Entergy, based in New Orleans, with $12 billion in annual revenues is pivoting to a new business future in its second century of business. The Energy Times recently sat down for an extended interview with Andrew “Drew” Marsh, the utility’s executive vice president and chief financial officer. This is the first of a three-part series of articles based on that interview. To listen to the entire interview, please visit this online site.
Energy Times: As someone responsible for the finances of a $12 billion company, do you feel that Entergy is challenged to come up with new business models?
Marsh: The way that we deliver service under our business model is likely to change over time. We are investing in the infrastructure of the grid, the generation that supports the grid, the transmission, the distribution, the metering, all those things. We’re getting a return on that investment. That will likely stay around. The harder part though is how do we actually deliver the service underneath that business model and how is that going to change. As technology continues to progress, it's going to lower costs in certain areas. It will lower the cost for customers to get better information, it will lower the cost for us to improve our reliability. We will have to take those things into account.
It's hard to get good data top scientists into the business. Those folks will be playing a big role a decade from now and trying to figure out where exactly issues are and where they're likely to be. It will be a much more efficient operation in the field. All the data that can be brought to bear on the customers’ behalf directly will transform the customer relationship.
Energy Times: Entergy has 13,000 employees. How do you describe the corporate culture today, and how would the company leadership like to see that corporate culture change and evolve?
Marsh: That's a good question. There is many different elements to that. We embarked in 2014 on three broad ranging cultural initiatives focusing on organizational health. Our goal is to really develop the leadership capabilities within the organization, to be able to deal with the changing environment in which we’re going to find ourselves. There are many different ways to compete in the marketplace. You can compete on operational basis which will be tough for us because we have so many different kinds of facilities. We have probably close to 80 or 90 different power plants. Almost all of them have a different design, a different configuration. We have multiple unions, multiple pay practices, we operate on multiple jurisdictions, we have multiple pension plans, we are pretty complicated outfit. If you were thinking about, how do you compete operationally you think about companies like, Southwest Airlines, or Walmart, where everything is standardized and simplified. It's tough for us to compete in that dimension.
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You have a way to compete around knowledge, and certainly we have very talented smart folks within Entergy. We certainly want dedicated smart people within Entergy and we have a lot of those now but we’re not going to get the kind of talent that Google or Goldman Sachs is going to attract..
You get really focused on the data that we’ve been talking about, and you can really understand your customers from the time that they get up in the morning to the time they go to bed. You understand everything they’re going to do, why they’re going to do it. Why we're certainly going to push in that direction. As an industry you have to think about where we have been. We have up until recently called our customers ratepayers. We feel as an industry, we have a long way to go to really understand a customer notwithstanding all the data that we talked about.
Procter & Gamble, or Clorox, or any other product management companies like Johnson & Johnson are really good at understanding their customers. We as an industry are not going to be able to get there for a while.
We need good strong leaders that can help solve all the complicated problems we face and create value for our owners, employees, customers and our community. From a cultural perspective that’s where we are headed. It’s a long journey, we have a long way to go. But that is what we’re thinking about right now.
Energy Times: Are you excited about Entergy’s future?
Marsh: There are a lot of things to be excited about. We have line of sight on some really good steady predictable growth and that's the basis for our core business and that's the basis for our dividend. If we can achieve that steady predictable growth, that's the thing that investors really seem to value, so as a CFO I'm excited about that. Having said that there are still some challenges out there.
Next week: Entergy's Nuclear Position