Chairman of the board, chief executive officer, and president, PPL Corporation
Nationality: American.
Born: March 18, 1943, in New York, New York.
Education: Lehigh University, BS, 1964; MS, 1970.
Family: Married Peggy (maiden name unknown).
Career: Pennsylvania Power & Light (PPL), 1964–1968, project engineer; 1968–1972, senior project engineer; 1972–1975, manager, distribution planning; 1975–1976, executive director, Corporate Energy Planning Council; 1976–1978, manager, systems planning; 1978–1984, vice president, system power; 1984–1987, vice president, marketing and economic development; 1987–1990, vice president, power production and engineering; senior vice president, system power and engineering; 1990–1991, executive vice president of operations; 1991–, president, 1993–, chairman and chief executive officer.
Awards: Community Leader of the Year Award, Arthritis Foundation, 1995; Distinguished Citizen of the Year, Sales and Marketing Executives of Lehigh Valley, 1996.
Address: PPL, The Plaza at PPL Center, 2 North 9th Street, Allentown, Pennsylvania 18101-1179; http://www.pplweb.com.
■ William F. Hecht joined Pennsylvania Power and Light Company, later named the PPL Corporation, in 1964 and rose through the ranks to become the company's president in 1991 and chairman and CEO in 1993. As head of the worldwide energy company that delivers electricity to customers in Pennsylvania, the United Kingdom, and Latin America, Hecht successfully guided the company through deregulation when many other electric companies were experiencing major upheaval. Industry analysts commended Hecht for his strong business strategy of steady growth that enabled his company to outperform many of its competitors.
Hecht was born in New York City and attended Lehigh University, Bethlehem, Pennsylvania, where he earned bachelor's and master's degrees in electrical engineering. After receiving his bachelor's degree in 1964, Hecht joined Pennsylvania Power & Light Company. He served primarily as a project engineer until he entered management in 1972, when he was appointed manager of distribution planning. Over the next two decades Hecht held several managerial posts, including vice presidencies of system power, marketing and economic development, and power production and engineering before becoming senior vice president of system power and engineering.
In 1991 Hecht was made president of Pennsylvania Power & Light. Two years later he assumed the posts of CEO and chairman of the board. Hecht came into a leadership role with the company just as the electric industry was entering an era of consolidation and deregulation. As a result Hecht helped oversee the restructuring of Pennsylvania Power & Light from a geographically organized traditional electric utility in a natural monopoly environment to a functionally organized electric power supplier in a competitive environment. In 1994, a year after he took over as chairman and CEO, Hecht guided Pennsylvania Power & Light to form a holding company, PP&L Resources, which became PPL Corporation in 2000.
In 1996 Hecht made Pennsylvania Power & Light the first Pennsylvania utility to endorse generation market competition. While many others in government and business argued that deregulation of the power industry should move slowly, Hecht warned of procrastination due to fear of change on the part of people in industry and government. Although he said he believed the transmission and distribution of electricity should remain businesses best operated in a regulated atmosphere, Hecht believed there was no reason for regulation of the generation of electricity. In a speech at a conference on electric industry restructuring, Hecht said, "A competitive marketplace is good public policy because it does a better job of encouraging efficiencies than does even the best of economic regulation. Our current system of economic regulation for electric utilities can actually reward inefficient companies" (September 20, 1996). Hecht believed that a competitive electricity generation marketplace would result in the shifting of business from the high-cost supplier to the lower-cost supplier, a process that would result in lower prices for customers.
Hecht and other representatives of Pennsylvania Power & Light helped craft legislation that allowed customers to choose their electricity generation suppliers. The legislation was signed into law in early December 1996, and Hecht saw the law as a both a challenge and an opportunity for his company. In a PPL news release Hecht noted, "With the transition legislation in place, PP&L and the other state electric utilities now face the substantial challenge of redesigning our companies to meet the ambitious timetable established by this bill" (November 26, 1996).
Over the next two years Hecht placed Pennsylvania Power & Light's plans to compete in an emerging deregulated market. In 1997 the company was the first electric utility to be granted a license by the state public utility commission to sell electricity throughout Pennsylvania as part of the state's new Customer Choice Act. Hecht also formed the retail energy supply group, which became PPL EnergyPlus, to serve customers in unregulated markets. To further position Pennsylvania Power & Light in the new deregulated market, in 1998 Hecht developed a financial plan that included dividend reduction and a stock buyback plan.
In addition to competing in Pennsylvania and New England power markets, Hecht continued to oversee a wide-ranging expansion of PPL's business interests throughout the United States and abroad. He ordered the purchase of a 25.2 percent interest in Empresas Emel, a Chilean holding company with electric utility operations in Chile and Bolivia. He also began acquiring mechanical contracting and engineering companies in the Mid-Atlantic region of the United States. Other expansion efforts guided by Hecht included a 75 percent interest in Distributidora de Electricidad del Sur, an electricity distribution company in El Salvador; plans to develop natural gas–fired power plants in Wallingford, Connecticut, and Kingman, Arizona; an increased equity interest in South Western Electricity; an electricity distribution company in England; and entering the retail gas business. Hecht oversaw an agreement to buy 13 Montana power plants, which combined had more than 2,600 megawatts of generating capacity. The acquisition was the largest in the history of PP&L Resources.
In March 2001 Hecht testified before the U.S. Senate Energy and Natural Resources Committee and outlined many of his thoughts concerning the electric energy crisis that had just occurred in California as well as his view of deregulation as a whole. As for the power crisis in California, Hecht said that he believed the problem could only be solved by allowing the forces of supply and demand to set prices that both discouraged consumption and encouraged production. Hecht believed high prices that reflected the actual economic value of electricity would cut consumption and reduce the mismatch between supply and demand. In the end, Hecht testified, the ultimate outcome would be to help reduce wholesale prices. In his concluding remarks about the energy crisis in California and possible crises elsewhere Hecht told the committee, as reported by the Electric Power Supply Association, "The real solution to the long-term supply issues in California and the West is inescapable: We need to build new power plants. And, those new plants will be built only if we allow the competitive market to do its job" (March 15, 2001).
Hecht addressed the U.S. Congress about the issue of deregulation as part of a fundamental building block that would lead to the construction of new power-generating facilities in the United States as an answer to energy crises. He emphasized that the free market would send the right price signals to encourage the capital investment needed to build the next generation of American power plants. He pointed out to the congressional committee that PPL was developing power plants in Connecticut, Long Island, Pennsylvania, Washington, and Arizona that would add more than 4,000 megawatts of supply in these key regions. He noted, "If the wholesale markets in these regions were not sending the appropriate price signals, we could not justify building plants there" (March 15, 2001).
PPL, like many energy companies, experienced setbacks in 2001 and 2002 owing to a general economic downturn. Hecht nevertheless was able to tell stockholders at a 2002 meeting that PPL was doing better than its competition and that he intended to maintain the company's strategy of remaining both a generator and a distributor of electricity.
Under Hecht's leadership PPL had been experiencing an impressive time of growth since 1998. From 1998 through 2002, for example, PPL's total return outperformed the Standard & Poor's 500 by 80 percent, and the company increased its annual dividend 45 percent over the figures for 2001 and 2002. According to Hecht, part of the company's success was its ability to make a profit in both the regulated electricity delivery business and the deregulation electricity generation and marketing business. Once again, however, Hecht pointed to deregulation as the primary foundation of the company's success. He noted that the company's plan for conducting business in a deregulated environment included procuring good contracts for both the sale of PPL-produced electricity and for the purchase of fuel needed to operate PPL plants. As reported by Fournisseur Municipal , Hecht told stockholders at a meeting in 2003, "We devised and implemented a strategy that allowed us to produce strong returns while also reducing volatility" (April 25, 2003).
Industry analysts noted that Hecht was one not to rest on his laurels but to keep looking forward to growing his company in a disciplined, operationally focused, and cost-effective way. For example, despite the company's success, Hecht announced in 2003 that he was realigning the company's management and broadening the executive team in the process. His goal was to further sharpen the company's focus. This move, noted analysts, reflected Hecht's disciplined but opportunistic management style, which allowed him to maximize benefits for shareholders while managing risks.
Hecht was a long-time proponent of long-term, steady growth of PPL. He did not hesitate to update plants and facilities as part of his style of always looking to the company's future needs. In a 2004 shareholders meeting, as reported by PR Newswire, Hecht summed up his own management style best when he noted, "A constant at PPL—decades ago as well as today—is our focus on the essentials and an aggressive pursuit of innovation within the boundaries of our fundamental business. We have grown our business without outgrowing our ability to deliver on our commitments" (April 23, 2004).
As he led PPL into 2004, Hecht continued to focus on domestic electricity generation and marketing and electricity delivery in select domestic and international markets. His success in guiding the company was reflected in several market indicators, including the fact that at the end of 2003 the company's total return to share owners over the previous five years was 88 percent, placing PPL among the leaders in the U.S. electricity business. Furthermore, the company's stock had risen 57 percent over the previous five years, a rate that was better than that of all but two of the Fortune 500 companies.
In addition to performing his duties at PPL, Hecht was a member of the board of directors of the Nuclear Energy Institute and the Edison Electric Institute, where he served on the executive committee. He also served as chairman of the Pennsylvania Business Round Table and on the board of directors of Dentsply International, RenaissanceRe Holdings, and the Federal Reserve Bank of Philadelphia. His community involvement included serving as vice chairman of the board of trustees of Lehigh University, president of the Lehigh Valley Partnership, and chairman of the Lehigh Valley United Way Campaign.
See also entry on PPL Corporation in International Directory of Company Histories .
"Passage of Legislation is Good News for Pennsylvania," PPL News Release, November 26, 1996, http://www1.pplweb.com/newsapp/news_releases.articleview?p_artid=991 .
"PPL Compiling Impressive Growth Record," Fournisseur Municipal , April 25, 2003, http://www.fournisseurmunicipal.com/news_detail.asp?ID=5125 .
"PPL Corporation Focused on Long-Term Growth, Chairman Tells Shareowners," PR Newswire, April 23, 2004.
"PP&L's Chairman: Electricity Business Competitions Is Good Public Policy," PPL News Release, September 20, 1996, http://www1.pplweb.com/newsapp/news_releases.articleview?p_artid=971 .
"Testimony of William F. Hecht before the U.S. Senate Energy and Natural Resources Committee," Electric Power Supply Association, March 15, 2001, http://www.epsa.org/forms/documents/DocumentFormPublic/view?id=305000000370 .
—David Petechuk
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