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Episode #115: 'Balancing Futurism in Utilities with the Regulations of Today' with Kwafo Adarkwa, Director of Public Affairs at ITC Holdings [an Energy Central Power Perspectives™ Podcast]

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The transmission and distribution component in the power sector spins a physical web of infrastructure across the United States, but behind that massive buildout is arguably an even more complex web when it comes to the regulations and policies that oversee that process. From multiple jurisdictions playing a role to the constantly evolving oversight that must keep track with ever-advancing technology, staying not only compliant but forward-looking for transmission companies is a full-time job.

But the true leaders in transmission aren't looking to just keep pace, they are striving to look to the future, plan for coming goals, and unlock innovation and opportunity. The guest of today's episode of the podcast is one of the leaders doing just that. Kwafo Adarkwa, Director of Public Affairs at ITC Holdings joins the Energy Central Power Perspectives Podcast to share his unique perspective on how transmission companies must weigh a long-term vision of the future with day-to-day tracking of active regulations today. Listen in as he shares with podcast host Jason Price and producer Matt Chester the lessons and wisdom that can assist any utility industry player to keep this careful balance.

Prefer to Read vs. Listening? Scroll Down to Read Transcript.

Thanks to the sponsor of this episode of the Energy Central Power Perspectives Podcast: West Monroe.  

 

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TRANSCRIPT

Jason Price: 

Welcome to the Energy Central Power Perspectives podcast, the show that brings leading minds from the energy industry to discuss the challenges and trends that are transforming and modernizing our energy system. And a quick thank you to West Monroe, our sponsor of today's show. Now, let's talk energy.

I am Jason Price, Energy Central podcast host and director with West Monroe. Coming to you from New York City and with me as always, from Orlando, Florida is Energy Central producer and community manager, Matt Chester. Today we're going to be talking about the transmission industry, the T in T&D. We think of transmission as the big power lines that crisscross our landscape. The transmission industry is pinnacle for getting power from far off locations to local distribution centers and are playing a key role in transferring cleaner generation to the utilities. Last year, MISO approved a $10.3 billion in new construction in its long range transmission planning. The LRTP Tranche 1 with more tranches expected in years to come. However, according to our next guest, the underpinning of the transmission industry is in FERC Order 1000. Matt, I know you've been studying up on this topic, so can you share us the cliff notes on FERC Order 1000?

 

Matt Chester: 

Sure, Jason. FERC Order 1000 is one of those ever-present regulations that since being put into place, it really bleeds itself into so many different utility conversations in one way or the other. The goal of FERC 1000 was to reform the transmission planning and cost allocation requirements for public utility transmission providers, a critical topic given the consensus these days about how much new transmission we need to meet future demand and growth in not just renewable generation, but overall to meet growing demand. The order was put into place in 2011, and its stated objectives at that point were to remove barriers to the development of transmission, promoting cost-effective planning, and the fair allocation of costs for new transmission facilities. But the question, over a decade later is whether that order has achieved these stated goals and how has the sector evolved around it, and what's the best way to continue to work towards those goals moving forward in today's landscape.

 

Jason Price: 

That's great, great context, Matt. Much appreciated. I asked for this framing because today's episode is a compelling one. We're talking about what good and bad policy looks like in the power sector. We share common goals pretty uniformly in the desire to keep energy clean, reliable, affordable, equitable and more. But we don't always see eye to eye on the best way to do so. Today's guest is deeply entrenched in that world of public policy and regulation, as he is ITC Holding's director of public affairs. The perspective he brings to these debates is an eye-catching one, seeking out future-proof regulations. I'm eager to hear him explain more. Let's get to it from ITC'S Holdings in Novi, Michigan with us today is Kwafo Adarkwa. Thank you for joining us in Energy Essentials Power Perspectives podcast.

 

Kwafo Adarkwa: 

Thanks Jason, and thanks for thinking of ITC.

Much appreciated and curious to dive in on all the discussion on Order 1000 and really sort of the downfall of that and the situation as you look at that chilling effect it's had on transmission development across the country, and really looking towards what's happening with respect to regulations in a lot of states in which ITC operates, which have really been important in a lot of ways to spur transmission development and work together.

 

Jason Price: 

Excellent. Well, we're excited to have you here. So Kwafo, before we dig in, how about if you give us a background on who ITC is?

 

Kwafo Adarkwa: 

Happy to Jason. Well, ITC is a nation's largest independent transmission company, operating in multiple Midwestern states, headquarters in Novi, Michigan. But we just celebrated 20 years of existence, so really excited about that. Employing close to a thousand people across the Midwest and Great Plains wonderful company to work for steeped in innovation, moving towards a cleaner grid and greener future.

 

Jason Price: 

We mentioned in the intro that we're talking about some pretty big topics, and before we dive into that meaty conversation, I wanted to give you an opportunity to share more about yourself in the background of what you do at ITC. Walk us through your history in the utilities sector, if you don't mind.

 

Kwafo Adarkwa: 

Yeah, Jason, thanks for that opportunity. I've got almost a 20-year career in the energy industry. I started back when I was much younger and much skinnier as a public utilities engineer with the Michigan Public Service Commission here in the great state of Michigan. I joined ITC about 15 years ago and have ascended to the ranks. Now, as director of public affairs, my job is to build trust with stakeholders, be it regulators, legislators, those in the public policy forum on what we do, and what we say, and standing by what we say.

My history's steeped in public policy also with an engineering background and really trying to look at a way to bridge the gap between our business goals and where we need to go in the regulated sector. It's been an illustrious career, really thankful for the opportunity to be here at ITC. It's been a great place to work and the sector is just an evolving, changing, growing sector. It's been a lot of fun and a great career so far.

 

Jason Price: 

As I mentioned, we're talking big picture about the tension between futurism and utilities and the regulations of today. Can you put it in simple terms for us, what that actually means?

 

Kwafo Adarkwa: 

Yeah, so it's simple in when we say it, but really it's in some ways complex. Really, the regulation of today and regulators that I've come across oftentimes are thinking about policy frameworks that are more at a short term vantage point.

Really the futurism and where we want to go from a good regulatory policy is moving towards a framework that has the future in mind and public policy that's done today that has a 5, 10, 15 year look at. It's very difficult to do that in large part, but really that is the most effective regulation. Regulation that allows customers today to take advantage of good public policy and good innovation in our sector, but then also has that same framework that allows us to grow into a policy that is somewhat future-proof, that looks at all the different changing landscapes with respect to the generation landscape that's changing, with respect to all of the different uses and needs of the system. One good example of that is electric vehicle policy in terms of where that needs to go in the future landscape. Right now the policy across most of the country is probably not ready for the upcoming demand that's coming in that sector.

We need to move to that future looking future lens that has public policy that encompasses all of what those future needs might need to be. That's a difficult balance, but it's one that we need to find as an industry.

 

Jason Price: 

Kwafo, for utility actors like ITC, how do you expect to actively balance the pressing needs that can sometimes feel counter to each other? Increasing decarbonization but increasing liability, allowing for mass electrification, but keeping prices low. Tell us about this.

 

Kwafo Adarkwa: 

The underpinnings of that balance and that push and pull have to be a balance between safe, reliable, affordable energy delivery. ITC stands at the center of that when we look at what we're trying to do in the grid and our operating footprint. Really, that balance has to be in place between the regulated community and those of us in industry trying to push toward that future that allows for good public policy, that keeps affordable, reliable power flowing to all of our customers around the country, but also allows for us to, as I mentioned in my earlier comments, have that future lens that allows us to grow into a public policy framework and investment strategies that look to what the future's going to be and not regulating so much in the present day.

I think that push and pull is nothing new, nothing different, but it's something that is going to be ongoing that we have to manage between the public sector and those in the regulated community and those of us on the other side in the business community that are trying to grow and trying to meet those needs. It is a very, very intricate dance that has to happen going forward.

 

Jason Price: 

Yeah, I can imagine. Kwafo, you do have a lot of experience in this sector and you have a lot of exposure to players who are marching towards success. How do you identify those good actors? How does that impact the progress that can be made?

 

Kwafo Adarkwa: 

Yeah, I think the good actors are those that are pushing that public policy that has those balances that we talked about in mind. One great example here in Michigan is when I look at what MISO did, maybe about a decade ago, with the multi value projects or MVPs. They took that forward looking step trying to plan for a future.

I think it was very successful. Here in Michigan. We were able to, at ITC, construct the Thumb Loop, which is a 510 million project spanning over 140 miles and serving so many customers, tens of thousand customers got to benefit not only here in Michigan and other places, as well. We have MVPs around the footprint, as well. It's a great example of good actors between MISO as the regional transmission organization. The state of Michigan was involved in that. Other states in the MISO footprint with the organization of MISO states all coming together and thinking about a future that was multipurpose and multi values in terms of the stream of the development there.

I know you had some of my colleagues, both Brian Drum and Chuck Marshall on an earlier episode. MISO's, again taking a very bold step with the Long Range Transmission Plan or the LRTP projects that are going to do the same thing, provide multiple benefits across a wide swath of our country. Looking forward to those challenges and looking forward to building out the infrastructure and the transmission side that allows for our decarbonization, that allows for the new uses of the system.

I'm really excited about what's happening in the RTO world that can allow for greater use, greater flexibility and allow us to move into that future not so disjointed. I think those are examples of some really good actors and some really good things that are happening across the RTO footprint.

 

Jason Price: 

Kwafo, you mentioned Thumb Loop. Do you want to share for our audience who may not be familiar with Michigan, what area that might be?

 

Kwafo Adarkwa: 

Yeah, those are the eastern part. If you look at Michigan, most of us Michigans like to put up our hand and show the state in that way, but the Thumb Loop is in the eastern part of the lower peninsula, spanning near kind of the Lake Huron part of our state. It runs kind of in the north-south direction, making a big almost u-shaped loop. Again, 140 miles that goes through some rural communities and then ends up near the St. Clair part of Michigan just outside of metro Detroit. Very, very robust, very strong, very well thought through project.

Again, a great example of public policy coming together with a future look for the benefit of customers around the region.

 

Jason Price: 

Interesting. I want to pivot for a second over to your relationship with regulations a bit further. I'm interested to understand more, and we talked about this when we first met up at the podcast and the planning session, that some of your best friends in the industry are from the regulatory side. I'd love to hear you talk about that. What are some of the conversations you have with them? What are they like? Do you all see eye to eye on these issues? Is there any tensions that result from having different goals? Which of those conversations you have with them over a beer sound like?

 

Kwafo Adarkwa: 

Yeah, there's a lot of friends I've made over 20 years, both being in the regulatory side of the things and then being in the private sector here at ITC, a lot of good discussion with so many regulators from around the country. There's an inherent push and pull just like any good friendship where you're talking about different policy issues and there's gnashing of teeth, but at the end of the day it's steeped in trust and the relationships are strong, because we've worked together and we've not seen eye to eye, but we have trust in the foundation of education. There is no beer thrown, I can assure you that, at the end of the conversation. But a lot of robust policy discussion. Again, not always going to see eye to eye on particular ways in which to get to the end goal, but again, I think we have the shared line goal of delivering power in a reliable, clean, affordable way through most of the people and most of the conversations I've had over an illustrious 20-year career.

 

Jason Price: 

Well, that's good to hear. No doubt that despite the tensions between different actors, we all want to see a future ready grid. We like to recognize that regulation has to play a role in that, though we may not always agree on the specific levels of transmission enhancing policies. What would you put forth as the framework that these policies should look like?

 

Kwafo Adarkwa: 

Yeah, I think a good public policy that balances where we are today and where we need to go takes into account a lot of different factors. Obviously, cost is a big thing and most of our folks are economic regulators. Thinking about cost, also thinking about reliability and also thinking with a lens toward the future. So much of our public policy is focused on just meeting customers need today. But as I discussed before, we have to move to a framework across the country no matter what jurisdiction you're in.

The framework that allows us to plan for today, take actions today that are going to have a benefit in five or 10 years from now. I know we talked about MISO a little bit. SVP is doing some good things with JTIQ, as well. A lot of different states are taking a lot of actions to try to ready us going forward, but it's going to have to be a consistent evolution of public policy in terms of thinking about today, providing for a framework and a structure that allows growth and development moving forward five and 10 years. I's very difficult to do. There's a push and pull for a variety of reasons, but I think what we need to do is continue to push forward with future policy that again, allows us to be ready for the changing dynamic, be it again decarbonization, be it the various factors and uses of the system on the electric side that are happening, that are inherent, that are just on the precipice of happening and are already happening.

I'm excited to be involved in the industry, excited to help push policy goals and initiatives in that way.

 

Jason Price: 

Fantastic. For our listeners who may not be aware, Kwafo's no stranger to the world of podcasts, and he shared with us that he regularly appears on sports related podcasts. Kwafo, I thought it'd be fun to take our traditional lightning round where we move away from asking about the industry and instead ask about you, and stick it with a sports theme. I'm going to ask you a handful of questions, looking for a quick one word or one sentence answer. Are you ready?

 

Kwafo Adarkwa: 

I think so. This might be the hardest part of the podcast.

 

Jason Price: 

Well, we'll see. What's your favorite sporting event of the year?

 

Kwafo Adarkwa: 

We are in it Jason, March Madness, both on the men's and women's side, big basketball fan, so college basketball is near and dear to my heart.

Go green with the Michigan State Spartans here where I'm from.

 

Jason Price: 

Okay. NFL Draft Prospect this year that has you most excited?

 

Kwafo Adarkwa: 

This is tough, but I'm going to show a little bias here. I'm going to go with Bryce Young, the quarterback from Alabama. Very small size quarterback, but really a good football player and I want to see where he lands and how he performs.

 

Jason Price: 

If you could invite any athlete, living or dead to join you at the bar to watch a big game, who would it be?

 

Kwafo Adarkwa: 

Also tough here, but let's stay with the Michigan State theme, Magic Johnson. If you're listening, Magic, my calendar's open.

 

Jason Price: 

What sports figure would do the best in your world of utility public affairs?

 

Kwafo Adarkwa: 

Ooh, this is a tough one. I'm going to go LeBron James. The reason why is he's able to be comfortable in a lot of different settings. He understands the landscape in front of him, he's able to push his own agenda, but also to understand the needs of others. LeBron would be okay in the world of regulatory policy.

 

Jason Price: 

Okay. This one is little on the tough side, but I'm sure you can handle it. By what metrics will you measure how successful you were at the end of your career? What puts you in the hall of fame?

 

Kwafo Adarkwa: 

Yeah, I think to be a Hall of Famer, you have to be multifaceted, multi dynamic, multi multi-tool type player. I think for me, if my family thinks that I have done an excellent job and can speak highly of me, if my coworkers can speak highly of me, if I can give back and mentor folks that look like me, sound like me, have come from the same type of background, and if I can have made some sort of mark on this industry in a way that goes toward the future, provides that next generation of leaders, I think I will have been a success and potentially in that pantheon of greats to practice public policy.

 

Jason Price: 

Nice job. Keeping with the sports theme, I would say that was a slam dunk, so good going. As a reward, that means you get the final word of this episode. What would be your final takeaway message that you hope our listeners remember from today's conversation, if nothing else?

 

Kwafo Adarkwa: 

Yeah, thanks again, Jason, for the time and audience today. What I hope folks take away from this message is that we need to practice good public policy that looks toward the future with an eye in the present that is safe, reliable, and affordable. Transmission is at the center pinning of all of that. Very excited about where ITC is going, where it's been. We just celebrated 20 years, so I'm very excited about where we're going. Again, futurism is here and now, practice public policy that leads us into the future in a measured way. Again, thanks for the time and audience today, Jason.

 

Jason Price: 

Terrific. Kwafo, thank you once again for joining us today, and for the inspiring and insightful conversation. The Energy Central community will surely have follow up questions and as they share them in the energycentral.com community, we'll be sure to get your responses there. Until then, thanks again for sharing your insight with us on today's episode of the podcast.

We also want to give a shout out of thanks to the podcast sponsors that made today's episode possible. Thanks to West Monroe. West Monroe works with the nation's largest electric gas and water utilities in their telecommunication, grid modernization, and digital and workforce transformations. West Monroe brings a multidisciplinary team that blends utility, operations, and technology expertise to address modernizing aging infrastructure advisory on transportation, electrification, ADMS deployments, data and analytics, and cybersecurity. Once again, I'm your host Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com and see you next time at the Energy Central Power Perspectives podcast.

 

About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The ‘Energy Central Power Perspectives™ Podcast’ is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at [email protected]. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

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