Oilman Ray Hunt was attending a Houston energy conference in early 1998 when he decided to shift his world.
The chairman of Hunt Oil wanted to expand into the electricity industry and was looking for an executive who shared the family's values and work ethic, who could fit easily into the family business founded by wildcatter H.L. Hunt.
"Before I go to my Rolodex and start calling people I know who would fit that description, it occurs to me that I have known somebody like that for over 30 years – and that person is you," Ray said on the phone.
Hunter accepted: "Great. What are you thinking?"
"Well, that's for you to figure out," Ray said.
At that moment, a piece of the late H.L. Hunt's oil empire slipped from his son to his grandson, from oil to electricity, from the 20th century to the 21st.
In the last eight years, by applying Ray Hunt's contrarian business principles and his own unassuming, brainy style, Hunter Hunt, 40, has changed the way the Texas electricity industry operates.
"We clearly see the energy mix of the country and the world evolving," Hunter Hunt said.
"Oil is certainly part of the future of Hunt as far as the eye can see," he said, but "30 years from now, if the fuel mix of the globe looks like it does today, it's a perilous situation," threatening the security of the U.S. energy supply.
Hunt is well-known in the energy industry as smart, creative and humble. (Ask him to claim credit for a successful idea, and he turns red and mumbles about a team effort.)
He's not famous like so many of his relatives. Hunt (Hunter is his mother's maiden name) describes his branch of H.L. Hunt's offspring as "the boring side of the family."
These are the people who own Reunion Tower. They never tried to corner the silver market, and they aren't involved in the lawsuits and bickering over Hunt family trusts.
"You would have no idea if you spent 10 hours with Hunter that he was the scion of an enormously wealthy family. That in itself is a remarkable thing," said Matthew Simmons, founder of Simmons & Co., a well-known proponent of the peak oil theory, and a family friend.
Deregulation
In 1999, shortly after Ray Hunt invited his son to the family business, the Texas Legislature deregulated the electricity industry. Policymakers hoped to see new, innovative businesses generating and selling power in the competitive markets.
Hunter Hunt, fresh from the electricity trading floor of Morgan Stanley, was ready to jump in.
Still, true to his father's style, he didn't compete in the retail or wholesale electricity markets, like everybody else. (Hunt recites his father's principle of contrarian investing: Following trends produces only average results.)
Instead, Hunt wanted to found an old-fashioned utility that operates power lines and relies on regulators to set rates. And a piece of Hunt land in South Texas fit the specific circumstances that would allow him to start a utility.
Birth of a utility
Hunt could not, for example, simply build a power line in Dallas and start delivering juice. If, however, rural land exists without electricity service, the owner may ask a neighboring utility to serve a new development, or do it himself. Thus, in 2001, Sharyland Utilities was born.
"There's an entrepreneurial spirit there that you don't always see at the other utilities," said Public Utility Commission Chairman Barry Smitherman.
According to former PUC Chairman Pat Wood, rival utilities were so annoyed by the formation of Sharyland that they soon persuaded the Legislature to close the loophole that allowed for the new utility.
Hunt sees transmission lines as oil pipelines, connecting faraway sources of energy to the main grid. Sharyland gives him a platform to, as he calls it, "crosswalk" the family's expertise in the oil business to the electricity business.
It was Hunt's idea to build the first electricity connection to the Mexican grid that can handle commercial power sales between the two countries. He's also building transmission lines to bring wind energy and other power generation from the Panhandle to the more populated areas of Texas.
One of his accountants suggested putting the power line assets into a master limited partnership, just like pipeline companies, to avoid some taxes. They had to wait for the Internal Revenue Service to approve the setup – the first-ever electric utility MLP.
Hunt isn't just focusing on power lines. He recently hired former Department of Energy deputy secretary Clay Sell to lead Hunt Energy Horizons, which aims to develop energy technology, such as solar and coal gasification, to large, commercial scale.
Hunt has learned that such bets can be painful. A few years ago, at the height of the investment boom in independent power generation, Hunt decided to build his own plants. It didn't end well: The company wrote off one site, sold another to break even and walked away from a third project.
"We tend to stay out of hot trends," he said, and this time, he "caught the cycle wrong."
True to his father's advice, Hunt spent a lot of time thinking about what went wrong, and, he said, was able to apply what he learned to later projects.
Hunt won't say how much he lost on the investment; he also won't say how much he makes on successful ventures. He said he views the recession as "an opportunity to expand our footprint," suggesting the Hunt companies are doing just fine.
'Well-heeled wonk'
Hunt grew up in Dallas, the second of five children. He played football at Richardson High School and was elected to the student council. Before he graduated in 1986, his classmates voted him the friendliest senior boy.
Eventually he would marry Richardson High School prom queen Stephanie Erwin. (Their fathers urged them to reconnect when they both returned home to Dallas, Hunter coming from New York, Stephanie from Wyoming.)
Hunt studied economics and political science at Southern Methodist University during the years that his father was chairman of the board of trustees. He joined Phi Delta Theta fraternity – his father had been president of the same fraternity during his days at SMU.
Hunt won the prestigious M award when he graduated in 1990 summa cum laude. Now he sits on the executive board of the university's School of Engineering.
"He is what I'll call a well-heeled wonk," said Pat Wood, former chairman of the Federal Energy Regulatory Commission and a business partner with Hunt. "He gets a good haircut, wears a nice suit, but he'd take it off in a minute and sit there in gym shorts and read a tome on economics."
After college, Hunt joined Morgan Stanley and worked in London and New York. When George W. Bush first ran for president, Hunt signed on as an economic adviser.
"He exceeded all of my expectations when we worked together," said Marc Sumerlin, Hunt's boss at the campaign and co-founder of the Lindsey Group economic advisory. He added that Hunt never dropped his family name.
For the campaign, Hunt built an online calculator that allowed people to see how much their taxes would decline under the Bush plan. At the time, it was a revolutionary way to connect economic policy to the voters, said Sumerlin, who now counts the Hunt companies among his clients.
Gerald Ford buff
Sumerlin notes that Hunter Hunt collects memorabilia of his favorite president, Gerald Ford.
(This delights Andy Stern, a former staff assistant to Ford and now chairman of Sunwest Communications in Dallas. He hasn't met Hunt but said: "People who would look at Ford as a great president, as a model, are looking at the integrity, the honesty he brought to America.")
After Bush won, Sumerlin offered Hunt a job at the White House. Hunt declined. It was time to go home.
Hunt said he always wanted to work in the energy industry, but whether he would join the family firm was an open question.
"I was blessed with a father who set no expectations about coming back into the company," he said.
Some of Hunt's friends assume he's the heir apparent to the empire, or at least the energy businesses. His father won't discuss succession plans publicly.
"I will say that I feel exceptionally fortunate that all three of the family members associated with our company, Hunter, Chris Kleinert and Jim Graham, are all exceptionally gifted individuals," Ray Hunt said in an e-mail.
The relationship between father and son is especially sweet. Hunter Hunt talks openly about emulating his father, and Ray Hunt exudes pride in his son, even in a short e-mail vetted through his media handler.
"Ray lights up when he sees Hunter enter the room. It's really, tangibly noticeable," said Simmons, the peak oil advocate.
The tight relationship is particularly noteworthy given the famous volatility of the Hunt family. H.L. Hunt, once the world's richest man, had children with three women, and Ray Hunt grew up in a secret family that didn't immediately get the Hunt name.
Hunter Hunt was 6 when his grandfather died. In the new Hunt headquarters building, behind the silver platters of the executive lunch buffet, hang poster-sized photos of the company founder.
"The one memory I have is playing checkers with him," Hunt said while gazing at a photo of H.L. Hunt beating the state checkers champ. Hunter Hunt can't remember if his grandfather let him win.
