J. LaMont Keen and the art of leaving the lights on

By the time J. LaMont Keen announced his retirement, Idaho Power had been his working life for almost forty years. He had arrived in 1974 as an accountant. He would leave the executive suite in stages, passing the utility to Darrel Anderson at the start of 2014 and its parent company, IDACORP, to him that May. Even the goodbye had a schedule.

There is something pleasingly appropriate about an accountant arranging his departure in installments. Yet the dates tell a more substantial story. Keen had spent decades learning a business in which decisions come due long after they are made. A generating plant needs years of preparation. A successor does, too. His final executive assignment gave that principle a human face.

His route began with a business administration degree in accounting from the College of Idaho. He joined Idaho Power in the year he graduated, 1974. Twenty years later, he completed Harvard Business School’s Advanced Management Program. Between those educational landmarks came the less glamorous schooling of staying with one organization and accepting increasingly consequential jobs.

He became controller in 1988, vice president and chief financial officer in 1991, and added the treasurer’s responsibilities in 1996. Administration followed. By 2002 he was president and chief operating officer of Idaho Power and executive vice president of IDACORP. Those titles trace a widening field of responsibility: the accounts, the money, the machinery of the organization, then its daily operations.

Keen assumed Idaho Power’s chief executive role in November 2005. In July 2006 he succeeded Jan Packwood as president and CEO of IDACORP. He had already worked at the utility for thirty-one years when he became its CEO. The company was acquiring a leader who had lived with the consequences of its earlier decisions.

Cheap power has an awkward side

A utility executive sells electricity. Keen also spent time explaining why customers should use less of it. In a 2007 interview, he described industrial efficiency, irrigation incentives and residential cooling programs. The practical detail matters. Southern Idaho’s electricity demand follows the needs of factories, homes and farms; the opportunities to reduce it follow those same customers.

He pointed to a difficulty that a household might reasonably regard as good fortune: low electricity prices weaken the financial incentive to invest in efficiency. A cheaper appliance can remain attractive at the shop even when a more efficient model will consume less power. Large homes, air conditioning and new electronics complicate the arithmetic further.

The response involved participation rather than a speech about virtue. Irrigation Peak Rewards and A/C Cool Credit offered ways to reduce summer demand. Keen also supported a fixed-cost adjustment that would let the company pursue conservation without imposing the corresponding financial penalty on owners. Behind the program names sat a familiar management problem: how to make the desired behavior economically sensible.

His account of conservation was distinctly local. Irrigation customers, industrial users and air conditioners occupied the conversation. An electricity system has a geography, and Keen’s version of leadership began by taking that geography seriously.

A power plant arrives before the need does

At the dedication of Langley Gulch in June 2012, Keen looked back to Idaho Power’s beginnings in 1916 and its early dependence on hydropower. The Snake River had supplied decades of growth. The company’s obligation to provide electricity around the clock had eventually required other sources. He called energy the “oxygen of the economy.”

The new natural-gas plant near New Plymouth embodied a long argument about the future. The project’s place in the resource plan dated to 2004, when the proposal was for a coal-fired plant. Changing fuel economics, uncertainty over environmental regulation and advances in gas technology helped turn it into a combined-cycle gas project. Planning involved changing the plan.

In 2009, Idaho regulators authorized construction and provided related cost-recovery and ratemaking assurances. The board then authorized the company to proceed. Keen’s public explanation emphasized infrastructure that could meet electric-service obligations and support economic development. This was a commitment made while the wider economy was struggling, with the plant intended to serve needs beyond that moment.

By the third quarter of 2012, Langley Gulch was operating. Keen reported that the project had arrived on time and on budget. It helped meet peak demand and integrate intermittent wind generation. A gas plant could respond when the output of another resource changed; the system needed that flexibility as well as additional generation.

The bill was part of the story. In June 2012 regulators approved a $58 million annual revenue increase associated with the plant, averaging 6.8 percent across customers. Infrastructure becomes a physical fact at a dedication ceremony and a financial fact on the customer’s bill. Keen’s earlier finance jobs had prepared him for a business in which those two events belong to the same decision.

The choices that resisted a tidy ending

New generation did not settle the question of old generation. At the 2013 annual meeting, Keen said Idaho Power would continue relying on coal plants in Wyoming and Nevada while revisiting the decision in its next two-year planning cycle. The company had compared pollution-control investment with the cost of a new gas plant. It was an argument about cost and dependable supply, with environmental obligations attached.

That episode keeps the story from turning into a procession of comfortable milestones. A utility can pursue efficiency, add a gas plant that supports wind, and still defend continued coal investment. Each decision has a different time horizon. Customers need service in the present, even when the company is debating what its future generating fleet should look like.

Keen’s financial results also came with explanations. In February 2014 he attributed the previous year’s earnings growth to factors including a full year of Langley Gulch rate adjustments, weather-related sales, customer growth and an accounting-method change. Operations and maintenance costs had been held in line with 2012 through work on business processes.

He also highlighted the sharing of earnings with Idaho customers. Over three years, that amounted to more than $90 million in benefits to reduce future rates. It is a useful detail in the portrait of a former CFO: the story of earnings included both shareholders and customers, because the regulatory arrangement connected their outcomes.

Boise was part of the job

Keen’s responsibilities extended beyond the electricity business. In 2011 Cascade Bancorp and Bank of the Cascades announced his election to their boards, subject to regulatory approval. The bank emphasized the breadth of his operational, fiscal and board experience. A career spent inside one utility had produced expertise another regulated business wanted.

His civic and industry work included the Edison Electric Institute, Western Energy Institute and Idaho Association of Commerce and Industry. He had chaired the latter two organizations. He was also a former board member of Community House, serving people in need, and a board member of Boise’s Arid Club. These affiliations placed him in the working network of the city and the region.

When his retirement was announced, IACI president Alex LaBeau described him as firm, steady and smart, and spoke of his concern for Idaho’s direction. Such descriptions are judgments by a colleague, rather than a personality test. They nevertheless fit the visible career: long service, increasingly broad responsibility and continued involvement in the place where he worked.

The connection had a family dimension, too. His brother Steven R. Keen also held senior finance roles at Idaho Power and IDACORP. During the announced succession, Steven was promoted to responsibilities being vacated by Anderson. The brothers’ careers overlapped in the same corporate organization, a relationship explicitly disclosed in company filings.

The replacement was already in the building

Anderson’s path helps explain why the handoff occupied so much of Keen’s closing chapter. Anderson had known Idaho Power as its auditor before joining the company. Keen offered him a controller’s job. As Keen advanced, Anderson advanced as well, eventually becoming the second finance professional in succession to lead the utility.

The transition had visible preparation. In November 2011 the board announced that Anderson would become Idaho Power president from January 2012, while Keen continued as its CEO and retained the presidency and chief executive role at IDACORP. Responsibility was moving before the final retirement announcement. The eventual change at the top had an intermediate step.

In November 2013, the companies set out the remaining dates. Keen would step down as Idaho Power CEO on December 31 and as IDACORP president and CEO on April 30, 2014. He would remain on both boards. Anderson would take over each executive role immediately after Keen left it. There was room for continuity without pretending that nothing was changing.

“Retiring from ‘active duty’ will be a big life change”

J. LaMont Keen / November 2013

Keen called retirement from “active duty” a major change and expressed confidence in Anderson, with whom he had worked closely for years. The phrase is revealing without needing embellishment. After a career this long, stopping the daily work is a substantial event. He was looking ahead to the opportunities of retirement while leaving the operating decisions to someone he knew.

His board service continued until May 2018. That later departure completes the sequence: accountant, finance officer, operating leader, chief executive, director after retirement, then former director. The organization had room to move through each stage at its own pace.

The temptation in a chief executive’s biography is to finish with the appointment. Keen’s career makes the departure at least as interesting. He spent thirty-one years getting to the top of Idaho Power and several more preparing the company to carry on after him. For a business whose customers expect the lights to come on without thinking about its leadership, a well-prepared successor is an achievement with a particularly suitable quality: most people can get on with their day.