Peco's CEO on the future and what keeps him up at night

Peco CEO Craig L. Adams, among Philadelphia's voices of leadership. ED HILLE / Staff Photographer
Peco CEO Craig L. Adams, among Philadelphia's voices of leadership. ED HILLE / Staff Photographer
Posted: September 09, 2013

Craig L. Adams, 60, a Kentucky native, has held many jobs at Peco Energy Co. and its parent company, Exelon Corp., since he started in 1989. For the last 18 months, he has been the president and chief executive officer of Peco.

The company serves 1.6 million electric and 490,000 gas customers in Southeastern Pennsylvania. It employs about 2,400 people, owns $9 billion in assets, and generates about $5.6 billion in annual revenue.

Question: Your degree is in math and economics, and much of your career at Peco and Exelon has been overseeing support, supply, and training. It's not the typical pathway for a utility CEO.

Answer: I was in charge of emergency planning and got exposed to all parts of the company continuously. One thing about working in support is it gives you an opportunity to see all the pieces of the business. Engineering is king in our business. At least that's what the engineers believe. I always remind the engineers that I'm not one. There's some poetic justice in that.

Q: Peco is connected to virtually every person and business in the area. Where do you see the regional economy heading?

A: Right now, I see some amount of commercial development going on that I won't say is robust but is active. Residential development is slightly better than 2009 and 2010, but it's very slow compared to some of the boom years. Until employment starts to pick up, that housing market is going to stay pretty flat.

Q: Where are the growth opportunities for Peco?

A: With mandated energy-efficiency programs, we're kind of holding our own on the electric side for the next couple of years. It'll be somewhere between 2019 and 2020 before our load grows back to the point where it was in 2008. On the gas side of the business, it's starting to grow a little - half a percent a year, maybe. That's certainly not the kind of returns that Wall Street is looking for.

Q: What about electric cars?

A: Electric vehicles are a growth opportunity from a utility perspective. So we're certainly very supportive. It just doesn't seem that the customers have seen that value in the electric vehicle. Manufacturers are still wrestling with the battery capacity.

Q: The city is currently trying to sell Philadelphia Gas Works. Wouldn't it be a good fit for Peco?

A: We just don't talk about those kind of deals when they're under play, for obvious reasons. Acquisitions are run out of our Exelon corporate center, and to quote my boss, "We don't let the jockeys pick their horses."

Q: Peco is spending about $800 million to upgrade its distribution system, including installing smart meters by the end of 2014. What benefits do smart meters bring?

A: We've had an automated meter-reading system for almost 10 years. We derive a lot of benefits from smart meters in the outage-management system. We can ping the meter and determine if power is on or off, instead of rolling a truck out to check. We think in Hurricane Sandy that saved us 2,000 or 3,000 truck rolls, about two days' time. Hurricane Irene, we think it saved us maybe $10 million.

Q: Some customers have expressed fear about the radio frequency (RF) emissions from smart meters.

A: I'm guessing you have a cellphone in your pocket. Most of the customers who are concerned about smart meters probably have a cellphone in their pocket. They're swimming in a soup of RF energy, and the smart meter's some distance away from them. I think the issue will solve itself.

Q: What has Peco learned from some of the big storms that have struck the region recently?

A: Sandy demonstrated that the world is connected in a different way. One or two days of outage, maybe even three, people will gut it up. But their lives become really disrupted from a connectedness perspective. We saw people sitting in their cars, charging their cellphones. We saw people hooking up generators and having these huge chains of extension cords, just so people can charge up their cellphones or their iPads. Figuring out how to make the system more resilient so you can stay in that two-to-three-day window in big events is really the challenge to the industry.

Q: What keeps you up at night?

A: I get a lot of calls at midnight or 2 in the morning. The first thing that goes through my head is, I don't want an employee to be hurt. We can work very safely with a dangerous product, but we have to do it every day, exactly by the rules. I don't want our employees to rush. They don't have to be a hero. Any time one of our employees gets hurt, I believe management didn't do its job. We owe it to employees to analyze each event, tear it apart, understand what broke down that allowed it to happen. Safety is just basic respect for human life.

Q: Why is workplace diversity a priority?

A: We have a very robust group of employee resource groups, and I think we've made real progress. Utilities have a history as white-male engineer organizations, and it's our job to make the organization look more like the customers we serve.

Diversity is more than hiring. If you don't have a culture that makes employees feel valuable and safe, then they leave. We've tried to add diversity dialogues. It may seem simple on the surface, but most people in business settings don't have a good history of being able to talk about these things.

The LGBT [lesbian, gay, bisexual, and transgender] community is not one that has felt so safe in the work space. Having those discussions in the broader organization is helpful.

You have to get people who are very skilled to talk about it and deal with it. And yet you can't be afraid to talk about it, because that's the whole point of it.

Contact Andrew Maykuth at 215-854-2947 or, or follow on Twitter @Maykuth.

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