"Kentucky American Water Company president Nick Rowe remained close to home for his first round of post-secondary education, earning a bachelor's degree in civil engineering at Western Kentucky University in Bowling Green. Upon graduation from Western, Rowe launched his career as a senior resident engineer with CSX Railroad Corporation in Huntington, W. Va., where he remained until 1987. It was in '87 when the water industry captured Rowe's attention and he became a management assistant for West Virginia American Water in Huntington, moving on in '88 to become operations manager for Virginia American Water in Richmond, Va. Rowe later relocated to Hershey, Pa., to serve as director of corporate operation services for Pennsylvania American Water. During this period, Rowe also earned an MBA at Lebanon Valley College in Annville, Pa., and was soon promoted to manager of eastern operations at Pennsylvania American Water. In 1998, Rowe returned to Kentucky in the position of vice president of operations for Kentucky American Water here in Lexington. He served for a brief stint at the parent company offices in Vorhees, N.J., as vice president for business change between 2003 and 2005, followed by vice president for service delivery operations for American Water's southeast region. From early 2006 to the present, Rowe has held the position of president of Kentucky American Water here in Lexington.
Editor-in-chief Tom Martin's interview with Nick Rowe can be read and heard in its entirety online at www.bizlex.com. The following version was edited to accommodate space considerations.
TM: Once you moved into the water industry, you began a steady rise. I'm wondering what motivated you in the mid-nineties when you were busy with your career to take on the additional challenge of going for an MBA?
NR: Well, I just felt that the MBA in finance would bring a great balance to the engineering aspect of the background that I previously had. Moving around the country gave me a different community sense of getting involved in each and every community and I just felt for me, personally, it was a good growth opportunity, and not only for myself but more importantly for my family. I had one of my daughters who was born in Huntington, West Virginia. The other one was born in Richmond, Virginia, so for me, it was a growth opportunity, for not only myself but my family, to just see a different part of the world and really take on new experiences.
TM: Do you find when you're among engineers you're able to talk their language and, at the same time, you bring a corporate expertise to the table as well?
NR: Sure, and the MBA did help that. It brought the financial and accounting understanding of business. Let's face it, that is important and running the day-to-day business is making sure that any business achieves the financial results. But more importantly, it helped me understand from a technical aspect, to review business plans, to make sure they were most cost effective as we move forward. Because sometimes as engineers we like to build things, but one thing that we fail to take into consideration a lot of times is the cost and what impact it may have on the customer long term. So, it really helped bring that balance to me.
TM: I've been looking forward to this, Nick, because the community here in Lexington has gotten to know you through the lens of the whole eminent domain and water ownership issue and now we have an opportunity with that behind us to find out who Nick Rowe is. If you don't mind my probing a little bit, I'd like to do that and ask you what some of your more formidable challenges in life have been. What do you feel that you've overcome in life?
NR: Well, I've always been a hard driver no matter what I've been involved in, whether it's been some civic organization or my church community or at work on a daily basis and with my family. Probably pretty demanding, I think most employees that I've worked with would say I'm very demanding, but it's been very demanding on my daughters as well to try to work hard. I grew up with a solid work ethic in Bowling Green, Kentucky with parents that just instilled the values of hard work. And I've kind of taken that, and thank God for my parents who've allowed me to grow and develop with that, and I've tried to pass it on, me and my wife, to our daughters to make sure that they have that same work ethic. I think that's something that, at many times, is truly missing in our society today at any level of a company or school system or whatever the case may be. We've just got to teach our kids to work hard.
TM: You have a pretty impressive roster of civic organizations on your bio, and anybody who's involved in just a little bit of that knows how time consuming that can be. I mean, you've been chairman of the board of Commerce Lexington; you still serve as a member of the board of trustees, just to mention one. How do you balance that against the rigors of a professional career?
NR: Well, it is a balance. We have a lot of good business leaders and folks in non-profit who really give a lot of their time to civic organizations just as I do, and it is a balancing act. I think the challenge for most of us in today's society is trying to balance a career and a business obligation, our families, and try to make sure we spend adequate time with our kids and our spouses and at the same time, try to give back to our community. Me and my wife have always said that our measuring stick as we've moved around the country in different communities is: is that community any better for us being there for that period of time? And that's kind of our overall measuring stick. Have we made a difference in some form or fashion to help those that probably are not as blessed as we are, in some form or fashion?
TM: The other Nick Rowe who's not in the corporate mode — What does he do?
NR: I have two daughters, one 20 and one 15, and over the last several years they both have been athletes and they have grown up playing soccer. They're both big basketball players. My older daughter still plays on a club team at the University of Kentucky where she's majoring in engineering. My younger daughter plays for Dunbar High School, so we spend a lot of time, me and my wife, with our kids following them around the country and going to basketball games, and we make it a family affair. Every now and then, I get a chance to get out and play a round of golf and squeeze that in, or I take a little time to read a good book. So, I really try to spend time away from work with my family every moment I can.
TM: I'm curious, what in particular are your favorite books of recent reading?
NR: Well, you know a couple of them. Good to Great, The Art of Execution — two of the newer leadership books. And I also believe, I'm very avid to my faith and The Purpose Driven Life by Rick Warren is one of my favorites. And I just think it's so important to have the balance of a Christian life along with your day-to-day career, balanced with that the family side, and I think it all ties together. I think that's why I've been somewhat very blessed and I couldn't ask for a better life.
TM: How about music or any form of the arts — any interest there?
NR: Well, I do. I guess I listen to the old Motown sounds quite a bit, but when you have teenage daughters, you listen to the top 20s because every time you get in your car or whatever the case may be, they turn your radio and you end up listening to what they want to listen to. But also as a family, we like to spend time traveling.
TM: We hear these days that water is fast becoming the new gold or perhaps the new oil, with disturbing scarcities cropping up in the face of massive demand in major portions of the world, China for example, and also perhaps as a result of global warming. From the perspective of one who's been on the inside since the late eighties, what is your view of the global supply situation?
NR: Well, water is a very valuable resource, and it is a global issue and I've followed this in my 20-year career with American Water. A lot of communities have a challenge with their water supply, particularly in the western part of the U.S. One of the fastest growing areas in the U.S. is Tampa, Florida, and Southern California. And the West has challenges because they are so dependent on the Colorado River, but it is a global issue. American Water itself, we serve about 18 million folks in about 29 different states, so we're very involved in trying to solve some of those challenges. And many communities are looking for help because it is such a capital intensive business that really needs to have a lot of infrastructure in order to serve the communities.
TM: I'd like to bring that home now, and first let's look at our supply situation here in Central Kentucky and then we'll get into how Kentucky American is getting involved in addressing it. What's your assessment of our supply situation here?
NR: Well, Lexington has grown — let's face it — tremendously. We at Kentucky American add about almost 3,000 new service connections every single year because of the growth and the new development that has occurred. At the same time, you have to have additional treatment plant capacity, and you have to have additional source issues. And Lexington, a lot of people don't realize, is one of the largest communities on an inland waterway such as the Kentucky River, so during challenging summer months, when you have a summer drought where people actually use a lot of water during the summer sprinkling the lawns here, it really does cause a demand on our supply. We have made some improvements at Kentucky American to help with our treatment process, but quite frankly one of our biggest challenges is the source of supply, which is the Kentucky River. And during those summer months, we are only allowed to take a certain amount of water from the river due to maintaining adequate supply for the aquatic life. So, that's our big challenge here in Central Kentucky: growing community on the inland waterway. And it's not just a Lexington problem; it really is a Central Kentucky issue.
And you are absolutely right, Tom, we're just a drought away, and every summer we really hold our breath and manage our system to try to minimize any type of challenges for our community, and we've been very fortunate; we've got good people who have helped us through that process.
TM: One of the biggest discussions in our city and area is all about growth and all about how infrastructure is grown to keep pace with it, and of course water is a huge component of that. Again, from your perspective, are we in a position to keep pace?
NR: Well, we are, and you know, one thing we have done at Kentucky American is continue to invest in our infrastructure. A lot of communities have not invested in the infrastructure, whether it's water or sewer, and I tell you it really has caught up with major cities around America. But our water system here, we have invested in the water infrastructure but more importantly we have got to find a long-term solution to Central Kentucky's water supply, and Kentucky American stands ready to meet that challenge.
TM: Kentucky American wants to build a treatment plant north of Frankfort, and we read recently in the paper that the company has proposed expanding that plant if a group of Central Kentucky towns become part owners of the plant. Do you believe regional cooperation between municipalities might be the answer to managing supply?
NR: (For background, see Bill Grier's three-part series, "Tapped Out," concluding in this issue.) We're proposing that we build a new treatment plant in Owen County on Pool 3 of the Kentucky River, and that's in alignment with our city council resolution from 1999 to find ways to partner with the regional players so that everyone can benefit from this solution. We think it's doable. We have the expertise at Kentucky American because of the American Water footprint around the U.S. We have about 900 water plants across the U.S., so we build treatment plants every single day. Since March of this year, we've moved forward very quickly in trying to get this plant designed and we're about 60 percent (of the) way on design of this plant for 20 million gallons. And that plant can be expandable to 30 million gallons if we can come to some agreement with the regional players.
TM: Has there been any response so far to this proposal?
NR: Yes, there really has been. We've had some technical meetings where we're sharing best practices on treatment processes and making sure that all the surrounding municipalities feel comfortable with the treatment process. I think they do at this point in time, and right now we're in the midst of continuing negotiations on how do we best get this project done. We're sort of moving on two parallel tracks: one as Kentucky American because we have to abide by the order of the Public Service Commission that we're accountable for our own customer base, but on the second parallel track where we continue to work with the regional players. I'm very optimistic based on our discussions with that group that we'll be able to come to some regional solution that will solve this supply issue. Not only, again, for our customer base but for all of Central Kentucky, and that's very important, and we think it would be the first time in the history that somebody has seen in Kentucky that type of regional partnership work.
TM: That word and that concept, regional, is becoming more and more frequently heard and used in our area in these times, and I wonder, in both your role with the water company and also as a member of the leadership community, we look to the north and we see the triad of Northern Kentucky, look out west into Henderson and the Northwest Forward region, Greater Louisville Inc., where these regional collaborations are occurring, where success is happening, yet here in Central Kentucky we're just in the very initial stages of talking about doing anything close to that. Where are you on that? Do you feel that we should move in that direction?
NR: Absolutely, I think we do. As a business community, we have really tried hard to bring the regional players into the discussions. I think our Chamber of Commerce, Commerce Lexington under Bob Quick's leadership, Luther Deaton, Joe Kelly, and many others have really worked hard to try to open that dialogue and put out an open hand to the other communities. And you're absolutely right — Northern Kentucky has done it well, Louisville has done it well. If you listen to some of the comments by our new mayor, Jim Newberry, I think you'll see that's very high on his radar screen, and it's optimistic to me that there may be more dialogue around a collaborative effort on regional partnership, so when we go to the state legislators or Washington, that we're united on one front in asking for several projects for Central Kentucky — not just a Lexington project, but what's best for all of Central Kentucky. I think we fell short in that area over the years, and we really are trying to move in that direction, and I'm optimistic that we're headed that way with our new mayor and our Commerce Lex and some of the partnership discussions there.
TM: Okay, on to that red-hot subject: Now that the whole eminent domain question is behind us, where does Kentucky American go from here? What are the next challenges, and maybe we've already been talking about some of them?
NR: I do think the eminent domain issue is behind us. It was one of the most challenging times in the history of our company here locally, and unfortunately one of the most divisive issues in our community, so we're glad to move well past that, and our focus, as it has been over the last five years while this debate has been ongoing, is to continue to find ways to improve our customer service. We're not a perfect company. We don't do everything right, but I'll tell you what — we've got 133 employees that come in the back door of that building every single day and we really do try to do out best job, we really do. We have had discussions since this vote and the confidence that this community has shown us by the November 7th election, and we want to live up to that expectation, so we want to really improve up on our customer service. We have got to find a way to get this regional water supply project done because we owe that to our customers and to the Central Kentuckians, and that's going to be our primary focus over the next several years: providing good quality service. And let's address this water supply issue. At the same time, we must continue to invest in the community because again, we still have some aging infrastructure in the ground that we have to replace. We have to put in new mains and upgrade streets, there are going to be some relocations that are going to occur throughout with our infrastructure because of the World Games coming in 2010, and we're well aware of that. So those are kind of our primary focuses here over the next four to five years, and we want this community to be positioned to handle the World Games in 2010.
TM: Just continuing a little bit further on this issue, there was, of course, a 40 percent component of the electorate that disagreed and certainly a core among whom this idea will linger, and it seems that perhaps one of the most important issues to them is local control. At one point in this debate, some xenophobia began to arise, yet we live in a very troubled world and that can be understood in these times. How do you feel about that?
NR: I do agree with you that after 9/11, I think there were xenophobic concerns in the community, but you know, we are a very local business — we really are. There was concern because of RWE being a German-owned company, and quite frankly they were no more than investors in the company. I had very little discussions with RWE. All decisions are made locally, we have a local board, and I just think, people, if you look at the facts, we're a very regulated industry. That's one good thing about the water business: we have EPA regulations and environmental protection agencies, we have state agencies in Frankfort, the Kentucky River authority, division of water, the OSEA. We're very regulated, so I don't think there's a lot of concerns there. And I guess more importantly going forward, we are going through a process of American Water being divested by RWE ... So, I think once we get back, Tom, to being a publicly traded company sometime next year, I'm hopeful that this issue will be well behind us and we can move on as a community, and we are a very local business.
TM: As former chair of Commerce Lexington and continuing as a member of the board of trustees, when you look ahead, what's your vision of Lexington and Central Kentucky ten years from now?
NR: I'm optimistic that one of our main focuses has got to be how do we balance the growth in the community and have smart growth but make sure that we are attractive to industries to bring some economic opportunities for our kids? Having two daughters of my own, and they're educating themselves in a very technical field in engineering, my older daughter is, and it's a challenge to keep the young teenagers who graduate here in Lexington right now. That's a real challenge; the jobs are not there for them. I see us, as a community, working hard to attract businesses here and in technical fields and healthcare fields so that there will be a place for our kids to live and work. At the same time, balance that with the need to maintain our character for Lexington and Central Kentucky, which is the green space and the horses, and we really have to have that balance. We have to do both.
TM: Our biggest challenge here, obviously, is education and where we go with that. And again, as a parent of a 15-year-old and another daughter in college, I'm sure this is foremost on your mind. When you're listening to discussions about how we fund our schools and how we meet growing demand as our population expands, what do you think we need to do?
NR: Well, education when I was a chair, it was the Chamber of Commerce at that time, that was one of my soap box items. Our big focus as a community there was closing the achievement gap, and we worked at the chamber with a lot of good business folks who were working hard with Dr. Aikens, P.G. Peebles, and Reverend Brown and many others in trying to educate our business community on how important it was to close that achievement gap. We've got a great superintendent here in our community now in Stu Silberman. We're very fortunate to have Dr. Shearer at Transy, Dr. Todd at UK, and trying to keep our kids here is really a challenge. You know, my daughter was a Governor's Scholar and she wanted so bad to leave the community because that's what a lot of the Governor's Scholars are doing unfortunately. And Lee Todd took the time and spent about two hours talking to her about visiting UK and staying at home, at least to get her bachelor's degree before she makes that decision on whether or not she wants to move on, and I think that was really key. Many of the industries like Lexmark and others are trying to find ways to have internships to keep some of our local kids here, and we really have got to do that. And they have got to see opportunity for their career growth right here in Lexington balanced with an opportunity to enjoy a safe community that has the balance of the arts and other opportunities for entertainment here in Lexington and Central Kentucky.
TM: Nick, earlier in the interview you mentioned the importance to you of the book, A Purpose Driven Life. Can you tell us a little bit more about that and what it means to you?
NR: I guess that's real important to me. I've traveled a lot over the last five years, and I've really tried to have a balance and understanding where my Christian faith falls in line with career. Sometimes in corporate America, that's something that you don't hear a lot about, because it makes people uneasy, and it doesn't make me uneasy. And I'm at freedom to say that Christian faith is first and foremost on my agenda and second my family and unfortunately my career, at times, falls in the number three spot, but that's how it has to be for me. I think because of where I have those in the right order I have, in my mind, been successful. Not because of career aspirations, but more importantly, I have a wonderful wife of 24 years and two beautiful daughters. And I've been able to balance that with a nice church community and using my time here in this community or as I travel to take time to witness to those non-believers, not just here in Lexington or Central Kentucky but on a worldwide stage. As I travel to Germany or to London or California or anywhere in the U.S., I use that as an opportunity to not only do my job, but more importantly, to understand what our real role here is, and I think we have a responsibility as individuals to not only do the right things for our family and our communities but also to make this place better. That, at times, means taking some personal time to witness to those and give personal testimonies, and I've got a lot of personal testimonials the last five years of some of the challenges here as we've gone through this eminent domain proceeding. But as bad as it seemed, I have taken that as truly a blessing, because it increased my faith and also increased our employees' faith and made us stronger individuals, and as a witness, that you can get through these types of challenges as long as you understand who the real CEO is.
TM: Is there room in there for people who are just as strong in other faiths such as Buddhism or Judaism?
NR: Sure, and individuals have to make their own personal decision. I just know what works for me and what's important for my faith and my family, and that's how I was raised. And I really think that all of us do have a purpose here, and once we understand that in this world — that it's not about us — then we really get it. In my career, as I've moved around the country and (been) involved with so many different people and in the business and non-profit sector, I look at people who are really happy, and it's the people who have the balance of all those things. Like you said, no matter what their beliefs are that you've got to have that balance, and you balance that with your career and your family and you really have the best of all worlds. And that's why I've been pretty blessed, because I feel I've got to be the luckiest guy in the world.
TM: I believe the saying that I've heard is the people in this world who truly make a real difference are those who are convinced that their life has a purpose.
NR: Sure. You couldn't say it any better.
TM: Nick Rowe, we really appreciate your time with us and we've really enjoyed it.
NR: Thank you, Tom. Thanks for having me. I really appreciate the time you've given me.
TM: Thank you.
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