April 2018, Vol.245, No.4
Features
Kimberly Harris Sees Future Shaped by Customer Needs as AGA Turns 100
By Jeff Awalt, Executive Editor
Kimberly Harris was only 12 years old when she announced to her family that she would become a lawyer. She got that part right, but she never imagined where her career would take her.
After graduating law school in Arizona, she started her legal career in West Texas as outside counsel to an electric utility company. By the time she moved to the Seattle, WA, area in 1995, the energy business was in her blood. Harris joined a law firm that represented Puget Sound Power and Light, which merged with Washington Energy the following year in one of the first takeovers of a gas company by a large electric utility. She became the second attorney to join the in-house legal department of the combined company, Puget Sound Energy (PSE), but a growing fascination with its business led her to push aside her legal career for a series of operational roles.
A self-described green-leaning "strategy and policy geek," Harris was named president of PSE in 2010 and CEO in 2011. This year, she brings her unique combination of environmental sensibility and unabashed love for the energy industry to the international stage as chair of the American Gas Association as it celebrates its 100th year and hosts the World Gas Conference.
P&GJ: It seems like your unexpected move to Abilene, Texas, after law school shaped your entire career. What was your first experience in the energy business there?
Harris: Right, what else was a lawyer going to do in West Texas? Natural gas prices were low when I started there in the early ’90s, and companies were trying to renegotiate their coal contracts or switch to lower-cost gas. Ironically, the industry has come full circle and companies are trying to get out of their coal contracts again, although it’s more for environmental reasons now than about price.
I was outside counsel to West Texas Utilities, a subsidiary of Central and South West (CSW), which is now part of American Electric Power (AEP). AEP’s chairman, Nick Akins, started out as an electrical engineer at CSW, and I started out as Nick Akins’ lawyer. I have to say, the energy business got into my blood almost from the moment I stepped into that fuels division in Abilene.
P&GJ: What did you like so much about it?
Harris: It was the people. The people who work in the field for a utility company share qualities with first-responders. They are absolutely committed to their customers and to taking care of each other. That kind of dedication is contagious, and it’s compelling work. You’re dealing with public policy and safety and so many different issues at the same time. It’s incredibly complex but very heartening too. Even now, my best days at work are the ones when I’m spending time with people in the field.
P&GJ: You didn’t stay in your legal position at PSE very long before moving to a variety of operations jobs. What compelled you to take on so many different responsibilities?
Harris: I started getting more interested in operations even before I joined PSE full-time because I was being exposed to more of PSE’s business and learning more about it. I’m just one of those people who is a lifelong learner, so being able to take on new challenges and learn different parts of the business was very exciting for me. I decided within the first year that I really wanted to get on the business side. Fortunately, I received a lot of support and was allowed to choose where to work, and I picked a position that gave me exposure to the trading floor, because that was the area of the company I had interacted with the least. After that, I started doing integrated resource planning and moving into other areas.
P&GJ: What are the biggest changes that you see in the industry since you first started working at Puget Sound Energy? You’ve already mentioned a major regulatory change right at the beginning.
Harris: Certainly, there have been some dramatic changes, but I think there are two ways of looking at that. There are changes that come from within the industry and changes to the industry through the customers’ eyes. If you consider it from an industry perspective, there certainly have been significant changes in federal regulations and policy over the years, as well as market-based changes. But I think the more exciting piece of this really is the change coming from the customer side.
The way our industry interacts with customers, and the expectations and needs of customers have changed dramatically. Customers have more information and more choices now. They have greater opportunity to communicate expectations and needs, and we are better able as companies and as an industry to interpret and respond. This capability will continue to evolve and enrich our understanding of the fuel choices customers want, and the technologies we should be investing in to meet their expectations and needs.
P&GJ: Are you saying that customers will have a bigger voice and more influence on how local distribution companies operate in the future?
Harris: Yes, but not just in the future. I’ve been talking about this recently in my capacity as AGA chair, and my message has been that natural gas utilities are thinking about the energy consumers of the future and adapting to meet their needs. Listening to our customers and adapting to serve them better has always been our north star. It’s not new. It was the key to our success in the past, and it will drive our future, too.
When I talk about listening to customers, I don’t just mean surveys and community meetings with our existing customer base. I also mean listening to the needs of potential customers, evaluating new technologies and services that can meet their needs and make a positive impact on their businesses. At PSE, for example, we’re building an LNG storage and liquefaction facility at the Port of Tacoma. This is predominantly intended to help ensure our ability to meet peak demand for our natural gas customers. But we also have an anchor tenant, TOTE Maritime, which is building and converting its cargo ships operating between Tacoma and Anchorage to run on LNG instead of bunker fuel. This will have a positive environmental impact by reducing emissions related to shipping, while also ensuring peak load for our customers.
P&GJ: As you’ve talked with other AGA members since becoming chair, what seems to be most on their minds?
Harris: This year is a little different, and it’s an exciting year for AGA, because it’s our 100th birthday. That’s a huge milestone, and I think everybody takes a certain amount of pride in it, so there’s been more conversation than usual this year about our past and our progress as an industry. I hear about a lot of different concerns among my fellow CEOs related to trends and operational issues, including the need to attract new workers and retain the knowledge of our retiring workforce.
The one issue that I hear about consistently from CEOs I’ve talked to is safety, which really is a hallmark of AGA. Across the country, we spend about $24 billion dollars annually on improvement to our infrastructure and our own systems related to safety. Statistics show something like $700 spent on safety every second – it’s pretty incredible how much the industry is focused in on safety.
P&GJ: What is AGA doing to help member companies improve safety?
Harris: The AGA Peer Review Program helps illustrate how committed our members are to safety and I’ve personally seen how effective it is. By the end of this year, after only three years since the program’s launch, about 81% of all customers will be served by a company that has gone through this program. This is something we implemented at my own company in 2016, and I can tell you it’s top to bottom, it’s very robust and has a meaningful impact to the organization and the customers.
The program brings subject-matter experts from peer AGA member companies who look at all areas of your operations that could impact safety. I can tell you, as CEO, you pay attention to that report and act on it. It’s a great program, and it’s one of the things that differentiates our industry. You don’t really have other industries making the same kind of effort as the natural gas industry and the electric industry to work together and try to make each other better.
P&GJ: What is your outlook for the natural gas industry for the rest of 2018 and beyond?
Harris: I’m very optimistic that the industry will continue to thrive, and I’m hopeful that AGA’s current efforts to engage and educate the public will yield greater public support in the future. Something we have going for us that others don’t: I don’t believe there is another industry as important to the quality of life for each individual as the energy industry. As industry leaders, it’s our job to ensure we’re focused 100 percent of the time on the needs of those customers and adapting our companies to meet them. P&GJ
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