Lexington, Ky. - Former Kentucky American Water Executive Nick Rowe has been tapped for a new leadership position within the utility's parent company. Rowe, who has been Senior Vice President of American Water's Eastern Division, today begins his new role leading the water company's Central Division based in St. Louis. Rowe will oversee the president's of Kentucky American Water and six other American Water operations in Illinois, Indiana, Iowa, Michigan, Missouri and Tennessee.
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Mr. Rowe recently talked with 's Tom Martin about his tenure in Lexington and a number of issues related to politics, conservation and community.
TM: In a way this is an exit interview. You're going to be pulling up stakes and moving to St Louis.
NR: Yes, it is. But you know Lexington has been a big part of our lives for the last twelve years and me and my wife are both Bowling Green, Kentucky natives so it's kind of bittersweet. It's a great opportunity from a career standpoint but still a lot of good friends here and not only within the business but externally in our community as well.
TM: Is it difficult to pull up stakes and move to another community?
NR: Absolutely. When we moved here our kids were very small and as they get older they, you know we got them through high school here, grade school and middle school, my older daughter went to the University of Kentucky. So there are a lot of fond memories here and through that process of being involved in the community and civic organizations and the relationships that you've formed, it's just always a challenge for a family. But its part of corporate America today.
TM: What have you been doing with Kentucky American since Cheryl Norton stepped into the role of President? What's been your role?
NR: Well, you know my role as Senior Vice President for the division has been a supportive role of really trying to make sure we are doing the right things from an operating standpoint, from a financial standpoint and our corporate responsibilities standpoint, involved in our communities. But with Cheryl I've really taken a back seat and focused on the other states to allow her some room to grow and develop and she's done a great job of that and really getting out in the community and building her relationships and getting introduced to different folks and different organizations so we can continue to be a vital part of this community.
TM: So you are moving into the mid-section of the country, into the true Midwest, which of course will come with its own geographic issues and so forth that differ from those in the east. Can you kind of tell us about what you know about the difference?
NR: Well, I've traveled through that Midwest area quite a bit growing up as a kid from Bowling Green, Kentucky. The good news is they are similar to Lexington in how they treat people. Lexington is a great community as far as welcoming new people into the community and embracing them. The Midwest has a little bit of that same flavor, from what I can tell. Of course, St. Louis is a big metropolitan area, much larger than Lexington. There is some exciting things like pro teams and things of that nature and so we'll get a chance to take advantage of that. But overall I think the community is kind of what you make of it and everywhere we have lived whether it's been north, midwest or south we just make it our home and we intend to do the same thing there.
TM: Are water related issues different in any way?
NR: No, very similar. In Missouri and Illinois, big communities, high growth areas, water is a needed necessity for the economic prosperity. They haven't had some of the same challenges that we've had here in Lexington over the years. But overall water is pretty plentiful there with the rivers that they have.
TM: Okay, you mentioned challenges here in this market and one would relate to the recent mayoral election.
NR: Sure.
TM: In that election Kentucky American announced a significant 38 percent rate increase to support financing of a new plant on the Kentucky River. That was initiated prior to the election instead of awaiting PSC approval and it turns out that when PSC did act on the rate hike request, it reduced the increase to 29 percent. In his initial run for office Mayor Jim Newberry was a firm opponent of condemnation of the water company - which, of course, supported the position of Kentucky American, only to have this huge rate increase arise in the weeks prior to the election. Mr. Newberry has made no secret of his belief that this contributed to his failure to win reelection. Do you have any thoughts on that?
NR: Well, I don't know if that's true or not. You know, when you're in a business that has invested $164 million on a project that we're pretty proud of because it's been an issue that has plagued this community for decades. Over two decades we've been trying to get the water supply issue resolved and we got it done. You have to do what's right for the customers and I think we made the right decision. As far as the political side of that we really did not get into that discussion or thought process, we just knew we had to get the project done for the large industries that we have here, for the homeowners in giving them that flexibility to use water when they need to along with a pretty stringent conservation policy. So we felt we did the right thing. You know, it would be just like me or you or any customer building a brand new home and saying 'well, you know we're not going to pay the bank back for two or three years because this is a bad political time to do that.' We tried not to make that decision. We built the plant, we got it done and filed our rates based on what we thought was fair and reasonable. The commission ordered us to solve the problem and we got it done. And it's unfortunate the timing was around election time. When you can take that one issue and put it all in one basket, I doubt if that was the case. It's probably a lot of issues and some that probably will be debated for years to come.
TM: It might be viewed that the former mayor really stuck his neck out on behalf of Kentucky American in opposing condemnation, only to feel that he was undermined by that initial announcement of the 38 percent rate increase when PSC had not even approved it yet. I know there is a perception out there that it was a political decision, but you're saying it was not.
NR: No, no. We don't make decisions like that. I mean really our decision was solely based on the fact that we had made such a huge capital investment and it was time to start paying back the lenders for the loans and the debt service that we had taken on for that large project. Again to me it compares to a house note that payment comes due right away and we have to start paying for that and that's how we made our decision. And we have tried to stay out of that whole debate around the political issue. We were just focused on getting our project done and getting cost recovery.
TM: With the plant now up and running, what does that imply for the future for Lexington and its water supply?
NR: Well, it puts Lexington in a very comfortable position as we continue to grow our economy. Lexington has been very blessed that we have not taken as big a hit as other communities. If you think about communities just south of us like in Atlanta, which is a great community, a very large city that has outgrown its water needs. And they really struggled a couple of years ago. And most folks who are not in the industry are not aware of that. They've got a major water shortage issue that is being debated right now on how they are going to solve it because Atlanta has grown so quickly. The good news for Lexington is we've got the issue resolved for decades to come and as we attract new industry or expand plant facilities here, whatever the case may be, we're well positioned to move forward.
TM: How is this economy affecting your ability to make decisions about future growth?
NR: So far we haven't really seen a major shift in our customer demand. A little bit less industrial usage here and there and a little bit less manufacturing demand but nothing of a magnitude that would change our demand projections substantially.
TM: Is water a limited resource? Are we looking at a finite resource that we better be taking care of?
NR: Well, I think we should be and I tell you Tom, Lexington is probably one of our most
conservation conscious communities here in the central part of the nation. It really is because you know for the last decade or so Kentucky American has been emphasizing conservation and we've seen a decline in residential usage because of that. You've got the low flow
toilet facilities, the low flow faucets and things of that nature with the new plumbing codes. So we've seen people take on that conservation initiative. But you go out west and you ask for a glass of water, you've got to ask for it when you sit down at the table because they really conserve because so much of the western states depend on Hoover Dam and the Colorado River to supply that whole west coast area. So it is something that we can't be taking for granted and we should be stressing conservation for our kids and the next generation each and every opportunity. And we've done a lot of that I think in Lexington. I've seen folks really trying to do the right thing. But we've all got teenagers, we all have gone through the time when we have to ask them to cut back their showers and it lasts for a little while and we've got to keep reminding. It's just a different generation. My wife and I, you know we've got two daughters in the household where they take those showers and you've got to peck on the wall to get those ladies to shut it down after awhile. It's still hard to get that mindset when that 'why do we have to conserve the water' keeps coming out. It's going to take an educational process and we've tried to do that through a lot of our conservation programs here not only at Kentucky American but American Water in general. We've tried to do that throughout the nation.
TM: When do you make your move?
NR: Well, it's effective November 1 to start the new position. I'm excited by that but my family will be behind here. I've got a daughter who works at LexMark so she'll live here in this community. My wife is a nurse at Central Baptist Hospital so she'll stay here for quite a while and we may retain a home here for awhile and maybe get temporary living in St. Louis. We have a lot of good friends here. It's a community that we love and we'd love to retire here and we'll be back. And again the good news is that Kentucky is still part of my division so I'll be spending quite a bit of time with Kentucky employees. So, I'll still be about to see the employees, see friends, have a cup of coffee with them; play a round of golf with them when I can on the weekend or whatever the case may be. I'll be traveling quite a bit for the first six months. So my wife will probably transition there when she gets an opportunity.
TM: Nick Rowe, Executive with Kentucky American Water we appreciate you taking the time and the best of luck to you.
NR: Thank you Tom. Appreciate the interview.