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New Tucson Electric Power chief looks to follow through on clean-energy plans
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New Tucson Electric Power chief looks to follow through on clean-energy plans

Susan Gray didn’t set out to follow in her father’s and grandfather’s footsteps as an electrical utility engineer, enrolling as a biology major at the University of Arizona in 1990.

But Gray soon switched majors to engineering and later got an internship with Tucson Electric Power Co.

After earning her UA electrical engineering degree, Gray was hired as an engineer for the utility and worked her way up the ranks.

And last month, some 26 years after cutting her teeth as a TEP intern, she became the first female CEO to lead TEP and its corporate parent, UNS Energy Corp.

Gray replaced her fellow UA alumnus and longtime TEP colleague David Hutchens, who became president and CEO of UNS’s Canadian-based parent, Fortis Inc.

Gray, 48, has taken the helm at TEP as the utility is making a major transition away from its longtime coal-based power generation to renewables like solar and wind.

And, as a TEP vice president since 2015 and president since January 2020, she is one of the architects of TEP’s plan to get more than 70% of its power from wind and solar resources and reduce carbon emissions 80% by 2035.

“That’s the great thing about becoming the CEO of a company that you’ve worked for for so long, and to get involved in the strategy even before you’re in this seat,” Gray said in a virtual interview with the Star.

And while some environmental groups want TEP to move further, faster toward carbon-free energy generation, Gray said TEP’s latest integrated resource plan was created with input from a broad group of community stakeholders to balance environmental responsibility with affordable rates.

“I think it’s really the best plan that balances all the interests and provides a path to reduce emissions at a pace our customers can afford,” she said.

SWITCHING LANES

If things had gone a little differently, Gray might be designing medical devices instead of running TEP.

A walk-on at the UA, Gray swam the 100-yard butterfly behind two of UA greats — former world-record holders and Olympic medalists Crissy Ahmann-Leighton and Amy Van Dyken.

After two years, Gray transitioned to a manager’s role on the team and decided to focus on schoolwork, switching to engineering and landing an internship with TEP her senior year.

“I’m a third-generation utility power engineer, so it’s in the blood, I knew the business,” she said. “But that was not where I was headed — I thought I wanted to do biomedical engineering. But I fell in love with the culture at TEP and learned there’s a lot more exciting things going on at an electric utility than I had ever guessed.”

During her time at the UA, Gray also fell in love with Tucson, and met and fell in love with her husband, Josh. The couple raised a family here, with a daughter who is a freshman at the UA and a son in high school.

An avid hiker who still swims and had been competing in triathlons before the COVID-19 pandemic, Gray said she grew to love the weather and natural beauty of the Tucson area and the city’s vibe.

“I love the big-city amenities with the small-town feel — it feels like everybody knows each other,” she said.

Gray said she wanted to work at TEP right after graduation, but the company had a hiring freeze in place at the time. She and her husband spent a year in Colorado before TEP offered her an engineer job in July 1997 (an avid Wildcat fan, Gray laments she wasn’t in town during the Wildcats’ run to win the national basketball championship).

CLIMBING THE LADDER

Gray, who earned an MBA from the UA in 2001, worked as engineer at TEP for more than 14 years before being named director of transmission and distribution operations in 2011. She became a vice president in 2015 and senior vice president and chief operating officer in 2018.

In announcing Gray as his replacement, Hutchens called her “an inclusive, collaborative leader” who knows TEP’s culture well and “is well-prepared to execute our aggressive transition to cleaner energy.”

Hutchens joined UNS Energy and TEP as a vice president in 1995 and became president and CEO in 2014.

For her part, Gray said she appreciated Hutchens’ mentorship during their long years working together at TEP.

“It meant a lot to have that endorsement from him, as he moved on,” she said.

Gray noted that Hutchens was also a big booster of Women in Energy, a leadership-development program she co-founded at TEP while Paul Bonavia was CEO.

Gray is a longtime participant in local STEM (science, technology, engineering and math) education programs for high-school girls and engineering and management programs for women at the UA.

Hutchens is still technically Gray’s boss, but she doesn’t expect much micro-managing from him under Fortis’ strategy of keeping its acquired utility subsidiaries under local management.

Based in St. Johns, Newfoundland and Labrador, Fortis acquired UNS Energy in 2013 and also owns utilities in Canada, New York and the Caribbean, with 2019 revenues of nearly $9 billion.

“They have no intention of running their subsidiaries, they’re really just there for support, and they buy companies that are already in good shape and help them become stronger,” she said, noting that Fortis has fewer than 100 employees at its Canadian headquarters.

As seamless as Gray’s transition at UNS has been, she faces a range of thorny issues as TEP and utilities across Arizona and the nation grapple with the shift away from fossil-fuel generation to renewable resources.

Energy mandates in crosshairs

In December, the Arizona Corporation Commission adopted draft rules that would require state-regulated utilities to get 100% of their power from carbon-free sources by 2050 — without any specific mandate for renewable energy like solar and wind.

The draft rules, which also set new requirements for energy storage and energy efficiency gains, still need to go through a formal rule-making process by the new commission, though the proposal could potentially be blocked by new efforts by Arizona lawmakers to strip the commission of its power to mandate the use of renewable energy by utilities.

TEP expressed support for the clean-energy rules when they were adopted, but Gray said it remains unclear how the state will reach 100% carbon-free power even in 30 years.

“We support that as an aspirational goal, to reach 100% by 2050,” Gray said. “And the reason why our current plan provides a path to get to reduce our emissions by 80% by 2035 is because we know how to do that, the technology exists and we feel we can get to a place where we can operate our system safely, and reliably and affordably, on that path.”

But she said going 100% carbon-free will be difficult, citing the sometimes intermittent nature of renewable power generation.

She also cited the recent dayslong blackouts in Texas, where along with gas-fired power plants some wind turbines that provide a significant amount of power were reportedly knocked out of service by the unusual winter storm.

“When turbines aren’t spinning and the sun’s not shining, you’re relying really heavily on battery storage, and right now that’s a pretty heavy lift, going days in a row on batteries,” Gray said. “The technology just doesn’t exist now, but I’m sure we’ll get there, and we’re committed to doing this as quickly as we can.”

While it’s unclear whether the newly seated Corporation Commission will change the clean-energy goals as part of its formal rule-making process, TEP will push ahead with its plans, she said.

“There’s some uncertainty if we don’t go forward with the state draft rules, but ultimately we need to execute on our integrated resource plan,” Gray said, noting that regulatory uncertain can negatively affect a utility’s credit rating, increasing borrowing costs and driving rates higher in the long run.

ROOFTOP SOLAR

TEP and other utilities have been accused by solar-energy advocates of trying to tamp down customer-owned rooftop solar systems, contending that rooftop solar customers shift some system costs to other customers.

In 2016, the Corporation Commission voted to lower over time the credits new rooftop solar customers get for excess energy they generate and export to the grid.

Gray said there is a place for rooftop solar and TEP will continue to support such installations, but she maintained that utility-scale solar is much cheaper and more equitable.

“I do think the future of our system definitely does include rooftop solar, and we have 30,000 systems on our customer homes now that are providing energy,” she said. “I think where the rub comes is with the subsidies — the folks that can afford to do rooftop solar are receiving subsidies that are funded by taxpayers and customers who can’t afford rooftop solar. I think the benefit to our community to doing utility-scale solar is that we can do it with economies of scale for much less cost per kilowatt hour and everybody can benefit from it.”

Gray said the concept of microgrids — neighborhood-level solar installations linked to battery storage systems — is worth exploring as a way to add resiliency to the system and provide power during peak demand periods.

TEXAS BLACKOUTS

Gray said widespread blackouts in Texas amid severe winter weather appear to be the result of the failure of a disparate array of both renewable and gas-fired generation assets that form the competitive market in Texas.

She noted that Arizona’s state-regulated utilities have an obligation to serve customers and go through a rigorous annual process of forecasting demand and how they intend to meet it, with annual winter and summer preparedness meetings with the Corporation Commission.

And while Texas which operates its own, independent power grid and part of its competitive market, Arizona utilities are linked to a regional grid that gives them access to power when in-state resources can’t meet demand, Gray said.

Though rules intended to open Arizona’s electric power markets to retail competition were struck down in court in 2004, Corporation Commission member Justin Olson, a free-market Republican, has been pushing to reopen the discussion.

TEP has opposed a move to retail electric competition in the past and is still leery of such a move, Gray said.

“Yeah, there are times when retail competition has reduced the bills for Texas customers,” she said. “But they have these wild swings and I think that in general, customers would prefer knowing they have that steady, predictable bill versus the risk involved. You’re adding risks, you’re adding costs. I don’t think it’s the right thing for our customers.”

Contact senior reporter David Wichner at dwichner@tucson.com or 573-4181. On Twitter: @dwichner. On Facebook: Facebook.com/DailyStarBiz


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