A lot has changed
in the energy industry since 1998 when Alliant Energy was formed through
the merger of three Midwest utilities, and Erroll B. Davis, Jr. was named
president, chief executive officer and, later, chairman of the new company.
"In the late 90s, there
was great pressure for investor-owned utilities to look a lot like Enron,
as the market favored organizations that expanded outside the regulated
utility business," Davis said. "Now the market is punishing
everyone who looks anything like Enron. In fact, over the last year, we've
shifted from proactively designing new, more competitive market structures
to reacting to the backlash prevalent throughout Corporate America."
However, as both the leader
of Alliant Energy and the current chairman of the Edison Electric Institute,
the trade association of investor-owned utilities, Davis is working hard
to regain the confidence of the financial community, attract capital to
new energy generation and infrastructure projects, and - once again -
plan for more competitive utility markets.
"Unfortunately, the entire
energy industry has been tainted by the unethical actions of only a few,"
Davis said. "Battered share prices and ongoing debt downgrades all
contributed to the difficulties fundamentally strong utilities are now
facing when trying to access capital. These tight credit markets are obviously
hindering our ability to build and improve our electric power infrastructure."
Despite the current turmoil
in the industry, Davis remains confident that - with more transparency
and standardized reporting - the energy industry will soon regain its
footing. "With the demand for power continually increasing, new electric
infrastructure must get built ... and eventually it will," Davis
said. "It's often been said that America will most enthusiastically
do what it has no choice but to do. This is another such case."
Davis, who has worked in the
industry for more than 25 years, also added that today's problems should
not permanently distract utilities, regulators and legislators from restructuring
the market. "Over the long term, properly structured, well-functioning
retail competition can benefit customers," Davis said. "But
we have to get the rules right to guide competitive markets where they
make sense, because - as history has shown - robust competitive markets
are almost always more efficient than regulated monopolies."
While Davis is cautiously optimistic
about the future of the industry, he is very enthusiastic about the long-term
prospects for Alliant Energy, which operates two regulated utilities as
well as various non-regulated businesses. "Through our predecessor
companies, we have a long and proud tradition of public service and dedication
to our customers," Davis said. "That tradition and our strong
core values impact and influence everything we do."
For example, the company's
utility operations performed flawlessly throughout the summer of 2002,
and continued to rank very highly in customer satisfaction surveys. Under
Davis' leadership, the company also continues to win awards for its environmental
stewardship, safety initiatives and diversity programs.
In response to current market
realities, late in 2002, Alliant Energy announced it was shifting toward
a more conservative execution of its diversified strategy, adopting a
lower risk profile and correspondingly less aggressive growth targets.
With this announcement, Alliant Energy is now accelerating its plan to
narrow its focus to three core business platforms: regulated domestic
utilities, international utilities and non-regulated generation.
"Domestic regulated utility
will remain our core business," Davis said. "And we'll continue
to have a presence in the international energy market, but on more limited
scale than originally anticipated. We'll also seek to grow our domestic
non-regulated generation assets over time.
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