♪ ♪ ♪ captioned by the national captioning institute --www.ncicap.org-- >> hello, i'm llewellyn king, the host of "white house chronicle." you're going to meet one of the interesting man in america. in an age when industrialists are treated as celebrities, i have for you and industrialist who is a scholar, man of letters, as well as somebody who

has done extraordinary things for his company and community. you will be delighted when we come back and you meet john roe. >> "white house chronicle" is produced in conjunction with whut, howard university television. and now nationally syndicated columnist llewellyn king and coast linda gasparello. ♪ ♪ ♪ >> welcome back and thank you for coming along guerrilla i promised thieu john roe and serious, the chief executive officer of exelon who is now retiring after an incredible career in the electric utility industry.

the thing about electric utilities is so long as they keep the lights on and so long as you can keep watching this television, you don't think how important electricity is. john roe is. how did you get into electricity? you were a lawyer and i believe you were a railroad lawyer. >> railroad dened utilities and when i got out of law school in 1970, i wanted to go to a big city and chicago was closer to my relatives in wisconsin. i thought i wanted to go into management sunday. it seems that going to a law firm that represented regulated industries was a way to make that a possibility so i made that choice. i did a particularly bad job on an early memorandum and was assigned to work on nuclear plants as a punishment. it happened i did a better job

on that. i did that for most of seven years and then i did a railroad bankruptcy for three years and went to conrail as general counsel. it was the usual mix of planning and serendipity that goes into most careers. >> you became chief executive at central maine and new england electric and then the big one, which who made much bigger, exelon. it combines the old commonwealth edison with the old pennsylvania electric and most recently in maryland where we have many viewers, you have taken over the utility there. is it good for consumers for utilities to get bigger? >> yes, within some ultimate limits. it would not be good to have one national utility i don't think. we don't need 100 or whatever we have now.

this is a business that requires a lot of scale to do it well and you need companies that are big enough both to cope with the economic pressures of the industry and, frankly, to balance off some of the political pressures. it is convenient and nice the progressive to think of the grasping utility and the reforming regulator, but of course the real world is more complex than that. much of what utilities do is try to keep politics from driving their costs up to much. >> this brings up the subject of the interaction with government. you react with a lot of local governments and many local entities and many public utility commissions and the federal

energy regulatory commission, nuclear regulatory commission, and epa and probably several others like the army corps of engineers. how'd you find a government? is it too big and depressive? is it over-regulating all these things? >> one might as well throw out the political rhetoric rick for both sides and start over. it is almost unthinkable to have something as important as energy and not have some forms of public regulation. exelon operates 17 nuclear plants. are you going to trust us to do that without some federal oversight? the nrc is, in general, and efficient knowledgeable and constructive regulator.

environmental pressures to -- we may sometimes think the epa is too intrusive and it may sometimes be but do we really think that businesses will get all the environmental pressures without some government pressure? i don't think so. it is fascinating to hear the political rhetoric. some people think that the only good things and all wisdom comes from the government. that is horse manure. you have other people who act as a private actors in the marketplace always act with such wisdom and responsibility and we know that to be equally nonsense. somehow, we have to keep struggling to build the systems that give private enterprise as much room for creativity and motion as we can, while still

having government providing rules of the road, providing property rights, and preventing egotistical access. there is no alternative but struggling to make both work. >> at one time, you annoyed your colleagues, some of your colleagues and i think the u.s. chamber of commerce over cap and trade. you were somebody who supported cap and trade. in the political rhetoric, it has held up as an awful socialist idea. why did you support capt. trade? >> first because i believe the climate change issue is real. i don't think the science is just political. i think it is good science and largely correct. i would not put on my list as the greatest problem facing the

world but i think this is a real problem. and second, i think cash and trade or carbon tax, are the least marketer intrusive ways of dealing with this the most. almost every quarter, certainly every six months, we get asked to do something somewhere allegedly for greenhouse gas or environmental reasons which has a cost per ton of avoided carbon dioxide of $100 or $150 or $200. the waxman-markey bill which is not considered conservative had initial price cap of $25 per ton. the truth is, if you set the rules for the market to incorporate the externality, you usually do it much more cheaply

than if you just go and diddle with the market for somebody's pet project. >> you have interest far outside of the utility industry. i promised our listeners and viewers a man of letters. when i look at your charities, they are astounding, the things you have done with your family of foundations and the things you have done directly yourself and they extend from these props. you have an interest in shakespeare and sophocles and educational, across the board, ecumenical, if i might say so, a holocaust undertaking, and a utah elegist -- and in egypt elegist. -- and an egyptology this party when you find time for this and

how was your day divided up between this extraordinary step besides electric interests? >> the other interests are probably taking more time than the electricity because i am slowly handing authority over to chris crane who will succeed me at exelon. you can get astonishing things out of history books that once the succession is clear, the nobles tend to gather around the successor. one just has to accept that that's the way it is. >> let's go to these interests one by one. why ancient egypt? >> i am a history buff and i have been since i was 10 years old. my travel focuses on papal of this -- places of historical interest and i read history every night and i tend to read in splurges. i go for one period and then i

get interested in something else. the truth is, the older i get, the more i care about how the book is written because i don't have patience. >> it is amazing what you can read when you are young. you can read and regions but it is not easy now. >> i went back to "the deer slayer" and founded rather sappy. i realize why i had not read that many years. >> will have station identification for our listeners on serious ex-im channel 124. you are listening to "white house chronicle"with llewellyn king and john roe, the extraordinary outgoing chairman of the exelon corporation which is why we are in chicago. this program can be seen around the world on english language voice of america and 200 select television stations in the u.s. john roe, we have some toys.

i ask you to bring these toys and on this table, what is this marvelous little green figure? >> you can't touch that one. it is called an oshapti. it is a statue of a little server that would have been put in somebody's tomb. that was about 2600 years old. a farrell might have had thousands of these or hundreds in a tomb. a minor official might have had six or eight. they were symbolic means of assuring the deceased would be provided for in his afterlife. it was considered far more civilized than killing six vice- president to keep -- take along with >> are you planning anything for your vice- president? >> murder is not on the list. >> you once had a mummy and your office? >> a mummy case.

>> i just the coffin. >> note monday. >> -- no mummy. how did you get the mummy case. i assume the egyptians wanted it back. >> they did not relate wanted back. they just want to make an issue of it. i bought half a block up the street at an antiquities dealer. it was in pieces and they had reassembled it. it is not first-class quality but it is intriguing and unusual for an office. it is a large way of displaying my interests. as people, we don't change much. i think the egyptians or the greeks or the romans or the han chinese were the same people we all are today. their interests and needs and desires and foibles were

probably pretty similar to ours. we may have acquired an immense amount of economic and technological capital but are social capital is not all that different than it was 2000 years ago. >> the last toy that i see here would look to me like a nuclear reactor. is that a nuclear reactor? it could be something from a coffee shop. >> it could be an espresso machine. in fact, it is a model of a nuclear reactor. >> that would make an awful lot of espresso. >> it was a going away present from our nuclear group. i brought it out because this is al i have made my living for 28 years. while i have a great many other interests, as you have been kind enough to say, keeping the lights on, trying to do it at a profit and trying to do a little cleaner and trying to make the

service a little better is what my life has, in large part, been about for 28 years. i had a minister was asked me why i'd do this business. i described its purposes and he said you mean it is a calling? for me it has been calling. you have to understand when you do it that the electricity industry uses both a very modern technology, computer equipment that is as up-to-date as yesterday and very old technology light poles and wires. it takes real people doing dangerous work to care for those poles and wires. we use very big technology like nuclear plants. >> you are a nuclear advocate? >> yes, i am, but also an economic cynic.

i think nuclear power is a wonderful source of clean energy. i have little doubt that it can be made to operate at the highest level of safety. and yet, fukushima illustrated that even very good operators can find themselves in the middle of big troubles and economically, the influx of channel gas has made nuclear plants impossible. yes, i champion the technology but to me is a business, not a crusade. right now, the business that is to bet on gas. >> this has made some of your friends and the nuclear industry a little unhappy as they look to you for some years as their great articular a proponent of the virtues of nuclear power, clean energy, relatively little disturbance of the earth. >> there are those that think

that i went from being on trustworthy young man to a un trust for the old man without ever going to the stages of wisdom. for me, it has always been about meeting the needs of the public in a way that is good business. i tell people that i went to the wake of one of my predecessors who ordered six of our nuclear plants. i was sitting at the wake thinking due to his courage, i have had these wonderful machines that have helped make me wealthy. maybe i should have that courage. then i remembered that they did not turn a profit until he was almost in the grave. that is not a very good present value analysis. to me is a business. >> you have been a very successful businessman. >> i believe. >> you have increased the value of exelon enormously with acquisitions and redding -- and

getting agree to more efficiency out of the existing nuclear plants among others and you have a way of saying in speeches that intrigues me -- you say no where you are going and when we began this interview, you say at your own career had a mixture of desire and happenstance. you did not always quite know where you're going >> no one does. the world is a great deal better than any of us. i hear people using slogans like "manage change," yeah, right. if we can foresee a change in place their assets in the right place ahead of it, we are a whole step better. but the idea that will manage changes at an absolute joke. i did not exactly manage the development of a shale gas that has _ -- under cut my stock by a factor of two.

we must try to remember that it is a business and keep our eyes on the economics and try to identify the changes we keep all -- we think are inevitable and plan for them. over the course of my 28 years, i have had a compound return of somewhere between 12 and 13%. i wish i had bet more money on me when i was young but i did not having more to bet. here and exelon, we have been through the collapse of 2000 and 2008 and shale gas expansion and we have a total return of almost 10% compounded at a time when the s&p 500 is now near four and the utility index is something like 7.5% area we have done very well in the environment we have had. >> and his other life you have outside the utility which is now

your primary light. i did not mention that you have endowed a chair of biology? this is virus fighting? >> it is at the university of wisconsin where i went to school. jean and i, my wife, have endowed with three chairs there, one in greek history, byzantine history, and one virology. i sent the little beasties are smarter than we are. when i look at perils, i worry about some kind of new buyers more than i would worry about climate change. bad government is always the worst thing. i think that -- keeping ahead of how we cope with the endless mutations of different forms of viruses is a very important

public health investment theme what have you learned from the study of history of how to run a business? >> everybody has their own way of learning. economists learn from incentives and marginal behavior. sociologists try classifications. i m and historian. i think you learn very nicely from how people responded in even more challenging situations before. i don't read management books very often if one reads "lincoln and his general," you find out how difficult it was four really great man to manage a bunch of other very tough people in a really important cause. i think lincoln and his generals is the best management book

there is. spread more generally, there is reason i brought the sophocles book along because there is that wonderful line near the end where oedipus' says count no man fortunate while he still lives. we all need to remember that we are always capable of scoring up. the world is much bigger than we are. we are always capable of having our successes turn to ashes in spite of our best efforts. history teaches both brett of vision and some humility. there is that old chili bowl about coming on the ruins in the desert -- there is the oldshelley poem about coming on the ruins in the desert. the other side of that is at least he had the power to build them.

to me, you learn so much about the failures of what i would call analytical models from history. exelon has a vision statement. we have a management model but am i foolish enough to believe that everybody lives to the statement in the model every day? no. >> does john roe? >> no, but he tries pretty hard. i would give myself a high batting average on that. i really worth it because when i give speeches to employees, often start with the mission statement. i will look them in the eye and say i can tell you what every word in a mean. i can tell you why is there. i think you need to start with basics. people need to understand that

the box is not all wrapped up in sophisticated whirligigs but is really working on a program that they can understand and can grasp and hopefully when they find -- one day find meaningful. we found exelon 20/20, it excited employees. they had something they could go home and tell their kids. they could say their utility was trying to be greener than the other utilities. the kids like that there for the parents like to that. >>exelon does not have a huge commitment to what is now thought of as green technologies. do they have a vast commitment to wind and solar? >> that is not because we don't believe in them. it is because they are too expensive right now. we have a huge commitment to nuclear which is the biggest low-polluting energy we have.

we have some big hydroelectric facilities which are also low- polluting. i believe, as you looked toward the future, it will be mixes of gas, wind, and solar. we just don't want to buy too much before it is economical. you can buy solar today at half the price you could 10 years ago. the advocates say it will get cut again and i would rather buy it after the next cut them before. >> it could come sooner if people buy it. >> yes, but -- >> if you employ technology, the cost tends to come down. >> sometimes. >> to be an example where did not come down. >> nuclear, it went the other way. >> the real cost of a kilowatt went the other way? why is that? >> more regulations, people to build plants that they were not quite ready to build and interference from political

forces, all of the above. >> what do you make of the interference from political forces in nuclear? it has gone on for a very long time. there has been a permanent, now fairly hereditary opposition to nuclear power. anchor and the anger abates and people go on but nuclear remains constant and is handed down from one generation to another. >> that is true for say 20-30% of the populace and want to take that seriously. one should also remember that fukushima was not supposed to have. three mile island was not supposed to happen. we have feted as an industry by failures in our own house. i think that opposition with shrinking greatly before fukushima.

now i think it is growing reinforced. you also have this strange problem that we cannot find a waste disposal facility even though everyone knows we need one. one just past to take as an enduring reality that certain things like wind and solar will have more such political support than the economically desert. other things like nuclear will have more opposition than a economically deserves. >> do wind and solar deserve support for their environmental superiority as well? if you take a nuclear power plant at 1,300 megawatts which is a big chunk of power, and you take a wind farm where the average power is 1.5 megawatts, you would not -- you have to have nearly 1000 windmills.

isn't that an asymmetrical arguments >>? precisely. it is a matter of which form of environmental intrusion you find most disagreeable. the key thing is that both technologies need government help to get going and in the long run, they both need to stand on their own economic legs. i think, however, that things like cap and trade, a carbon tax, things that internalized the environmental effects into the analysis are very positive additions to the equation. i have found again and again that the carbon tax would be much cheaper than the alternative forms of environmental intrusion of >> john roe, you fascinate me and if i had had any money, i would have a joh onn roe.

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