- Email: [email protected]
Conversation with an iconoclast
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TEJ: What made you take this job?
Talking With... Dave Freeman Conversation with an Iconoclast Faced with a poorly performing public power agency, who do you call? Dave Freeman. S. David Freeman, the self-described utility repairman, is at it again, this time as head of the troubled New York Power Authority. Named as NYPA's chief executive only months after announcing his retirement as general manager of the Sacramento Municipal Utility District, the feisty Freeman, 68, has already started making waves at the giant state agency. The Freeman career - - or careen - - is dizzing. From junior civil engineer at the Tennessee Valley Authority, to TVA attorney, to the Kennedy administration as chief staff aide to Federal Power Commission Chairman Joseph Swidler. Two years in private law practice with Swidler in Washington from 1965-67, and Freeman was back in government, as head of energy policy in the White House Office of Science and Technologyfrom 1967-71. Then, the move that really put the rockets behind Freeman's ride, as head of a $4 million Ford Foundation study of U.S. energy policy, begun presciently in 1971, before the first Arab oil embargo. The result was a book, A Time to Choose, published in 1974, a period when many believed oil prices would exceed those of gold and, if we didn't put nuclear plants on every corner, we would allfreeze in the dark. Freeman's study didn't see it that way at all. It argued that we could reap enorTnous rewards from energy conservation, a heretical notion indeed. Freeman's analysis found a convert in Georgia Governor Jimmy Carter, who, when he became President, appointed Freeman to the TVA board and chairmanship, succeeding the legendary, nuke-loving Aubrey "Red" Wagner. Freeman canned eight nukes, pushed that dirty word "conservation'" in the valley, and cleaned up the TVAfossil program before leaving in 1984. Next it was the Lower Colorado River Authority, where Freeman's doctrine of conservation and efficiency led to cancellation of a controversial lignite plant. Then on to SMUD, where the citizens had just voted to shut the 900-MW Rancho Seco nuclear plant. Freeman's answer to the Ranch? Efficiency and renewables. And in Sacramento, Freeman fell in love with electric vehicles, a love he took with him to New York, where he displays a photo wallet full of pictures, not of grandkids, but of EVs. Freeman talked with characteristic wit and conviction to energy journalist Kennedy Maize in NYPA's offices in Manhattan.
April 1994
Freeman; It's a chance for another life. This has been m y life's work. There's something poetic about my being here. I ran the [Tennessee Valley Authority], I ran the son of TVA d o w n there in Texas, Lyndon Johnson's little TVA, the Lower Colorado River Authority. It seems somehow in the cards that I should come back and run the father of them all, Franklin Roosevelt's power authority. I feel quite blessed, and honored, quite frankl~ We're the transition team here. There's a real advantage if you've got some heavy duty repair work to do - - you get it done early in the game and get it over with, then rally everyone behind a common goal. If you come in and piddle around, you fade into the woodwork, then you haven't really done anything.
TEJ: You aren't piddling around.
Freeman: No, and I think that's the greatest sin for anybody in a public position. The greatest sin is if you don't stand for something. Why the hell are you there? These folks who keep jobs just to keep them are not my cup of tea. TEJ; You're obviously not afraid to make waves.
Freeman: Well, everybody thinks I'm just putting on a show. But I have been saying pretty much the same thing for 20 years. 71
i iil ii i!i!i!!iJJiiJiiiiiiiiiiiiiiiiiiiiiiJ!iiiiiiiiiiiiJiiiiiSiiiiiiiJiiiiiii!!iiiiiJiiiiiiiiiiiiiiiiiiiii!iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiii iiiiiiiiJiiiiii i! JiJiiiiii I haven't always been right, but the world has been m o v i n g in the direction that I have pointed to, more than I h a d any right to expect. I just do m y job and people think I'm making waves. Honestl)~ in California the last few years, I have felt pretty m u c h in the middle of the road.
TEd; Here in N e w York, there has been a corrosive relationship between the Power Authority and the independents. Freemsn; I don't think that will continue. A n d I expect to have a cordial relationship with the investor-owned utilities. I'm not here looking for a fight.
We're struggling to compete in a wholesale marketplace and those folks have got monopolies on retail markets. I don't see that head-to-head clashes is the road to glory for any of us. Now, I'm not one of those utility executives w h o just automatically goes with the herd. I'm very m u c h aware that we have got some contentious situations. In the utility industry toda~ there are a lot of folks m o u t h i n g the words of competition while continuing to have a good-sized monopoly. We don't have a m o n o p o l y over a large retail market. I'm here to make peace, not war. But I expect we can all work to-
gether on w h a t I think is a positive agenda. That includes renewables and electric transportation. That's sort of the Lord's work for the utility indus~¢. That's been m y life's work and that's where we will take a leadership role.
TEd; What gives you joy in your job?
Freeman: If I've a d d e d some value, if I feel I've m a d e a difference, then I'm happ)a A n d you don't have to do it all yourself, you make a contribution w h e n you bring good people in. I take a lot of pride in the accomplishments of the people I've mentored. Someone w h o worked for me at the Tennessee Valley Authority w h o is n o w chief forester of one of the western states. That gives m e a lot of jo)a I k n o w I could go d o w n to Fayette C o u n t , Texas, any day and they w o u l d h u g m e because they k n o w that, but for me, Fayette County w o u l d be turned upside d o w n in a big lignite mine. N o b o d y can take that away from me. A n d I k n o w that but for m y vote TVA w o u l d have eight more nukes and TVA w o u l d be broke by now. A n d I k n o w that out there at SMUD, there's a whole hatful of people w h o feel the same. Some people might sa)~ that's just pure ego, and of course it is, but not pure ego. Everybody has an ego. If you don't, you are dead. I have been blessed, you know. I go back and remember that
S. DavidFreeman 72
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Jimmy Carter read m y energy policy project, and he has a photographic mind, so that became his energy policy: You are forcing m e to go back in m y memories. I a m blessed with an e n o r m o u s array of pleasurable experiences in m y work career. I've been lucky and I think luck is one of the principle ingredients for any g o o d manager. You make your o w n breaks to a certain extent, but you've got to have luck.
TEd: Tell m e your background
I went to w o r k for TVA w h e n I graduated from Georgia Tech. Just working for TVA was m y childhood ambition, growing u p in Chatanooga. So I worked over a drafting table as a civil engineer, designing box culverts and the basement floor of the Johnsonville steam power plant. It was the worst work I've ever done and I was absolutely no good at it. In those days the person w h o checked your drawings w o u l d make the
Freeman: I grew up in Chatanooga, Tennessee. My d a d was an umbrella repairman, he had an umbrella shop. We weren't dirt poor, b u t we didn't o w n an automobile until I was in college. We certainly were not well off. In school, I was a shy kid, in the m i d d l e of m y class. I went to Georgia Tech because Atlanta was very close and because I was good in algebra they thought maybe I should be an engineer. It was the worst vocational choice. I h a d little aptitude for engineering, but I ' m a pretty stubborn person so I persevered and I graduated from Georgia Tech. It was the hardest struggle of m y life; m y grades got worse as I progressed, so I just barely m a d e it. In between, in World War II, I was in the Merchant Marines, and m a d e three trips across the North Atlantic. I loved the sea and could easily have become a sea b u m if I h a d n ' t quit w h e n the war was over and gone back to school.
April 1994
I graduated first in my class in law school It changed my life. All of a sudden I became arrogant in one fell swoop.
changes in red. My drawing w o u l d come back and it w o u l d just be blood red. I m u s t confess I experienced the agony of having people p r o m o t e d over me. So I k n o w h o w tough that is to take. But I was rational e n o u g h not to say that it was favoritism or the boss's pet. I knew in m y heart and m y head that I just wasn't cutting it. So I went back to school, to law school. I thought, I m a y be a sorry engineer but I might make a hell of a good lawyer. A n d it's true, because I graduated first in
m y class in law school. It changed m y life. All of a s u d d e n I became arrogant in one fell swoop.
TEJ: Doesn't that come with the law degree?
Freeman: Not reall3a It comes with being first in your dass. I h a d really found something that I was g o o d at, for the first time in m y life. A n d it really did change m y life. I ' m persuaded I'd have been dead decades ago if I h a d n ' t changed careers. So I was going to law school, and I had just gotten married, and we were getting the hell out of Knoxville a n d we were leaving TVA. That was certain. A n d by the time I was a senior, TVA had m e working part-time as a lawyer. A n d they m a d e m e the best offer of anyone, so I went to work for the TVA legal department. I loved it and had a rich variety of legal work. I was there from 1956 to 1961. A n d then this g u y n a m e d John Kennedy was elected and I decided I w a n t e d to come to Washington and be part of that. I h a d been interviewing with a m a n n a m e d [John] Doar in the Civil Rights Division [of the Justice Depar[a~ent] about being a civil rights lawyer. Then this power commission thing came u p while those interviews were going on. I remember Doar saying to me, "You know, I don't think y o u ' d be good before a Southern jury because they w o u l d consider you a traitor."
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But there was the chance to work with Joe Swidler, w h o was the chairman of the Federal Power Commission, so we m o v e d to D.C. in '61. A n d I was working in Btus w h e n everyone else was interested in civil rights. I can recall going to cocktail parties in Washington in those years and if I started talking about m y work, I could see the person's eyeballs lifting up, going over m y shoulder and looking for somebody else to talk to. I mean, we were absolutely the dullest group in Washington.
TEd; It didn't get sexy until '73?
Freeman: Oh, no, it got sexy one night in '65, w h e n the lights went out. Here was a little agency that had not gotten an inch of ink in the Washington Post. All of a sudden we had all three networks outside. It was a night that I will never forget. It was about 5:19, and I was in the chairman's office, along because it was the only time in the whole four years that Joe had gone h o m e early President Johnson h a d called h i m that day to ask if he w o u l d stay on for the rest of the year, because he hadn't gotten a successor yet. Actuall~ I think it was Bill Moyers w h o called, it wasn't actually Lyndon. Joe and I were going into private practice together. We h a d already rented office space. Joe told Moyers he had to talk to his law partner to find out if we could afford to stay on. We had to pay the rent, anyhow. We agreed
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to have dessert together and talk about it. I was going to go h o m e and have dinner and then go to Joe's for dessert. The first phone call came in from the Wall Street Journal, saying [the blackout] was spreading all over N e w England. Then, all of a sudden, every light on the switchboard lit up. I was in the ofrice by myself and Charlie Ross, a m e m b e r of the commission, was walking d o w n the hall. I said,
It was a wild night. It was Califano's first big night in the White House. He called us and said, 'Stop talking to the news. You're scaring the hell out of the American people.'
"Charlie, don't leave. The lights are out all over New England." We tried to get hold of Swidler, and we did and he came back. It was a wild night. It was Califano's first big night in the White House. He called us and said, "Stop talking to the news. You're scaring the hell out of the American people," because Swidler had said this could h a p p e n again. I said, "Joe, that ain't an easy d a m n thing for m e to go in and tell Swidler. His response was, "It
isn't an easy d a m n night for any of us. Do it." I went into Swidler's office, and I tried to be diplomatic about it. "Joe," I said, "the White House doesn't think you ought to be on the tube anymore, and I think maybe we ought to get somebody else to talk." "Well," he said, "if I'm not going to do it, you're not either." I said, "Hell, nobody's inviting me, they're just disinviting you." We finally m a d e it through the night. We sent out telegrams for information. Because we had just completed the [National Power] Surve)~ we knew w h o all the players were. The information came flying in, we looked at the logs. A n d it was the Canadians w h o did it. We were all relieved we could blame it on Ontario Hydro. What had h a p p e n e d was, the relays on all the transmission lines going north from Niagara had been set for a certain level. They tripped all the d a m n relays. So all of a s u d d e n this huge surge of p o w e r cascaded d o w n through New York. In those days, the only thing that was protected were the power plants. They all went ought like that, it went like a tidal wave and knocked out everything. It was quite a night. A n d the interesting thing, it was one of the calmest nights in N e w York City. There was very little looting. Neighbors got to k n o w each other, and nine months later the birth rate shot up.
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TEJ: So it would have been Swidler and Freeman, w h a t later became Swidler and Berlin? F/'0emaf;: It was Swidler and Freeman for a couple of years. Then I went back to government, and Joe went back later on to the N e w York Public Service Commission. Neither of us were very h a p p y in private practice at that time. Now, Joe seems to have thrived in it. The two years we were in practice together didn't work out very well. Joe and I did not have a discouraging word the whole four years at the power commission. But it didn't work in private practice. I think each of us preferred to be in public service. Joe was a good deal more conservative than I am, as it ~ r n e d out. On the commission, he was the swing vote between two liberals and two conservatives. And I'd always get the last lick in, because we car pooled together. But m y view is that those years were among his proudest hours. He taught m e a lot about how to run a place.
TEdJ H o w did y o u get picked for TVA?
Freeman: It was the [Ford Foundation] Energy Policy Project report that I sent to the governor of each state. O m i Walden [Georgia Governor Jimmy Carter's energy advisor] told m e this story; so I believe it is true. Carter gave her the report and asked her to s u m m a rize it for him. She took it and started reading and noticed that the executive s u m m a r y pages had
April 1994
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been t o m out. She summarized it and gave the s u m m a r y to Carter. He compared her s u m m a r y to the executive summary, and they were about the same, and he liked what he read, so that became the basis of the state energy policy of Georgia. So I had become Jimmy Carter's energy advisor. I had never met the man. All through the campaign, people were saying, "You know, Jimmy sounds just like you, Dave." Carter, of course,
[Sen. James] Sasser asked me, 'Where are you from?' And I answered, 'Tennessee, sir. And Senator, as it stands now, it'sjust me and you.'
think of the TVAjob? Have you thought of that?" I said, "Fine, will the president support me?" He said, "Yup." So Schlesinger went to w o r k for m e and he went to w o r k with H a m i l t o n Jordan [Carter's chief of staff]. One day Jim came to m e and said, "The president wants a m e m o from you, Dave, on the future of TVA. It's a dual purpose memo, Dave. Do you understand?" Of course, it was a takeh o m e exam. I only had a couple of days to write it, so I wrote this memo. I didn't meet with Carter, but I got a note back from Carter, saying this w o u l d be his policy and he h a d sent it to TVA. I didn't quite get it, then I realized I had passed with flying colors. To the extent that the president didn't want to wait until I got d o w n there, he wanted to start immediately. That's h o w the conservation programs got a big boost.
TEJ: Did you have any problems with Senate confirmation?
Froeman: N o w that you menis a very smart person, and he adopted these ideas through his o w n brain power. But having done this $4-million piece of research, it pulled it all together. So we were intellectual friends, not political friends. I was not a political supporter. Toward the end of the campaign, I was invited d o w n there and helped write a policy paper for him, but it was never really used. Then Jim Schlesinger came in, and he was the top energy man. He said to me, "What do you
tion it, Carter had neglected to tell Sen. [James] Sasser ahead of time that he was nominating me. So w h e n it came time for the hearings, Sasser was just raising hell, because the White House hadn't gone through him. Sasser asked me, "Where are you from?" A n d I answered, "Tennessee, sir. A n d Senator, as it stands now, it's just me and you." W h e n the hearing adjourned, I went u p to Sasser's office. He said, "This is nothing personal. I'm angry and I'm go-
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ing to be angry with you for quite a spell here, and we're finally going to get along. We probably agree on everything. But this is just not the way the junior Senator from Tennessee ought to be treated."
TEJ: H o w a r d Baker was the senior Senator?
Freeman: Yes, that's right. A n d I had k n o w n H o w a r d w h e n he had been an attorney in Knoxville, before he ran for office. I have nothing but the highest regard for Howard. W h e n he was thinking about running for president, I told him, "I don't k n o w about the Republic nomination, but I think you can get the Democrats." He said, "Coming from anybody but you, Dave, I'd consider that an insult. But coming from you, I consider that a high compliment." H o w a r d was helpful to m e w h e n I went to the Lower Colorado River Authori~. He told them, "When he came to TVA, Dave was a flaming liberal. But by the time he left, h e ' d become pretty conservative. I think you guys can probably make a Republican out of him."
TEd: You also p u t a lot of emphasis on getting the fossil p r o g r a m in shape, so that TVA was in reasonable shape w h e n the nuclear program collapsed in the mid-80s.
Freeman: I was long gone w h e n that happened, and in all candor, I've gotten precious little credit for that from our good friends, the distributors of the Tennessee
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Valle)¢ w h o remember me only because they perceived I was antinuclear, because we shut d o w n eight plants. I wish we had shut d o w n more. But we did p u t resources into those coal-fired plants, and they have carried the load. I got sued by some of the co-ops and distributors w h e n I agreed to obey the air quality laws. We worked out an agreement with the EPA.
jected. I think Craven Crowell has inherited an animal that is not fundamentally different from the animal I inherited. They've poured billions of ratepayers' dollars into those nukes, with nothing to show for laws. We worked out an agreement with the EPA.
TEd: You were very interested in electric vehicles w h e n you were at SMUD. Are you bringing that interest with you?
Freeman: It's here. This is what
Howard Baker told them, 'When he came to TVA, Dave was a flaming liberal But by the time he left, he'd become pretty conservative. I thinkyou guys can make a Republican out of him.'
TEJ: [Former TVA Chairman] Red Wagner said TVA wasn't required to obey federal law.
Freeman: Some folks w o u l d rather fight than get on with their lives. That was the m o o d of a lot of those folks. But it w o u l d have been rate shock galore, on top of the nuclear stuff. I must say I do not have the feeling that I m a d e a big, lasting impact on TVA. I hate to say it, I feel like a heart transplant that was re-
people in N e w York and California are going to be driving. I'm meeting with the economic develo p m e n t people of the State of N e w York in a few days. We're going to make it happen. My feeling is that the challenge for the electric p o w e r industry in the next century and the last part of this one is the electrification of the transportation sector. I consider this as big a challenge as rural electrification was in the '30s, '40s and '50s. We are on the verge of success. Between N e w York and California, we are going to p u t the squeeze play on Detroit. If there is a place on this earth that demonstrates the need for electric vehicles, it is the N e w York City area. I look out this w i n d o w and I see the city in gridlock 10 or 15 percent of the time. An electric car doesn't b u r n any fuel w h e n it is sitting in traffic. A n d there just isn't e n o u g h room for all these limos and big cars. Swatch is coming out with a small car that is good for commuting.
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TEJ: At SMUD, y o u p u t considerable emphasis on the flywheel battery.
Freeman: I'm really excited at the w o r k Honeywell is doing, with the aide of some m o n e y we got for t h e m at SMUD from the Defense Department. God forbid that DOE should invest any m o n e y in that sort of thing. The smart people in the Defense Department are interested in electric vehicles for their o w n defense purposes. In a few m o n t h s from now, we will k n o w that we can build these flywheels. If we can, we've got a 350-mile range, with existing batteries. A n d all these h u n d r e d s of millions of dollars that the big three has talked DOE into spending on chemical batteries is a delaying tactic. This will be a big initiative by us, and a beautiful thing is that the transit authority is our customer. So we are going to make music, make cars, reduce pollution together. Here at the p o w e r authority we're not going to be the grandest i n d e p e n d e n t p o w e r producer in the world, b u t we're going to be in the lead on efficiency; the environment, economic development, and electric transportation.
TEJ: Will Detroit get passed by some entrepreneurial c o m p a n y that gets there first?
Freeman: It's a whole n e w ball game. It's electronics, plus the materials out of the space and defense industries. It m a y be that Detroit isn't nimble e n o u g h and
April 1994
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innovative e n o u g h to make this product. But once the entrepreneurial companies are up and running, Detroit will buy t h e m out. If we are ever going to clean u p the air and prevent global warming, we are going to have to get the cleaner sources of energy and p u t t h e m in and replace the gas tank. Public p o w e r used to be 100 percent renewable energy before World War II. Now, we're not going to get m u c h more hydro.
The [Clinton administration's]idea was to get people who don't have a track record and haven't pissed off anybody. Unfortunately, the quality of govemance has suffered as a result.
What's left of North American probably needs to be left alone. But w i n d power potential is enormous, especially in the northern tier of states. There's a tremendous biomass resource that can be gasified and converted to methanol. That's a fantastic resource to replace imported oil, which is up to 60 percent. Hazel O'Leary does not have a program to get us off imported oil. It kind of hurts me to say that,
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because Bill Clinton and AI Gore k n o w this issue.
TEJ: Were you expecting a call from Bill Clinton?
Freeman: Expecting is too strong a word. I assumed I w o u l d be part of a Clinton-Gore administration. I k n o w t h e m personally a whole lot better than I knew Jimmy Carter, so I thought I w o u l d be part of the team. In retrospect, they k n e w they weren't going to make energy a big deal in the first term and they didn't want s o m e b o d y w h o was going to cause controvers:~ If I was Hazel, I w o u l d n ' t hire me. So I understand w h a t they have done. The idea was to get people w h o don't have a track record and haven't pissed off anybody. Unfortunately; the quality of governance has suffered as a result. Carter and Clinton are fundamentally different. Jimmy Carter didn't care one bit about politics. Clinton is 100 percent political. N o b o d y can accuse Clinton of cronyism. He drops his friends as fast as people he doesn't know. I haven't seen Gore since he's been vice president. He's been real bus)a He's someone I worked with like a brother w h e n he was in Congress and I was on the TVA board. There's never been a conversation with A1 Gore w h e n I didn't learn something. He's one of the brightest people I have ever met, and he's as sincere and dedicated as can be. •
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TEJ: What made you take this job?
Talking With... Dave Freeman Conversation with an Iconoclast Faced with a poorly performing public power agency, who do you call? Dave Freeman. S. David Freeman, the self-described utility repairman, is at it again, this time as head of the troubled New York Power Authority. Named as NYPA's chief executive only months after announcing his retirement as general manager of the Sacramento Municipal Utility District, the feisty Freeman, 68, has already started making waves at the giant state agency. The Freeman career - - or careen - - is dizzing. From junior civil engineer at the Tennessee Valley Authority, to TVA attorney, to the Kennedy administration as chief staff aide to Federal Power Commission Chairman Joseph Swidler. Two years in private law practice with Swidler in Washington from 1965-67, and Freeman was back in government, as head of energy policy in the White House Office of Science and Technologyfrom 1967-71. Then, the move that really put the rockets behind Freeman's ride, as head of a $4 million Ford Foundation study of U.S. energy policy, begun presciently in 1971, before the first Arab oil embargo. The result was a book, A Time to Choose, published in 1974, a period when many believed oil prices would exceed those of gold and, if we didn't put nuclear plants on every corner, we would allfreeze in the dark. Freeman's study didn't see it that way at all. It argued that we could reap enorTnous rewards from energy conservation, a heretical notion indeed. Freeman's analysis found a convert in Georgia Governor Jimmy Carter, who, when he became President, appointed Freeman to the TVA board and chairmanship, succeeding the legendary, nuke-loving Aubrey "Red" Wagner. Freeman canned eight nukes, pushed that dirty word "conservation'" in the valley, and cleaned up the TVAfossil program before leaving in 1984. Next it was the Lower Colorado River Authority, where Freeman's doctrine of conservation and efficiency led to cancellation of a controversial lignite plant. Then on to SMUD, where the citizens had just voted to shut the 900-MW Rancho Seco nuclear plant. Freeman's answer to the Ranch? Efficiency and renewables. And in Sacramento, Freeman fell in love with electric vehicles, a love he took with him to New York, where he displays a photo wallet full of pictures, not of grandkids, but of EVs. Freeman talked with characteristic wit and conviction to energy journalist Kennedy Maize in NYPA's offices in Manhattan.
April 1994
Freeman; It's a chance for another life. This has been m y life's work. There's something poetic about my being here. I ran the [Tennessee Valley Authority], I ran the son of TVA d o w n there in Texas, Lyndon Johnson's little TVA, the Lower Colorado River Authority. It seems somehow in the cards that I should come back and run the father of them all, Franklin Roosevelt's power authority. I feel quite blessed, and honored, quite frankl~ We're the transition team here. There's a real advantage if you've got some heavy duty repair work to do - - you get it done early in the game and get it over with, then rally everyone behind a common goal. If you come in and piddle around, you fade into the woodwork, then you haven't really done anything.
TEJ: You aren't piddling around.
Freeman: No, and I think that's the greatest sin for anybody in a public position. The greatest sin is if you don't stand for something. Why the hell are you there? These folks who keep jobs just to keep them are not my cup of tea. TEJ; You're obviously not afraid to make waves.
Freeman: Well, everybody thinks I'm just putting on a show. But I have been saying pretty much the same thing for 20 years. 71
i iil ii i!i!i!!iJJiiJiiiiiiiiiiiiiiiiiiiiiiJ!iiiiiiiiiiiiJiiiiiSiiiiiiiJiiiiiii!!iiiiiJiiiiiiiiiiiiiiiiiiiii!iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiii iiiiiiiiJiiiiii i! JiJiiiiii I haven't always been right, but the world has been m o v i n g in the direction that I have pointed to, more than I h a d any right to expect. I just do m y job and people think I'm making waves. Honestl)~ in California the last few years, I have felt pretty m u c h in the middle of the road.
TEd; Here in N e w York, there has been a corrosive relationship between the Power Authority and the independents. Freemsn; I don't think that will continue. A n d I expect to have a cordial relationship with the investor-owned utilities. I'm not here looking for a fight.
We're struggling to compete in a wholesale marketplace and those folks have got monopolies on retail markets. I don't see that head-to-head clashes is the road to glory for any of us. Now, I'm not one of those utility executives w h o just automatically goes with the herd. I'm very m u c h aware that we have got some contentious situations. In the utility industry toda~ there are a lot of folks m o u t h i n g the words of competition while continuing to have a good-sized monopoly. We don't have a m o n o p o l y over a large retail market. I'm here to make peace, not war. But I expect we can all work to-
gether on w h a t I think is a positive agenda. That includes renewables and electric transportation. That's sort of the Lord's work for the utility indus~¢. That's been m y life's work and that's where we will take a leadership role.
TEd; What gives you joy in your job?
Freeman: If I've a d d e d some value, if I feel I've m a d e a difference, then I'm happ)a A n d you don't have to do it all yourself, you make a contribution w h e n you bring good people in. I take a lot of pride in the accomplishments of the people I've mentored. Someone w h o worked for me at the Tennessee Valley Authority w h o is n o w chief forester of one of the western states. That gives m e a lot of jo)a I k n o w I could go d o w n to Fayette C o u n t , Texas, any day and they w o u l d h u g m e because they k n o w that, but for me, Fayette County w o u l d be turned upside d o w n in a big lignite mine. N o b o d y can take that away from me. A n d I k n o w that but for m y vote TVA w o u l d have eight more nukes and TVA w o u l d be broke by now. A n d I k n o w that out there at SMUD, there's a whole hatful of people w h o feel the same. Some people might sa)~ that's just pure ego, and of course it is, but not pure ego. Everybody has an ego. If you don't, you are dead. I have been blessed, you know. I go back and remember that
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Jimmy Carter read m y energy policy project, and he has a photographic mind, so that became his energy policy: You are forcing m e to go back in m y memories. I a m blessed with an e n o r m o u s array of pleasurable experiences in m y work career. I've been lucky and I think luck is one of the principle ingredients for any g o o d manager. You make your o w n breaks to a certain extent, but you've got to have luck.
TEd: Tell m e your background
I went to w o r k for TVA w h e n I graduated from Georgia Tech. Just working for TVA was m y childhood ambition, growing u p in Chatanooga. So I worked over a drafting table as a civil engineer, designing box culverts and the basement floor of the Johnsonville steam power plant. It was the worst work I've ever done and I was absolutely no good at it. In those days the person w h o checked your drawings w o u l d make the
Freeman: I grew up in Chatanooga, Tennessee. My d a d was an umbrella repairman, he had an umbrella shop. We weren't dirt poor, b u t we didn't o w n an automobile until I was in college. We certainly were not well off. In school, I was a shy kid, in the m i d d l e of m y class. I went to Georgia Tech because Atlanta was very close and because I was good in algebra they thought maybe I should be an engineer. It was the worst vocational choice. I h a d little aptitude for engineering, but I ' m a pretty stubborn person so I persevered and I graduated from Georgia Tech. It was the hardest struggle of m y life; m y grades got worse as I progressed, so I just barely m a d e it. In between, in World War II, I was in the Merchant Marines, and m a d e three trips across the North Atlantic. I loved the sea and could easily have become a sea b u m if I h a d n ' t quit w h e n the war was over and gone back to school.
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I graduated first in my class in law school It changed my life. All of a sudden I became arrogant in one fell swoop.
changes in red. My drawing w o u l d come back and it w o u l d just be blood red. I m u s t confess I experienced the agony of having people p r o m o t e d over me. So I k n o w h o w tough that is to take. But I was rational e n o u g h not to say that it was favoritism or the boss's pet. I knew in m y heart and m y head that I just wasn't cutting it. So I went back to school, to law school. I thought, I m a y be a sorry engineer but I might make a hell of a good lawyer. A n d it's true, because I graduated first in
m y class in law school. It changed m y life. All of a s u d d e n I became arrogant in one fell swoop.
TEJ: Doesn't that come with the law degree?
Freeman: Not reall3a It comes with being first in your dass. I h a d really found something that I was g o o d at, for the first time in m y life. A n d it really did change m y life. I ' m persuaded I'd have been dead decades ago if I h a d n ' t changed careers. So I was going to law school, and I had just gotten married, and we were getting the hell out of Knoxville a n d we were leaving TVA. That was certain. A n d by the time I was a senior, TVA had m e working part-time as a lawyer. A n d they m a d e m e the best offer of anyone, so I went to work for the TVA legal department. I loved it and had a rich variety of legal work. I was there from 1956 to 1961. A n d then this g u y n a m e d John Kennedy was elected and I decided I w a n t e d to come to Washington and be part of that. I h a d been interviewing with a m a n n a m e d [John] Doar in the Civil Rights Division [of the Justice Depar[a~ent] about being a civil rights lawyer. Then this power commission thing came u p while those interviews were going on. I remember Doar saying to me, "You know, I don't think y o u ' d be good before a Southern jury because they w o u l d consider you a traitor."
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But there was the chance to work with Joe Swidler, w h o was the chairman of the Federal Power Commission, so we m o v e d to D.C. in '61. A n d I was working in Btus w h e n everyone else was interested in civil rights. I can recall going to cocktail parties in Washington in those years and if I started talking about m y work, I could see the person's eyeballs lifting up, going over m y shoulder and looking for somebody else to talk to. I mean, we were absolutely the dullest group in Washington.
TEd; It didn't get sexy until '73?
Freeman: Oh, no, it got sexy one night in '65, w h e n the lights went out. Here was a little agency that had not gotten an inch of ink in the Washington Post. All of a sudden we had all three networks outside. It was a night that I will never forget. It was about 5:19, and I was in the chairman's office, along because it was the only time in the whole four years that Joe had gone h o m e early President Johnson h a d called h i m that day to ask if he w o u l d stay on for the rest of the year, because he hadn't gotten a successor yet. Actuall~ I think it was Bill Moyers w h o called, it wasn't actually Lyndon. Joe and I were going into private practice together. We h a d already rented office space. Joe told Moyers he had to talk to his law partner to find out if we could afford to stay on. We had to pay the rent, anyhow. We agreed
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to have dessert together and talk about it. I was going to go h o m e and have dinner and then go to Joe's for dessert. The first phone call came in from the Wall Street Journal, saying [the blackout] was spreading all over N e w England. Then, all of a sudden, every light on the switchboard lit up. I was in the ofrice by myself and Charlie Ross, a m e m b e r of the commission, was walking d o w n the hall. I said,
It was a wild night. It was Califano's first big night in the White House. He called us and said, 'Stop talking to the news. You're scaring the hell out of the American people.'
"Charlie, don't leave. The lights are out all over New England." We tried to get hold of Swidler, and we did and he came back. It was a wild night. It was Califano's first big night in the White House. He called us and said, "Stop talking to the news. You're scaring the hell out of the American people," because Swidler had said this could h a p p e n again. I said, "Joe, that ain't an easy d a m n thing for m e to go in and tell Swidler. His response was, "It
isn't an easy d a m n night for any of us. Do it." I went into Swidler's office, and I tried to be diplomatic about it. "Joe," I said, "the White House doesn't think you ought to be on the tube anymore, and I think maybe we ought to get somebody else to talk." "Well," he said, "if I'm not going to do it, you're not either." I said, "Hell, nobody's inviting me, they're just disinviting you." We finally m a d e it through the night. We sent out telegrams for information. Because we had just completed the [National Power] Surve)~ we knew w h o all the players were. The information came flying in, we looked at the logs. A n d it was the Canadians w h o did it. We were all relieved we could blame it on Ontario Hydro. What had h a p p e n e d was, the relays on all the transmission lines going north from Niagara had been set for a certain level. They tripped all the d a m n relays. So all of a s u d d e n this huge surge of p o w e r cascaded d o w n through New York. In those days, the only thing that was protected were the power plants. They all went ought like that, it went like a tidal wave and knocked out everything. It was quite a night. A n d the interesting thing, it was one of the calmest nights in N e w York City. There was very little looting. Neighbors got to k n o w each other, and nine months later the birth rate shot up.
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TEJ: So it would have been Swidler and Freeman, w h a t later became Swidler and Berlin? F/'0emaf;: It was Swidler and Freeman for a couple of years. Then I went back to government, and Joe went back later on to the N e w York Public Service Commission. Neither of us were very h a p p y in private practice at that time. Now, Joe seems to have thrived in it. The two years we were in practice together didn't work out very well. Joe and I did not have a discouraging word the whole four years at the power commission. But it didn't work in private practice. I think each of us preferred to be in public service. Joe was a good deal more conservative than I am, as it ~ r n e d out. On the commission, he was the swing vote between two liberals and two conservatives. And I'd always get the last lick in, because we car pooled together. But m y view is that those years were among his proudest hours. He taught m e a lot about how to run a place.
TEdJ H o w did y o u get picked for TVA?
Freeman: It was the [Ford Foundation] Energy Policy Project report that I sent to the governor of each state. O m i Walden [Georgia Governor Jimmy Carter's energy advisor] told m e this story; so I believe it is true. Carter gave her the report and asked her to s u m m a rize it for him. She took it and started reading and noticed that the executive s u m m a r y pages had
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been t o m out. She summarized it and gave the s u m m a r y to Carter. He compared her s u m m a r y to the executive summary, and they were about the same, and he liked what he read, so that became the basis of the state energy policy of Georgia. So I had become Jimmy Carter's energy advisor. I had never met the man. All through the campaign, people were saying, "You know, Jimmy sounds just like you, Dave." Carter, of course,
[Sen. James] Sasser asked me, 'Where are you from?' And I answered, 'Tennessee, sir. And Senator, as it stands now, it'sjust me and you.'
think of the TVAjob? Have you thought of that?" I said, "Fine, will the president support me?" He said, "Yup." So Schlesinger went to w o r k for m e and he went to w o r k with H a m i l t o n Jordan [Carter's chief of staff]. One day Jim came to m e and said, "The president wants a m e m o from you, Dave, on the future of TVA. It's a dual purpose memo, Dave. Do you understand?" Of course, it was a takeh o m e exam. I only had a couple of days to write it, so I wrote this memo. I didn't meet with Carter, but I got a note back from Carter, saying this w o u l d be his policy and he h a d sent it to TVA. I didn't quite get it, then I realized I had passed with flying colors. To the extent that the president didn't want to wait until I got d o w n there, he wanted to start immediately. That's h o w the conservation programs got a big boost.
TEJ: Did you have any problems with Senate confirmation?
Froeman: N o w that you menis a very smart person, and he adopted these ideas through his o w n brain power. But having done this $4-million piece of research, it pulled it all together. So we were intellectual friends, not political friends. I was not a political supporter. Toward the end of the campaign, I was invited d o w n there and helped write a policy paper for him, but it was never really used. Then Jim Schlesinger came in, and he was the top energy man. He said to me, "What do you
tion it, Carter had neglected to tell Sen. [James] Sasser ahead of time that he was nominating me. So w h e n it came time for the hearings, Sasser was just raising hell, because the White House hadn't gone through him. Sasser asked me, "Where are you from?" A n d I answered, "Tennessee, sir. A n d Senator, as it stands now, it's just me and you." W h e n the hearing adjourned, I went u p to Sasser's office. He said, "This is nothing personal. I'm angry and I'm go-
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ing to be angry with you for quite a spell here, and we're finally going to get along. We probably agree on everything. But this is just not the way the junior Senator from Tennessee ought to be treated."
TEJ: H o w a r d Baker was the senior Senator?
Freeman: Yes, that's right. A n d I had k n o w n H o w a r d w h e n he had been an attorney in Knoxville, before he ran for office. I have nothing but the highest regard for Howard. W h e n he was thinking about running for president, I told him, "I don't k n o w about the Republic nomination, but I think you can get the Democrats." He said, "Coming from anybody but you, Dave, I'd consider that an insult. But coming from you, I consider that a high compliment." H o w a r d was helpful to m e w h e n I went to the Lower Colorado River Authori~. He told them, "When he came to TVA, Dave was a flaming liberal. But by the time he left, h e ' d become pretty conservative. I think you guys can probably make a Republican out of him."
TEd: You also p u t a lot of emphasis on getting the fossil p r o g r a m in shape, so that TVA was in reasonable shape w h e n the nuclear program collapsed in the mid-80s.
Freeman: I was long gone w h e n that happened, and in all candor, I've gotten precious little credit for that from our good friends, the distributors of the Tennessee
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Valle)¢ w h o remember me only because they perceived I was antinuclear, because we shut d o w n eight plants. I wish we had shut d o w n more. But we did p u t resources into those coal-fired plants, and they have carried the load. I got sued by some of the co-ops and distributors w h e n I agreed to obey the air quality laws. We worked out an agreement with the EPA.
jected. I think Craven Crowell has inherited an animal that is not fundamentally different from the animal I inherited. They've poured billions of ratepayers' dollars into those nukes, with nothing to show for laws. We worked out an agreement with the EPA.
TEd: You were very interested in electric vehicles w h e n you were at SMUD. Are you bringing that interest with you?
Freeman: It's here. This is what
Howard Baker told them, 'When he came to TVA, Dave was a flaming liberal But by the time he left, he'd become pretty conservative. I thinkyou guys can make a Republican out of him.'
TEJ: [Former TVA Chairman] Red Wagner said TVA wasn't required to obey federal law.
Freeman: Some folks w o u l d rather fight than get on with their lives. That was the m o o d of a lot of those folks. But it w o u l d have been rate shock galore, on top of the nuclear stuff. I must say I do not have the feeling that I m a d e a big, lasting impact on TVA. I hate to say it, I feel like a heart transplant that was re-
people in N e w York and California are going to be driving. I'm meeting with the economic develo p m e n t people of the State of N e w York in a few days. We're going to make it happen. My feeling is that the challenge for the electric p o w e r industry in the next century and the last part of this one is the electrification of the transportation sector. I consider this as big a challenge as rural electrification was in the '30s, '40s and '50s. We are on the verge of success. Between N e w York and California, we are going to p u t the squeeze play on Detroit. If there is a place on this earth that demonstrates the need for electric vehicles, it is the N e w York City area. I look out this w i n d o w and I see the city in gridlock 10 or 15 percent of the time. An electric car doesn't b u r n any fuel w h e n it is sitting in traffic. A n d there just isn't e n o u g h room for all these limos and big cars. Swatch is coming out with a small car that is good for commuting.
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TEJ: At SMUD, y o u p u t considerable emphasis on the flywheel battery.
Freeman: I'm really excited at the w o r k Honeywell is doing, with the aide of some m o n e y we got for t h e m at SMUD from the Defense Department. God forbid that DOE should invest any m o n e y in that sort of thing. The smart people in the Defense Department are interested in electric vehicles for their o w n defense purposes. In a few m o n t h s from now, we will k n o w that we can build these flywheels. If we can, we've got a 350-mile range, with existing batteries. A n d all these h u n d r e d s of millions of dollars that the big three has talked DOE into spending on chemical batteries is a delaying tactic. This will be a big initiative by us, and a beautiful thing is that the transit authority is our customer. So we are going to make music, make cars, reduce pollution together. Here at the p o w e r authority we're not going to be the grandest i n d e p e n d e n t p o w e r producer in the world, b u t we're going to be in the lead on efficiency; the environment, economic development, and electric transportation.
TEJ: Will Detroit get passed by some entrepreneurial c o m p a n y that gets there first?
Freeman: It's a whole n e w ball game. It's electronics, plus the materials out of the space and defense industries. It m a y be that Detroit isn't nimble e n o u g h and
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innovative e n o u g h to make this product. But once the entrepreneurial companies are up and running, Detroit will buy t h e m out. If we are ever going to clean u p the air and prevent global warming, we are going to have to get the cleaner sources of energy and p u t t h e m in and replace the gas tank. Public p o w e r used to be 100 percent renewable energy before World War II. Now, we're not going to get m u c h more hydro.
The [Clinton administration's]idea was to get people who don't have a track record and haven't pissed off anybody. Unfortunately, the quality of govemance has suffered as a result.
What's left of North American probably needs to be left alone. But w i n d power potential is enormous, especially in the northern tier of states. There's a tremendous biomass resource that can be gasified and converted to methanol. That's a fantastic resource to replace imported oil, which is up to 60 percent. Hazel O'Leary does not have a program to get us off imported oil. It kind of hurts me to say that,
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because Bill Clinton and AI Gore k n o w this issue.
TEJ: Were you expecting a call from Bill Clinton?
Freeman: Expecting is too strong a word. I assumed I w o u l d be part of a Clinton-Gore administration. I k n o w t h e m personally a whole lot better than I knew Jimmy Carter, so I thought I w o u l d be part of the team. In retrospect, they k n e w they weren't going to make energy a big deal in the first term and they didn't want s o m e b o d y w h o was going to cause controvers:~ If I was Hazel, I w o u l d n ' t hire me. So I understand w h a t they have done. The idea was to get people w h o don't have a track record and haven't pissed off anybody. Unfortunately; the quality of governance has suffered as a result. Carter and Clinton are fundamentally different. Jimmy Carter didn't care one bit about politics. Clinton is 100 percent political. N o b o d y can accuse Clinton of cronyism. He drops his friends as fast as people he doesn't know. I haven't seen Gore since he's been vice president. He's been real bus)a He's someone I worked with like a brother w h e n he was in Congress and I was on the TVA board. There's never been a conversation with A1 Gore w h e n I didn't learn something. He's one of the brightest people I have ever met, and he's as sincere and dedicated as can be. •
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