All the compliments regarding Ralph Izzo’s acumen and intellect prove true when the head of Public Service Enterprise Group needs to explain things in simple terms. Such as the company’s reorganization last week, which saw Ralph LaRossa elevated to chief operating officer of PSEG and new titles and responsibilities for Dave Daly and Kim Hanemann.
Izzo, PSEG’s chairman, CEO and president, said the moves were not made to show the company is transitioning toward a clean energy future — a longtime goal of Izzo’s — but to make sure the company is in position to implement the moves it is making toward that goal.
“Most companies think in two buckets,” he told ROI-NJ. “One is a strategic bucket and one is more of an operational/tactical bucket. As a strategy gets more fully baked and more fully ingrained in the culture, what you love to see is when that strategy is not just the domain of just the handful of senior leaders, but becomes much more of a part of the life of the organization at large and has to become operationalized.
“So, as we continue to try to build that strategic core — things like the Clean Energy Future filing, things like our investment in offshore wind — we’ve begun to realize that, wow, there’s a lot going on in the company on an operational level that needs to get the attention of management.”
PSEG’s move to clean energy has been apparent for a while. Izzo recently testified before Congress — something he’s done for more than a decade. He’s hopeful New Jersey — and the world — are headed in the right direction. But he’s worried about whether enough is being done.
When asked to set a timeline of progress in terms of innings of a baseball or softball game, Izzo again expressed an answer in simple terms.
“There’s two parts to that question,” he answered back. “One is what inning we’re in. But the other is, ‘What’s the score?’ I’m indifferent as to what inning you think we’re in. I would say we’re somewhere in the middle innings. My fear is, we’re behind 10-0.
“You just have to read the reports of the United Nations intergovernmental panel on climate change. You just have to see what the scientific community is saying about our prospects for achieving no more than a 1.5 degrees sea change by the year 2030. And, with the tremendous accolades to what New Jersey aspires to do, we need a lot more than New Jersey to realize a late-inning rally to overcome that score.”
He applauds all of the moves Gov. Phil Murphy has made, including Murphy’s own announcement last week, in which he signed an executive order raising the state’s goal from 3,500 megawatts of offshore wind-generated electricity by 2030 to 7,500MW by 2035.
But, while Izzo feels New Jersey is, indeed, trying to overcome the 10-0 deficit, he wonders if others around the country and around the world are as committed.
“I fear (the situation) becomes a basis for people saying, ‘Let’s just throw in the towel and worry about what we’re spending, because we’re never going to make up for the rest of the United States or for the international community,” he said. “This, all too often, becomes the argument that folks offer for not acting.”
New Jersey, he said, continues to act in a positive way.
“We’re eagerly awaiting the state’s energy master plan, which I believe is just a month or two away from being published,” he said. “We’ve seen enough drafts and we’ve seen the direction that’s headed into to be enthusiastic about being a full partner with the state in realizing its goals and aspirations.”
For Izzo, that means five key initiatives:
- Energy efficiency;
- Preserving carbon-free nuclear energy;
- A price on carbon;
- Renewable energy;
- Electrifying transportation.
If you didn’t catch it, No. 1 is something Izzo feels is being overlooked.
For all the talk about wind, solar and nuclear energy, Izzo feels energy efficiency is a key move going forward. And, he said, one of the most cost-effective.
“You’ve seen us enter into an option agreement with Ørsted for offshore wind,” he said. “We continue to look at the development of solar projects throughout the country. We continue to operate our nuclear plants with excellence. But the piece that is missing — by far, the biggest one — is the major investment in energy efficiency that we want to make.”
PSEG announced a plan to invest more than $4 billion of its own capital in a Clean Energy Future program last fall.
“It’s not that hard,” Izzo said. “We’ve had programs over the past 10 years where we have helped hospitals, schools, municipal office buildings, low-income customers change their thermostats, change their lighting systems, change their air conditioning systems, change their heating systems, revisit their building for cracks and underinsulation,” he said. “And these things have been wildly successful, so successful that we have waiting lists of those same customers who want us to do more for them, but we haven’t been able to, absent the authorization.”
Izzo, after spending a lot of time on the issue with Murphy, is confident good things are ahead.
“He’s clearly completely committed to a carbon-constrained future,” he said. “And I think that his targets are exciting and something that we all aspire to achieve. I am confident that, knowing his sophistication about what these things cost, that he is optimistic that we will see further declines in prices.
“The plea that I put out there for others is that, unlike the price points of some of these supply technologies, whether it’s solar or offshore wind, energy efficiency is the one way we can reduce carbon and lower the customer bill and create the same economic stimulus. Because, unlike online supply technologies — whether it’s solar or wind — most of what you pay for in energy efficiency is not the equipment. It’s the labor associated with the installation. So, it’s a huge job creator.”
But, as Izzo notes, just one (often overlooked) part of the puzzle.
“I would be disappointed if this came out as we should stop doing those other things and just do energy efficiency,” he said. “That’s not at all what I’m saying. I’m just trying to get an equal seat at the table for energy efficiency.”
It’s a table Izzo plans to be sitting at for some time.
Last week’s announcement spurred speculation that it was the first step toward his retirement.
Izzo laughed at the idea. Then gave a simple response.
“I’m still CEO,” he said. “And, no pun intended, I still have a lot of energy left.”