Long-staid utility receives its biggest surprise ever Poindexter's reign marked by cost-cutting

September 26, 1995|By John E. Woodruff | John E. Woodruff,SUN STAFF

In less than 2 1/2 years as chief executive officer, Christian H. Poindexter has driven Baltimore Gas and Electric Co. through more and faster changes than most people at the 179-year-old utility have seen in entire careers.

He has used buyouts and early retirements to slash payrolls by 1,200 -- shock treatment to a workplace where a job was traditionally for life. He has lopped more than $50 million a year from annual operating expenses and even more from annual investments in plant and equipment. He has opened the door to rate bargaining with the firm's biggest customers, starting with a deal that locks the utility in as electricity supplier to Bethlehem Steel's Sparrows Point plant well into the next century.

No detail has been small enough to evade his eye. Even the lowly ampersand -- the curlicue that means "and" -- is gone from the company's logo, which now reads simply: "BGE."

But separately or collectively, all of the changes Mr. Poindexter has engineered since taking command on Jan. 1, 1993, pale next to the one now in prospect.

What it means

At one stroke, the merger the 56-year-old chief executive has engineered with Potomac Electric Power Co. will put a single utility company in command of electric service to virtually all of the Baltimore-Washington metropolitan area.

The boldness of that move is both consistent with what he has done since taking charge of BGE and inevitable given his vision of the sea changes rumbling through the once-stodgy electric power industry.

By the time he took over, U.S. laws had opened the prospect of competition in an electric power business that long counted on its monopoly to assure profits. And state regulators in Maryland and elsewhere were already studying ways to require companies such as BGE and PEPCO to use their lines to carry electricity from other companies' generators to factories that have long been the utilities' biggest customers.

A year after taking command, the former U.S. Navy flier likened his company to an endangered offshore oil drilling platform. He said he had to act before it caught fire and forced its workers to choose between clinging to the burning rig and jumping into a flaming sea.

"If we did nothing to change our culture, our philosophy, our approach to things, sooner or later the platform would be burning," he said in that interview.

"Clearly the whole industry is undergoing a significant change as we see competition come into what has been a monopolistic business, and as that intensifies, clearly the pressure to keep prices down intensifies," he told the Baltimore Security Analysts Society last winter.

There are also things about BGE that Mr. Poindexter has worked hard to keep the same.

One is the tradition of keeping relationships close between America's oldest utility company and Maryland's power elite.

Like his brother and fellow Naval Academy graduate John M. Poindexter, a former national security adviser, he is a Republican who can get along with Democrats.

$1,000 to Glendening

He gave $1,000 to Parris N. Glendening's successful campaign for governor last year, and like his predecessors he has cultivated friendships among the state's overwhelmingly Democratic legislators.

One of those friendships blossomed last year when R. Clayton Mitchell Jr. resigned as speaker of the House of Delegates and four months later became a paid political consultant for the utility.

The year before he retired, the House speaker had prevailed upon then-Gov. William Donald Schaefer to appoint his legislative assistant, Susanne Brogan, to a seat on the Public Service Commission, which regulates the rates that BGE can charge the public.

All sides vowed at the time that the Mitchell-Brogan relationship would not become a conduit to the PSC for the electric company.

But no one questions that the broader network of political connections Mr. Poindexter and other BGE executives have nurtured may take on new importance as BGE and PEPCO join forces to create a regional electric-power monolith.

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