Developing A Secure Nuclear Energy Strategy In Middle East: IP3

of the U S Army. He is a retired four star general who joins us. He's also the co founder and director of I P three Corporation, also chief executive and president of iron Net cyber Security, and he joins us here at the Bloomberg New Energy Summit. Thank you so much for being here. I want to start with this idea that an increase in nuclear development in the Middle East could somehow foster peace. A lot of people think of nuclear weapons is being very close to nuclear

power plants. Explain how this, how this could be? Well, that's a great question, and thanks for that, because you see that the Middle East is getting nuclear power. They won't have oil and gas forever. They've got to make a transition for their economies. Several of us got together and said, how do we help do this in a way that ensures security, not only future energy for both of those Because at the end of the day, that security is something the United States is going to be

involved in. It's a vital national interest to our country. So how do we work with the Middle East to get good nuclear power that works, that is secure, and that we know will not be used for weapons. So those are the key ingredients that we brought in the Middle East. There are allies. What goes on in the Middle East will effect the rest of the world. We

can't back off on. And from my perspective, the United States has to be involved and how they build their nuclear plants, how they secure them, and how we work with them. The greatest concern is somebody builds it and walks away. This would be a disaster for the rest of the world. So we see this is a great opportunity. You could look at things like wind solar, but those come and go with the sun or with the wind,

and so you need a durable energy base. I think for the future that's going to be nuclear for us. We see this as a great opportunity not only in the Middle East but globally because the rest of the world is going to have to do the same. So, now, how do we take that step to ensure you have secure, safe nuclear power? And we see the Middle East as the starting point. General Alexander uh you're one of the

world's experts on cyber security. Not only have you head a distinguished you're in the military, but now to your retirement, uh in founding your company and the president of IronNet cyber Security. And I'm wondering would you offer to people listening to this about their own security online in the wake of We're going to have Mark Zuckerberg that we

testify before Congress tomorrow and and on Wednesday. And this issue, while perhaps not financially as a huge as some may describe it to be, has certainly touched a nerve with people who can trust their information to a social media site. What what has been your experience and how what would you say to people that are concerned about this? Well, this is a tough question, and thanks for bringing it up, because I'm sure Mark Zuckerberg he's at the center right

now of all that attention. The Wired magazine had a great picture of him uh and it highlights the issues that he and other companies that use data like that for marketing face. Having said that, I think what's required for our country first is to have a public discussion on what can and cannot be used, and how you can opt in and out and how you ensure your privacy. Now,

there's two parts to what you brought out. One is what what can companies use for the good of their company update about you that they can resell like ads. The second part, what happens to our cybersecurity online and how do we protect that? So things like you're personally identifiable information, your credit card information that's wholly different from this, but that will touch this discussion on cybersecurity, privacy, civil liberties. I think our country is in a good place with

the general population. That is, we want to use this data for good man time, but we don't want it to exploit us personally. And that's where people get into this discussion. What are you doing with my data that you didn't tell me about? So I think that transparency upfront will go a long ways, and my my personal opinion is Facebook, we're trying to do the right thing. I don't wish him any harm in that. I think

he was actually trying to do the right thing. I think what they do with Facebook, my wife, my children, they use it. It's been a good thing and a good way for people to communicate and very helpful. I think now we have to help that game and explain where the data goes. I have I have two questions for you. First, are there currently any plans in development to create nuclear plans? And then at least that are not currently there. Um well, the Saudis have asked for

bids from companies to actually build nuclear power plans. In their vision twenty thirty, they talked to building up to sixteen in Saudi Arabia. And if you look at the rest of the region, you have plants right now being built by Russia in Egypt and in Turkey, or at least the initial phases of it. You've got four plants right now being built by Korea in the United Arab Emmis. So it is going nuclear. So you have that already

on the table. So in just thirty seconds, I'm wondering what you think of the cybersecurity of nuclear power plants both that have been created there as well as in the US. Are are we at risk there? It's absolutely vital that we get that straight. So one of the things that I P three has brought in is this concept of not just putting in nuclear power, but ensuring it's secured not only in cybersecurity, but in physical space as well. And for us that means working with our allies.

I want to thank you very much for coming in and spending time with us here at the Bloomberg New Energy Finance Summit. Entire General Keith Alexander of the U. S. Army, co founder director of I P three Corporation, also the chief executive and the president of iron Net Cybersecurity, and of course, thank you, General for your service to our nation.

Much affreciating Chris Ailman, who is giving us a round of high fives right now, chief Investment Officer of California State Teaches Retirement System, known for riding that bicycle to work and listening to us on his UH phones while while he does so. We can't wait to speak with you. Thank you so much for being here. Uh. Chris almen overseas cow Starde, which is two thirty one at point six a billion dollar pension fund, the second biggest public

US pension in the country. UM, I want to start with attention between we're responsible investing and the vast move toward indexing. And this goes to sort of this profound question of how do you pressure companies to behave well when you can't really sell their shares? And Facebook is a prime example of this. You yourself have deleted your Facebook account and yet your your pension is not selling uh their shares? How are you going to make them

more responsible when it comes to data security? I think indexing and responsible investment or actually perfectly aligned because it's a long term investment. I would say to Mark Zuckerberg, as long as they are public school teachers in the state of California, we're going to own that stock. So we have a long term focus, much longer than than really even some of his employees do. So we want them to perform. We want companies to do well, not for the next quarter or even year, but for the

next twenty and thirty years. Okay, But just to push back, if you're not going to sell your shares, how do you pressure them to do something that might work out for them? In three years time, but will cause a hit to their bottom line in the next year. That's where we talked to the board of directors and that's our only influences to get the Board of the directors to realize we don't really just we're having a longer

horizon than even management does. And I've talked to CEO is it's so hard for them to get their head around that that we're going to be involved in their company longer than they will be there. So we have a broader perspective. We want them to make decisions. We don't care about the next ninety one days earnings. What we really care about is how they do over the next twenty and thirty years. So were the ideal long term capital that that they really want? And they want

patient capital. They're tired of people flying in and out of their stock. They they themselves since they've they've invested their personal lives in their company. Think that they want investors who are invested for their lives with their company. Do they want patient capital that don't have any voting rights. I think management would absolutely love that, and I think that's just offensive. That is just absolutely right. Yes, it is.

Unfortunately Silicon Valley. As I said before, they like that model, and we just that's got to stop. If you want use of other people's capital, you have to give them some rights. But to Pim's point, if you don't have the rights, you can't vote the board of directors kind of office. That is correct. Do you find that they're receptive because I know that you did send a letter

to Facebook? Have they responded? They do care about what people think because they have reputational damage, and those individuals care about their perception. I mean, there's a hospital in San Francisco named Zuckerberg Hospital. He cares about his public image, so he wants to listen to people. Because at some point, companies have got to realize that if they're going to use other people's capital, they're going to have some shareholder rights.

They've got to have some ability to have a dialogue with that Uh, with that board of directors. Uh. That's been a tradition in America for over two hundred years and it needs to stay in place. Well, is there any way that you could actually put that to a legal test, Because unless you have a situation like a breach of security, or unless you have poor performance of a stock. You don't hear many investors say that almost on a moral basis. If you take my money, at

least want to vote in how my company operates. I guess i'd argue we do. We don't do it in headlines, we don't do it on radio. What we do it isog to the Council of Institutional Investors, though, but we do it in a constant dialogue with companies, which is to the Chamber of Commerce, into the business roundtable. We

are the ones that elect the board of directors. We want more independent border directors, not selected by management, people who will think about the long term, about the health of the company, about shareholders, about the employees, because that's about the most important assets. So let's take Mark for an example. Zuckerberg thinks he's got God's gift of wisdom about what to do on social media. Kind of looks

like they're making some mistakes right in here. If an individual runs the company like they're king, they're going to make mistakes, and at some point the board of directors are gonna have to step in and take that company away from that people and bring in somebody else to advise them. Are you suggesting that Mark Zuckerberg could be pushed out as the EO. No, because I uh no, one can. No one has that power. All right, well,

let's see how he does this week. But you know that will somebody in that company and the employees in that company care. So since we are here at the Future of Energy Global Summit, I now you care deeply about the future of energy. I want to ask, has there been a company that you own shares of that you've actually made an impact in discussions with them to act more responsibly. UM, tough question. Yes, we think we can say there's a direct line between our engagement and

their activity. Can I show you a change in the stock price? Can I show you a discrete change. No, it's very hard to measure up because there's so many different things that are driving the markets on a given day. But we've gotten involved with companies to dialogue with them

about pesticide use, about their methane emissions. We've been one of the nation's leaders of pension plans and getting people to disclosed and then CEOs and boards are more aware of what their methanes and they're paying attention to that as a cost and realizing they need to change the way they do their energy mix. Which company has been most responsive to you on us? I can't give you

a specific name. I am apologized for that, but I will talk to my staff and uh, I know my corporate governance team has done a lot of work in this area and can give you very specific names about electric utilities that have stepped up. Thanks very much for being with us. Please do He's gonna bring his bicycle next time you met you, all right, Chris Silman. He is the chief investment officer at Calster's helping to manage the future pensions kind current pensions the public state employees

of the State of California. Much appreciated. We are broadcasting from Bloomberg's Future of Energy Global Summit in New York City at the Bloomberg New Energy Finance Summit. Here to tell us a little bit more about the world of energy as someone who knows a lot about it is Thomas Fanning. He's the chairman, the president, and the chief executive of Southern Company. Tom Fanning, thanks very much for being here. Appreciated. Yeah, Pam, great being here again. It's

good to see you too. Like a topic that I'm always interested in is give us an update on nuclear power in the United States. We get to things like shale and all that kind of great stuff, But let's talk about electricity generation and the role that nuclear power plays. So nuclear power in the United States portfolio currently represents about the energy production h A lot of those plants, particularly an organized markets so in the Northeast Midwest, are

at risk um because of the pricing structures there. As Southern Company is located in the Southeast, largely integrated regulated markets, I think we've got a better environment in which to operate those plants. Further, Southern Company now remains the only company in America's ill developing new nuclear So we're going

forward on that. You know, I want to talk about how the results have been because I know you've been working on a number of different plants and have faced some challenges, and I'm just wondering, you know, which obstacles are you most concerned about going forward and which are you sort of looking at as as sort of challenges you've overcome that sort of show why you're optimistic. Well, uh, nuclear has enjoyed a tremendous amount of support from the

United States government. I think it's in a national security interest that the United States remains involved in new nuclear development, and so as we undertook this project way back, even before I became chairman of Southern Company back in two thousand eight and nine, we've been able to preserve those kinds of incentives to carry to the benefit of our customers. Further, uh, I think one of the big challenges we faced on

Plant Vogel has been the bankruptcy of Westinghouse. So they wrote off about six billion dollars themselves, and as a result of the commercial arrangement we have with Toshiba Westinghouses parent, we were able to get three point seven billion dollars

of guarantees out of Toshiba. When you add up the ability to have the tax benefits in place that all accrue to the benefit of our customers, and the commercial obligations that were undertaken by Toshiba, and also the costs that were born by Westinghouse, we're still able to say, and this gets under reported so much that the original price estimate rate impact to our customers was and right now, even with the schedule and the extra cost, we're gonna

bring Plant Vogel in and a below ten percent looking number. In other words, that the amount that consumers need to spend will only be ten percent more than what they currently do, rather than as your initial estimates work. It's right even with the schedule and cost changes. And that's because Toshiba's paid for Westinghouse, took some write offs, and then we have tax pant. But just to push back a little bit, I mean, Toshiba didn't want to be involved in this anymore, and I believe that you had

conversations with them to try to keep them involved. Why didn't they want to be Now that it's not that they didn't want to be involved. They bought Westinghouse and Westinghouse as our primary contractor, and as a result, we had some very wise people negotiate those arrangements. Toshiba never really had an interest particularly other than Westinghouse. We had

the parent guarantee Westinghouses obligations. If we did not have the parent guarantee, Westinghouse would have just declared bankruptcy and we would have had a general creditors obligation at Bankruptcy Corp. Instead, we had Toshiba sitting there owing US three point seven billion, and we got it with the healthy United States government. I'll add they've been terrific, Tom, You're also pushing aggressively

into solar power, you bet. And I'm wondering if if people recognize or maybe you don't, if it's not fact or to say but that nuclear power and solar power can be beneficial not only in terms of the rate structure, but also in terms of the environment. Oh, that's absolutely right. Look, we're committing this year in a very formal way, and I guess I've already made a little bit of news

at your conference today. I was going to kind of do this at my annual meeting, and I'll do this in a much more rigorous way there, UH to commit to take Southern generation portfolio. We produce about as much energy as the nation of Australia, a little bit less. We're really big and to move that generation portfolio to a low to no carbon future is a big deal. To do that, we need nuclear. To do that, we need a much bigger penetration of renewables. I've always been

much more of a fan of solar. Okay, the Southeast really doesn't have much wind flows and and wind has some other issues if you want to get into that. But then we need technology innovation, We need storage capability. We need innovation around dealing with the carbon anum because I think there still will be and it likely will come from gas. We'll still have carbon intensive fuels at play. We just need to do something with the carbon. Tom. I wish we had another hour with you. Unfortunately we

have run out of time. But we have to have you back because it's wonderful to have Fanning at Chairman, president, chief executive officer of Southern Company in Atlanta, Georgia, the one executive who is willing and excited to spend billions of dollars on nuclear and is aggressively at trying to cut his carbon footprint. We are broadcasting from the Future of Energy Summit by Bloomberg's New Energy Finance here at the Grand Hyatt Hotel in Midtown Manhattan, and you know these.

Of course, one of the big topics here has to do with solar energy and all of the solar panels that are being installed on people's roofs around the country. Uh. It turned out though that the actual growth in the industry has slowed, and indeed, if you take a look at the number of mega wats that was added last year using these solar panels, it dropped by sixteen percent compared to the year before. Now this is the first decline that they've registered from the year two thousand. Yeah, well,

this is this is a fascinating also. Survey that was put out earlier this year, sixty one percent of solar project developers who were pulled so they were anticipating installations to drop by more than twenty five percent this year, in large part due to the higher cost incurred in implementing some of those solar panels in the wake of some of the tariffs. Indeed, and here tell us more about it is Tom Warner. He is the president and the chief executive of a sun Power. They're based in

San Jose. He joins us here at the Bloomberg New Energy Finance Summit. Tom, thanks very much for being here. Maybe you could just tell us about this decline in the number of install also and the declining amount of growth that we're seeing in the use of solar panels on people's homes. What's what's the cause of this? UM Well, it's still a very incentive driven industry. Um in the

policies very from state to state. What we're seeing is in California, which has been the real driver of distributed generation. We're seeing state policy or or the UH transition from NEM net metering one point oh to net metering two point oh. And so there's some transition challenges, but we're seeing great things happen in new states like uh, Massachusetts. So we have new states coming online that are growing fast.

But it's a transition that's happening in the biggest market. Well, how much of a factor are the tariffs that President Trump announced last year specifically on solar panels being made here and making it more expensive. Well, that the tariffs are super important. If you think about the cost of a older system, call it one to three one dollar for installed what and a utility scale too for commercial

and three for residential. If you add say twenty or thirty cents, it's a big deal to a utility scale power plant. We're seeing business push out and seeing developments slow down considerably there less so in residential. So the teriffs are super big deal. And you should probably know. We're in the exclusion process. So we hope that uh, well, I'll be in DC tomorrow. The comment period ends Monday, and then there's four weeks, well four weeks. There's some

period of time after that that don't make decisions. I it's very very hard to read. I think our position is awesome. I mean we meet all of the criterias. So on a logical basis, you think an American solar company billion dollars of payroll over five years differentiating technology customers want it. We think our odds are good, but

we don't know. The marketing efforts by the actual installing companies have pushed this idea that you don't actually have to pay for the solar panels, that you can just lease them. You don't have to have any money down. Does that model need to change in order to provide you with the more consistent UH industry backdrop? Uh? So the sun power allows customers to choose. They can buy a system, they can waste it, they can get alone.

I think what the key here is the evolution of financing that as it matures and the risk premium of solar goes down, then solar becomes far more affordable. UH. We're also seeing with the I t C phase down over the next few years, a shift from lease to loan, and I think more customers want to own the system when when they're done pain at the monthly bill. So one thing that sun Power has announced in light of

the tariffs has been the holding of a US plant. Yes, and I'm wondering you said that it was a part in response to the tariffs that President Trump announced. Does it increase your cost of doing business to have a plant in the US and if so, by how much? Um? So, it would be fair to say that some power is going to be in faction in the US because of the tariffs. I I'd say more importantly because we get it and we know where the administration wants to go.

And uh, we're such an important part of the American solo industry it sort of makes sense for us to be a leader. Yes, it adds costs, It's not easy. There's a reason why we weren't making product in America. However, we can make higher end product, uh more automated facilities, things that fit this market, and of course logistics are better. So we think we can engineer our way to a solution that makes sense. If we've done so much work on it that we're down to two sites and soon

to make a call. One thing I'm wondering about, do you have enough people to hire skill people? Ah, That's a great question because it's sort of a contradiction, right, we want American manufacturing, yet we're super short on labor. So that's a big part of our criteria. The two sites we're looking at, we think so uh, but a trained, skilled workforce is super important because in America they need to be more productive because frankly, we pay more uh, and so I think a lot of us are looking

for those same employees. So that's a big challenge. It's uh, we'll talk more on that, we'll see how it goes. And just quickly, what do you want to get out of this New Energy summit that you're attending here in New York. Well, I think this is a This New Energy Summit is a great place to meet senior people both in the supply chain. Already today met battery uh, manufacturers uh, and then customers who have Tara lots of load, and then financiers who are at the looper camp for

the whole system. Everybody's here, so the ecosystems here, So this is where they action is to sort of get a sense of how eighteen is going to shape up. At nineteen, I just can feel the energy in the air, so to speak Tom Warder, Thank you so much for being here. Tom Warder, President, chief executive officer at sun Power, which is based in San Jose. Uh here with us at the Bloomberg New Energy Finance Summit. Thanks for listening

to the Bloomberg p m L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramo wits one. Before the podcast, you can always catch us worldwide on Bloomberg Radio