Cavanaugh, William III 1939–

William Cavanaugh III 1939–

Former chairman, chief executive officer, and president, Progress Energy

Nationality: American.

Born: 1939, in New Orleans, Louisiana.

Education: Tulane University, BS, 1961.

Career: U.S. Navy, 1961–1969, rose to the rank of lieutenant commander of the navy's nuclear program; Entergy Corporation, 1969–1986, several management capacities at subsidiaries, became chief operating officer (COO) and director, became group president of Energy Supply; 1986–1992, chairman, president and chief executive officer (CEO) of Entergy Operations; chairman, president, and CEO of System Energy Resources; Carolina Power & Light Company, 1992–1996, president and COO; 1996–2001, president and CEO; Progress Energy, 2000–2004, president, CEO, and chairman.

Awards: Member, National Academy of Engineering, 1993; Thad Eure Jr. Memorial Award, Greater Raleigh Convention & Visitors Bureau, 2002; Outstanding Alumnus Award, Tulane University, 2002.

■ As CEO of Carolina Power & Light Company, William Cavanaugh III forged a merger in 2000 between his company and Florida Progress Corporation to establish Progress Energy as a regional leader in the energy business. While many power and utility companies began to expand quickly after industry deregulation, Cavanaugh and Progress Energy took a more cautious approach, primarily focusing on its core businesses. Cavanaugh's conservative approach helped Progress Energy weather industry scandal, a recession, and the vagaries of deregulation that eventually plagued the more aggressive power companies. Industry analysts subsequently praised Cavanaugh's approach of keeping the company true to its utility roots while taking disciplined steps toward expansion and diversification.

FROM THE HIGH SEAS TO HIGH WIRES

A native of New Orleans, Cavanaugh received his bachelor's degree in mechanical engineering from Tulane University. He then spent the next eight years in the U.S. Navy, primarily serving in the navy's nuclear-powered submarine program. After leaving the navy in 1969 as a lieutenant commander, Cavanaugh joined the Mississippi-based Entergy Corporation, where he spent the next 23 years working in a variety of positions. At first he held management positions with the company's various subsidiaries, including Arkansas Power & Light, Louisiana Power & Light, and Mississippi Power & Light. He went on to serve as group president of Energy Supply; chairman, CEO, and president of Entergy Operations; and chairman, CEO, and president of System Energy Resources.

In 1992 Cavanaugh left Entergy and joined Carolina Power & Light (CP&L) in Raleigh, North Carolina, as president and COO. At the time, the company was a sleepy utility with one of the industry's worst run plants. Over the next eight years, Cavanaugh would guide the company toward establishing facilities that would rank among the best in the industry.

When Cavanaugh was appointed CEO of CP&L in 1996, few industry analysts paid much attention to the change in leadership. Within two and a half years, however, the company had undergone major adjustments; many insiders noted that Cavanaugh sparked more change in the company in that short amount of time than it had experienced in several decades. Cavanaugh oversaw several expansion efforts, including a $354 million acquisition of the North Carolina Gas Company, the building of a $250 million gas turbine plant in Rowan County, and the purchase of the Internet company Interpath Communications, which Cavanaugh integrated with CP&L's Caro-Net Telecommunications. Cavanaugh also made significant changes in senior management and accelerated the company's cost-cutting efforts.

WARY OF DEREGULATION

While companies such as Duke Energy, Enron, and others pressed North Carolina for deregulation, Cavanaugh stood firm in his beliefs. Cavanaugh and CP&L were concerned that states with higher electricity rates, like New York, would end up draining power from low-cost states like North Carolina and force CP&L and other electric utilities to raise their prices. He also saw deregulation as removing companies' incentives to invest in power grids and new plants as they focused on becoming the lowest bidders for supplying power. In direct confrontation with Duke Energy, Cavanaugh and CP&L initiated concerted lobbying in an attempt to sway legislators and donated over $60,000 to a pair of groups aligned against deregulation, which assisted two people in attaining appointments to the 23-member commission assessing the issue. Cavanaugh told Martin, "We felt deregulation of electricity was such an important step—fiddling around with something that already worked well—that we should be careful not to put the system in jeopardy" (November 2003).