Energy People: Bob Catell

Bob Catell was formerly the chairman and chief executive officer of KeySpan Corporation, the former Brooklyn Union Gas. His career with Brooklyn Union Gas started in 1958. He received his Bachelor's and Master's degrees in mechanical engineering from the City College of New York. Following National Grid's acquisition of KeySpan Corporation, Mr. Catell became chairman of National Grid U.S. and deputy chairman of National Grid plc.

Among his very many leadership roles, he served as chairman of the American Gas Association, and of the United States Energy Association. He's presently chairman of the Advanced Energy Research and Technology Center at Stony Brook University, and of the New York State Smart Grid Consortium.

PUF's Steve Mitnick: What was an important turning point in your career?

Bob Catell: A major turning point was the transaction on Long Island. Brooklyn Union Gas Company was trying to transform itself into more of a total energy company. We really had no room to grow in the gas business in the territory we served. So we looked to Long Island. We became involved in a very complicated political process to acquire the gas properties of Long Island Lighting Company and its electric generation.

I now found myself not only in the gas business, but also in the electric business. This was a time when the electric business was beginning its transformation to competition.

PUF's Steve Mitnick: You started somewhat humbly. In the mail room, something like that?

Bob Catell: I grew up in Brooklyn, went to public schools, and had the benefit of getting a free education at the City College of New York. I studied mechanical engineering.

I worked for six months at AT&T. It was when it was called "Ma Bell."

AT&T had about five hundred thousand employees. I didn't think I would have much of an opportunity in a company that large.

Then I saw an ad in the paper for engineers at the Brooklyn Union Gas Company. I was interviewed, hired, and started as a junior engineer in the meter repair shop.

PUF's Steve Mitnick: Your career took off at some point. Were there some key people, mentors or bosses, that propelled you?

Bob Catell: I was very fortunate. Even though I started as a junior engineer, in the meter repair shop, I advanced and progressed to becoming a field engineer. It was in the outside construction area, putting gas pipes in the ground. I was able to learn the gas business from the "ground floor."

I had the good fortune of working for a number of really great gentlemen. They shaped my career and my life.

One was a gentleman named Gene Luntey. He eventually became the chairman and CEO of the Brooklyn Union Gas Company. Gene was "Mr. Methane." We were the first ones in the industry who saw the benefits of methane, and all that it could do for energy and the environment.

The other person was a gentleman named Elwin Larson. He followed behind Gene and became chairman and CEO. El taught me a lot about leadership.

There was a point in my career when I was going to leave. I had been with Brooklyn Union about fifteen years, and was looking around to see where I should go. I actually sat down with both of them [Gene Luntey and Elwin Larson]. They advised me to hang in there, so to speak.

They said, "Bob, you can have a good career here at Brooklyn Union. You don't really need to leave." That was a very instrumental turning point in my life.

I decided to stay. It all worked out pretty well. After thirty-three years with the company, I rocketed to the top and became president and CEO in 1991.

PUF's Steve Mitnick: You're known as an incredible motivator and leader. How did these skills play a role in your career?

Bob Catell: I was very fortunate. I was raised by a single parent, my mother. While she didn't have a college education, she had a lot of common sense. What she taught me, in addition to "you will go to school and get your education," is respect for people. Have respect for individuals no matter who they were and no matter what station they had in life. It didn't matter about race, religion, or color. All people deserved respect.

I think that was an important thing for me to carry forward, to treat people with respect. And being an engineer, you also learn how to solve problems, whether an engineering problem or a people problem. In life, it's all about solving problems.

I try to approach my life that way. Treating people with respect. Figuring out ways to solve problems.

PUF's Steve Mitnick: You were at Brooklyn Union Gas. It became KeySpan at some point. Then there was the mega-combination with National Grid. What were the key turning points, going from a fairly small company to one of the largest energy companies in the northeast?

Bob Catell: It started with Brooklyn Union. We were just a gas company in Brooklyn, Queens, and Staten Island. We were very effective in competing with the oil companies. We converted eighty percent of the market to natural gas.

We didn't have any room to grow. So we looked to get into other energy-related businesses. We formed an exploration subsidiary, the Houston Exploration Company, which we eventually took public and sold.

At that point, I had a vision that we were going from the well head to the burner tip. It didn't quite work out that way, but that was my concept. We formed an oil and gas exploration company to have our own supply. Then we got into pipelines to deliver gas to the market. 

We built the Iroquois pipeline. It was bringing western Canadian gas to the market in the northeast, because at that time, we thought we were running out of natural gas in the lower 48.

We also acquired the midstream properties of Gulf Canada. We formed a company called KeySpan Canada. Eventually it became Keyera, a public company located in Alberta.

That's when we formed the holding company KeySpan. We needed to keep our unregulated businesses separate from our regulated businesses. That was a major turning point, I think, evolving to an energy company.

On the utility front, in 1998 we did acquire Long Island Lighting Company's gas properties, and four thousand megawatts of electric generation on Long Island.

In 2000, we acquired Eastern Enterprises up in New England. We grew to a company that now had close to ten thousand employees. If you counted our electric customers, we serviced over three million customers. So we became perhaps the largest gas and electric distribution company in the Northeast. 

We reached a market cap of about seven billion. We grew quite nicely. Then we were approached by National Grid. They had acquired the properties of Niagara Mohawk in New York and the New England Electric System. They had an interest in acquiring additional utilities in the United States.

We had to make a decision, obviously, as to whether or not this was something we wanted to consider from the standpoint of our shareholders and employees. We were at a good size. But probably not big enough to survive as the utility industry was evolving.

After lengthy negotiations, National Grid offered to pay our shareholders forty-two dollars a share. This was about a twenty percent premium above the price we were trading it for in the market. 

It allowed us to become part of a very fine global energy company. They were good enough to appoint me chairman of the U.S. operations, and vice-chairman of the National Grid PLC.

I spent the last two years of my career in that capacity. For me personally, it was a very gratifying conclusion to a very satisfying career.

PUF's Steve Mitnick: You became quite a leader in electricity, after being primarily a leader in natural gas.

Bob Catell: I had to learn the electric business when we acquired the generation of Long Island Lighting Company. Also, we entered into a contract to manage the electric distribution system for the Long Island Power Authority, so I had to quickly learn the electric distribution business.

I was very fortunate. The former LILCO employees were extremely competent, terrific people, and great operators of the electric system. We had the benefit of their experience and operating capabilities.

We were also fortunate to acquire, from Con Edison, when they were divesting of their generation, their large generating station, Ravenswood, which has been called Big Allis over the years.

We grew to own over six thousand megawatts of generation. Then we built a new two hundred-fifty megawatt combined cycle plant at the Ravenswood site. We were then fully into the competitive electric business with all that that entailed.

PUF's Steve Mitnick: You wrote a book, fairly uniquely for a CEO in our industry. Can you talk a little about that, and your style for leading an energy company?

Bob Catell: I was the co-author, although I really shouldn't take a lot of credit. A co-author of the book was a gentleman named Glenn Rifkin, a professional writer.

We had a great collaborator, a gentleman named Kenny Moore. He was a former Catholic priest, who left the priesthood. He's the monk, obviously, of "The CEO and the Monk."

The title of the book is "The CEO and the Monk." The subtitle is "One Company's Journey to Profit and Purpose." It focuses on how you change the culture of a company, in our case, from a very highly-regulated monopoly to a much more competitive company. 

It describes a journey in changing the culture of the company; and in melding the two cultures, the Brooklyn Union culture and the Long Island Lighting Company culture, to become one company, KeySpan. It talks of many of the things we did and describes the role that Kenny Moore played in assisting me in accomplishing that.

PUF's Steve Mitnick: Could you talk about what you're doing now?

Bob Catell: I have the honor of being chairman of the Advanced Energy Research and Technology Center out at Stony Brook University. The other hat I wear is chairman of the New York State Smart Grid Consortium.

At the Energy Center, I have the benefit of seeing new technologies that are being developed in both gas and electric. The Center is a Platinum-LEED "Center of Excellence for Energy in New York State."

The New York State Smart Grid Consortium is a collaboration of the utilities, technology companies, regulators, colleges, and universities, focusing on the modernization of the energy delivery grid.

I use the term energy delivery grid, not electric grid because I believe natural gas is a key player in the evolution of the energy delivery grid.

The rebirth of natural gas is very interesting to me. I went to Canada in the late 1980s, and the early 1990s. We built a pipeline to bring natural gas from Alberta to New York, because, as I mentioned earlier, we were told we were running out of natural gas in the Lower 48.

Of course, that's all completely changed. When I tell people about the future of the energy industry, I talk about two game-changers. I talk about the role of natural gas. And I talk about the role of new technologies.

I have the benefit of being involved in the transition, seeing the changes that are going on in the utility industry. There are more changes going on now than probably went on in the fifty years during my career.

I think there are many challenges. But I think there will also be many opportunities in the energy utility business in the future.

PUF's Steve Mitnick: People think of the word "leader" when they think of you. Our readership includes thousands of present and future leaders. What advice would you give to them?

Bob Catell: I believe leadership starts by treating people with dignity and respect. Motivating them to do the best they can in their jobs and recognizing and rewarding their accomplishments. I think there are a lot of great leaders in the energy industry, particularly those in the utility sector, those in the technology sector, and I'll include regulators as well. Evidence of that is the proceeding going on in New York State, where, in the "Reforming the Energy Vision," regulators are taking a leadership role in the evolution of the energy industry.

I would say there are many opportunities that can be taken advantage of. The utility model is significantly changing. Leaders need to look for opportunities in the new utility industry, with the new business models that are evolving. They need to be willing to take some risk. It's not going to be the same old utility any more.

Having said that, with some foresight and with some innovative thinking, it can still be a very exciting and rewarding industry to work in, and by taking advantage of the new technologies that are becoming available in the marketplace, the consumers can be better served.