 who will think about the long term, about the health 0:11:29.880 --> 0:11:33.000 of the company, about shareholders, about the employees, because that's 0:11:33.000 --> 0:11:35.560 about the most important assets. So let's take Mark for 0:11:35.600 --> 0:11:40.840 an example. Zuckerberg thinks he's got God's gift of wisdom 0:11:40.920 --> 0:11:43.440 about what to do on social media. Kind of looks 0:11:43.440 --> 0:11:46.400 like they're making some mistakes right in here. If an 0:11:46.400 --> 0:11:49.640 individual runs the company like they're king, they're going to 0:11:49.720 --> 0:11:52.120 make mistakes, and at some point the board of directors 0:11:52.120 --> 0:11:54.000 are gonna have to step in and take that company 0:11:54.000 --> 0:11:56.520 away from that people and bring in somebody else to 0:11:56.600 --> 0:11:59.040 advise them. Are you suggesting that Mark Zuckerberg could be 0:11:59.040 --> 0:12:03.240 pushed out as the EO. No, because I uh no, 0:12:03.280 --> 0:12:06.000 one can. No one has that power. All right, well, 0:12:06.160 --> 0:12:08.120 let's see how he does this week. But you know 0:12:08.360 --> 0:12:11.200 that will somebody in that company and the employees in 0:12:11.200 --> 0:12:14.320 that company care. So since we are here at the 0:12:14.320 --> 0:12:16.720 Future of Energy Global Summit, I now you care deeply 0:12:16.880 --> 0:12:20.720 about the future of energy. I want to ask, has 0:12:20.760 --> 0:12:23.840 there been a company that you own shares of that 0:12:23.960 --> 0:12:27.800 you've actually made an impact in discussions with them to 0:12:27.880 --> 0:12:32.679 act more responsibly. UM, tough question. Yes, we think we 0:12:32.720 --> 0:12:36.760 can say there's a direct line between our engagement and 0:12:36.840 --> 0:12:39.520 their activity. Can I show you a change in the 0:12:39.559 --> 0:12:42.480 stock price? Can I show you a discrete change. No, 0:12:42.679 --> 0:12:45.120 it's very hard to measure up because there's so many 0:12:45.160 --> 0:12:48.199 different things that are driving the markets on a given day. 0:12:48.240 --> 0:12:51.400 But we've gotten involved with companies to dialogue with them 0:12:51.440 --> 0:12:57.040 about pesticide use, about their methane emissions. We've been one 0:12:57.040 --> 0:12:59.800 of the nation's leaders of pension plans and getting people 0:12:59.840 --> 0:13:03.840 to disclosed and then CEOs and boards are more aware 0:13:03.880 --> 0:13:05.960 of what their methanes and they're paying attention to that 0:13:06.000 --> 0:13:08.800 as a cost and realizing they need to change the 0:13:08.840 --> 0:13:11.200 way they do their energy mix. Which company has been 0:13:11.200 --> 0:13:15.360 most responsive to you on us? I can't give you 0:13:15.360 --> 0:13:18.440 a specific name. I am apologized for that, but I 0:13:18.480 --> 0:13:20.800 will talk to my staff and uh, I know my 0:13:20.880 --> 0:13:23.520 corporate governance team has done a lot of work in 0:13:23.520 --> 0:13:26.000 this area and can give you very specific names about 0:13:26.000 --> 0:13:29.240 electric utilities that have stepped up. Thanks very much for 0:13:29.280 --> 0:13:33.200 being with us. Please do He's gonna bring his bicycle 0:13:33.240 --> 0:13:35.840 next time you met you, all right, Chris Silman. He 0:13:35.920 --> 0:13:39.800 is the chief investment officer at Calster's helping to manage 0:13:39.800 --> 0:13:45.959 the future pensions kind current pensions the public state employees 0:13:46.080 --> 0:13:49.800 of the State of California. Much appreciated. We are broadcasting 0:13:49.880 --> 0:13:53.080 from Bloomberg's Future of Energy Global Summit in New York 0:13:53.120 --> 0:14:01.559 City at the Bloomberg New Energy Finance Summit. Here to 0:14:01.640 --> 0:14:03.400 tell us a little bit more about the world of 0:14:03.520 --> 0:14:05.360 energy as someone who knows a lot about it is 0:14:05.440 --> 0:14:08.000 Thomas Fanning. He's the chairman, the president, and the chief 0:14:08.040 --> 0:14:11.440 executive of Southern Company. Tom Fanning, thanks very much for 0:14:11.480 --> 0:14:14.520 being here. Appreciated. Yeah, Pam, great being here again. It's 0:14:14.559 --> 0:14:17.400 good to see you too. Like a topic that I'm 0:14:17.720 --> 0:14:20.560 always interested in is give us an update on nuclear 0:14:20.600 --> 0:14:23.200 power in the United States. We get to things like 0:14:23.280 --> 0:14:25.360 shale and all that kind of great stuff, But let's 0:14:25.360 --> 0:14:29.160 talk about electricity generation and the role that nuclear power plays. 0:14:29.560 --> 0:14:33.440 So nuclear power in the United States portfolio currently represents 0:14:33.480 --> 0:14:37.880 about the energy production h A lot of those plants, 0:14:37.920 --> 0:14:41.800 particularly an organized markets so in the Northeast Midwest, are 0:14:41.920 --> 0:14:46.280 at risk um because of the pricing structures there. As 0:14:46.360 --> 0:14:51.280 Southern Company is located in the Southeast, largely integrated regulated markets, 0:14:51.880 --> 0:14:53.720 I think we've got a better environment in which to 0:14:53.760 --> 0:14:58.600 operate those plants. Further, Southern Company now remains the only 0:14:58.680 --> 0:15:02.440 company in America's ill developing new nuclear So we're going 0:15:02.480 --> 0:15:05.400 forward on that. You know, I want to talk about 0:15:05.600 --> 0:15:07.640 how the results have been because I know you've been 0:15:07.680 --> 0:15:09.640 working on a number of different plants and have faced 0:15:09.720 --> 0:15:13.320 some challenges, and I'm just wondering, you know, which obstacles 0:15:13.440 --> 0:15:17.080 are you most concerned about going forward and which are 0:15:17.160 --> 0:15:20.400 you sort of looking at as as sort of challenges 0:15:20.440 --> 0:15:25.600 you've overcome that sort of show why you're optimistic. Well, uh, 0:15:25.800 --> 0:15:28.640 nuclear has enjoyed a tremendous amount of support from the 0:15:28.680 --> 0:15:32.560 United States government. I think it's in a national security 0:15:32.680 --> 0:15:37.320 interest that the United States remains involved in new nuclear development, 0:15:37.400 --> 0:15:42.080 and so as we undertook this project way back, even 0:15:42.120 --> 0:15:45.120 before I became chairman of Southern Company back in two 0:15:45.160 --> 0:15:49.040 thousand eight and nine, we've been able to preserve those 0:15:49.160 --> 0:15:54.960 kinds of incentives to carry to the benefit of our customers. Further, uh, 0:15:55.280 --> 0:15:57.360 I think one of the big challenges we faced on 0:15:58.040 --> 0:16:02.040 Plant Vogel has been the bankruptcy of Westinghouse. So they 0:16:02.040 --> 0:16:05.520 wrote off about six billion dollars themselves, and as a 0:16:05.560 --> 0:16:11.520 result of the commercial arrangement we have with Toshiba Westinghouses parent, 0:16:12.240 --> 0:16:15.800 we were able to get three point seven billion dollars 0:16:15.800 --> 0:16:19.040 of guarantees out of Toshiba. When you add up the 0:16:19.120 --> 0:16:22.200 ability to have the tax benefits in place that all 0:16:22.240 --> 0:16:25.840 accrue to the benefit of our customers, and the commercial 0:16:26.680 --> 0:16:30.440 obligations that were undertaken by Toshiba, and also the costs 0:16:30.440 --> 0:16:34.080 that were born by Westinghouse, we're still able to say, 0:16:34.120 --> 0:16:38.240 and this gets under reported so much that the original 0:16:38.320 --> 0:16:43.520 price estimate rate impact to our customers was and right now, 0:16:43.800 --> 0:16:46.960 even with the schedule and the extra cost, we're gonna 0:16:46.960 --> 0:16:51.040 bring Plant Vogel in and a below ten percent looking number. 0:16:51.200 --> 0:16:54.400 In other words, that the amount that consumers need to 0:16:54.440 --> 0:16:57.000 spend will only be ten percent more than what they 0:16:57.040 --> 0:17:00.160 currently do, rather than as your initial estimates work. It's 0:17:00.240 --> 0:17:03.040 right even with the schedule and cost changes. And that's 0:17:03.080 --> 0:17:06.159 because Toshiba's paid for Westinghouse, took some write offs, and 0:17:06.200 --> 0:17:07.840 then we have tax pant. But just to push back 0:17:07.840 --> 0:17:10.399 a little bit, I mean, Toshiba didn't want to be 0:17:10.480 --> 0:17:12.719 involved in this anymore, and I believe that you had 0:17:12.800 --> 0:17:16.440 conversations with them to try to keep them involved. Why 0:17:16.480 --> 0:17:18.639 didn't they want to be Now that it's not that 0:17:18.680 --> 0:17:21.000 they didn't want to be involved. They bought Westinghouse and 0:17:21.000 --> 0:17:24.240 Westinghouse as our primary contractor, and as a result, we 0:17:24.280 --> 0:17:29.200 had some very wise people negotiate those arrangements. Toshiba never 0:17:29.240 --> 0:17:34.800 really had an interest particularly other than Westinghouse. We had 0:17:34.840 --> 0:17:38.919 the parent guarantee Westinghouses obligations. If we did not have 0:17:39.040 --> 0:17:42.560 the parent guarantee, Westinghouse would have just declared bankruptcy and 0:17:42.600 --> 0:17:47.160 we would have had a general creditors obligation at Bankruptcy Corp. Instead, 0:17:47.200 --> 0:17:50.479 we had Toshiba sitting there owing US three point seven billion, 0:17:51.720 --> 0:17:54.480 and we got it with the healthy United States government. 0:17:54.840 --> 0:18:00.959 I'll add they've been terrific, Tom, You're also pushing aggressively 0:18:00.960 --> 0:18:03.680 into solar power, you bet. And I'm wondering if if 0:18:03.680 --> 0:18:06.680 people recognize or maybe you don't, if it's not fact 0:18:06.720 --> 0:18:10.359 or to say but that nuclear power and solar power 0:18:11.000 --> 0:18:14.080 can be beneficial not only in terms of the rate structure, 0:18:14.520 --> 0:18:17.600 but also in terms of the environment. Oh, that's absolutely right. Look, 0:18:18.040 --> 0:18:20.200 we're committing this year in a very formal way, and 0:18:20.200 --> 0:18:21.760 I guess I've already made a little bit of news 0:18:21.760 --> 0:18:23.439 at your conference today. I was going to kind of 0:18:23.480 --> 0:18:25.280 do this at my annual meeting, and I'll do this 0:18:25.359 --> 0:18:29.000 in a much more rigorous way there, UH to commit 0:18:29.040 --> 0:18:32.440 to take Southern generation portfolio. We produce about as much 0:18:32.520 --> 0:18:34.960 energy as the nation of Australia, a little bit less. 0:18:35.000 --> 0:18:38.879 We're really big and to move that generation portfolio to 0:18:39.000 --> 0:18:42.320 a low to no carbon future is a big deal. 0:18:42.760 --> 0:18:45.359 To do that, we need nuclear. To do that, we 0:18:45.400 --> 0:18:48.520 need a much bigger penetration of renewables. I've always been 0:18:48.600 --> 0:18:51.760 much more of a fan of solar. Okay, the Southeast 0:18:51.760 --> 0:18:54.880 really doesn't have much wind flows and and wind has 0:18:54.920 --> 0:18:56.760 some other issues if you want to get into that. 0:18:57.520 --> 0:19:01.880 But then we need technology innovation, We need storage capability. 0:19:02.000 --> 0:19:05.440 We need innovation around dealing with the carbon anum because 0:19:05.440 --> 0:19:07.320 I think there still will be and it likely will 0:19:07.320 --> 0:19:12.359 come from gas. We'll still have carbon intensive fuels at play. 0:19:12.480 --> 0:19:15.600 We just need to do something with the carbon. Tom. 0:19:15.640 --> 0:19:18.679 I wish we had another hour with you. Unfortunately we 0:19:18.760 --> 0:19:20.199 have run out of time. But we have to have 0:19:20.280 --> 0:19:23.960 you back because it's wonderful to have Fanning at Chairman, president, 0:19:24.000 --> 0:19:28.560 chief executive officer of Southern Company in Atlanta, Georgia, the 0:19:28.600 --> 0:19:32.280 one executive who is willing and excited to spend billions 0:19:32.280 --> 0:19:35.840 of dollars on nuclear and is aggressively at trying to 0:19:36.119 --> 0:19:42.919 cut his carbon footprint. We are broadcasting from the Future 0:19:42.920 --> 0:19:46.639 of Energy Summit by Bloomberg's New Energy Finance here at 0:19:46.640 --> 0:19:49.719 the Grand Hyatt Hotel in Midtown Manhattan, and you know these. 0:19:49.800 --> 0:19:51.879 Of course, one of the big topics here has to 0:19:51.920 --> 0:19:55.680 do with solar energy and all of the solar panels 0:19:55.680 --> 0:19:59.480 that are being installed on people's roofs around the country. Uh. 0:19:59.520 --> 0:20:03.240 It turned out though that the actual growth in the 0:20:03.320 --> 0:20:07.160 industry has slowed, and indeed, if you take a look 0:20:07.160 --> 0:20:10.359 at the number of mega wats that was added last 0:20:10.520 --> 0:20:16.080 year using these solar panels, it dropped by sixteen percent 0:20:16.160 --> 0:20:18.159 compared to the year before. Now this is the first 0:20:18.160 --> 0:20:23.120 decline that they've registered from the year two thousand. Yeah, well, 0:20:23.119 --> 0:20:26.240 this is this is a fascinating also. Survey that was 0:20:26.240 --> 0:20:29.760 put out earlier this year, sixty one percent of solar 0:20:29.760 --> 0:20:33.000 project developers who were pulled so they were anticipating installations 0:20:33.000 --> 0:20:36.760 to drop by more than twenty five percent this year, 0:20:36.840 --> 0:20:40.280 in large part due to the higher cost incurred in 0:20:40.440 --> 0:20:43.119 implementing some of those solar panels in the wake of 0:20:43.119 --> 0:20:45.399 some of the tariffs. Indeed, and here tell us more 0:20:45.400 --> 0:20:47.439 about it is Tom Warner. He is the president and 0:20:47.480 --> 0:20:50.560 the chief executive of a sun Power. They're based in 0:20:50.800 --> 0:20:53.600 San Jose. He joins us here at the Bloomberg New 0:20:53.680 --> 0:20:56.120 Energy Finance Summit. Tom, thanks very much for being here. 0:20:56.720 --> 0:20:58.960 Maybe you could just tell us about this decline in 0:20:59.040 --> 0:21:01.600 the number of install also and the declining amount of 0:21:01.680 --> 0:21:04.800 growth that we're seeing in the use of solar panels 0:21:04.880 --> 0:21:09.160 on people's homes. What's what's the cause of this? UM Well, 0:21:09.560 --> 0:21:14.359 it's still a very incentive driven industry. Um in the 0:21:14.520 --> 0:21:17.639 policies very from state to state. What we're seeing is 0:21:17.680 --> 0:21:23.080 in California, which has been the real driver of distributed generation. 0:21:23.119 --> 0:21:28.320 We're seeing state policy or or the UH transition from 0:21:28.480 --> 0:21:31.760 NEM net metering one point oh to net metering two 0:21:31.840 --> 0:21:35.960 point oh. And so there's some transition challenges, but we're 0:21:35.960 --> 0:21:40.360 seeing great things happen in new states like uh, Massachusetts. 0:21:40.400 --> 0:21:43.399 So we have new states coming online that are growing fast. 0:21:43.440 --> 0:21:46.440 But it's a transition that's happening in the biggest market. Well, 0:21:46.480 --> 0:21:49.760 how much of a factor are the tariffs that President 0:21:49.760 --> 0:21:54.800 Trump announced last year specifically on solar panels being made 0:21:54.880 --> 0:21:57.160 here and making it more expensive. Well, that the tariffs 0:21:57.160 --> 0:21:59.720 are super important. If you think about the cost of 0:21:59.760 --> 0:22:03.320 a older system, call it one to three one dollar 0:22:03.560 --> 0:22:07.680 for installed what and a utility scale too for commercial 0:22:07.720 --> 0:22:12.199 and three for residential. If you add say twenty or 0:22:12.240 --> 0:22:15.480 thirty cents, it's a big deal to a utility scale 0:22:15.480 --> 0:22:19.960 power plant. We're seeing business push out and seeing developments 0:22:20.000 --> 0:22:24.320 slow down considerably there less so in residential. So the 0:22:24.400 --> 0:22:27.159 teriffs are super big deal. And you should probably know. 0:22:27.240 --> 0:22:32.320 We're in the exclusion process. So we hope that uh, well, 0:22:32.359 --> 0:22:36.760 I'll be in DC tomorrow. The comment period ends Monday, 0:22:36.880 --> 0:22:39.720 and then there's four weeks, well four weeks. There's some 0:22:39.760 --> 0:22:42.760 period of time after that that don't make decisions. I 0:22:44.000 --> 0:22:46.840 it's very very hard to read. I think our position 0:22:46.960 --> 0:22:50.000 is awesome. I mean we meet all of the criterias. 0:22:50.000 --> 0:22:52.919 So on a logical basis, you think an American solar 0:22:52.960 --> 0:22:58.080 company billion dollars of payroll over five years differentiating technology 0:22:58.160 --> 0:23:01.240 customers want it. We think our odds are good, but 0:23:01.320 --> 0:23:05.760 we don't know. The marketing efforts by the actual installing 0:23:05.800 --> 0:23:09.919 companies have pushed this idea that you don't actually have 0:23:10.000 --> 0:23:12.840 to pay for the solar panels, that you can just 0:23:13.000 --> 0:23:14.760