Power to the People

Sound fanciful? Consider the career of Scott Gardner, 29, who joined AES in 1992 right out of Dartmouth College. Gardner joined a team developing a $200 million cogeneration plant in San Francisco. "It involved a lot of work and few people to do it," he says. "I took on tasks that ranged from designing a water system to negotiating with the community to buying and selling pollution credits."

Gardner also helped lead a bid (ultimately unsuccessful) for a $225 million cogeneration plant in Vancouver, British Columbia. When a similar deal materialized in Australia, Gardner volunteered for that assignment. Two weeks later, he was on his way to Brisbane.

"My task was to understand an unfamiliar regional power system, develop a design for the plant, and prepare a financial and technical bid document - all in six weeks," he says. When Gardner's proposal made the final round of competition, his division manager had him negotiate the terms of the $75 million deal. "The stress was incredible, but I was having fun," he says.

His bid won. "I held a press conference and was interviewed by local TV stations," says Gardner, who has left AES to attend business school. "I had to pinch myself to be sure this was happening."

Don't Just Make Money - Make a Difference

There's no denying AES's financial success. But Bakke and Sant didn't start the company so they could cash in. Bakke is a devout Christian whose ideas on business trace back to his religious beliefs. Sant is an environmentalist who has been active in organizations like the World Wildlife Fund and the Environmental Defense Fund. "This isn't about maximizing profits," Bakke insists. "We do this because it maximizes our ability to have fun and make a difference."

Of course, building and operating power plants is not one of the world's most environmentally benign endeavors. That's why AES tries to compensate for the emissions that it generates. When it built a coal-fired plant in Montville, Connecticut, it calculated that it would generate 15 million tons of carbon over 40 years. It planted 52 million trees in Guatemala - enough to offset those emissions.

As AES has moved into the developing world, its social initiatives have moved beyond environmentalism. It has funded medical care in Kazakhstan, organized food banks in Argentina, built schools in China. Roger Sant says AES started shifting gears when it built two 340-megawatt power plants in Pakistan, where the adult literacy rate is less than 40%. "You can't go to Pakistan and say that the number-one priority is global warming," he argues.

AES's practices are undeniably radical. They are also distinctly American. Decentralized authority, open-book management, challenging jobs - this is the new formula at more and more young U.S. companies. So what happens as AES goes global?

Five years ago, almost all of AES's operations were on American soil. Today, after billions of dollars worth of acquisitions and joint ventures, two-thirds of its holdings are outside the United States. AES now generates 20% of all the electricity in Hungary. It operates one of the world's largest coal-fired plants - in Kazakhstan. It has a stake in six plants in China and five in Argentina. The biggest challenge facing Bakke and Sant is whether they can do business the same way in Hungary and China as they do in Texas and Oklahoma.

Oscar Prieto's work in Brazil is a test case. Light Servicios de Electricidade, established almost a century ago, is Brazil's answer to Consolidated Edison. Founded by Canadians as a private company, Light was seized by the Brazilian government in 1979.

"That's when time stopped around here," says plant supervisor Ricardo Silva, 48, as he rides a rusty cable car to the top of a water pipeline that feeds 10 generators at Light's 600-megawatt Fontes complex. "Nothing much has happened since."

Fontes, Light's largest generating facility, is situated on a former coffee plantation in the mountains west of Rio. Until 1990, it employed more than 1,000 workers - and housed them and their families in a bucolic village built by the company. A lot has changed at Fontes since privatization. For one thing, Prieto and his colleagues have slashed the workforce by more than two-thirds. They designed a generous severance package, but there's no denying the dislocation. "A lot of people had to move away," says Silva, who has worked and lived at Fontes for almost two decades.

Such stories make Roger Sant wince. "But keeping three times as many people as you need doesn't work for anyone," he says. Adds Oscar Prieto: "The people who remain behave differently; their humor changes; their habits change. There's an inverse relation between the number of people and the quality of behavior."