Click here to enlarge image
Peggy Fowler, Portland General Electric CEO and president, talks about surviving the collapse of Enron.
In Oklahoma, in the spring time, there are thunderstorms unlike any you’ve ever seen. The sky gets pitch black in the middle of the day and the wind is eerily still in those few moments before the sky explodes with rain, thunder and electricity. As wondrous as the storms are, the aftermath is equally beautiful. As the sun comes out, you feel a deep sense of relief.
Peggy Fowler, CEO and president of Portland General Electric (PGE), had a feeling much like that just recently when she finally saw the clouds lift and the sun come out. But it wasn’t rain and lightning that she had been struggling against in Oregon. It was the dark cloud of Enron, until recently the owner of PGE, and the storm that was unleashed when the company suddenly crumbled. Taking the reins at PGE in April of 2000, Fowler eventually saw her company enveloped in the Enron storm, accused of fraudulent tax practices, and approached for buy-outs from every direction. During that chaotic period, many workers lost their 401K savings.
The clouds lifted when, on April 3, 2006, PGE stock was issued to Enron creditors and began trading on the New York Stock Exchange. The Enron situation is “dead,” Fowler said in a recent interview with Electric Light & Power. From PGE’s perspective, they are finally on their own. “Locally, we’ve been able to move beyond it, in part because we’re a 118-year-old company. We’ve been here a long time.”
But this moment in PGE’s history was not without its very dark times, and even a tragedy that went beyond the financial scandal surrounding Enron’s collapse. For Fowler, the darkest moment came “[w]hen the company (Enron) declared bankruptcy and I realized the financial impact it would have on my co-workers. Also, when I heard that Cliff Baxter committed suicide.” It was tragic, said Fowler, that Baxter, an executive at Enron, got to a point where he felt he had to end his life.
Despite such tragedies, Fowler persists in a positive outlook. She said she knew “deep down in my heart” that PGE would pull through the mess. Now the company is looking ahead, focused on a future of providing energy for its customers and creating value for shareholders.
Starting as a chemist at PGE 30 years ago, Fowler came up through the ranks and worked in many different capacities at PGE. She held senior officer posts as head of PGE’s customer service and delivery areas, power production, hydroelectric and substation operations, and served as PGE’s chief operating officer of distribution operations.
That benefited her, said Fowler, by giving her a perspective on so many different aspects of the company and by allowing her to get to know the people that call PGE their career home. And Fowler described those employees, her co-workers, as “amazing.” They all leaned on each other through the rough patches, Fowler said. “With a company as old as ours, the last thing [the employees] wanted to see was a terrible ending. They wanted to return [PGE] to what it had been.” And they’ve helped in one major area: PGE’s stock is back on the New York Stock Exchange.
Some wounds will still have to be bandaged. The company matched 401K contributions with Enron stock so when Enron collapsed, employees lost the match. In addition, those who chose to purchase Enron stock with some or all of their own contributions lost that as well.
Fowler said PGE is taking steps to help those who have lost so much. First, PGE has a pension plan that existed prior to Enron, and still exists. The pension fund was independent of the 401(k)plan and thus was not affected. About two years ago, said Fowler, PGE established its own 401(k) plan and provided a company match to employee contributions. And that 401(k) does not include any PGE stock. PGE is also looking into establishing an employee stock purchase plan. Fowler added that PGE has taken the extra steps of supporting a congressional act allowing larger employee contributions to their 401(k)s in order to “catch up” on what was lost, providing financial workshops for employees, and encouraging them to seek professional financial advice.
The company has had somewhat acrimonious relations with the city of Portland. At one point during the upheaval that Enron caused, the city of Portland wanted to buy the company but lacked the support to do so.
Today, Fowler and her team are working to rebuild bridges between the company and the city. “We have far more in common than we have differences,” Fowler said. “We all want the same things-economic development, education, and workforce development. I believe we can work together to get there.” She also stressed that PGE serves many other cities and the company’s relationships in those cases have stayed agreeable.
Fowler also isn’t overly concerned about more takeover bids coming down the pike. It’s difficult to arrange a takeover, she said. “The OPUC (Oregon Public Utility Commission) process is built around demonstrating a net benefit. Any buyer would be expected to lower prices and benefit customers. I trust the OPUC to make sound, rational decisions in the best interests of our customers.”
PGE hasn’t regained its footing as a company quietly. The company has let people know it’s ready to get out from under all the scandal and tragedy. Efforts have been made to emphasize that it’s a Portland-run company with an interest in the local community.
On April 10, 2006, Fowler rang the opening bell at the New York Stock Exchange as a celebration of the first day that PGE’s stock was available for regular trading after ownership was transferred. Fowler was joined by seven PGE employees who were elected by their peers to represent their company in New York. “This bell-ringing opportunity is the beginning of an exciting future for PGE,” Fowler said at the event.
And in May, PGE threw a party for the local community in Portland. All were invited to the event that featured live (and there’s emphasis here) local music, activities for children, and a baseball game with prize giveaways. Fowler threw out the opening pitch.
“This event is our way of saying thanks to our customers and the community for their support during our ownership transition,” Fowler commented at the time. “Oregon is our home, it’s where we started, and it’s where we’re focused on a bright future serving our customers.”
That bright future Fowler spoke of might be closer than one would expect. PGE reported in its 2006 second quarter earnings report that net income for the company totaled $27 million, up from $16 million the same quarter a year ago. Operating revenues were also up from $333 million a year ago, to $351 million. And, PGE expanded its customer base by 14,000 customers for a total of 791,000.
From one challenge to the next, Peggy Fowler and her team took PGE out of the storm of Enron and into the sunlight of being an independent company. So will it be hard to get back to normal and just run a utility? Fowler’s response is simple. “We’re already doing that.”