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It is early in the morning, and Jack Pfister is hunting for cream for his visitor's coffee. He is rustling around in an alcove that is a kitchen or a bathroom and that opens out of the north side of his large office. When he finds the cream--which is not really cream, but powdered Cremora in a foil packet--he rips the package open and stands over his visitor's coffee cup, rather slowly tapping the white dust into the dark brew and watching it sink to the bottom. The general manager of the Salt River Project and one of Arizona's most influential leaders appears to be deeply interested in this activity. He continues with it until the packet is empty.

He seats himself at the handsome conference table and begins, quietly and deferentially, to talk into a tape recorder about the ways in which he has wielded power for twenty years. Each time he finishes a sentence, his unemphatic, pleasing voice rises into a question, as though he is wondering whether he has been heard and understood.

"I never set out to be a leader?" he is saying. "I just don't really think in those terms? The Arizona Republic once did a story about leaders in the Valley, and I was one of seven or eight who consistently came out on everyone's lists? And that really startled me?"

He is as calm as he is self-deprecating--the people who know Jack Pfister will tell you he is nearly always calm--but he is not terribly comfortable when he is trying to comment upon his own career. Sometimes he hesitates or shoots a perplexed glance across the table. He has not sought out this interview and, although he is cordial, it is pretty clear that he would prefer to retire from the helm of SRP in July without being eulogized in the press.

He warms to the discussion, though, when it stops asking him to pat himself on the back and begins showing an interest in the methods he has used when, again and again, he has reconciled diverse interests in his self-appointed role as mediator on a range of crucial state and Valley projects. That is the skill that his admirers point out most consistently--an ability to bring varied interests to the bargaining table and help them to discover common ground.

They also say that, for two decades, he has been convincing entrenched powers to accept fairly radical ideas. Sometimes, these newfangled ideas have seemed at first glance to serve the community but to work against SRP, and yet Pfister has often been able to convince his board of directors to go along with them.

Observers say that he persuaded hidebound water czars to accept sweeping revisions in groundwater pumping regulations in 1980--regulations that forced members of the board of directors of the Salt River Project who are farmers to accept restrictions on irrigation. They say he was a key force behind the establishment of the Environmental Quality Act of '86 that legislated standards for water purity, and that set up a vast governmental bureaucracy for regulating pollution control to which SRP, as the state's largest water provider, is now subject. It was also Pfister who spearheaded water negotiations with Arizona Indian tribes, with the result that decades-old disagreements have been settled in two cases and a future water supply for Arizona cities and agriculture is beginning to be assured.

Some observers even say that he stood in the middle of the heated, swirling Orme Dam controversy in the early Eighties, and finally led SRP away from its support for the dam when it became clear to him that there were options that were less damaging to the environment. (Those who are not Pfister supporters say that he merely acquiesced to the environmentalists' triumph over Orme Dam, however, and none too readily.)

The list goes on and on. And it is November 1990, and Arizona has been without a governor since the mid-Eighties. It is a year or two after many of Arizona's most visible business leaders have been flushed down the economic drain and only days after the election has ushered into power a roster of yuppie turks, all of whom look lovely in expensive suits and none of whom have a history of being able to put deals together. It is very sobering in the middle of such a pronounced leadership crisis to consider that a seasoned negotiator like Pfister is choosing this moment to relinquish his hold on Valley affairs.

Pfister doesn't want to discuss whether he's irreplaceable, though. What does interest him is talking about the deliberate way that he has gone about learning to form complex agreements. The things he's saying are a little surprising; they do not sound very much like the bullying philosophies you might expect to hear from a captain of industry either, whose primary goal is to benefit his own company. In particular, they don't sound like the philosophies you might expect to hear from a captain of industry in Phoenix--the self-aggrandizing, ruthlessly hyperactive ones who have recently fallen from power and onto their own swords. The mannerly Pfister is a stark contrast to APS' Keith Turley, Circle K's Karl Eller, American Continental's Charlie Keating. Beyond that, he actually sounds like a New Age psychologist.

"If someone takes an adversarial position in a negotiation, if you respond in kind, then you have let that individual control your emotions," he says. "You have to set the tone for the relationship by responding in a constructive way all the time. Then you are in control.

"And it does indeed work. It leads to win-win solutions and an investment in your relationship with people."

These are not conclusions he has reached on his own: He refers often to authors who study human relations--psychiatrist Scott Peck, Harvard professor Roger Fisher, BYU management professor Stephen Covey. His wife Pat says that the Pfister home is filled with books on management, and that her husband's gift for reconciliation is not a matter of magic but of hard work.

It is apparently also due to one other quality that Jack Pfister developed early in his life, and that explains why he has worked upon an ability to mediate with such zeal. Unlike many tycoons who have made it to the top by competing, and by feeding their large egos with success achieved at the expense of the weak, Pfister seems to derive genuine pleasure from enabling others to succeed at the same time that SRP does. "One thing that Roger Fisher particularly talks about is that win-win solutions are generally more creative than win-lose, and that once you have learned how to do it, it releases the creative force," he says. "It's more fun."

It is this perspective that has allowed him to relish the turnover in Arizona power that has been occurring all around him in recent years. He has long been a member of the entrenched Phoenix 40, a group of elite community leaders that used to dictate political victories and allowed Valley growth to become helter-skelter by making sure no one, particularly no one with an aesthetic view, was allowed to control it.

Unlike many of his cronies, Pfister says he has not been alarmed to see the group's influence eroding over the last decade, however. If anything, he says, he has welcomed the emergence of "a dozen major power bases" that now seek to have their say in community affairs. According to Pfister, certain financial leaders now influence financial affairs; other leaders pull strings for the arts; a different group is interested in bringing more professional sports to Phoenix, and so on. There is no central group that holds sway in everything.

"To be effective now, you really have to be a consensus builder," he points out. "I find that more exciting than frustrating."

He may also, by now, find consensus building to be second nature. In the course of interviews that span more than three hours, he speaks only once in a manner that is not understated and conciliatory, and even in that moment, he is more amused than anything else. (Asked whether he ever resorts to threats during a negotiation, he concedes with good humor, "You have to be prepared to get as much as you can with `win-win.' But if you can't, then `win-lose' is better than `lose-win.'") His eyes are intent on his listener, and he doesn't fidget or even shift his weight very much. His stubby body, anchored in the center of his chair as solidly as a sandbag, is relaxed but ready for action, the pose of a man with nothing to hide.

He radiates abundant personal security and benevolence. Somehow this doesn't seem surprising, even though he is the CEO of a major utility company, the breed that is known for blows to the kneecaps. Pfister's manner is so orderly, and what he reveals of his approach to life is so well reasoned, that it's hard to imagine him engaging in anything so chaotic as vengeance or insecurity.

He tells a story about his years in college that throws some light on this serenity, and the air of assurance that observers say he brings to the bargaining table.

He says when he was about nineteen, he broke with the Catholic Church and threw himself into an orgy of reading comparative religions that lasted three years. He felt that if he were going to stop being Catholic, he needed to replace it with something else.

This is a man who embraced even rebellion in a measured way.
He did fill religion's void, too, although not with another faith. The years of reading had convinced him that the same fundamental values underlie all religions--that the values were the thing. So he internalized those, things like integrity and reliability, and then threw the form away. He says that the values have become such a bedrock of certainty within him that most decisions make themselves: "I am not troubled by small things." There is another reason beyond orderliness that his gentle demeanor makes sense. It seems almost a given that Jack Pfister would be an expert listener, since listening is a form of selfless involvement. SRP also has a public image that emphasizes selfless involvement in the form of consumerism, environmentalism, and community-mindedness, and it is easy to believe that Pfister and his organization stand for the same praiseworthy things. It is easy, but it is not accurate.

If you asked the average Phoenician to describe SRP, you would probably hear that it's the electric utility with lower rates. If the Phoenician happened to be someone who broods about the condition of the Earth, he or she might add that SRP has shown exceptional sensitivity to conservation and other environmental issues--that it was, in fact, one of the first few utility companies in the country to join with Amory Lovens, a radically visionary MD120 Col 1, Depth P54.06 I9.08 energy consultant who advocates the development of "soft energy" sources such as conservation, solar power, and electricity that's generated from garbage. The protection of the environment is even part of SRP's mission statement, and its annual report is dominated by expressions of concern for air and water quality.

In these ways, it has tried to lay claim to a progressive reputation in the Valley, and sometimes rightfully so. It's true that as a quasi-municipality, the Project is entitled to tax breaks that usually keep its rates well below those of Arizona Public Service. It's true, also, that Pfister's enthusiasm for conservation and the environment is reflected in the policies of SRP, and is real: He tore out his own lawn and converted to desert landscaping a while back, and he has supported the state's groundwater management laws at least partially out of a concern for Arizona's future generations--a concern that's so well known that even state legislators cite it when they speak of him.

The Project's closest observers, however, say that, despite its popular image, it is hardly a paragon of environmental and community concerns. Says Renz Jennings of the Corporation Commission, "I am always frustrated by Pfister, because I think he is bright. And I don't think he has been as good an environmentalist as he could have been."

The Corporation Commission regulates the state's private utilities but not SRP, which is unregulated because it is a public, nonprofit utility. Jennings goes on in a vein that suggests he is not totally at ease with the idea of rate increases that are voted in behind closed doors by SRP's own board of directors. He complains that, despite tax breaks that have established SRP's reputation as a rate buster, the water-and-utility company charges the highest rates of any other public utility in thirty major cities.

He also says that SRP does not offer as many pricing options to encourage conservation as APS does, and that in some cases, APS customers who choose a time-of-day pricing structure are now paying lower utility bills than SRP customers.

Jennings is also concerned that SRP alone among Arizona's major utilities continues to offer its electrical customers something called declining block rates--a billing method that encourages consumption rather than Col 3, Depth P54.02 I9.03 because of the reason SRP was founded.

As the first water-reclamation project in the country, established by the feds in 1903, the Project's purpose was to provide water to farmers in the days when agriculture was Arizona's primary industry. Toward that end, individual farmers pledged their lands as collateral for the government loan to build the Theodore Roosevelt Dam, located eighty miles east of Phoenix. The SRP board of directors has been dominated by farmers ever since, since directors are elected according to a one acre-one vote system, instead of one that grants a vote to every person. They are elected this way despite the increasingly urban nature of the 238,266-acre area the Project serves in Maricopa County. They are elected this way despite the fact that the system of voting according to property rights has been phased out of American government.

The special-interest board of SRP decided long ago that two thirds of all water fees would be picked up by SRP's residential electric ratepayers. It amounted to nearly $34 million last year that electricity customers paid for water they didn't receive. Such subsidies themselves are a tradition of water-reclamation projects, but the percentage of this one certainly is not: The board itself has set it around the 60 to 70 percent mark.

It's a situation that has long rankled portions of the public. "Salt River Project was set up for a purpose--to provide water to agriculture--and now that purpose is no longer there," says Frank Welsh, a well-known activist and expert on water issues. "Now it should either be controlled by the Corporation Commission, or its board should be elected by people and not land, or it should be merged with APS so we can fight just one monopoly."

In '76, this sort of sentiment became pronounced enough that a lawsuit was filed to try to change the one acre-one vote system. Filed by the Arizona Center for Law in the Public Interest, it was finally ruled against by the U.S. Supreme Court. This did not cause the irritation of some customers to go away. These days, a brand-new consumer organization called Utility Customers Advocating Rate Equity (UCARE) is taking another close look at the SRP board-of-directors setup and is expressing concern not only about election methods, but at the fact that the SRP board is still unregulated.

(Pfister, by the way, contends that the special-interest situation with the board Col 2, Depth P54.10 I9.14 probably no one ever has. Those who've dealt with SRP describe the attorneys who receive their instructions from Pfister as flint-nosed negotiators who never lose sight of their company's best interests, and who overcome their built-in biases only when persistently pressured. The difference between these counselors who play hardball and some others, according to numerous sources, is that they don't engage in sly moves, they keep their promises, and they sometimes argue their way into agreements that seem to satisfy everyone.

A case in point is the ongoing water-rights negotiations with Arizona's Indian tribes living on reservations, two of which finally have been settled. Although the Indians have first entitlement to Arizona's water, these intense bargaining sessions seek to divide it up among many competing interests. Pfister has long spearheaded the talks because he believes everyone will gain more from negotiation than from litigation. And he seems, so far, to have been right. Says Arlinda Locklear, who represented the Fort McDowell Indians in their settlement, "I don't think anybody in this negotiation feels as if they got burned. And that is unusual, particularly in something this complex."

Perhaps more often than he goes unappreciated, Pfister runs up against anti-industrialists who will always believe he is the devil. Even these intractables sometimes recognize that he is slightly different from their typical enemies, however. Says Carolina Butler, one of Arizona's most dedicated environmentalists, who became acquainted with Pfister during discussions about the Orme Dam, "I am not saying that Pfister is open-minded, but he does realize that environmentalists come to the table loaded with information. He is aware that there are other interests out there besides business interests. Other business leaders dismiss all environmental views as a bunch of wackos."

Whether or not his style of management inspires personal admiration, observers easily rattle off fifty stories that demonstrate how it has made a tremendous difference to SRP. It is doubtful that ambition is the thing that caused him to develop it, though: His friends from childhood say that his executive face is also his personal style, and that Pfister may be understated in battle because nothing in his boyhood Col 1, Depth P54.02 I9.03 begin to consider environmental issues at the same level as our energy evaluations."

He cites this story as an illustration of a personal characteristic that must be dear to him, seeing as how he remarks upon it several times in different ways: "For reasons that I don't understand, I am not afraid to expose myself to new ideas. As a matter of fact, I find it invigorating. And I have made many significant changes in my views based upon a growing body of evidence that I was in error."

It is also something that admirers say about him. The example they cite is a more well-known one, however. They speak of the way he turned his back on the Orme Dam after years of supporting the idea. Theirs is not the only view of that notorious battle. The environmentalists who opposed Pfister and SRP view him as anything but a sweet-tempered leader who was eager to listen to reason.

In the wake of the devastating floods of the late Seventies, SRP and the Bureau of Reclamation favored as a much-needed measure of flood control a dam that had long been planned for the confluence of the Salt and Verde Rivers. That support landed Pfister smack in the middle of a battle with eagle-loving environmentalists and Indians, who fiercely opposed the dam on the grounds that it would flood the Fort McDowell Indian Reservation. In time, a federal study located alternatives to the dam that won the support of the opposers--and even Pfister. Plan 6, which improved existing dams to the point of making the Orme unnecessary, became Arizona's flood-control blueprint. That much is certain. The story diverges when Pfister's supporters and detractors begin to reminisce about his personal open-mindedness throughout the process.

"SRP was very, very open to a fair evaluation process, and when it became clear that Plan 6 was a reasonable alternative, they backed off," says Herb Dishlip, who was in charge of the federal study that analyzed alternatives to the dam.

Counters Frank Welsh, who led the charge against the dam and as a result does not view Pfister as an environmentalist, "SRP was dragged kicking and screaming into the world of reality when they saw they were not going to get Orme Dam. Jack just toed the line. I do remember that toward the end, they actually invited some of us radicals to a meeting at SRP. There was the beginning of some openness. But by that time it had become obvious that we were going to kill Orme Dam."

Whatever the level of Pfister's personal commitment to environmentalism, it unavoidably became synonymous with SRP itself in '76, when he succeeded McMullin as general manager.

It was a time when SRP's place in the community was rapidly changing. In the beginning, its dams had assured Arizona of a dependable water supply for the first time, and had made it possible for both farmers and miners to feel certain of a living. During those years, SRP was such an absolute power that it pretty well dictated water policy: The legend is that it wrote its own surface-water code and regulated the revisions. Now, water management in Arizona had become a matter of complex and competing interests.

Cities wanted water, developers wanted it, irrigation districts wanted it, Indians wanted it, and the state's lawmakers were grappling with the grim realization that there wasn't enough of it. SRP had become one part of a bigger system that was seeking to rewrite water laws.

It was a situation tailor-made for Pfister, who had become interested in the art of diplomacy during his early dealings with environmentalists.

During the long negotiations that eventually coughed up the Groundwater Management Act of 1980--the first meaningful legislation the state ever enacted to regulate groundwater pumping--Pfister demonstrated the ability to "bring others along." Observers say that, as legislators and water suppliers tried to hammer out a water-conservation policy that would allow Arizona to survive and thrive, Pfister saw that the changes facing SRP were monumental and inevitable. And, wherever board members were reluctant to accept limitations on access to the irrigation water they had long considered their sacred right, it was Pfister who saw beyond SRP's narrow self-interests and convinced his board to acquiesce.

Says Wes Steiner, the former head of the Arizona Department of Water Resources who worked closely with Pfister throughout the formulation of the legislation, "He saw that there just is not enough water in Arizona to meet all the needs without a very, very serious and rigorous conservation program. There were some hard bullets that SRP had to bite. They were willing only because they had Jack Pfister to tell them that this was the best they were going to get."

His talent for perceiving the need for change, often long before others do, has also become a hallmark of his style. "He looks at where issues are going and decides early in the game that certain issues' times have come," says lawyer Betsy Rieke, who works closely with Pfister as SRP's lobbyist. "Since its time has come, he thinks it is better to get involved and share the resolution instead of being `anti.'" It is by allying himself with forces that are typically unfriendly to industry, such as environmentalists, that he has managed to wrest benefits for SRP out of very unlikely situations, says Rieke: "He understands that those who fail to act do not influence the outcome." It is a take on doing business that has resulted in some surprising involvements--on the surface. Beneath the surface, the victories Pfister has won for SRP make clear that he is motivated by shrewdness as well as altruism.

For instance, in '86 Pfister was enlisted by Priscilla Robinson, one of the state's leading liberal activists, to help design a law to purify Arizona's water supply and stave off future pollution. The idea of such strict regulation had been resisted by Arizona business leaders for a decade, since it would restrict the pollutants they could dump into the water supply and would cost their companies a fortune in cleanup. Even more significantly, Robinson's law upset a sacred status quo: the first break in the Arizona tradition that had always had industry writing the state's water-quality laws.

Despite this history of resistance, Pfister recognized that the law was needed and became readily involved. He and Robinson put together a group of miners, farmers and lobbyists, and met with them to define the problems the Environmental Quality Act was bound to face. It's odd to hear Robinson describe Pfister's deportment at these meetings: She says, "He hopped around." It seems that Pfister taped large sheets of paper to the walls of the meeting room and then dashed from one to the other, writing down salient points as committee members came up with them and trying to discern common ground.

Like a CEO drizzling powdered cream into a visitor's coffee cup with absolute attention, he was a picture of totally accessible involvement.

And he set an example, according to Robinson. "I think a lot of the importance of his participation was that he did help bring along the business community simply by positioning SRP in a cooperative stance," she says.

That, at least, was the primary thing to Robinson. One of the things that was doubtless primary to Pfister is that, when the Environmental Quality Act passed through the legislature in '86, SRP was a winner. "He had a big self-interest in the way the liability for past pollution got written," Robinson explains. "He was successful in getting some of the modifications he wanted but in a way that did not gut the proposal."

Robinson points out that Pfister is now involving himself in another important issue: He is serving on the Governor's Task Force on Environmental Impact Assessments. The committee will evaluate whether environmental impact studies should be required for all state projects, and Robinson thinks that Pfister's presence on that committee is having an effect similar to the one he wrought by participating in the Environmental Quality Act.

She says, "A typical reaction from business would be to say, `We don't want that.' And Jack is saying, `I can see that there is value in this kind of review. It can save business a lot of money because you don't get into a screw-up that you have to fix later. Let's sit back and design one that's workable.' He is such an important voice in the business community that that agreement shifts the center of the argument to `Yes, we are going to do it, and now let's attend to the details.' Otherwise it would have been, `Are we going to do it or not?'" He is perceived this way--as the needle that pulls the thread--by a broad range of observers, from executives within SRP, to his peers in the Phoenix 40 who have watched him work to try to revitalize downtown, to those who served with him on the Arizona Board of Regents. He is perceived this way by enough people that it can seem a worrying thing to watch Jack Pfister retire at age 57. It's even more worrisome in light of a growing momentum to gut the groundwater code that political observers say is occurring behind the scenes.

He says he is leaving because "turnover invigorates organizations." A friend of his confides, "I think he knows when he has done what he can do. He has addressed SRP's major issues in the best way he could. No matter when he leaves, that company will still face major issues."

He says he looks forward to doing some writing and to teaching what he calls "the art and practice of private diplomacy." He says he will continue to be involved in the community in some way--perhaps in a way that will enable him to benefit the disadvantaged. A peer of his, Richard Lehmann of Valley National Bank, considers the prospect of Pfister's being less involved in local affairs than he is now and laments, "I guess I would be hard-pressed to think of anybody offhand who is as good at bridging gaps as he is." Will someone step into his shoes and become an industry leader who resolves the unresolvable? Will it be the next general manager of SRP?

Pfister won't reveal who that is likely to be, but rumors favor C.A. Howlett, the assistant general manager of customer services and marketing (and a former aide to Mayor Margaret Hance and President Ronald Reagan) or Dick Silverman, assistant general manager of law and land at SRP.

Says a close observer, "I don't know if those people have the same stature that Jack has. And the quality of that organization and the enlightened vision which it takes on water issues--and they are still a major voice--will be directly impacted by who is at the helm."

It is also true of communities, and states. With the current crop of helmsmen, the truth hurts.

"I never set out to be a leader?" Pfister is saying.

He actually sounds like a New Age psychologist.

Unlike many of his cronies, Pfister says he has not been alarmed to see the Phoenix 40's influence eroding over the last decade.

This is a man who embraced even rebellion in a measured way.

SRP has not leapt to clean up after itself.

"Does it help to camouflage failings when your CEO is someone as smart and community-minded as Jack Pfister? Yes."

DeMichele speaks the words "scholarly and intelligent" with respect and a sort of rueful bewilderment.

"Other business leaders dismiss all environmental views as a bunch of wackos."

"I became a one-man debater who was trying to justify electric power plants."

The environmentalists who opposed Pfister and SRP view him as anything but a sweet-tempered leader who was eager to listen to reason.

"He understands that those who fail to act do not influence the outcome."

He is perceived as the needle that pulls the thread by a broad range of observers.


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