By Jonathan Spencer Jones
These are philosophies that have underpinned the life and career of Debra Reed, president and CEO of San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCalGas), the utility subsidiaries of Fortune 500 energy company Sempra Energy.
And Reed, a Southern Californian by birth, who opted to study (civil) engineering and enter the utility industry at a time when this was not a popular choice for a female, has notched up a number of firsts in her rise to the top of one of the US’s largest investor-owned utility companies.
“I’ve been working here for 30 years and in that time I have been in almost every area of the company,” says Reed, who joined SoCalGas as an energy systems engineer in 1978 and a decade later became the first female and, at 32, the youngest officer to be appointed there. In that time positions she has held included vice president of human resources, vice president of administrative services, manager of environmental engineering and manager of personnel relations, before becoming president of energy distribution services, overseeing SoCalGas’ operations for residential, small-commercial and industrial customers, and from 1995 to 2000 serving as senior vice president.
In July 2000 Reed became president of SDG&E and in January 2002 she also became president of SoCalGas and chief financial officer of the two companies. Then in May 2004 she became president and chief operating officer of both SDG&E and SoCalGas.
“I’ve had to take on challenges and perform in areas for which I have not had training, and I’ve succeeded by asking lots of questions and using my ability to build consensus and put ideas into action,” says Reed, adding: “If you take career risks and demonstrate you can succeed, you earn a reputation for competence.”
SoCalGas is the US’s largest natural gas distribution utility serving 20.1 million consumers through 5.6 million meters in a 52,000 km2 service territory in Southern California, from San Luis Obispo in the north to the Mexican border in the south. SDG&E serves 3.4 million consumers through 1.4 million electric and 830,000 gas meters in a 10,600 km2 area encompassing San Diego and southern Orange counties.
Reed comments that one of the greatest challenges facing utilities is getting major infrastructure projects sited and built to meet growing energy demand. New transmission lines and power plants are sorely needed in California and around the US. “The regulatory approval process takes a lot of time and planning and even an environmental impact assessment can take as long as two years to complete.”
One key project was the US$170 million, 230 kV underground electric transmission line in downtown San Diego (the Otay-Metro Power Loop), which was completed in May 2007 “ahead of schedule, under budget and with no complaints,” Reed says, emphasising the company’s commitment to striving for good relations with customers. Then there is SDG&E’s smart metering project. Meter installation starts later this year and should be complete in 2011.
Another challenge facing utilities, Reed suggests, is the state’s renewable energy mandate requiring California utilities to get 20 percent of their electricity from renewable sources by 2010. “These resources often are far from the urban centres that need the power and will require new transmission to deliver them.”
Commenting that California is a leader in promoting demand response and energy efficiency, Reed says new technology is allowing utilities to do many new things in these areas.
“Technology will revolutionise how we communicate with customers and how they manage their energy use. It will also allow us to detect system problems before they cause outages and restore service more quickly.
“We believe it is important that customers see the value of technology to provide more information and self-service opportunities to make it easier to do business with us 24 hours a day.”
And, with an ageing workforce, the utilities must not only replace the considerable skills which are being lost as employees retire, but also “transition” the existing workforce to the new technologies.
In light of these challenges, Reed has charted a 5-year vision of what SDG&E and SoCalGas hope to accomplish by 2011, including being in the top quartile nationally for operating excellence, maintaining the lowest average rates among the major utilities in California, being in the top decile nationally for customer reputation, completing major projects on schedule and budget, and being in the top decile for return on invested capital among industry peers.
“These are tangible things that we can achieve,” says Reed. “For example, we have been in the top 10 percent of utilities for customer satisfaction and we want to stay there.”
Reed says that perhaps the challenges facing utilities in California are “a bit more intense” than in other states with, for example, restrictions on the use of coal for power generation and more stringent greenhouse gas emission reduction targets.
But the state is also at the forefront of meeting the challenges, she says. “This is a very positive direction for California and over the next few years we can expect to see the rest of the nation following suit.”