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Progress Energy Florida's new boss, Vinny Dolan, takes over at delicate time

Growing up with seven brothers in an Irish Catholic household in a small New Jersey town, Vinny Dolan was set on the path for his chosen field early. • For one, he says, he was born to be an engineer. He excelled in math and science, like many of his siblings. His dad, an engineer, had worked for a utility; five of his seven brothers wound up becoming engineers like him. • Second, vying in a large family taught him the art of getting along at a young age. Starting with rivalries on baseball fields and basketball courts, he developed a competitive nature and political skills, later honed working the halls of Tallahassee and Washington, D.C. • "I tend to ask a lot of questions. I try to make everyone feel that they have a view that matters. I try to be inclusive," Dolan says of his management style. • It's a style, and background, that could come in handy in the new post Dolan starts Monday: president and CEO of Progress Energy Florida.

Jeff Lyash, the high-profile head of Progress Energy's St. Petersburg-based Florida operation since 2006, is being promoted to a corporate post in the company's North Carolina headquarters.

He passes the baton to Dolan at a momentous time. Rate increases loom in an economic climate in which more customers struggle to pay monthly bills. A costly nuclear plant proposed for Levy County is facing a 20-month postponement. Progress Energy, like all utilities, is grappling with political pressure and new mandates to curb reliance on carbon-emitting coal plants and push renewable energy sources.

Dolan's political acumen certainly will be tested this fall as he tries to shepherd a sequence of rate increases through the Florida Public Service Commission.

One proposal to recoup fees for the planned nuclear plant would add $3.07 to the average monthly bill; a base rate increase would add $9.66 a month; and recouping environmental expenses at Crystal River, a request expected to be filed in August, could tack on $3 a month. Still to be decided is the utility's annual surcharge to recoup its fuel costs, but Dolan anticipates that's at least one part of the monthly bill likely to drop. Rate hearings on the base rate increase, which would generate $500 million for Progress Energy, begin this week.

All the rate changes, if approved, would become effective Jan. 1.

"It's unfortunate that this is happening at the same time that we're in the downturn in the economy," Dolan said. "At the same time, we have to make the right investments for the long term."

So far, Progress has recovered from customers about $98 million toward its preconstruction costs on the nuclear plant. It deferred $198 million of its costs in 2009 and, in a May filing, has proposed deferring collection of roughly $300 million.

In deciding the extent of rate increases, Dolan said, the company is walking a fine line between the effect on customers and being financially prudent, the latter key to finding lenders to back the $17 billion nuclear project.

The project's delay was triggered by the Nuclear Regulatory Commission's stance that Progress could not begin building the foundation for the power plant until after it received its license, likely in late 2011 or early 2012.

The NRC aside, Progress still has a long way to go to make the project work: updating its contract with Westinghouse, the builder of the reactor; arranging financing "when the markets settle down"; and hopefully signing agreements with other utility partners to share costs by year-end.

Given the delay, Dolan acknowledges "people have a lot of questions" why his company should be allowed to recoup more up-front project costs through rate increases, particularly during a recession.

Yet, he puts the onus in part on customers to offset higher rates by cutting their energy usage and participating in cost-saving programs offered by his company.

About 130 Progress employees work with customers on energy efficiency, an effort highlighted by ads featuring the utility's memorable Save the Watts guy. Progress has installed energy-efficiency improvements in more than 5,000 low-income homes free of charge. More than 500,000 customers are participating in a money-saving Energy Wise program, allowing Progress to temporarily cycle off their power to a central heating/cooling unit or pool during periods of peak demand; they can cut their bills up to $145 a year.

Dolan and other Progress officials won't disclose how many customers are delinquent with payments or have been deemed "uncollectible," except to say the writeoff in the latter category is in the millions of dollars and is rising.

Background allows for empathetic view

At 54, Dolan is capping more than three decades in the utility industry.

Fresh out of Rutgers University in 1977, he began as a field engineer for an Ohio company, working on industrial steam generators in the Southeast, including the University of Florida steam plant.

His new job makes him responsible for more than 1.6 million customers in 35 counties throughout Central and North Florida. He'll oversee 4,000 employees — from linemen to meter readers to technicians at 14 power plants, including the Crystal River nuclear plant.

Dolan, who came to Florida in 1986, relishes the days that he spent as Florida Power's district manager in Brooksville in the early '90s. Running all parts of the operation, "it was like having my own little utility company in Brooksville," he recalled.

Unlike the first two chief executives of Progress Energy Florida, Dolan has roots in the old Florida Power guard.

Former Florida Power CEO Dick Korpan and most of his senior management team left after North Carolina utility Carolina Power & Light bought the company in 2000, a move that created Progress Energy.

In the years since, Dolan thinks the integration of the Carolina and Florida cultures has gone smoothly.

He credits the Carolina management for helping to instill a more disciplined operation, improving customer service in Florida. "Those were some areas that, quite frankly, we had some issues in before the merger," he said.

Dolan was here through many of the company's highs and lows: the no-name storm of 1993 that roared ashore without warning in the middle of the night, knocking out power for a week to many homes in the Brooksville territory he was overseeing; the back-to-back-to-back hurricanes of 2004 and 2005.

Add to that the death two years ago of his close friend and former boss Joe Richardson, following a brief battle with cancer. Richardson was president of Florida Power from 1997 to the company's sale in 2000.

Dolan has felt the pain of loss at home, as well.

One of his three children, James, was born a special-needs child, legally blind due to a genetic abnormality. He died 12 years ago at the age of 10. The experiences that he and his wife, Lorene, shared in raising James, Dolan says, have increased his empathy in dealing with people.

"If people have a bad day," he said, "you never know what they might be dealing with."

Helping people deal with their struggles, economic and personal, is weighing heavily in Dolan's next step.

As he considers offers to join the boards of various civic and community organization boards in his new leadership position, Dolan said he intends to give special consideration to working with social service groups. Organizations, he said, like the United Way or Make a Wish Foundation.

"I know the increasing need that they have," he said.

Jeff Harrington can be reached at [email protected] or (727) 893-8242.

Vincent

"Vinny" M. Dolan

Age: 54.

Education: Bachelor's of science in mechanical engineering, Rutgers University.

Past jobs: Various roles at Progress Energy Florida and predecessor Florida Power, including operations, business management and vice president of external relations; before joining Florida Power in 1986, he worked in sales and project management for the Foster Wheeler Energy Corp. and as a field engineer in the Southeast for Babcock & Wilcox.

Local ties: Has lived in Pinellas County for 20 years, the past six in Gulfport.

Family: Married 25 years to Lorene; sons Matthew, 24; and Jeremy, 17.

Favorite pastime: Golf.

Boards: Florida Chamber of Commerce Foundation; Salvador Dali Museum; Florida TaxWatch.

Progress Energy Florida's new boss, Vinny Dolan, takes over at delicate time 07/04/09 [Last modified: Saturday, July 4, 2009 4:31am]
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