Joseph L. Welch
Chairman, President and CEO
ITC Holdings Corp., Novi
Why he’s a Champion of the New Economy:
Operating the nation’s largest independent electric transmission company, Joseph L. Welch — chairman, president, and CEO of ITC Holdings Corp. in Novi — isn’t one to stand still. By the end of the year, ITC is expected to merge with Entergy Corp., which oversees some 15,000 miles of electric transmission lines in Louisiana, Arkansas, Mississippi, and Texas. The merger, which will double ITC’s size, will give the company “a footprint from the Great Lakes to the Gulf Coast,” Welch says. ITC was spun off from DTE Energy in 2003. Since then, the company has acquired and operates transmission lines in Michigan, Iowa, Illinois, Minnesota, Missouri, and Kansas.
What will your growth strategy be following the Entergy merger?
How will you merge the two companies?
You don’t get a tactical advantage on the human capital side. The systems are separated by thousands of miles. There will be a regional headquarters in Jackson, Miss., but the corporate headquarters will be in Novi. Where we see big savings is in economies of scale. We are one of the largest consumers of high-voltage systems, and we will have greater buying power with the completion of the merger. We source a good deal of new equipment from the Netherlands and Japan; there are no domestic suppliers. and construction techniques will be utilized, which will add more savings. Consumers, including residents and businesses, will benefit from better operating systems and new equipment.
Why have municipalities and utilities struggled to maintain electric transmission lines?
It goes from the simple to the complex. When communities were adding electrical lines 65 years ago, there were huge cost considerations and they had to push through rate hikes. Naturally, there was some pushback. Back then, cost-savings were a big thing — but if you look at something as simple as wooden poles, well, over time they rot. So now we use all steel poles, which will last virtually forever. We stopped using copper 40 years ago, so that has to be sequenced out. We utilize more composite materials, and the transformers are better insulated now. We don’t use environmentally offensive oils. We now have diagnostic equipment where we can trouble-shoot problems with computers. The point is, all of these upgrades cost major money, and that’s a big reason why improvements have been put off.
With the advent of cyber attacks, how do you ensure a computer hacker doesn’t take over your network?
Cyber security is a big issue. The more Internet-based you become, the more firewalls you have to install to limit access to the system. We continually monitor our systems, we continually test our systems, and we utilize best practices. Our goal is to deliver electricity in the most efficient way possible, but we’re not going to cut back on security.
Since the Nixon administration (1969-74), there has been talk of developing a national energy plan. Why don’t we have one?
Everyone understands that reliable energy is needed — whether you’re a homeowner, a small or large business, or an institution. The problem is that there are no quick fixes. What’s more, there is a lot of lobbying activity that prevents a national energy plan from being adopted. Changing that system requires pain and sacrifice, and no one seems to be able to tackle it head-on.