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The CEO Forum: The Ultimate CEOs: Peggy Fowler

President and CEO, Portland General Electric

Fortnightly Magazine - June 2006

areas that are deregulated. How do you grow, and how do you improve for an investor? It’s difficult to do unless you have generation or some other things attached that allow you to do that. Maybe they will get back to investing in generation again. I suspect that will have to happen for some of those customers if the markets don’t work effectively or if costs get to the point where they don’t make sense.

Fortnightly: What type of performance metrics might we expect from the new Portland General Electric? What type of growth and total return to shareholders? What type of dividend?

Fowler: The earnings guidance that we have given is public. We’re focused on 2007 because we have a rate case in place. We hope in the long term that we can have earnings expected to grow between 4 percent to 5 percent per year. We are going to start with paying a target dividend ratio in the range of about 60 percent.

That’s probably a little bit low compared with some other utilities. But we have more opportunities to invest capital in our system. We are building a gas-fired plant now. We have an additional wind resource we’re looking at. We’re looking at some automated meter reading and some transmission within our system. So, we do have some good opportunities to invest, and you do need to invest in this business to keep it going.

Fortnightly: What is your definition of leadership and how has it been applied in what we see today?

Fowler: You learn from the situations that you have been through. To begin with, building on core strengths, just the basic business itself, and paying attention to the details. Make sure that you are serving the customers well, that you know what the customers want, which is reliable, reasonably priced energy, and you have ways to measure that, and know how you are doing on it. [Know] that within the company you have the right people and the right jobs, particularly ethical and honest people, who are focused on the basic business. You have to pay attention to that, [make] strategic decisions into the future in a very uncertain environment.

There are a couple of things people don’t realize about PGE. One is throughout all of this bankruptcy with Enron, we kept investment-grade ratings, which was huge. And we continued to invest in the business. We came out very strong and very stable. Certainly, I’m grateful to the people who worked on the plan of reorganization and all of that, too, because they could have had us pay more dividend or whatever. But they wanted us to be strong. The PUC ring-fenced us so it could only go to a certain point. But that allowed us to move forward and not to slip backward, not do damage to our system during that time frame.

I think in our business, meeting higher customer expectations and staying focused on that all of the time will ultimately serve your shareholders.