Texan admits to steep learning curve as he takes reins at Epcor
How does a Texas-born chemical engineer who moved through the oil and gas industry and then into electricity end up running Edmonton’s electrical distribution and water operation?
“If you have an opportunity in your career to keep learning, why wouldn’t you?” said David Stevens, new chief executive at city-owned Epcor Utilities.
He replaced retiring CEO Don Lowry earlier this month and admits he is on a steep learning curve in the water area of the business, but is pleased to know he will be able to use some of his chemical processing knowledge.
Since Epcor has “brilliant people who are running the day-to-day operations,” Stevens has given himself a few months to get up to speed.
“I need to understand enough to ask good questions and I better have the knowledge to do that,” he said.
His challenge in Edmonton will be far different from what he faced three years ago at El Paso Electric, which supplies power to west Texas and southern New Mexico. That firm had gone through three CEOs in just three years.
“At El Paso there wasn’t a lot of clarity of direction, and I think that is what the staff were missing,” he said.
He changed the situation by using his “pretty simple” formula.
“I have this theory that collective brainpower is much more powerful than individual brainpower. I really believe when everybody is involved, you communicate clearly what your plans are and truly execute those plans and goals, then you build momentum.”
Stevens assumes staff want to do the right thing, and when they are successful, good things can happen.
“It’s like when a sports team gets on a roll, they often win despite themselves.”
Stevens thinks a good barometer of morale is what staff are saying about the company.
“When people get positive, they get more creative. If you have a system that is not consistent, you get so much ‘water cooler’ talk that it hurts people’s morale.”
Stevens believes every employee of Epcor should understand what the company is doing, its plans and its goals.
“I am not saying they can do that today, but over time I am hopeful that everybody here will be able to tell you the company plan because it will be that well known.”
Epcor is not like El Paso, adds Stevens.
“Epcor had the consistency of one CEO for a long time, and it has a good plan that is progressing. For me, now my job is honing the strategy and direction, and then executing the plan.”
The plan includes continuing Epcor’s core role — maintaining and expanding electricity, sewer and water services in the city and capital region — while also looking for ways to expand with new water and waste water projects in smaller cities across the prairies, in the oilsands and in Arizona.
Last year Epcor was the project leader for a winning $59-million bid to replace the Evan-Thomas water-treatment and waste-water treatment plant in Kananaskis, with partners Stantec and Lockerbie Stanley.
“The P3 (public-private partnership) model is a real opportunity for Epcor. We had people help us design it, somebody else builds it, we finance it and we run it. This is a good model for Epcor, and Edmonton and its ratepayers will benefit from the better earnings.”
Epcor paid the city a dividend of $138 million in 2011.
Acquiring more private water companies in the U.S. southwest is also on Epcor’s radar after its previous purchases in the Phoenix area. It paid $460 million for Arizona Water and New Mexico Water, and took possession last year.
“My comfort level would be infill in that area, because we are right next door,” said Stevens. “I would say we are going to focus on Alberta and Arizona near existing operations. I don’t see us stepping out to my home state of Texas, for example.”
All such acquisitions would be funded from the sale of shares of Capital Power, Epcor’s former power-generation arm, which was spun off in 2009.
After its success in taking over some water and waste water operations from Suncor Energy, Stevens also aims “to keep showing the oilsands companies that we can help them and be costeffective.”
He said Epcor enjoys good relationships with oilsands companies and expects there will be more opportunities as the firms move to focus on their core operations, extracting oil, rather than running water plants.