“Any leader who thinks their job is only about articulating a grand vision is sadly mistaken. Success is 20 percent planning, 60 percent execution, and 20 percent luck.”
The Ultimate CEOs: C. John Wilder, TXU Corp.
The CEO Power Forum: Not all utility CEOs are created equal...
those businesses because of the way the rate mechanisms are established just don't invite competition.
Fortnightly Natural gas prices have been extremely high throughout the country, particularly in Texas. Is there a market or legislative answer? What has been the impact of high gas prices to your business?
Wilder Natural-gas prices since the market opened have increased a couple hundred percent. Natural gas prices are the predominant price-setting commodity for electricity in Texas. It's difficult to market a product to a consumer when the underlying product pricing has been under some substantial inflationary pressure. The customer is not supposed to understand why we can't find more hydrocarbons in the ground and in North America. Or why there are drilling constraints in Alaska. Or why the geological structures 10,000 years ago didn't put more natural gas under the ground of the United States, but put five-fold of that under Brunei. Those are the kinds of issues that the consumer never can understand. But the reality is not that they are not smart enough, it is just that there is no reason that they should invest in an understanding of that. The consequence is that they have to pay more for their natural-gas product and their electricity product as a result. So, to be retailing that product to them in that escalating cost environment does offer up some challenges in the legislative framework because politicians like to look for easy answers. And there is not an easy answer to the long-term energy needs of the Unites States of America. … We have gone decades with under-investing in energy infrastructure across the entire business system. From refineries to oil and gas fields, to gathering systems to gas processing plants. You kind of name it, and there have not been adequate market signals and adequate reinvestment opportunities for industry participants to invest. It's going to take us at least a decade if there are adequate price signals, which today there seems to be in almost all of the key commodity lines to get the infrastructure back in productive shape…
Fortnightly TXU undertook in the last year one of the biggest business process outsourcing (BPO) deals in the industry with consultants Capgemini. Has the relationship and the projected savings performed to plan?
Wilder It is going really positive and good. What we didn't have at TXU, if you look at the basic performance level, our back office performed very poorly by any performance standard that we were able to apply to it. To take it a step further, [the back office] was performing poorly-high cost, poor service-and it was hurting us in the marketplace. Our phone answer time was 300 seconds when I got here. It's now sub-15 [seconds] on almost any given day. Many days we drive it down to a two- to three-second answer time. Those are clearly best in the industry and are best when you go across other industries like telephone.
What happens when [customers] get poor service and they call a utility and get the interactive voice response and it is hard