Redmond Will Step Down At Wwp Ceo Led Utility Through Period Of Dramatic Growth
As the electrical utility industry steps into the most dramatic period of change in its history, the man who has led Washington Water Power Co. for the past 12 years is stepping aside.
Paul A. Redmond, WWP’s board chairman and chief executive officer, has announced his plan to retire as soon as a successor is found.
“In order to attract the right person,” Redmond, 60, said Monday, “now is the time.
“We are extremely well-positioned to compete in the new competitive world right now. I’ve been here a long time. It’s time for someone else to come in, raise the bar and move forward.”
Utility analysts and citizen action groups around the region praised Redmond’s leadership of the Spokane-based utility in an industry that faces tremendous change.
“Water Power is among the top utilities in the country in being prepared for anything coming its way,” said Bill Gillis, a member of the Washington Utilities and Transportation Commission.
“He’s got a national reputation, out of all proportion to the utility’s size,” said Ralph Cavanagh, Northwest energy program director for the National Resources Defense Council.
Redmond’s successor will step into a company that has seen dramatic growth under Redmond’s leadership.
WWP had $600 million in revenues just three years ago. Its revenues in 1996 were $1 billion. They will be $2 billion in 1997, Redmond said.
“And in the year 2000 we will do between $4 billion and $6 billion in revenue,” he added.
Redmond, who started with WWP in 1965, became president of the company in 1982. He was named chairman and CEO in 1985. Under his leadership, WWP has grown from a regional utility to one of the nation’s leading energy companies.
The U.S. utility industry historically has been among the most tightly regulated businesses in the world. Federal and state agencies have carefully monitored and controlled almost every step a utility company takes.
Today, the industry is moving rapidly toward deregulation at both federal and state levels. And in a deregulated climate, in which utility customers can shop around for their energy, the challenges facing utility companies will be vastly different.
Redmond led a restructuring of WWP “to make it more lean and mean” as it approaches deregulation, Gillis said. “Paul was ahead of his time, recognizing the need for more competitive markets.”
Redmond says his successor needs to take over leadership of WWP early in the deregulatory process.
“The foundation is being laid” at WWP to make the utility an industry leader in a deregulated world, Redmond said. But the most talented people will be more attracted to the job if they have the opportunity to shape the company’s place in that new world, rather than stepping into a company in which that plan is at a later stage of development.
At the same time, Redmond said his successor will come into a company that is ahead of the deregulation curve rather than trying to catch up.
“Today, you’ve got to be among the first in the market with these things,” Redmond said. “You can’t be a laggard.”
WWP has established subsidiary companies under its Avista group to deal in areas of marketing in a deregulated industry. Those companies have already set up experiments in existing markets to allow both commercial and residential customers to buy from competitors so WWP can better develop its own marketing strategies. They also market a wide range of services unheard of in the industry only a few years ago.
Reflecting on his leadership of WWP, Redmond said one of his few regrets is that WWP did not begin preparations for deregulation a few years earlier.
“The merger delayed that activity,” Redmond said. “While we waited on the merger, a lot of things were sort of on hold. But as soon as the merger was over, we really got cranked up quickly on these things.”
“The merger” was WWP’s failed attempt to merge with Reno-based Sierra Pacific Resources. Together, the companies - renamed Altus Corp. - would have provided electricity, natural gas and water to 500,000 customers scattered from northwestern Montana to northern California.
The companies began discussing the deal in January 1994. It fell apart in June 1996 when it ran into problems with federal regulators. When it began to look like those problems might take an additional year to iron out, Redmond and the WWP board decided to walk away. The world was moving too fast in new directions for WWP to wait any longer. The company wrote off $14 million in earnings later that year to cover expenses of the failed merger.
Redmond, though, says that while the failure was disappointing, the merger collapse isn’t high on his list of regrets.
“We were the ones that called it off,” he said, “and it was a darned good decision we made. It’s a mixed-emotion kind of thing. We worked hard for two years, but when we had to call it off, it was the right choice. I’ve never looked back and said ‘only if…”’
Gillis said the federal agency demanded conditions that were unacceptable to the utility and the WUTC.
Under terms of the merger, Redmond would have remained WWP chairman and CEO until 1999, when he was to be succeeded by Sierra Chairman Walter Higgins.
Redmond said WWP had almost completed a succession plan in 1993 when the merger agreement came along and made the whole thing moot. So following the merger’s collapse, the company had to reconstruct a plan for Redmond’s eventual departure.
The Boise-based search firm of Horne/Browne, International, Inc., has been hired to find Redmond’s successor. The search, which will include candidates from both inside and outside the company, is expected to take at least six to nine months.
Redmond has agreed to stay on until his successor has been hired, and will remain as a consultant for a period of time if the board and the new CEO want him to.
Redmond, is a past chairman of the Greater Spokane Chamber of Commerce and a past quad chair of the Momentum economic development group.
He plans to remain active in the community and in the business world, but on a part-time basis. Redmond is a pilot, and said he and his wife plan a West Coast-to-East Coast trip soon after he leaves the company, as well as a trip to Europe.
He said he will leave WWP with a great deal of satisfaction as to the company’s prospects.
“I’m so excited about where the company is today, and how well it is positioned,” he said.
“This has been a very easy company to lead because of the talent that is there. We are doing things right now that I’m not sure I understand very well, but other people in the company understand it, and that’s what’s going to continue to make us successful.”
, DataTimes ILLUSTRATION: Color photo Graphic: Redmond’s financial legacy
The following fields overflowed: BYLINE = Michael Murphey Staff writer Staff writer Jim Camden contributed to this report.