Mike McGregor for Bloomberg BusinessweekIn 1998 I became chairman of Commonwealth Edison. It was a big, troubled Chicago utility with a history of high rates, a clunky fossil fleet, and poorly performing nuclear plants. And I came in as the Illinois legislature decided to bring competition to the electricity business.
Something had to give. We contemplated breaking up the company, but we would have gotten very little for those nuclear plants. Given how they were running, they were virtually worthless. We had invested $10 billion and weren't getting a return. When you have nuclear plants, they own you. They're a massive responsibility; they make or break your reputation.
We needed cash. We couldn't rebuild the nuclear fleet and upgrade the coal plants, too, so I decided to give up coal. In the middle of all this, we were having terrible reliability problems. Mayor Daley was gnawing my liver out because of service, and he was right. After my first year, he let me know time was running out. Honeymoons don't last long in Chicago.
My choices were constrained by the fact that we'd invested so much in our nuclear plants. We had to make a bet that nuclear would work and, in the long run, be worth more than coal. There was also a lot of nervousness around nuclear energy. Three Mile Island, which didn't hurt anyone, ruined the industry for more than a decade and destroyed growth for several decades.
I orchestrated a merger with PECO (Philadelphia Electric Co.) to create Exelon (EXC). Life isn't just about what you want to be. It's about what you are. We had become a culture of trying rather than a culture of succeeding. A lot of good people had to go. We needed some way to grow. Real growth requires a totally new technology or consolidation. We've since become one of the fastest-growing players in the industry.
This is a massively unforgiving business. It's not China or Japan that you worry about. It's that unidentifiable country that builds one plant but doesn't have the regulatory or engineering infrastructure to handle it. If something goes wrong, it affects all of us.