As the once halcyon Enron era draws to a conclusion in a Houston federal court room, 2,000 miles to the northwest at the Oregon headquarters of Portland General Electric (PGE) utility employees are rubbing their eyes and wondering if it was all real -- those eight years as a subsidiary of Enron Corp.
It started when the energy trading behemoth was approaching its zenith in the late 1990s. But even in those years of soaring stock prices and endless deal-making, Enron had already decided the staid utility was a misfit, PGE CEO Peggy Fowler recalled during an interview Tuesday with NGI.
Less than two years after Enron purchased PGE in mid-1997, the Oregon-focused utility was already on the sales block with a pending purchase from Enron by Reno-based Sierra Pacific Resources. PGE personnel were removed from the Enron corporate phone book in 1999 as soon as it looked like Sierra Pacific was going to become the corporate parent, she said.
While Fowler will not speculate on how the Kenneth Lay-Jeff Skilling trial will end, and she is circumspect about what she says about the two former top Enron executives, she thinks that they and many other senior executives did not pay attention or care about anything going on at PGE, and they showed the same neglect in other parts of the massive Enron organization at the time. "I think that is pretty clear from what happened to them," Fowler said.
"Enron was always a very different company from us, and in the beginning when we looked at how good [ostensibly] Enron was doing, there was a fair amount of excitement about possibilities for PGE, but pretty soon it became pretty evident that their vision wasn't anything that could be a reality here in our state. They quickly lost interest and were willing to leave us alone to let us operate and do what we needed to do," she said, recalling that she had meetings and discussions with Lay and Skilling, and that she remains interested in the trial and has followed the news coverage of it.
"Every once in a while I hear something on the news and my ears perk up. I think it will be interesting to see what the jury decides, although I am not close enough to it to know what might have been legal and what might have been illegal. I certainly do believe, however, that they didn't pay as much attention to what was going on as they should have, and I do believe much of it could have been prevented if they had managed the company in a tighter, more intelligent manner."
In the early days under Enron, Richard Kinder, subsequently the billionaire founder of so-far successful Kinder Morgan, was the COO, and Fowler dealt with him. She credited Kinder with "paying attention to details" and being involved in the operations, while Lay was primarily focused on outside political and community projects. Then, when Kinder moved on and Lay brought in Skilling, Fowler said he was like Lay and "didn't pay attention to details -- maybe on the trading side -- but not on the other parts of the company."
PGE survived the Enron debacle, Fowler said, by "focusing on our basic business and not losing track of our customers or employees or what our core business is -- that is why we have always been here, and we are still here today." A saving factor in retrospect is that there was no "blending of the cultures" of the established utility and the fast-moving energy trading firm, she said.
"When they first bought us, we thought there might be some of that, but as it turned out, I think we had one person from Enron come here for a very short time, but that didn't work out; and the person went back to Houston," Fowler said. "A few of our employees went to Houston for awhile, but they came back very shortly, too.
"Enron decided within a very short time after they bought us that this wasn't a business that made sense for them. Their model of deregulation or what they hoped to accomplish in the Pacific Northwest didn't play out, so they lost interest [quickly]. One of the things that was always very clear to me about Enron was that its executives and managers were not operators and implementers; they were 'big idea people,' and little did we know how big some of their ideas were.
"[As a closely regulated, investor-owned utility] we're asset people and operators; we take care of our system and we take care of customers. We usually have long-term relationships with the people we deal with. They were never interested in what we were doing, and they didn't pay attention; they literally did not pay attention to what was going on in a lot of parts of their business."
Wasn't there a lot of integration in the energy trading sector between Enron and PGE? No, said Fowler, contending that the utility and Enron always maintained separate trading areas.
"Enron set up a 'West trading desk' and some of our people that we had went to work on that desk, but that was a totally separate operation housed in separate buildings," Fowler said. "What we [the utility] do in terms of trading is done around our customers and the power plants we have. We were accused of being involved in some of [the market manipulations], but none of that ever played out."
Fowler acknowledges that PGE has had to deal with a stigma among some elected officials, regulators and customers, but now that the utility has separated from Enron, she thinks the company is "putting all of that behind us." Amazingly, she said, some customers don't even know that PGE was part of Enron. Nevertheless, she recognizes the importance of getting back to being a successful, stand-alone company. She is seeking to develop a "wider circle" in the investment community that will be more knowledgeable about the utility.
Another lesson she has taken from the experience of being in the high-flying and later cratering Enron organization and observing that culture was "having the right people in the right jobs," Fowler said. "I have my opinions about Enron, like every one does, but I think putting the right team around you, getting the right CFO, the right legal counsel and the right operating people, keeping alignment on your goals and direction and cascading that down in the company has allowed us to stay successful and is a basic ingredient for us going forward."
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