While his role as president and CEO of Halifax-based Emera frequently means Scott Balfour is on the road across North America and the globe, he hasn’t strayed far from his Canadian roots. During a wide-ranging conversation about the challenges of leading an energy company with electricity and gas utility operations in Canada, the U.S. and the Caribbean through a period of massive transformation, he shares leadership lessons from hockey legend Scotty Bowman, and when he talks about Nova Scotia ‘punching above our weight’ he’s referring not only to Emera’s USD $10.4 billion acquisition of Tampa-based TECO in 2016 – which turned the company into a major North American energy player – but also the province’s reputation for producing top NHL talent. In the following interview with U.S.-based energy writer David Coburn, he discusses his career path, managing through unprecedented upheaval, and the evolving energy transition conversation. Comments have been edited for brevity.
What first drew you to the energy sector and what has kept you engaged in it over the course of your career?
I started my career in banking, which ultimately led me to go to work for one of my clients, Armbro Construction (now Aecon Group). At the time, it was a small company involved in road construction in Ontario, but through organic growth and multiple acquisitions it grew into Canada’s largest publicly traded construction and infrastructure development company. It had many clients in the energy sector, building or maintaining, nuclear, coal plants, and gas plants, as well as installing or servicing underground gas infrastructure. When I left construction, I thought the energy industry was interesting. Ultimately, I joined Emera, with its core focus on regulated utilities. There was a time in my life when I would have thought regulated utilities seemed pretty boring place– low drama, low growth. Obviously, that coin flipped a couple of decades ago, and now it’s an industry that really matters. Whether it’s gas or electric, they’re enablers of economic growth and activity within the regions they serve. We serve customers not just 24/7 but every second within that 24/7 timeline, and yet we’re making investment decisions that last for decades. So that mix of mission-critical, complex and impactful was just really, really compelling to me. I’ve been here for 14 years, and it continues to evolve and never gets boring.
Can you tell us about some of the experiences that helped shape your path to ultimately becoming CEO?
After my first year of business school, I took a year off because I was trying to figure out what I really wanted to do, and I spent the year working on the assembly line at a couple of Ford plants. That was in many ways a crystallizing moment for me because there was so much learning that happened around the importance of people and the disconnect that can sometimes happen between leadership and the people who actually have their hands on wrenches. Working at Aecon, again seeing where the money really gets made – in the skilled labour that has hands on tools –reinforced that essential role of leaders in enabling a workforce. My career in banking, where we served a very diverse mix of commercial and corporate clients, taught me the importance of asking the right questions to reach the right decision, and also about the complexities of capital allocation. All of those experiences were significant contributors to wanting to play a role in helping companies succeed. My roles as CFO and President at Aecon, and then when in 2012 as I joined Emera as CFO and later as COO, all allowed me to be very close to the CEO position. I had the good fortune of working with great leaders that allowed me to get direct exposure to the CEO role and ultimately got me to the point where I said, ‘Coach, give me the ball. I want to have my hands on this ball for a while.’
What are the most significant changes shaping the energy industry today, and how do leaders balance the need for innovation and change with maintaining reliable and affordable energy systems?
The level of uncertainty continues to increase and accelerate, whether it’s changes in government policy – energy policy, obviously, is changing quickly – or rapidly evolving technology or changing market realities such as the growth in energy requirements from data centers, which is certainly a significant opportunity and challenge within our industry. Geopolitical conditions are driving changes and challenges in supply chains and affordability. This also impacts the energy sector and can lead to policy and political engagement. So there’s a lot of change going on in the industry, and some of that is challenging, but within those challenges and changes, exists opportunity, which makes the importance of strategy, of execution, of team, of staying customer-focused all the more critical. Customer focus is particularly important when we think about innovation. It’s easy to talk about innovation and it’s become its own talking point, but it must be purposeful, and help with some component of reliability and resiliency, customer service or cost. If it’s not directly and purposefully, quickly, and positively impactful in these ways, then you’re not talking or thinking about it the right way. It can’t just be innovation for innovation’s sake.
How have differing approaches to energy transition across Emera’s footprint affected your ability to reduce emissions?
We have an interesting perspective because we operate in Canada, in the U.S., and in the Caribbean, and the dynamics are very different in each region. In Canada, the drive to cleaner energy is largely legislative, so there is a requirement to be making investments or adopting technologies that meet certain conditions, whether it’s a price on carbon, renewable energy standards, so there’s a certain amount of energy that needs to be renewable by certain timeframes, and a requirement to close coal plants by a specific date. That’s part of what drives activity here in Nova Scotia. In Florida, there are none of those requirements, though there are still, for the time being, some federal tax credits that will fade away between now and 2030. What’s interesting is that we’ve been able to make investments in both jurisdictions and make a difference. When we acquired TECO back in 2016, they had essentially zero renewables in the system, and 38% of the energy was coal. Last year, less than 1% of the energy was coal and 15% of the energy was solar. There, it’s all about whether we can demonstrate that it’s cost-effective for our customers to make those investments, and we’ve done just that, time and again. In Canada, we make those investments because we have to meet certain standards and we have to do it in the most cost-effective way possible, but it certainly risks incremental cost when you need to accelerate investment to meet government or legislative requirements.
How do you view the role of established energy infrastructure – including natural gas – as the energy sector continues to evolve?
It’s foundational. If it ever gets to the point where the price of natural gas is very high, the lens on it could change, but it’s hard to see that changing in North America over a long period. Natural gas is foundational to the energy system, whether that’s for space heating, residential and commercial, or for electricity generation. I think the mindset shift (away from being a short-term “bridge” fuel) is real, I hope it’s permanent, and that is that the search for energy is not an either/or of renewables or nuclear or natural gas, it’s all of the above. There is no logic in thinking that the answer is in one source of energy; the reality is that all of them are going to be critical. And natural gas is that strong foundational base that supports the implementation of renewables, particularly intermittent renewables like wind and solar. I think we’re going to see natural gas as an important energy source for decades to come.
“Natural gas is foundational to the energy system, whether that’s for space heating, residential and commercial, or for electricity generation.”
How would your colleagues describe your leadership style?
I learned early on in my career that more important than knowing what I do know is knowing what I don’t know. When I moved from banking into construction, I became a CFO, but I wasn’t an accountant, and I’d never been in construction before. There was a lot I didn’t know, so learning early and making sure I had people around me who did know was really important. I think my colleagues would say being a consensus builder is part of my style. I do like to engage the right people, put the right people in the room, ask them questions, challenge their thinking, and ideally build consensus in arriving at the best outcome through that process.
Another element of my leadership style that my colleagues might point to is trying to lead with what I call respectful candour. I like to provide feedback in real time. I remember (NHL coaching legend) Scotty Bowman saying that if you’re going to give a player feedback, you don’t wait until the end of the season – you know, the annual performance review – you do it at the end of the shift, and then maybe again at the end of the game. That has always stuck with me, and the respectful candour part of it is to be honest about it, but empathetic, sensitive and respectful and do it in private. You don’t call someone out in a group.
When you think about the next decade, what developments in the energy sector are you watching most closely?
One of them is technology implications for the workforce and how work gets done. Ultimately, a lot of what we do is put steel in the ground, and it’s hard to imagine that aspect of the workforce evolving too significantly, but the application of technology and where that’s going is definitely something that we’re watching. Another one, and it’s real today, is the whole issue around affordability and its impact, the engagement of politicians, policy shifts and legislative reactions to affordability concerns and challenges. We operate in an industry that, for the most part, on the electric side is regulated monopolies – it can be a little different on the gas side, oligopolies in some cases – so that can be an easy target for politicians, particularly with regard to investor-owned utilities. And the other development is geopolitical, and the shifting lens that may have implications for energy security and therefore energy policy. Frankly, I think there’s going to be tremendous opportunity within North America to capitalize on the beneficial position that we have in both countries as it relates not only to how energy is used and the growing demand, but also the reality of our abundant natural resources and therefore the importance of finding and investing in pathways to move that energy to market, whether that’s in molecule or electron form.
What gives you confidence about the future of energy systems in North America?
It feels like energy is having a moment. There’s recognition that it’s never been more important in how society needs and relies upon energy, electrification, and the important role that both electricity and natural gas play within that.. The connection between energy and security has become so foundational and fundamental to our way of life now. And the underlying strength and diversity of our systems in North America – gas and electric – all of these are reasons to be confident. The other thing that gives me confidence is that we’re finally having the right conversations about it. I’ve been concerned that for a long time, we weren’t really having an honest conversation about the connected challenges within the energy transition, reliability and the resulting impact on cost and affordability. There has been a tendency to talk about how the importance of the energy transition, and how were going to be non-emitting by whatever timeline – 2030, 2040, 2050 – without any connection to whether it really is achievable, what its going to do to the cost of energy, who’s going to pay for it and are they willing to pay for it? These are all big questions. Finally we’re starting to have honest conversations around those tradeoffs, and that’s really important because without that honesty, the ability to achieve it has been challenged from the beginning.
What kind of legacy or impact would you like to leave as a leader in this industry?
Ultimately, legacy is decided by others, but I think we all want to make a difference and leave things a little better than we found them. At Emera, I was fortunate enough to take the helm of a great company that was doing really well. As it relates to the team – seeing the people that have grown their careers and developed as individuals to maximize their potential – I’d like to have made a difference for the people and culture along the way, and leave the company in an even better position than how I found it. And I’d like to have had a voice in helping to shape the future of the energy transition, finding the right balance between cost and affordability, and navigating a path forward that is achievable. Not just sound bites that sound good, but a real, practical path to make it happen.