top power executive is shutting out the lights and calling it quits.
After presiding for 14 years over Teco's power plant division -- which pinned its fortunes on deregulation -- Richard Ludwig is retiring at the age of 57. Ludwig, who spent more than two decades at Teco, will not be replaced.
Ludwig's division, Teco Power Services, is being downsized after failing to produce the rich profits many utilities chased in the wake of deregulation. Teco is among a crowd of utilities now shedding power assets -- into a glutted marketplace -- as it struggles to pay down debt and reinvent itself as a more traditional utility.
Teco is eliminating another senior executive as well. Royston Eustace, a 16-year veteran of the company, is ending his career as senior vice president of business development.
The retirements come as part of a restructuring that protected -- and even promoted --- other senior managers. Teco shares inched up 27 cents to $12.10 on the news.
"We believe the new structure will benefit our customers and shareholders by holding down costs, improving cash flow and maximizing the value of all our regulated and unregulated assets," said CEO Robert Fagan. "We have lots of work ahead of us to successfully complete this reorganization, but I am confident that our new team will help us serve our constituents in the best manner possible."
Fagan, who made his name in the unregulated world as well, will remain as Teco's CEO. Fagan assumed the top spot at Teco in 1999 -- just before its power division exploded -- after spending much of his career developing independent power plants around the globe. Prior to the merchant energy meltdown that followed
collapse, Fagan pointed to the expansion of Teco Power as one of his three top priorities.
By 2000, the company was celebrating Teco Power as one of its fastest-growing divisions.
"Projects announced in 2000 put the company among the top 10 independent power companies in the United States and the top 20 worldwide," Teco announced late that year.
Teco also applauded Ludwig in particular.
"During the last several years,
Teco Power Services has become a significant component of the growth for its parent, Teco Energy," the company's Web site states. "Richard E. Ludwig combines leadership experience with a solid financial background and an in-depth knowledge of the energy industry that serves Teco Power Services well."
But recently, Teco has been selling power assets -- including a prized plant that serves its hometown Tampa Bay customers -- instead of building or finishing new ones. And it has slashed its dividend, with further cuts possible, as it battles to regain its financial strength.
However, the company has yet to take a real bite out of juicy executive paychecks. Last year, Fagan picked up a six-figure performance bonus despite a 41% plunge in the company's stock. Ludwig, who ranked as Teco's third-highest-paid executive, collected a six-figure bonus as well.
Teco pledged to freeze executive salaries after the big bonuses last year. But in the meantime, the company has just promoted several of its senior managers.
John B. Ramil, who currently serves as president of Teco's utility, will now become operating chief of the entire company. William Cantrell, now president of the utility's gas division, will take over Ramil's job as president of the utility. Charles Black will assume oversight of the power plants as senior vice president of generation. And human resources chief Clinton Childress will become a new senior vice president with additional responsibilities.
"We are today realigning our corporate organization to most efficiently manage the various Teco Energy operating units," Fagan said.