CEO Power Forum: Erle Nye, Chairman and CEO of TXU
In your 2001 annual report, you wrote that neither California nor Enron challenges the value of a competitive market. If not on competition, what effects have those two events had on TXU's strategy and on the industry as a whole?
It's clear that California and Enron are factors that introduced some discontinuity into the development of public policy and in particular public policy around customer choice and competition in the electric utility industry. And in that regard, it is my belief that that confusion is unwarranted and that neither California nor Enron provides any basis for suggesting competition is not a good thing. We know from our experience in other industries and we know from our experience in the free enterprise system that competition is the lifeblood of our economic system. California was an infrastructure problem. It also was a problem with respect to trying to implement a flawed system that was destined to fail in an area where the barriers to entry are so high that it's hard to provide adequate infrastructure. Enron is a financial and business failure of major proportions. With respect to what we're doing, we're clearly going to be disclosing more than we have in the past, simply because it's to our advantage. We have a sound system. We have appropriate financing. We have thoughtful accounting. Because we do, it's important that we make sure that everybody who is interested can read exactly how we go about our business. So we're probably going to expand our traditional disclosures in terms of our 10-K, in terms of analyst reports and so forth.
If the Texas deregulation plan remains a success a year or two from now, will that help to overshadow what happened in California?