Iberdrola USA executives lead from HQ here

Thomas Adams//December 10, 2010//

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The nerve center for Iberdrola USA Management Corp. is at Rochester Gas and Electric Corp. offices on East Avenue, where an executive team with much international experience works.

Iberdrola USA Management, which does business as Iberdrola USA Inc., is a subsidiary of Spanish energy firm Iberdrola S.A., the world’s fifth-largest energy company and the largest wind producer, with 33,000 employees in 40 countries and $30 billion in annual revenue.

Iberdrola USA, now with its headquarters in Rochester, generates $4.5 billion in revenue.

Iberdrola S.A. acquired RG&E, New York State Electric & Gas Corp. and their holding company, Energy East Corp., in 2008. Energy East was renamed Iberdrola USA in late 2009.

The top local executive is Kevin Walker, senior vice president and chief operating officer, whose office was formerly occupied by James Laurito, president and CEO of RG&E and NYSEG.

Laurito resigned in August 2009 after nine years with Energy East, which acquired RG&E and NYSEG in 2002.

"This is clearly the operations center of Iberdrola USA," Walker said of the building at 89 East Ave.

Mark Lynch, president of RG&E and NYSEG, currently lives in Albany. He joined the Iberdrola subsidiaries in November. He and Walker are peers on the Iberdrola USA organizational chart. Both report to CEO Robert Kump, based at former Energy East headquarters in New Gloucester, Maine.

Iberdrola USA serves 2.7 million customers in Upstate New York and in New England.

Building a Rochester team

Walker’s first day with Iberdrola was Nov. 23, 2009. He replaced Michael Conroy, who had replaced Laurito and retired in March.

Nov. 23 also was the first day of work in Rochester for Jose Maria Cirujano, Iberdrola USA’s vice president of operations, and for Neil Clitheroe, vice president of customer service for Iberdrola USA Management. Both are here for at least three years.

Cirujano is a full-time resident of Madrid, Spain, where Iberdrola S.A. has its headquarters. Clitheroe is from Scotland, where he previously worked for Iberdrola’s Glasgow-based subsidiary, Scottish Power Ltd.

The Iberdrola USA Management team in Rochester also includes Mary Smith, vice president of engineering and asset management; Franklyn Reynolds, vice president of general services; Jeffrey Ballard, vice president of information; Gene Jensen, vice president of electric operations; and Michael Eastman, vice president of gas operations.

Smith came to Rochester three months ago, after working for Iberdrola subsidiary Central Maine Power Co. Reynolds has been here four years after working for Iberdrola utility subsidiaries in Connecticut. Ballard also came from Central Maine Power.

The ninth member of the Iberdrola USA Management team lives in Binghamton. Carl Taylor, formerly CEO of Iberdrola retail energy subsidiaries Energetix Inc. in Rochester and NYSEG Solutions Inc. in Binghamton, is vice president of business transformation. He is usually in Rochester during the week, returning to Binghamton for weekends.

"If you have a planned meeting, folks call in or they get in on a video conference," Walker said. "Those things would happen whether they were with you or not with you.

"But it’s those unplanned meetings and impromptu discussions that really make the difference between being physically present and not. They just don’t happen when you’re not physically located together."

The eight vice presidents are peers, reporting to Walker.

Members of the management team were given the option of coming to Rochester or staying where they were when it was put together last year, Walker said.

"We’re such an integrated business that everything that people do affects the other parts of the business. The benefits of having everybody here have been shown several times over.

"If we had just drawn a line in the sand and said everybody is going to be in Rochester, it was going to take some time to get the employee re-engaged. Then you have to move and your family commitments have to change, and we have the families to worry about. But it was a conclusion that the employee as well as the company came to, that it was better to be co-located here in Rochester."

Coming to Rochester

Cirujano, an Iberdrola employee for 35 years, lives on East Avenue with his wife.

"The company asked me if I wanted to come," he said. "I talked with my wife. That is very important. She agreed, so I asked the company if I could go."

Two things about Rochester are most noticeable, Cirujano said.

"People don’t live downtown," he said. "That’s the main difference between Madrid and Rochester. In Madrid, they have more shops in the city. If you need to buy something here, you have to go to a mall."

And, of course, there is the weather.

"It’s cold in the winter in Rochester," he said. "I knew that. I haven’t seen this cold weather, but I deal with that as best I can."

Clitheroe asked to come to Rochester.

"I was looking for an international assignment with Iberdrola, and there were strong opportunities with Iberdrola USA. Since the operations team is based in Rochester, it became my first choice."

Clitheroe, 37, lived in northwestern England before moving to Glasgow.

"Glasgow is a bigger city, but Rochester holds its own in terms of culture," he said. "We saw the Garth Fagan Dance company at Nazareth College. There is also a great outdoor life, with winter and summer sports that are great."

Walker, 47, came here after five years at American Electric Power Co. Inc. in Columbus, Ohio, which serves 5 million customers in 11 states. He most recently was its senior vice president and chief information officer.

Prior to joining AEP, the Washington, D.C., native spent 13 years with Consolidated Edison Inc. in New York City, moving up to vice president of maintenance and construction services. Walker helped restore energy service after the collapse of the World Trade Center towers on Sept. 11, 2001.

Changes ongoing

"I’ve been frustrated for pretty much my entire career by the industry’s lack of ability or willingness to innovate, to become more efficient and to use resources more wisely," Walker said. "Part of that has been the incentive mechanisms from a regulatory standpoint.

"If you did those things, there was no benefit to the company. It went directly to the customer. I understood that, and I thought while we were trying to change the regulatory paradigm we should also try the best that we can to do those kinds of things."

Iberdrola is doing that, he said, by reaching an agreement with New York regulators to allow the company and customers to share money saved through efficiencies.

"That was really attractive to me," Walker said. "I was hoping my frustrations would finally be relieved, and they were. It’s really been exciting."

The efficiencies also have involved job cuts. Iberdrola last January eliminated 140 workers in the Northeast, including 40 at RG&E and 40 at NYSEG.

"We have some jobs that can be done by one line person because it’s safe and they have the expertise to do it, as opposed to having two or sometimes three," Walker said. "That takes some negotiation with the union, but it also takes a track record of saying here’s how it can be done with one person.

"We’ve gotten the unions to agree that these certain class of jobs can be done by one person. It took us being able to point to someplace that already has done it successfully and safely and efficiently."

The company wants to invest in automation rather than additional workers, Walker said.

Iberdrola invests $1 million each day to upgrade New York infrastructure such as substations, transmission lines and its hydro facilities on the Genesee River.

"Believe it or not, with most utilities, the only way you know there’s an outage is when customers start calling," Walker said. "And the only way you know how widespread the outage is is you start mapping when the customers call. Then you dispatch people to see what the problem actually is.

"Well, that’s a very inefficient process. In today’s age, when you have routers and wireless and everything else, you should be able to automate that process where, with the first outage, you know where it is. Those kinds of things we’re trying to put into our system."