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Tue, Jun 6

Episode #125: 'Traversing the Utility ESG Journey' with Christine Waller, Vice President of Communications and Corporate Responsibility at Duquesne Light Company [an Energy Central Power Perspectives™ Podcast]

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The concept of ESG, or Environmental, Social, and Governance, oversight has become an increasingly common topic across economic sectors, especially utilities. The importance of ensuring that the utility integrates into its DNA the spirit of sustainability, both from an environmental perspective but also in terms of business practices, is clearer than ever before, but not every stakeholder knows exactly the best way to dive in.

To get to the bottom of that with specific examples, this episode of the Energy Central Power Perspectives Podcast sees host Jason Price and producer Matt Chester welcome Christine Waller, Vice President of Communications & Corporate Responsibility at Duquesne Light Company. The discussion revolves around the recently released ESG report by Duquesne Light Company and its implications for the energy industry. Listen in as Christine shares how, as an investor-owned utility located in Pittsburgh, Duquesne Light Company's unique perspective sheds light on the challenges and opportunities faced by companies operating in regions with a rich industrial history.

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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Did you know? The Energy Central Power Perspectives Podcast has been identified as one of the industry's 'Top 25 Energy Podcasts': blog.feedspot.com/energy_podcasts/ 

 

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. 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. Matt, we have the privilege of welcome to the episode today a guest who recently led their utility in the development of its first public ESG report. ESG has been in the news an increasingly amount lately, but for those who may still be unsure about what exactly that means, can you give us a definition overview of what ESG is?

 

Matt Chester:

ESG stands for environmental, social and governance, and it's an idea that covers the ways to make an organization more sustainable for the planet, for its people and how the businesses run generally. This framework is used to evaluate the current state of the enterprise while also planning how to improve in terms of sustainability and ethics in the years to come and doing so on the basis of these sort of non-financial, non-traditional indicators, but they really do serve to measure the impact of a company.

 

Jason Price:

That's great, Matt. ESG indeed is popping up more and more from company boardrooms to public policy to customer demand, so this conversation about the recently released ESG report is timely and we're speaking, of course, of the ESG report published by Duquesne Light Company. Joining us to give an overview of what that report contained, what the motivation for it was and how it's going to shape the coming years of energy development in the Pittsburgh area is Christine Waller, the Vice President of Communication and Corporate Responsibility. Thank you so much for joining us today and welcome to the Energy Central Power Perspectives Podcast.

 

Christine Waller:

Jason, thanks so much for having me. I'm happy to be here.

 

Jason Price:

Well, we're thrilled to have you as well. And as noted, we're putting this episode live on the heels of Duquesne Light Company publishing its ESG report, so we want to start there. Can you give us the elevator pitch for what this ESG report is saying and what its release says about Duquesne and your priorities?

 

Christine Waller:

So this report, Jason, indeed is the company's first, and it represents our most comprehensive disclosure to date, and it builds upon previous disclosures that we've made, but it contains new information about diversity, equity, and inclusion as well as our environmental performance. The report is organized into three chapters aligned with E, S, and G, and that is a chapter focused on how we seek to be climate conscious in a nod to the E of E, S and G, how we're powering people in our region in a nod to the S of E, S and G, and how we maintain responsible performance in an nod to the G of E, S and G. So creating transparency around initiatives that impact our customers, our workforce, and our community and the environment is an important step in measuring our company's progress in transitioning the Pittsburgh region toward an equitable clean energy future for all.

The report shows the critical role that we play in helping to choreograph our region's energy transition and how we're ready to partner with organizations and customers to make this transition a reality. The other thing that I would highlight about the report is that it shows areas where we're making future commitments. For the first time, we're putting forward-looking target into the public space to demonstrate that we are in this for the long haul and are holding ourselves accountable to progress.

 

Jason Price:

I appreciate that. Before we dig into the ESG report, I want to take a step back and give you a chance to highlight your role at Duquesne. You've described yourself as an industry outsider when it comes to utilities when we first met. You also share that within your family, your father was in the coal industry and selling equipment to mines in Pennsylvania, and I have to imagine that these experiences shaped a unique perspective that you bring today in your role, especially as it relates to the topic of ESG. Share with our listeners a bit more of your background on how you found yourself entrenched in Duquesne's ESG work.

 

Christine Waller:

So while I wasn't born in Pittsburgh, I was raised in the city proudly, and I was raised by two parents who are both engineers by trade. My father in particular spent his career in the coal mining industry selling equipment into the region's mines, and so you can imagine the dinner table conversations we are now having as they continue to live locally about the clean energy transition and the debates that that entails. I spent the early years in my career in the building materials industry followed by more than a decade in pharmaceuticals and now energy specifically in the utility space, but all with a common focus on helping to position companies for long-term success through reputation and brand building and more recently corporate responsibility.

Similar trade and functional expertise throughout those different industries, but I think it's been very fascinating for me to join the energy space where as an outsider coming in, I knew that the energy transition was happening, but as I joined, I think it's given me permission to ask questions that folks who have been in this space for a long time might not feel so comfortable asking because they're maybe supposed to know the answers or maybe used to the way things have been done. It's created interesting dialogue with people internally to engage on topics of conversation that are more common outside of the industry.

 

Jason Price:

ESG is not new for Duquesne. You've been working on this for quite some time. This part of the history of the company itself has been doing many of the things that ESG talks about. Why now do you see this as an opportunity or a moment to create a public facing document?

 

Christine Waller:

Obviously Duquesne Light is not the first utility to issue a public facing ESG report and while we celebrate this as a really significant milestone and it being the most comprehensive public facing disclosure around our ESG strategy to date, as you note, Jason, this is work that the company has been doing for decades and I think as important, it's what the report says about our readiness to be a leader in the region's energy transition that is the real milestone and the reason for us deciding to publish this report now. We recognize that transparency builds trust and our focus is on being a trusted partner to all of our stakeholders, not the least of which are our customers, and they want to understand what our efforts are to make a difference in their lives.

People know that we deliver electricity. We're known regionally, we have very strong brand recognition regionally for being the electricity provider of the Pittsburgh region, but we see ourselves as having actually a lot more to offer as we embark on a clean energy journey together. Our vast and our deep experience during pivotal moments in history from the steel age to the medical advancements of world-class institutions, which we'll talk a little bit more about in terms of our region's ESG journey, these are all proof points that we've been an integral part of Pittsburgh's past and we're poised to be driving its energy future. That's an exciting place to be, and that's what this report is all about, is demonstrating our readiness to be a leader not only through stories of impact but hard data that we've included in this report around our environmental, social and governance performance.

 

Jason Price:

One of the things that I think that's really interesting about the work you're doing is that DLC from an investment standpoint is investor owned but not publicly traded. Instead the infrastructure funds that own your equity are your investors, but given the unique arrangements, who exactly is the audience for this report and what are you trying to communicate to them?

 

Christine Waller:

It's a great question. We are a privately held investor owned electric distribution company. Our parent company, which is DQE Holdings, is currently owned by three private equity investors based in the United States, Europe, and Asia that own the entirety of the company's equity. But the content of the report applies to various audiences. We want to demonstrate that DLC is ready to lead the charge and adjust transition to a clean energy future for all our board, which is our ownership and other financial institutions. Our public debt holders, for example, are certainly interested in how we're performing in this space to ensure that their investments are sound and to make whole on reporting their own ESG requirements. Duquesne Light as an asset under their management is required to report certain metrics to the funds that own us because they report in aggregate on the impact of their investment portfolio.

Beyond that, we want our customers and our regional stakeholders to be confident in our ability to deliver as a trusted energy partner. Lastly, we're a top regional employer and we really want to be viewed as an employer of choice, and we know that our ESG story is part of that. An interesting fact that I think is really unique to how we're situated in two counties in southwestern Pennsylvania is the fact that 70% of our employees are also our customers, and we want our employees to be proud of the successes that the report represents and the role they play in that. They're really the backbone of the work that's advancing our region into the next energy revolution. The journey that we're on is one that we're on together and it wouldn't be possible without all of these different stakeholder groups that I'm describing to you, employees, customers, and support from our partners.

So the report is seeking to be responsive to expectations that all of them have of their utility as a trusted partner, while also remaining true to our business model. None of our ESG strategy is separate from the company's corporate strategy, recognizing that good business is good business, and if our ESG approach isn't impactful ultimately to our bottom line, then we're not conducting good business. It's a lot to balance and we believe that this first inaugural report is a step in the right direction.

 

Jason Price:

Sure. But in the past year, ESG has become bit of a political lightning rod I guess you can say, or even a third rail for ... depending on perspective. Given that Duquesne is in Pennsylvania and in Pittsburgh specifically, these are two areas for the past century that have built this entire industry and one of its major industrial drivers is its fossil fuel resources, so I have to imagine that approaching this report requires some sensitivity and care. Can you speak to that aspect of your customers and public debt holders and how they approached, what the response has been like with this report?

 

Christine Waller:

For sure. I mean, we still have legacy industries in our area, in the Pittsburgh region, there's still some amount of steel manufacturing that goes on here, and certainly industries that rely on rich and natural resources, natural gas in particular. We're sitting on top of one of the world's largest deposits of natural gas with the Marcella Shale, and we need to strike the right balance in our approach that serves a number of different stakeholder interests, but we believe there's room for everybody in the conversation. For example, while a good portion of this region's electrical grid is powered by nuclear energy, it also relies heavily on natural gas as I mentioned before, and we're all working together on cleaner and greener technology and ways of working that benefit our region to ensure its continued long-term growth.

I think that's a unique dynamic that we have in Pittsburgh. We've been through a lot of transition in the past. From powering World War II through the manufacturing of steel to the decline of that very industry in the late '80s that left our region with significant challenges, and yet today the Pittsburgh of today is booming with technology investments, world-class educational institutions like Carnegie Mellon University fueling a local entrepreneur, community robotics and other technology sectors and medicine. We've got world-class health institutions in Pittsburgh. We've been down the path of transition before, and I think Duquesne Light Company stands at the ready to be a partner in the next period of transition, which is our region's new energy economy.

 

Jason Price:

So just to provide some context here, you're based in Pennsylvania and Pittsburgh, of course. Industrial rich center of the country. This is more of a voluntary exercise than anything else in the sense that you put this ESG report together because you felt it was the right thing to do. Share with us, what are the perspectives do you think that Duquesne brings to this report that other utilities may be able to learn from? Share with us some of the unique perspectives that you may have developed that you think other utilities would be able to benefit from based on your experience?

 

Christine Waller:

We are in a unique situation in that we've been serving our customers and communities for more than a hundred years. We've got a long history of powering the moments that matter in our region, as I mentioned, from the industrial revolution to the technology education and medicine revolution that we're living today. Our predecessor companies that form the modern day Duquesne Light Company have been around since the creation of electricity and the modern electric grid. Because of this, the customer base that we've served throughout history like steel and manufacturing, we have experienced working with large customers who operate big companies in complex industries with high demand and that are difficult to decarbonize.

Because of our long history, we also have some older infrastructure so grid modernization for us is critical. As we invest in our infrastructure to make sure that it can serve the needs of today and tomorrow while supporting more complex clean energy technology, we won't lose sight of the experience that our rich history lens to us. In fact, in this report, we're making some commitments that I want to highlight. One is that we're committing to investing almost $2 billion in transmission and distribution infrastructure between 2023 and 2027. This investment is what's going to allow us to make sure our infrastructure is reliable as more and more customers come to depend on the grid as we transition to a clean energy future.

Secondly, our region can take advantage of our legacy infrastructure that's been left behind. ... Our grid was built to support very large steel manufacturing sites and other heavy industry and when that industry left the region, it actually left us with excess capacity on the grid. Today, we are better positioned than some of our peers to support increased electrification of transportation and buildings because of how our grid was originally constructed. Additionally, I think the last thing that I would say is that I'm sure there are utilities can relate to this, but the electricity sector in Pennsylvania was deregulated in the late 1990s and early 2000s.

We don't actually own generation in the state of Pennsylvania. We're a poles and wires company only, which actually allows us some flexibility in our approach to ESG because of the number and types of assets that we're responsible for. But it also forces us to be a little bit more creative with our approach to environmental issues because in order to impact and reduce the environmental impacts of power generation in the state of Pennsylvania, we actually have to collaborate pretty significantly with a multitude of stakeholders on policies that are in the best interests of our customers while not losing sight of affordability.

 

Jason Price:

That's interesting. But Christine, as we mentioned, you are a privately held company which makes you unique. Can you speak to who you answer to when it comes to these issues and how that may shape your approach? More importantly, Energy Central listeners are represented in all dimensions of the energy utility world, so it's IOUs, municipalities, cooperatives, and so on. How do you think that makes your approach necessarily different and what could they learn from your experiences on this?

 

Christine Waller:

I think similar to many other utilities, the customer really is at the center of every decision that we make. Everything we do seeks to put the customer's best interest in mind to make sure that not only are we continuing to deliver safe, reliable, and affordable power today, but that we're positioning our grid to supply increasingly clean power in the future. Our customers depend on us. We know that. They run their businesses off our grid, they live comfortably in their homes because of our grid, and we're always going to be here to be a trusted partner to them, even as we launch new products and services that will advance our region's energy transition. That said, as you note, Jason, ESG also continues to be a top priority for many other stakeholders that we serve, not the least of which is our ownership group, which we've talked a little bit about.

They've encouraged us to share our story because they believe in it and they know that we have a positive story to share and strong intentions in this space to help advance our region. At the same time, as I already mentioned, some of them are obligated to share ESG disclosures related to their assets through different assessments of our performance. We participate in industry benchmarks like many other utilities do. GRESB is one in particular, which is an infrastructure and real estate benchmark that many companies participate with to help evaluate their ESG performance over time. Then you mentioned municipal utilities. Just in terms of where we're similar, I think the fact that we serve a smaller geographic region in southwestern Pennsylvania helps us to address complex problems with very local solutions.

We have strong partnerships in part, Jason, because we know these people personally, and I think there's a really unique angle to that aspect of how we're able to serve the region. Unlike municipal utilities, we face different challenges because of our ownership structure. As I mentioned earlier, our owners sit on at least four different continents, and the reality is that the expectations are becoming increasingly interconnected and global when it relates to our local impacts and local performance, realizing that the energy space can't be separated or operate in a bubble from other utilities around the world.

 

Jason Price:

Sounds like we have a lot to learn from what you're doing down in Pittsburgh. We'll definitely make this ESG report available on the Energy Central platform. I'm sure that the audience will appreciate it and dig into it. I'm looking forward to doing it as well. Christine, so at this point, we want to pivot over to what we call the lightning round. We had an opportunity to learn about you, Christine Waller, the professional. Now it's an opportunity for us to learn a little bit more about Christine Waller, the person. In our lightning round, we have five questions that we throw at you. We ask you to keep your response to one word or phrase. Christine, are you ready?

 

Christine Waller:

I think I'm ready, and I'll try really hard to keep it to one word or phrase.

 

Jason Price:

Fantastic. All right. What time of the day are you most productive?

 

Christine Waller:

Middle of the day.

 

Jason Price:

One recommendation you'd make to someone visiting Pittsburgh for the first time.

 

Christine Waller:

You've got to go to The Point. That's the confluence of the Monongahela, the Allegheny Rivers, and they form the Ohio River at The Point.

 

Jason Price:

Place you have on your bucket list to visit.

 

Christine Waller:

I am dying to see the Northern Lights, wherever that is.

 

Jason Price:

Who are your role models?

 

Christine Waller:

Madeline Albright, the first female Secretary of State because she deployed fashion in her diplomacy.

 

Jason Price:

Right, those lapel pins.

 

Christine Waller:

Yes, Jason. That's awesome that you know that.

 

Jason Price:

What are you most passionate about?

 

Christine Waller:

Storytelling and always going on an adventure.

 

Jason Price:

Fantastic. Nice job in the lightning round. As a reward, you now earn the final word for today's show. What I'm curious about is if you can speak to what core message and lesson from your experience in this ESG report you hope our listeners take away from today's conversation.

 

Christine Waller:

I would simply want to emphasize that the contents of this report seek to demonstrate our readiness to be a leader in our region's clean energy transition. As the local electric distribution company, we have an obligation to serve all the customers in our region, and we want them to know that this is the direction that we're headed as a company so that they can have confidence in us to boldly harness clean energy opportunities for tomorrow, while not losing sight of our core function to deliver safe, reliable, and affordable electricity today. We want to be a trusted partner in this effort, and the first thing they can trust us to do is to balance today with tomorrow, the investments that that requires and always keeping sort of safety and affordability and reliability at the center of what we're providing to them.

The other thing that I would say is just that our ESG story is a journey. The targets that we included in this report are all five year targets. We hope to set more aggressive and longer term targets in future reports, but with this inaugural publication that we've put out, we wanted to focus on targets that use known technology and known investments in order to make sure we're putting an initial stake in the ground to advance our performance. Finally, just reminding everyone that we're responsible for powering the Pittsburgh's Region Energy transition and it's not something we take lightly. We understand that we're an essential service provider and the transparency we're providing in this report seeks to build trust with our stakeholders by helping them touch and feel the responsibility that we know we have to serve them well.

 

Jason Price:

Nicely stated. This was a great conversation and I know that our Energy Central community members will keep the conversation and discussion going with the Energy Central platform comments and questions module that we have. So until then, we just want to thank you for sharing your insight on today's episode of the podcast. So everyone, thank you. Christine Waller, Vice President of Communication and Corporate Responsibility at Duquesne Light Company.

 

Christine Waller:

Thank you so much for having me, Jason.

 

Jason Price:

You can always reach Christine on the platform where she welcomes your questions and comments. 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 we'll 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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