October 19, 2004
Wilder, CEO of TXU, Relates Lessons Learned from Utility Deregulation
by Sandie Taylor

As a former leader on the management team at Entergy, John Wilder, MBA ’74, experienced firsthand the challenges of deregulating the utility industry. Speaking at the McCombs School Oct. 14 as part of the VIP Speaker Series, Wilder, now CEO of the country’s sixth largest energy company, TXU, discussed lessons learned when Entergy helped commercialize the utility business.

In the last three decades, Wilder explained, the world has moved toward market economies. A prime example in this country was the 1978 deregulation of airlines, which had once been a strictly-controlled industry. “The government even regulated how many wafers of ham could be placed on a sandwich,” Wilder said. After transforming airlines into competitive businesses, the result was lower fares, increased productivity and better customer service.

Imperative to staying competitive at a global level, said Wilder, is pricing. “As you get into an industry, you find out that supply and demand is very relevant,” Wilder said. “We were making electricity more expensively than we could buy it.” Once Entergy managers discovered the disparity, the firm changed practices and formulated a new model.

Wilder described to BBAs the business model his team used for integrating monopolistic structures to commercial businesses. The approach focused on cost leadership, commercial excellence and operational agility. Wilder’s team also produced a three-phase plan to restore financial strength, drive performance and allocate capital for growth.

If you’re at a point of action, but don’t know where to go, Wilder advised, just look around. “You need to think about with whom and where your industry is competing,” he said. “What I chose to do was look at other industries to see if I could understand who were winners and who were losers.”