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The New CEO's

Michael G. Morris
Fortnightly Magazine - June 2004

very hard with the ALJ in the current case, was to say, "Folks, let's do this but let's do it with some understanding that the states are giving something up." The human nature of giving something up is to get something logical in return; some kind of a commitment that the states will have a role to play. As far as interstate commerce, I think at the end of the day the FERC wins this case in court, whether it's three years, five years, or seven years from now. A kilowatt-hour generated in Michigan and consumed in Indiana, that's interstate commerce.

Robert B. McGehee

Chairman, President and CEO, Progress Energy

The Executive

Age: 61
Education: United States Naval Academy, Annapolis, Maryland, B.S. Degree; graduated with distinction; 1966-1971 U.S. Navy, graduated Nuclear Power School and Submarine School; 1971-1974 University of Texas Law School, Austin, Texas, J.D. Degree, graduated with honors.
Board Memberships: Nuclear Energy Institute, vice chairman of the board of directors and executive council; vice chairman of the Atomic Energy Committee of the Public Utility, Communications and Transportation Law Section of the American Bar Association; Institute of Nuclear Power Operators, nominated for election to the board of directors in March, 2004; chairman of the board, Wise Carter Child & Caraway, 1974-1997
Earlier in Career: President and chief executive officer of Progress Energy Inc. since March 2004; president and COO of Progress from October 2002 to March 2004; president and CEO of Progress Energy Service Co. LLC from December 2000 to October 2002; executive vice president and general counsel of Carolina Power & Light Co. administrative services and corporate relations group from March 1999 to December 2000; and senior vice president and general counsel of Carolina Power & Light Co. from May 1997 to March 1999. Previously, McGehee was an attorney in private practice specializing in utility matters.

The Company

Market Cap End of 1Q2004: $11.6 billion
Revenue 2003: $8.7 billion
Net Income 2003: $782 million
Employees: 15,300

What are your goals as a CEO? What do you hope to accomplish and how will you measure success?

To start with, we have a very good and very stable management team here. The people that are in place here have been working on the direction of the company and strategy for a number of years together. So our transition, unlike some others, has been very smooth without a significant change in direction. Having said that, … in the financial area … we are still digesting our merger with Florida Progress to some degree. We are trying to improve our balance sheet. We are trying to get our debt to total capitalization down in the 55 percent range. We certainly want to continue to grow our dividend every year. We want to have easy access to the capital markets, which we do … and essentially position ourselves over the next two to three years to take advantage of any opportunities that may arise. I think the combination of an improving economy and wholesale environment over the next few years, as well as our financial situation,