CORRECTION: An earlier version of this article incorrectly said Northeast Utilities withdrew its funding from the Hartford-Springfield Economic Partnership. The company changed its level of funding to the $2,000 annual dues payment in 2013.
One of the major losses of talent at Northeast Utilities in the 20 months since its merger with Boston-based NStar was the departure of Jim Robb, a former senior vice president for strategic planning and environmental affairs.
Robb, a top five named executive officer pre-merger, championed many of NU’s new revenue business ideas and strategies, including the $7 billion natural gas heating expansion and the spread of electric vehicles and charging stations across Connecticut.
Robb left NU in March sensing a culture and strategy shift at the utility after President and CEO Charles Shivery handed over the reins to Tom May, NStar’s top executive.
“The stuff I was working on under Chuck wasn’t as important to the new team,” Robb said. “There is nothing wrong with that. There is more than one way to run a utility company.”
Rather than focus on new business development — a hallmark of NU’s strategy in Connecticut — May shifted the company’s attention on growing existing businesses and improving customer service.
That led NU to change its funding to development groups like the Hartford-Springfield Economic Partnership to the $2,000 annual dues payment; and much of NU’s pre-merger economic development staff — including key people like David Driver, Douglas Fisher, and Thomas Marano — either took early retirement or were laid off.
Robb departed after his role in the company was reduced under the purview of a newly created chief administrative officer position, held by David McHale. Robb vested his NU retirement options and now is CEO of the Western Electricity Coordinating Council in Utah, a nonprofit corporation for western states with similar duties to grid administrator ISO New England.
“Tom is much more focused on engaging in the core distribution business and less focused on new business ventures,” Robb said. “That is fine. Tom is an incredibly successful CEO, and NStar is an incredibly successful company.”
Wall Street has been receptive to May’s strategy, but some Connecticut officials worry about the long-term consequences of NU imposing a Boston-learned philosophy toward proactive new business recruitment. Unlike Boston where the city and its suburbs have enough momentum to grow economically with little support from the utilities, Greater Hartford needs help in bringing new businesses and people to the region, economic development officials say.
By neglecting its previously established economic development network, NU could suffer long-term in growing the number of businesses inside its service territories, especially for Connecticut Light & Power and Yankee Gas, economic development officials say.
“We basically relied on NU as a major supporter of the Hartford-Springfield Economic Partnership,” said Lyle Wray, executive director of the Connecticut Capital Region Council of Governments. “We were able to recover from the loss and still keep the partnership going … but the biggest impact they had was eliminating their support.”
NU, however, objects to the notion that it’s doing less economic development; the company is just growing its business in a new way, said Penni McLean-Conner, NU senior vice president and chief customer officer.
“The focus is existing businesses and growing those businesses,” McLean-Conner said. “87 percent of all new jobs are created by existing businesses.”
Since taking over, May’s focus on customer service has led NU to invest $30 million in an outage management system, train its field workers on face-to-face customer communications, and open a business center in Windsor. The company still is investing in Connecticut economic development, McLean-Conner said.
NU, for example, spent $1.38 million supporting business development agencies in 2013, up from $1.33 million in 2008, she said, although the money has gone more towards organizations like the Connecticut Economic Resources Center that help in-state businesses, rather than the Hartford-Springfield Economic Partnership that looks for new businesses.
The customer service credo led NU to launch an electric vehicle information center and a plan to rework its websites in 2014 to make them more smartphone user friendly.
Meanwhile, the $30 million investment in a system-wide outage management system is designed to make restoration quicker and more open to the public. This includes the new Blue Sky Outage Initiative, which calls impacted customers on their phones to let them know crews are in route and the estimated restoration time.
“This is a game-changer … and will increase customer satisfaction,” McLean-Conner said.
Investors have responded positively to the new NU culture, praising the company’s long-term prospects because of May’s ability to manage costs while maximizing revenue from natural gas and electric distribution.
London financial services company Barclays called the NU executive team best-in-class, and the company’s stock price per share has risen 15 percent since the merger.
One of Shivery’s lasting legacies was billion-dollar investments in transmission construction projects, which greatly increased NU’s revenue and return on equity. While NU will continue to invest in transmission under May, the point of the projects will be ensuring customers have a reliable source of electricity, McLean-Conner said.
“Like Tom May says, ‘We are a service company; we are not a construction company,’ ” McLean-Conner said.
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