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New Command

Bill Habermeyer will wield enormous influence when he takes over Florida Power, whose acquisition by Carolina Power & Light will be completed this year. But the retired admiralhas faced challenges before and knows how to run a tight ship.

By STEVE HUETTEL

© St. Petersburg Times, published October 29, 2000


ASHEVILLE, N.C. -- Ask Bill Habermeyer for details of his days at sea as a Cold War submarine commander and he'll politely decline, still guarding national secrets. Never mind that it was more than a decade ago and naval espionage tactics are not exactly secret anymore.

The retired admiral is clearly conservative. He bristled when Asheville's chamber of commerce invited James Carville, the sharp-tongued Cajun and Clinton adviser, to speak at a dinner.

Habermeyer said he'd yank much of Carolina Power & Light Co.'s support for the event. The chamber dumped Carville and opted for former Washington Redskins quarterback Joe Theismann.

His by-the-book military style shaped his corporate career.

CP&L chief William Cavanaugh, another nuclear Navy alumnus, picked him to help straighten up troubled nuclear plants and make the utility leaner. Habermeyer saluted. He still makes no apologies for lost jobs.

"You try to look at the overall health of the organization," he says. "Will it be more viable and more competitive or not? Will it be better after resizing or not?"

Now Habermeyer is headed south to run Florida Power, which CP&L will own by year-end. He inherits a much larger operation, with 10 times as many customers as the 140,000 in CP&L's western outpost in the Great Smoky Mountains.

Habermeyer arrives at a time when many longtime Florida Power hands are leaving; 800 positions will be cut and competitors are sharpening their knives.

Employees and the communities wonder what's ahead as the industry changes and Florida Power customers continue paying the highest utility bills in the state.

Local leaders were shocked when Florida Power president Joe Richardson, picked by CP&L to keep running the operation, decided in August to leave when the sale is complete.

St. Petersburg Mayor David Fischer found Habermeyer friendly and straightforward at a get-acquainted lunch this month.

And he was encouraged to hear about Habermeyer's commitment to economic development in Asheville, where CP&L is behind the renovation of a public market that covers a city block and is a big supporter of education and the arts.

While Florida Power isn't St. Petersburg's only corporate heavyweight anymore, the company -- and whomever's in charge -- still wields enormous influence.

"We still look to Florida Power as one of the big anchors," Fischer says. "Coming in from the outside, it'll be interesting to see how he melds in with the community."

* * *

Howard William Habermeyer Jr. was born in 1942 and raised in Aurora, Ill., a suburb about 30 miles west of Chicago.

His father, who went by the name Howard, began work as a messenger for the Railroad Retirement Board, an obscure federal agency that administers benefits for the nation's railroad workers.

The senior Habermeyer worked his way up. In 1956, he was appointed agency chairman by President Eisenhower, a Republican. He held the job 16 years, reappointed by Democratic presidents Kennedy and Johnson.

When Bill Habermeyer was 8 or 9, he spent part of a summer with family friends in Virginia who took him to visit the Naval Academy in Annapolis, Md.

"I fell in love with it," he says. "I liked the nature of the activities, the mystique, the structure. It stuck with me."

His parents prevailed on him to apply to another college as well. But Habermeyer did well enough on an exam to qualify and won his congressman's appointment to the Naval Academy.

Like other midshipmen at Annapolis, Habermeyer spent summers trying out different branches of the Navy. The summer before he graduated, he worked with the crew of a diesel-powered submarine in Hawaii. Habermeyer was hooked.

"There was great camaraderie and close teamwork," he says. "They were a very elite part of the Navy. A very small part but with great cohesion."

The Navy was embarking on a new era of nuclear submarines under Adm. Hyman Rickover, legendary for his high standards and low tolerance for mistakes.

Able to operate silently under the ocean for months at a time, the submarines were perfect platforms for spying on the Soviet Union.

They lurked off the Soviet coast to intercept missile-launch data, tracked enemy submarines and slipped commandos ashore for clandestine operations, according to the 1998 book Blind Man's Bluff: The Untold Story of American Submarine Espionage.

With tours over two decades as an attack submarine engineer, executive officer and skipper, Habermeyer surely was involved in such spooky missions. As group commander in Groton, Conn., he oversaw the operations of 48 submarines.

Blind Man's Bluff authors Sherry Sontag and Christopher Drew contacted hundreds of submariners, and many told their stories. Not Habermeyer. People who talked broke their secrecy oaths and perhaps the law, Habermeyer says.

But Habermeyer was thrust into the limelight during his favorite Navy assignment: commandant of midshipmen at the Naval Academy in the late 1980s.

Joseph Steffan, a senior and respected battalion commander over 800 fellow midshipmen, went to the academy's chaplain with a dilemma. Rumors were spreading across campus that he was gay. The Naval Investigative Service had interviewed two fellow midshipmen about his sexual preference.

The chaplain asked if Steffan could talk with Habermeyer. Steffan was less than two months from graduating and didn't think he'd be kicked out. He asked to talk with Habermeyer. The conversation was short and to the point.

"Are you willing to state at this time that you are a homosexual?" Habermeyer asked.

Steffan hesitated briefly. "Yes, sir," he replied. "I am."

Habermeyer began an administrative investigation that led to Steffan's dismissal from the academy and the Navy.

Steffan sued in federal court over the Navy policy against gays. A panel of the U.S. Court of Appeals for the District of Columbia ordered the Navy to reinstate Steffan in 1993, but the full court overturned the decision on appeal.

Now a lawyer in New York City, Steffan says he doesn't hold a grudge against Habermeyer.

"He certainly toed the party line as far as the policy, but it's hard to criticize somebody for that," Steffan says. "He had relatively little flexibility."

Habermeyer agrees he had no other option. "It was tough for me to make that decision, but the policy was pretty clear-cut," he says.

* * *

Soon after retiring as a rear admiral in 1992, Habermeyer got into an orientation program for nuclear Navy veterans to learn about the commercial power industry. He was assigned to learn the ropes at CP&L.

There he met Cavanaugh, the new CEO recruited to turn around the company's troubled and expensive nuclear power plants. Its Brunswick plant south of Wilmington, N.C, had been listed among the nation's worst-run reactors.

Cavanaugh fired the plant's general manager, replaced about 20 other managers and cut the number of contractors and consultants.

He hired Habermeyer to head the company's nuclear services department. Among its responsibilities was parachuting teams of technicians into CP&L's nuclear plants when problems arose.

Like many utilities, including Florida Power, CP&L embarked on an aggressive campaign to cut costs. The company eliminated more than 2,000 jobs from 1992 to 1997.

Habermeyer's department was cut from 250 employees to 150, with some reassigned to the plants. Eliminating the parachute teams put responsibility squarely on plant managers to run a tight ship, he says.

"The "fireman approach' breeds bad practices," Habermeyer says. "It took some of the onus off the plant for taking care of their own problems."

In 1997, Cavanaugh sent him to the western tip of North Carolina for a very different job: keep CP&L's customers satisfied and hold up the company flag in the community.

* * *

Landing in a new place and taking charge was second nature to Habermeyer, who has moved 23 times since graduating from the Naval Academy in 1964. Still, Asheville was like nowhere he'd lived before. The city of 60,000 is remarkably diverse.

About half the churches listed in the religion pages of the Asheville Citizen-Times are hard-shell evangelical, the rest New Age or even witches from the ancient Wicca religion, says N. Steven Steinert, president of the Asheville Arts Council.

The historic downtown is home to two-dozen art galleries. Diners at cafes can watch jugglers, fiddlers or Libertarians campaigning to legalize marijuana around the memorial of Zebulon Vance, a Confederate officer elected North Carolina's governor and U.S. senator.

Habermeyer quickly became a major player.

When James Mullen arrived from Trinity College in Hartford, Conn., as new chancellor at the University of North Carolina-Asheville last year, Habermeyer was one of the first people who called.

He invited Mullen to dinner at his home with a small group of Asheville's business elite, including the top executives of a big bank and the local hospital, the city's largest employer.

"He spent a lot of time trying to decide what's the right kind of thing for Asheville," Mullen says. "He wants to build on what makes Asheville special but allows for job creation."

When arts council leaders needed a strategic blueprint for its future, they turned to Habermeyer. He later led the group's annual fundraising campaign.

Habermeyer couldn't tick off a long list of favorite symphonies. But he grasped the role arts play in an area that honors native authors Thomas Wolfe and O. Henry and is home to some 4,000 artists.

Under Habermeyer, CP&L has been the deep pockets behind restoring the historic Grove Arcade. The 1920s-era market was one of the nation's first indoor malls before the government seized it for federal offices during World War II.

In 1997, a local non-profit foundation announced plans to turn the ground floor into a market with 70 stores selling fresh food, crafts and other locally produced goods. An Atlanta developer planned to renovate the top floors into office space and upscale apartments.

But when the developer had trouble with financing, CP&L agreed to invest $5.5-million. The company took over the entire private portion in August.

CP&L will collect tax credits for renovating the 269,000-square-foot historic building. But the company's primary aim is to bring more people into downtown and spur development, Habermeyer says.

"It will provide more opportunities for people to live and buy things in the city," Habermeyer says. "We see it as a great additional engine for downtown."

The only public tiff he got into was the Carville invitation.

Habermeyer, then chamber president-elect, insists he would have objected just as strongly to a controversial conservative such as radio host Rush Limbaugh. The chamber's big annual event isn't a place for politics, he says.

"I just wasn't real comfortable inviting customers and guests when I can't predict what the nature of his presentation would be," Habermeyer says. "You don't want as you walk out to be apologizing for what he said."

Newspapers picked up on the controversy, suggesting that Carville was too hot for little Asheville.

"I thought this community was a little bigger than than," says Darryl Hart, the chamber's president, who approved the choice of Carville.

A former CP&L executive says Habermeyer also understands company politics. Asheville is closer to Atlanta than CP&L's headquarters in Raleigh.

Habermeyer should have no trouble looking out for Florida Power's interests, says David Rumbarger, a former CP&L vice president for service and sales.

"He already understands that separatist mentality that you have to fight for what you want," he says. "That makes him a neat choice. He understands that feeling of not being at the mother ship."

* * *

NAME: Howard William Habermeyer Jr.

TITLE: vice president, western region, Carolina Power & Light Co.

DUTIES: managing regional power distribution, customer support and community relations.

AGE: 58 (May 24)

FAMILY: wife, Sally; two sons, Jim, 27, and Billy, 22.

HOMETOWN: Aurora, Ill.

HOBBIES: golf (9 handicap), reading.

BOOK HE'S READING: The Fortunes of War by Stephen Coonts.

EDUCATION: bachelor's degree in naval science from the Naval Academy (1964); master's degree in public administration from George Washington University (1970).

EMPLOYMENT HISTORY: vice president of nuclear engineering department and vice president of nuclear services and environmental support department at Carolina Power & Light Co.; 28 years in the Navy. Served as submarine engineer, executive officer, captain and group commander; commandant of midshipmen at Naval Academy; director of attack submarines for the chief of naval operations.

COMMUNITY INVOLVEMENT: chairman, Asheville Area Chamber of Commerce; western area board member, Wachovia Bank; director, Western North Carolina Development Association; director, Community Foundation of Western North Carolina; strategic planning committee chairman, Asheville Area Arts Alliance; board member, Asheville Bravo Concert Association.

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