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2007 CEO Forum: Greenhouse Gauntlet

Tackling climate change is a monumental challenge. Power-company CEOs discuss long-range plans for a climate-friendly energy economy.

Fortnightly Magazine - June 2007

bad thing; either system can work if it is consistently applied.

The magic word is “consistency.” If you are in Georgia and you want to make sure Southern Co. is regulated, you can do that effectively but you must be fair and consistent. If you are in a free-market structure, you have to make it work and don’t keep running back in hindsight. All these models can work but they have to be applied with consistency and fairness to the investor.

Rogers, Duke: I had the privilege of visiting a cathedral in Seville that took 104 years to build. The people who worked on the foundation never lived to see the stained glass windows, and the people who worked on the windows never lived to see the steeple. But they had a vision of what it would look like when it was finished.

We need that kind of vision. The thing that is missing in Washington and in board rooms at energy companies is they are not engaged in cathedral thinking, but reactive, short-term responsive thinking.

We swing between panic and complacency in this country. Energy prices go up, and we panic. Then they settle down and we settle into complacency. To address climate change and grow our economy in the future, we need a sustained effort. We need cathedral thinking—with a scope of decades, not the term of a Washington politician or a quarterly report.

I have faith in the future, and I’m optimistic that we will put solutions in place. But it will take two or three decades to solve this problem. We are in the most capital-intensive industry in the United States. Our capital commitments are large, and our business cycles are long. When you build a nuclear plant, it lasts 40 to 60 years.

The challenge we face in our industry is to educate Wall Street and regulators about why these are good decisions. It’s a tough challenge when investors are focused on quarterly or annual earnings, and regulators don’t want to make any decision that is politically unpopular. But we need to make long-term decisions. We need to use cathedral thinking.