Episode #99: 'Creating Real Change With Utility Equity Investment' With Calvin Butler, Senior Executive VP and COO of Exelon [an Energy Central Power Perspectives™ Podcast]

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

Key Links
Calvin Butler's Energy Central Profile: https://energycentral.com/member/profile/calvin-butler/about

Investing in Minority-Owned Small Businesses Is Part of How we Recover Equitably from the Pandemic: https://energycentral.com/c/ec/investing-minority-owned-small-businesses-part-how-we-recover-equitably-pandemic

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

TRANSCRIPT

Jason Price: 

Hello and welcome to this week's episode of the Energy Central Power Perspectives Podcast, the show that brings leading minds to discuss the latest challenges and trends, transforming and modernizing the energy systems and the utility industry of the future. And a quick thank you to West Monroe, our sponsor of today's show. Now let's talk energy.

Jason Price: 
I'm Jason Price, Energy Central Podcast host and director with West Monroe coming to you from New York City. With me as always, from Orlando, Florida is Energy Central producer and community manager, Matt Chester. Matt, we're diving into an incredibly important topic on the podcast today, and that's how the utility sector too often falls short when it comes to equity and what power providers can do and some currently are doing to rectify this imbalance. Matt, can you define for our listeners what exactly it is when we talk about energy equity?

Matt Chester: 
Of course, Jason. So energy equity, at least as it's defined by the Department of Energy, is the recognition that certain disadvantaged communities have been historically marginalized and overburdened by pollution, under investment in clean energy infrastructure, and lack of access to energy efficiency in housing and transportation. Generally it's the idea that certain populations have been saddled with an overdue amount of the negative impacts of the energy industry while simultaneously not receiving their fair share of the benefits available from the advances in the energy sector.

Jason Price: 
Great, thanks for that, Matt. And I know that's just scratching the surface, so we're eager to plunge more into the meat of the issue with today's guest. And truly, we couldn't have gotten a better person to talk with us today when it comes to investing in equity from the utility perspective. Joining us in the virtual podcast booth is Calvin Butler. Calvin is the senior executive, vice president and chief operating officer of Exelon. In this role, Calvin oversees Exelon's six local electric and natural gas companies, which together form the nation's largest utility company across New Jersey, Maryland, Illinois, Delaware, Pennsylvania, and the District of Columbia.

Jason Price: 
What really drives Calvin though is its efforts to ensure Exelon is being a leader for and investing in energy equity. And bringing the benefits of the modern energy industry and ecosystem to elevate our underserved communities. These efforts have not gone unnoticed as Calvin was named by Black Enterprise Magazine as one of the most influential Black executives in corporate America in 2020, and he was Zee Prime's ETS Thought Leader of the Year. We're honored to have him on the show today and sharing his key wisdom in this area. So Calvin Butler, welcome to today's episode of the Energy Central Power Perspectives Podcast.

Calvin Butler: 
Jason, thank you very much and let me just say hello and how much I appreciate being invited and included in this podcast. And let me also say hello to Matt.

Jason Price: 
Calvin, we're thrilled to have you here. So thank you. You heard from Matt in the intro, they gave a basic introduction to energy equity. But as an expert on the topic, I'd love to hear you fill out that description. When we're talking about energy equity, what exactly do we mean and why is this something that is finally coming into focus?

Calvin Butler: 
Well, first off, I think Matt, by providing that definition from the Department of Energy, summed it up nice, but let me take it another step. Because energy, like so many things in our country, we're working to course correct and in our world, I want to say the equity issue is at the forefront and it should be at the forefront. But it's important to recognize that equity is not the same thing as equality. Equity means providing each person the exact resources and opportunities needed to reach an equal outcome, even if those resources or opportunities look different person to person or group to group, or in our case, community to community. We don't see equity as peripheral to our business. It's a core component that should be woven throughout all of our work and especially our work. And we take it very seriously when you're talking about delivering safe, reliable, and cleaner energy to all of our customers.

Jason Price: 
Let's make this challenge more tangible. What are some of the examples of equity issues that every utility across the country needs to be addressing?

Calvin Butler: 
As our industry is transitioning to this decarbonized era, there are several things that step to the forefront on what we're talking about and what we need to do as an industry. First and foremost, transportation electrification is an equity issue. Distributed energy resources, our DER enablement is an equity issue. All the utilities have set path to clean goals to achieve net zero operation driven emissions. And for Exelon, as you stated in the introduction, that's across 6 utilities impacting over 10 million customers. That's an equity issue. It's core to us because we cannot afford to leave poor communities, our communities of color behind when addressing the important topic or in my view, the most important topic of our generation: climate change. And when you think about those communities that you said that Exelon serves, we have the privilege to serve some of the most diverse communities in the country. And unfortunately, we also know that those communities are the mostly impacted by climate change. So that's why this issue is so important and that's why equity across the utility spectrum must be at the forefront of what we do.

Jason Price: 
Calvin, talk a bit about the risks that arise when utility overlooks investing in equity. For example, what goes wrong when a utility looks at equity as a box to check say, rather than a core business principle to focus on?

Calvin Butler: 
Yeah, that's a great question and I think I'll address the utility issue, but let me take a step back, Jason, to say I think it's a core issue for all organizations. No matter what industry you are in. If you're addressing equity or diversity, equity and inclusion as a check box, you'll never be successful. You will never have sustainable success. You may have one off success, but it won't be sustainable. When one views equity as a box to check or a quota to meet, the economic health of the communities we serve can get overlooked. That can mean a larger gap between underserved and under-resourced communities and wealthier ones. This was more prevalent than ever before over the last two years, as we've been dealing with a national pandemic, we saw that gap increase or more importantly, the impact of the pandemic on those under-resourced communities. Equity is not a box that can be checked as if it's a singular action that adequately addresses the issue.

Calvin Butler: 
Additionally, as energy providers, we recognize that we are an indispensable partner in confronting climate change in the communities that we serve. If we don't, we could see more air pollution and greater environmental damage everywhere. But again, particularly in communities of color and low income communities, that's another reason why we must do so in a way that includes underserved and under-resourced communities in technological progress because we can't stand by and let the gap continue to exist. And I think we are uniquely positioned as an industry to have a bigger voice in this debate than others.

Jason Price: 
All right, so that's the industry wide. Let's narrow the focus on Exelon.

Calvin Butler: 
We could spend the rest of your program talking about this because I'm so proud of the team at Exelon, and when I say the team, not just the leadership but our 18,000 plus employees. Because we have all leaned in, rolled up our sleeves and said this is important to us, and let's talk specifically in this instance about the utility programs. One, I'll give you specific examples. Pepco. Pepco installed over 1,100 KW community solar facility in DC's Ward 7, which provides clean energy to the city and build savings for low and moderate income district households. That's equity at work. In addition to that, when you talk about transportation, electrification, EV solutions in low and middle income areas, we're working with partners to fund electric vehicle solutions in low and middle income areas. For example, the BGEs, Baltimore Gas and Electric's ED lift program, which deploys over 100 electric vehicles in the Baltimore area for ride healing services because we know those who are using Lyft and other transportation companies more so in under-resourced communities than others. And to have those electric vehicles there demonstrates a couple of things.

Calvin Butler: 
One, you're valued. But two, we're going to help you clean up the air in your communities. And it provides transportation equity opportunities for those customers, and also increases EV education and awareness.

Calvin Butler: 
Another project, the Bronzeville project in Chicago on the south side, taking a community in transition and really focused in on saying, we're going to do this pilot in Bronzeville to emphasize the use of a microgrid network. In addition to that, we're going to provide senior citizens with free rides, electric vehicle transportation for their last mile. So you may get on a bus to go somewhere, but that last mile, we're going to have an electric vehicle right there to take you home, take you grocery shopping or some other venture. But that once again goes into the impact to the community and showing how it works. Those are just some examples of what we're doing in our communities to demonstrate that you need to be involved in this transition and we're going to help you get there.

Jason Price: 
Those are some great examples. I also want to ask you about the supply chain issues and the hiring and workforce issues. So when we talk about equity, can you talk a bit about how does Exelon ensure its workforce and business partners reflect a diverse and equitable landscape?

Calvin Butler: 
Oh, absolutely. If I can also say what's key to that equity issue, and I think it really jumped out in the pandemic, was when you look at our service territories, our communities in which we're partners in, we know we have a lot of people in need. And again, that was highlighted over the last two years more so than ever before. And it was not necessarily those who traditionally needed assistance. It was those who never sought assistance in the past who were struggling to pay their utility bills. And I'm so proud of the company and partnering with agencies and the like and providing up to $8 million in support and need for those communities through that pandemic response. But that's just a core component of our overall efforts.

Calvin Butler: 
To your question on the supplier diversity, it's not just about providing dollars, it's about empowering communities, lifting them up economically. And a big part of that for us is what we've done for our supplier diversity program. Let me give you an example. Last year we spent as Exelon Utilities, 2.9 billion, that's with a B. $2.9 billion with diversity certified suppliers. That figure represents a 56% growth in our total spend from 2016 to 2021. What I can tell you about that, Jason, is that was a very intentional effort. You just don't get to that number by happenstance. And we're not just hiring these qualified companies, we're investing in them. I don't believe there's any utility in the nation that can tout that number. And it's important to note this wasn't legislated for us. This was something that we saw as core to our business and our communities, and we're leading in that effort to do so.

Jason Price: 
Yeah, those are impressive numbers. When we were doing the research leading up to this conversation, we came across the Racial Equity Capital Fund, which sounds really interesting and very much part of your company's philosophy and mission. What can you share about this fund to our audience?

Calvin Butler: 
No, thank you for asking because I'm really proud of our efforts around the Racial Equity Capital Fund because in my view, it is the next step in what we're doing in our jurisdictions, in the communities that we serve to economically empower them. What we've come to recognize, and this wouldn't be surprise to anyone that's listening here, is that minority businesses, although they may have great services, provide wonderful efforts and growth and so. There's a lack of access to capital. And we launched in the fall, a $36 million Racial Equity Capital Fund, which we'll invest in minority owned businesses in our communities. And I'm pleased to tell you that applications have been coming in from all of our service areas since May. And it's great to see the diversity of businesses applying. Firms in the transportation, technology, healthcare and finance companies to food and beverage businesses and small real estate brokerages. And it wasn't necessarily firms that do business with us.

Calvin Butler: 
These were firms based in our jurisdictions that have access to this. And I think as important, we partnered with a minority owned, woman owned investment firm to manage those funds. We brought in someone from the outside who has experience doing this, RockCreek Investments based in Washington, DC. RockCreek breeds a level of expertise to ensure that this fund will exist long after those $36 million that have been invested. So let me give you kind of some of the highlights of the fund. The fund will invest in numerous businesses, as I've outlined, and loan amounts between 100,000 and $300,000 and equity investments of nearly 1 million. And it's part of our initial effort. But what was so key to this is how it originated. It started at our Pepco utility, the idea in partnership with the Washington Interface Network, WIN group, where they said, "How can we lean in deeper in DC to support minority owned businesses?"

Calvin Butler: 
And the CEO at the time of Pepco, Dave Velasquez brought this to my intention and I said, "I not only like the idea, but we should take this idea across all of our utilities, across all of our jurisdictions." And what you see now is a 36 million fund that each of the utilities invested in as well as the Exelon Foundation to set the structure up. And we've provided some tenants for RockCreek to manage, and we step back. We are not decision makers on who we invest in. We wanted to provide that wall. What we did is set up some governing tenants on what we expect from this fund. And this fund has been set up to be an evergreen fund. It is set up to live long after that initial 36 and long after these initial investments because we see as anchor institutions, this is our opportunity to build economic wealth in our jurisdictions.

Calvin Butler: 
And I think RockCreek is the right choice to manage that. And they have already partnered with minority community banks, other key local financial organizations, and community organizations to source originations and to really get this kick started. And I'm excited about what it will do.

Jason Price: 
Yeah, very interesting. I mean, investment models of this kind, I don't think I've come across in the utility space, so this is very unique. So you mentioned expectations. What do you expect say 2, 5, 10 years out from this program?

Calvin Butler: 
Well, I think the biggest expectation is that we will see these minority businesses grow. We will see them hire more people. We will see them invest back into their communities. We will see other companies come to RockCreek and say, "I want to invest in that fund." Because not every company has the willingness or the capacity to put $36 million for their own fund, nor should they. But if a company says, "Hey, I want to put a million dollars in that fund to do that," that is what this fund is set up for. And so those are some of the governing tenants that we've put in place, and I think that's the exciting part about this.

Jason Price: 
Well, I know that when the Exelon stamp is associated with something, people pay attention. So for all your peers listening in on this podcast today, what are some lessons learned or hurdles to overcome, things that they should think about, should they be intrigued and want to pursue something like this?

Calvin Butler: 
Well, I would say, first off, join us. It's one of the things to sit back and talk about these ideas and think about how you can make a commitment. But every great idea doesn't have to be original. And we think this is a great idea. So I would ask that you join us. But if you sit back and say, "No, we want to go solo," I would say work with a great fund manager. Partner with my minority community banks and other key local financial organizations and community organizations to ensure that you're focused on expanding capacity and local communities, and reaching the people who need the investment most. I would also say set clear impact goals, the goals that I was just talking about, job creation, wage increases, company growth, set those out front so the companies that are applying know how they're going to be measured. And I think with those key tenants, we welcome people to the table and we hope others think about doing this in their jurisdictions because this is, I hope, will be truly impactful and game changing for many.

Jason Price: 
That's great. Calvin, we're going to give you the last word, but before we do, we have something called the Lightning Rounds where we pivot to a series of questions where you give us one phrase or word response. And it's an opportunity for our audience to learn more about Calvin Butler, the person versus Calvin Butler, the COO. So are you ready?

Calvin Butler: 
I hope they're not disappointed, but yes.

Jason Price: 
I'm sure they won't. What's your go-to snack food?

Calvin Butler: 
Potato chips.

Jason Price: 
What superpower would you pick for yourself?

Calvin Butler: 
Time travel. I'd love the opportunity to, one, go back and look at some of the mistakes that were made by previous generations, and have an opportunity to lean into those discussions and help make a difference.

Jason Price: 
Where is your dream vacation spot?

Calvin Butler: 
I have to be honest. Anywhere that I have my family, because that time to decompress and spend time with them is invaluable, especially in our fast paced business and what we're doing. So anywhere that I'm with them, it could be in our backyard, it could be in Aruba, but anytime with them is invaluable.

Jason Price: 
Who were your role models growing up?

Calvin Butler: 
Without a doubt, my mother. I lost her when she was 47. Just a true example of a servant leader. She was definitely my role model.

Jason Price: 
What inspires you most?

Calvin Butler: 
I alluded to this earlier in the day that I recognize what my purpose is. I have a wonderful job and I work for a wonderful company, to be able to lean into the communities that we serve. But it's inspirational working with 18,000 talented men and women who show up every day to provide a core service, to make a difference in people's lives. And I think that was illustrated last week in the mid-Atlantic where we had a storm come through and you just saw people leave their homes who probably didn't have power to get power restored. You see, our employees and this industry across the country for mutual assistance go into some of the most damaged areas at times of need and help people. That's inspiring and that's a purpose driven organization and industry. And that's what that's exciting to me.

Jason Price: 
Well done in navigating the lightning round.

Calvin Butler: 
Thank you.

Jason Price: 
Yeah, absolutely. And for doing so, we want to give you the final word. So what final message do you hope the utility audience listening in today's show will take away from our conversation?

Calvin Butler: 
I'll end it how we started, that we truly need to put more energy into equity and equity into energy. As we all work to build a cleaner future, utilities and energy providers must do so in a way that includes underserved and under-resourced communities in this technological progress that we're making as a country and as an industry. But I just truly believe that culture change starts at the top. You can't do it from the mid level, it has to be foundational in everything we do. And it starts at the top. And I'm so proud of Exelon, and it starts at the top with our CEO, Chris Crane, who has empowered me to partner with him and others to make a difference in our organization and our communities. So thank you again for the platform, and I really look forward to talking to your audience in the future.

Jason Price: 
Calvin, thank you for those important thoughts and for keeping us informed on such a critical topic in the utility industry today and for the coming years. No doubt, this is an area Energy Central will continue to focus on and the community engaged in the comment section. And Calvin, we look forward to having you on the podcast in the future. But for now, thanks so much for your insights and we look forward to you and our community members keeping these important conversations going at energycentral.com.

Calvin Butler: 
Thank you.

Jason Price: 
And you can always reach Calvin through the Energy Central platform where he 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. And 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.

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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.  

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