We were thrilled to have Exelon Utilites CEO Calvin G. Butler Jr. join us for our “In Conversation” interview series last week at the #ThirdCloudSummit in Washington D.C. Calvin sat down with Wall Street Journal reporter Rob Barry and, as a utility executive, provided an intriguing perspective on the digital transformation for the utility industry.

When asked about some of the key challenges he is seeing in the utility industry, Calvin emphasized that customers are looking for something very different today and tomorrow – in terms of a user experience – than what they’ve traditionally had in the past with utilities.

“In the future, customers are no longer judging us against other utilities – theýre comparing us with their experiences to other industries – like Uber, Southwest and Dominoes,” Calvin said. “At the end of the day it́s a technology platform, and their thought is ‘Why should I have to give my cable a four hour window and wait around for him when I can track my pizza on a mobile app.”

Calvin stressed the need to get regulators to understand where utilities are trying to go so they can help us get there.

How do you keep data safe?

Rob asked Calvin about how utilities can keep data safe as they move to a more digital platform, to which Butler replied that privacy and protecting the data is paramount. He said that Exelon invests hundreds of millions of dollars across the company to do this.

What are you trying to accomplish 15 years out?

When asked about his 15 year plan for Exelon Utilities, Calvin said that “Operating the grid in a safe, reliable manner is going to be critical for who we are.” This works in tandem with providing the best level of service to its customers, and giving them the best experience possible. “Act as if your customers have a choice today, because they can all go off the grid tomorrow.”

Calvin expressed that Exelon Utilities is very diligent about putting together its long range plans, saying that calculated risks should be limited. “It’s important to acknowledge that we don’t fully understand where the technology is going, so we have a whole team working on that,” Butler said. “We’re always looking at technology, looking at start ups, and engaging in conversations about this. The partnerships we have formed are helping to form us, so recognizing that we dońt have all the answers helps us move forward.”

How are you navigating unpredictability of costs and challenges in transitioning from on-prem to the cloud?

Rob asked about how Exelon Utilities is navigating the costs of transitioning to the cloud, to which Butler replied immediately with, “Costs are key for us, every dollar we invest eventually flows back to our customers bill so we have to be cognizant of that.”

Calvin went on to discuss how Exelon and Exelon Utilities develops strategic partnerships – including one with Oracle Utilities. Their thinking was to partner with them on the front end, not knowing where it would end up, but knowing they’d get some place, and work together to determine what those solutions could feel like, and how they could better serve our customers.

“That partnership is one where you’re not worried about every dollar, it allows you to sit back and think innovative creatively, and say ‘okay if that’s where your end goal is, here’s what we can do’. And you’re not worried about all the inputs and outputs because it’s a partnership. That is how we’re managing those costs, but more importantly, think innovatively because we do not have all the best ideas, so we bring in those technology partners like Oracle to really leverage it and go and do it together.”

We’d like to extend a huge thank you to Calvin for joining us at the #ThirdCloudSummit this year and for sharing his point of view and insights as CEO of a utility company. These are critical as the industry continues its digital transformation.

Stay tuned for clips of Calvin’s interview on our YouTube channel.

Please visit our website for more recaps and photos of last week’s Summit.

Interviewed by Rick Cutter, Managing Director, Cloud for Utilities

August 15, 2019

During the Cloud for Utilities Summit last November 2018, Rick Cutter, managing director of Cloud for Utilities, sat down with Calvin Butler, CEO of Baltimore Gas and Electric (BGE) to discuss Butleŕs career path and his decisions along the way that led to his position at BGE. Perhaps most importantly, Calvin touched on how important it was for him to “be prepared and to make calculated risks for his career.”

Cutter asked Butler about how he started his career and what steps he took that led to his position as CEO of Baltimore Gas and Electric, the first gas utility in the United States:

“For me, Ím not your typical utility CEO. And what I would always say in terms of how I got here – it was being prepared and taking calculated risks,” said Butler. “Out of undergraduate school, I had a great job lined up with Procter & Gamble, but I decided to go to law school. Then as a lawyer in government affairs. I took a calculated risk to go run manufacturing because I knew that was the course, the path, to be a CEO.”

In 2011, Exelon, another leading energy provider in the U.S., asked Butler to help them get their merger done with Constellation Energy. No questions asked, he went to Baltimore, sight unseen, four or five days a week. They completed the merger a year and a half later. In February of 2013, BGE asked Butler to come to Baltimore full time as a senior executive. About one year later, on March 1, 2014, he was named CEO of BGE.

“For me, it was all about understanding where I needed to be or wanted to be and taking the calculated risk to continue my career and my personal development to be ready for when that opportunity came,” said Butler. “And Ím appreciative of Exelon for giving me those opportunities, and my previous employers for making sure that I continued to be put in a situation to learn. And it́s really all been about continual learning, and Íve been very fortunate to have those opportunities.”

Butleŕs drive and willingness to continue learning, determining the right steps and taking calculated risks helped him become the successful CEO that he is today for BGE. Now, Butler continues to move BGE forward as a leader in innovation in the utility industry.

Innovation is a critical component to the continued success of virtually any company in todaýs world, and BGE is no stranger to this. Cutter asked Butler to tell share a few of the things that BGE is currently working on to keep up with the everchanging technology and societal evolution.

“You dońt normally think of a utility company as being innovative. As a matter of fact you think of just the opposite. But Ím so proud of the fact that as a 202 year-old company, we have to continue to innovate in order to keep ourselves relevant outside of just delivering gas and keeping the lights on.”

Butler emphasized that BGE was founded on innovation. In fact, BGE came about because of an artist who innovated a gas lamp just so he could showcase his art in the evenings. This same gas lamp is on display today right across from Baltimorés city hall. The question, then, is how do you take that innovative spirit and communicate it to the 3,200 men and women that work at BGE every day?

“Wéve done a couple of things, because innovation is critical. And I always stress that́s it́s critical because our customers are demanding more from their utilities today than they did five or ten years ago,” said Butler. “Theýre comparing their customer experiences to all the other outlets that they have. They expect their experience with BGE to be like it is with Amazon.”

BGE customers want, as many other utility customers do, to be able to communicate with their utility company in the same ways they communicate with their social networks – phone apps and social media. “Customers are asking the question, ‘why do I have to wait at home between 12 and 4 ó clock for a service truck to show, when I can track my Dominoes pizza on my phone?́,” said Butler. “It́s real.”

“We have to communicate with everyone all the time, using the channels that customers prefer, and that all starts with innovation,” he said. ”And innovation for me is not about the next iPhone. It́s about looking at our processes, looking at how we can employ technology, and make us more efficient in delivering the service that́s so core to peopleś lives.”

One of BGÉs recent developments is its electric vehicle program. BGE is partnering with the Maryland Public Service Commission to make Maryland one of the most progressive in the nation in installing EV charging stations around the mid-Atlantic.

“BGE is the first utility in the nation to have an electric bus fleet,” said Butler. “We bought two electric buses last year to shuttle our employees from one location to this main office location and it does a couple of things: (1) encourages them not to drive to work, (2) reduces emissions in the city of Baltimore, and (3) highlights and showcases what an all-electric bus fleet looks like. That́s innovative.”

At the end of the day, technology drives companies forward, including utilities like Baltimore Gas and Electric. As the CEO of BGE, Butler understands the importance of leveraging the latest technologies to achieve the companýs mission.

“Technology is all over our business and I say, Ím a CEO of a company that happens to deliver electricity and gas. You should have the highest expectations that your gas flows and the lights come on,” said Butler. “What Ím trying to do is utilize all this new technology to deliver it the most efficiently, at the lowest cost, with the highest service.”

This yeaŕs theme at BGE is “Innovation at Work.” Last yeaŕs theme was “The Energy to Innovate.” The emphasis being that innovation is not going to go away and that BGE is always on top of it.

“This is really about how we go about doing our business each and every day, and it takes all 3,200 of us to lean in and be committed to moving this business forward,” said Butler. “At BGE, we talk about it, we live it, we recognize it, and we reward it. I think that́s how you get a culture of innovation and let people know that we welcome it and this is going to be the business of the future.”

Therés no doubt that Butler has been and continues to be a leader for the 3,200 employees at BGE. He attributes his readiness to take on the position of CEO to his focus on being prepared and taking calculated risks. His desire to be put in positions where he can learn is what allows him to be forward thinking, helping to keep BGE moving with the changing tides.

During the Cloud for Utilities 2018 Summit last November, Managing Director Rick Cutter sat down with Andrew Jornod, CEO of VertexOne to discuss the utility industry and its evolution to a more cloud-based business infrastructure. VertexOne, headquartered in Texas, is a market leader in North America for customer experience solutions for utilities Vertex has been providing cloud-based services for the last 20 years to more than thirty utility companies.

Cutter and Jornod have known each other for nearly 20 years, going back to when they both worked at SCT Utility Systems. Below are some of the highlights from this compelling interview.

Rick Cutter: Tell us about your career, and how you got to be CEO of VertexOne.

Andrew: I started out as an electrician, worked my way through university and then right into consulting. I got right into the utility space and I haveńt looked back. I have seen this industry change and adapt to things that at one point we thought were moving very rapidly. But as you compare that to today, things are just moving at an epic pace. Wére seeing the change that́s happening in this industry, I wanted to be part of that. When I started to see the shift to cloud across other industries, and saw utilities play more of a role in the cloud space, I quickly realized that this is an opportunity I couldńt pass up, and Íve been at VertexOne for about five years now.

Rick: As a cloud provider you guys have been doing some managed hosting for a long time. I know that SAP is your big partner now, can you tell us a little bit about that relationship?

Andrew: We took an evaluation 5 years ago, shortly after I joined, and then we started working with the organization to say “how do we want to go to market as a company?” One thing that we are really known for is our ability to service and deliver outstanding service over a period of time to our customers. And the software with both Oracle and SAP, have gotten to a point where the functionality of the base solutions are pretty standard. It’s really the solutions theýre putting around the core that has really evolved them to the point where theýre at today. We looked at that and thought if we really understand our market segment – we service customers anywhere from 50,000 utilities to about 2 million and above – and we saw and opportunity for us to leverage the SAP platform, and the excellence theýve had as the largest provider of customer-information systems and really core systems for utilities, and provide a solution set around the cloud that was focused on integrating into their business. We focused on leveraging SAP at the core but really it’s just the tip of the iceberg. The services we provide around our cloud-based solution are about integrating their business, which has provided the most value for our customers.

Rick: And to that point, yoúre not just offering a CIS system, yoúre providing multiple different apps as a service now as well, correct?

Andrew: That́s correct, yes. When we started this journey obviously customer information systems, for the last 20 years, has been the cash register for the utility. Today, it’s really about how do we create a subset of Vertex tools and partner tools that sit around the core, and how do we focus in on the core CIS by going in at low risk, lower cost and in a way that we can capitalize expense for our utility customers today knowing where the regulations are, but at the same time, providing all that value that surrounds it with our own IP and other utility providers.

Rick: Right, because Vertex extends SAP and adds extensions and, like you said, you have other products to make that overall solution so Vertex is very deep.

Andrew: Yes. Our job is to simplify the use of SAP. SAP is developed for a global utility base, and dealing with utilities and the size segment we talked about earlier, you have different requirements, different usability of the solution in those different market segments. So we really focused on how to right-size that for our customer base, regionalize it for each one of the utilities, but do it in a way that provides them some prescription around how the implementation should go at a low cost, low risk and low timeline

VertexOne started off having an application business and a call center business and was operating more than 20 million end-use consumers. They evaluated all of the services the company provided across electric, gas, water, waste water utilities of all different sizes and developed a solution that would help drive the behavior of not only those agents but of those customers.

“We find that to be extremely valuable for when we go into a utility of lets say a 50,000 to 500,000 customer size that have the same issues that utilities in the larger, Tier 1 segment have but also dońt have the budget or the manpower to be able to implement those types of solutions with the complexity that́s necessary to compete with the larger utility providers.”

Rick: Now that we have companies like Google, Microsoft and Amazon offering infrastructure applications – not necessarily SaaS applications for the utility market –How do you see the overall market evolving?

Andrew: We look at it from a maturity curve, definitely. You see things like infrastructure as a service, and Google and Amazon are providing the kit to run these systems. And then you see where the big software companies have gone – the Oraclés, the SAṔs – around a platform as a service, saying “Hey we can provide ERP, or CIS, or EAM functions in a cloud-based environment, through the provider of choice.” But, there is a lot of customization and a lot of configuration around the system, it’s just being hosted by a third party, therés value there. And then you get to that next step which is really the software as a service, where you start do see homogenizing of customers across a common code base, across a common platform. You see this in Salesforce.com and others that really are trying to drive to a central system that allows them to drive down the cost to serve, but at the same time drives up the functionality – you pick and choose what functionality you have – all the upgrades, functional and technical, are included. That́s where we see the market going.

Rick: I think one of the biggest advantages of a SaaS model (Software as a Service) would be continuous innovation as yoúre alluding today, and upgrades that are more automatic. How is VertexOne working with that type of model?

Andrew: The application upgrades is a good discussion, because a lot of people talk about upgrades that are included, whether it’s a platform as a service play or even a software as a service play. The reality is that upgrades come in a technical fashion as well as a functional fashion. At Vertex we push the limits with the functional fashion. We ensure the upgrades are included to move the application forward but also to take advantage of new functionality that we continue to add to our platform. As a service to our customers, all upgrades are included, functional or technical.

Rick: In regards to the market, you and I sat down and had a conversation about two years ago, and we were starting to see people asking about Cloud and kicking some tires. My opinion is it looks like wére seeing more people talk seriously about taking Cloud in the utility space as an option. What are you seeing today?

Andrew: You know four or five years ago yoúd say “wére not going to move our data into the cloud, wére not going to take the risk of having a third party be responsible for things that could be a security breach” or something of that nature. It’s the exact opposite today, and the question now is – how do I have someone else take the responsibility, have the capabilities around managing the risk associated with having customer, financial, or employee data within their organization? Íve seen that shift happen. The biggest challenge we see in the industry around cloud has been around the capitalization. We have talked about that extensively throughout the industry. And one of the things I spend a lot of time struggling with is, if I create a 100% cloud-based company which – you look at many of the different delivery models of licenses and services that are being proposed – it is primarily OpEx we had to compete with a lot of different cloud variations out there in the market. The bold business integration – is very interesting and provides a lot of value, and it comes down to figuring out how we capitalize as much of this cloud platform as possible.

According to Jornod, there are two things you need to do in order to capitalize on new technology like the cloud: (1) the ability to take over the solution for de minimis cost and (2) the ownership of the data and the solution itself.

Rick: It sure feels like therés a tangible shift in the market right now. Ím hearing a lot more about Cloud and utilities are certainly open to putting their data in the cloud now with the right protections and so forth, so it’s changing.

Andrew: You look at the evolution and, in some instances the confusion, of “cloud” in the industry. The value for customers really comes down to what it is that theýre getting out of the service? “Cloud” is a word that is used often and not necessarily defined clearly, and so wére trying to give some definition around what it is that we do differently from a Cloud perspective. With that said, I’m very excited with this conference and utilities in general moving to cloud, adopting cloud, and really seeing the benefits that it offers the industry and, more specifically, the traction we’ve been seeing in the last 5 years as the market continues to evolve. and really seeing the benefits that it offers the industry and, more specifically, the traction we’ve been seeing in the last 5 years as the market continues to evolve.