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Earley, Tony Jr. 1949–

Tony Earley Jr.
1949

Chairman and chief executive officer, DTE Energy

Nationality: American.

Born: July 29, 1949, in Jamaica, New York.

Education: University of Notre Dame, BS, 1971; MS, 1979; JD, 1979.

Family: Son of Anthony Francis Earley and Jean Ann Draffen; married Sarah Margaret Belanger, 1972; children: four.

Career: U.S. Navy, 19711976, lieutenant; Hunton and Williams, 19791985, associate; 1985, partner; Long Island Lighting, 19851989, general counsel; 19881989, executive vice president; 19891994, president and COO; The Detroit Edison Company, 19941996, president and COO; DTE Energy, 19961998, president and COO; 1998, chairman and CEO.

Awards: Michiganians of the Year, Detroit News, 2003.

Address: DTE Energy, 2000 2nd Avenue, Detroit, Michigan 48226; http://www.dteenergy.com.

As of 2004 Anthony Francis (Tony) Earley was the chairman and CEO of DTE Energy, the Detroit-based diversified energy company involved in the development and management of energy-related businesses throughout the United States. Its largest operating units were Detroit Edison, an electric utility serving 2.1 million customers in southeastern Michigan, and MichCon, a natural-gas utility serving 1.2 million customers in more than 550 communities throughout the state. In 2003 the largest blackout in U.S. history left seven northern U.S. states, including most of Michigan, in the dark for three August days. In a strategy that was considered risky for a CEO, Earley became the public face of DTE during the crisis, winning accolades for his performance from employees, government officials, and anxious customers alike.

LEARNING TO REMAIN CALM UNDER PRESSURE

After earning a degree in physics from the University of Notre Dame, Earley embarked on a five-year career in the U.S. Navy during the latter part of the Vietnam War. He served as the chief engineer officer aboard the USS Hawksbill, a nuclear submarine. The experience of serving in the military gave Earley many of the skills that would make him an effective leader during the blackout crisis. He credited working on a Soviet torpedo exercise in particular with giving him poise under stress. Paul Hillegonds, the president of Detroit Renaissance, the group of chief executives promoting redevelopment that Earley chaired, would later say, "What he exuded during the blackout was the real Tony Earley. He has the kind of quiet confidence that gives others inspiration at times and a sense of calm when the times demand it" (Detroit News, May 9, 2004).

Upon leaving the service, Earley took advantage of the GI Bill to complete degrees in engineering and law at Notre Dame. He then worked as an attorney for the Virginia law firm of Hunton and Williams as a member of its energy and environmental team. As such Earley participated in the licensing of both nuclear and non-nuclear generating plants and represented a substantial number of nuclear utilities in rule-making actions before the Nuclear Regulatory Commission. He then became general counsel to the large New York energy company Long Island Lighting (LILCO) in 1985. He worked his way up to eventually become LILCO's president.

As a LILCO executive Earley became known as the spokesman who, in a series of television advertisements, pledged to freeze electric rates for two years; the power company made this move after abandoning, under political pressure, plans to operate a $5.3 billion nuclear plant. The episode badly soured relations between LILCO and its customers. Earley would later categorize his efforts to restore LILCO's reputation as great training for the 2003 blackout.

HEADING AN OLD-ECONOMY ELECTRIC COMPANY

Earley joined The Detroit Edison Company in March 1994 as president and chief operating officer. He was responsible for a broad range of utility operations, such as the development of the workforce skills and culture needed by Detroit Edison in order to be successful. After being repeatedly sued for race-based discriminationand threatened with a class-action lawsuitunder Earley DTE Energy would come to be recognized as one of the best companies for minorities by Fortune magazine.

As government regulation was the largest concern facing energy companies in the 1990s, Earley's background in law and public service helped him to lead Detroit Edison through various bureaucratic webs. The company needed a friendly regulatory environment, and Earley put his legal skills to use by aiding Michigan's efforts to restructure the electric-utility industry.

Detroit Edison established the DTE Energy holding company in 1996, naming Earley as chairman and CEO in 1998. At DTE Earley was a major factor in the company's evolution from an old-fashioned, electric-only business into one that provided both gas and electricity. Despite his nuclear background Earley stayed away from that particular energy source, probably because of the inevitable surrounding controversy as well as bad memories from the LILCO debacle. DTE's change in focus away from electricity did not impress the financial community, however; Earley experienced considerable trouble raising DTE's stock price, blaming the lackluster performance on Wall Street's fascination with technology stocks over old-economy companies.

To resolve this problem, Earley continued to diversify DTE and pursue new businesses for the holding company; by 2004 more than 40 percent of DTE's earnings were derived from nonregulated ventures. Investment in emerging technology appeared to be reaping rewards for the energy giant. Plug Power, the Latham, New Yorkbased company that developed residential fuel cells, was one of Earley's success stories. Created in 1997, the company went public in October 1999 and had a market capitalization of more than $4 billion by January 2000; DTE's investment in the company was worth $1.3 billion.

With his attention centered on the emerging technology favored by Wall Street, Earley had temporarily pushed Detroit Edison to the back burner. To later improve the subsidiary's performance, he stressed such fundamentals as trimming trees more attentively and increasing the number of meter readersnevertheless, he appeared to pay comparatively little attention to the already mature business. Possibly as a result in late 2001, in an episode that would come to be called the "customer storm," DTE botched bills and service for 690,000 customers. Earley blamed the miscues on technology-transfer difficulties resulting from the merger between Detroit Edison and MichCon. State regulators ordered DTE to overhaul its billing, and Earley acknowledged that as of 2003 the company's customer-service department was still under construction.

RESPONDING TO THE LARGEST BLACKOUT IN U.S. HISTORY

The 2003 blackout crisis gave Earley the opportunity to prove himself amid the worst situation that could befall any energy-company chief executive. In August Earley was sitting in his office on the top floor of DTE's Detroit high-rise when the lights flickered; before long the power went out and stayed out. Lights, air conditioners, refrigerators, gas stations, and ATMs throughout Detroit had fallen victim to a massive shutdown. Earley then began to hear the phones in his 24th-story office ringing, as acquaintances reported that they had lost power and wondered what Earley planned to do about it. Earley thoroughly recognized how crucial the situation would be for both himself and DTE: "You realize that this is a bet-the-company operation. Either the company is going to survive or not survive depending on how well it performs. Leadership has to step up in those situations" (Detroit Free Press, August 20, 2003).

Earley had prepared for the emergency of a massive blackout but never expected to actually experience one. After learning that the blackout stretched far beyond downtown Detroit, he realized that he needed to personally reassure Detroit Edison's customers about the situation. He held seven press conferences in the following three days, stressing that life would soon be back to normal and asking those with restored power to be conservative until the system could be stabilized. Earley was one of the most visible utility officials anywhere during the shutdown; his response earned him praise from numerous officials, including Michigan Governor Jennifer Granholm, who called Earley a "calming presence" and described him as exactly the person she would want to be leading during a crisis (Detroit Free Press, August 20, 2003). The Detroit News later honored Earley for his "leadership and calm" (May 9, 2004).

The blackout gave Earley further impetus to promote new energy technology. He suggested transforming the local substations that distributed power around neighborhoods into electricity-generating islands; such a strategy would circumvent the huge legal and environmental obstacles to building new transmission towers as well as bring back power much more quickly in the event of any future massive losses of electricity.

Despite DTE's diversification Earley continued to stress the importance of the basics. In 2004 he stated that his formula for success was a simple one, based on a strategy linked to the core skills and assets of the utility as well as to conservative financial policies. Earley aggressively cut costs and sought to modify Michigan's Electric Choice program, which sapped a substantial chunk of Detroit Edison's electric margins by permitting customers to choose alternative suppliers. He expressed concern that the continuation of the Electric Choice program could lead to severe consequences for DTE.

See also entries on The Detroit Edison Company, DTE Energy Company, and Long Island Lighting Company in International Directory of Company Histories.

sources for further information

Boschee, Pam, "DTE Energy Tops Growth Targets, Leverages Energy Technologies, and Expands Business Portfolio," Electric Light and Power, July 2000, pp. 1719.

Bunkley, Nick, "Anthony F. Earley, Jr.: The Spotlight Reflects Well on the Man with the Power," Detroit News, May 9, 2004.

Earley, Anthony F., "The New Job Security Model: From Employment to Employability," Executive Speeches, October/November 1996, pp. 1319.

Rios, Brenda, "Detroit-Based Electric Utility's Stock Continues to Sink," Detroit Free Press, April 15, 2000.

Webster, Sarah A., and Jeff Bennett, "DTE Energy CEO's skills Shined During Blackout," Detroit Free Press, August 20, 2003.

Caryn E. Neumann

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