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Two Years Since NStar Merger, Northeast Utilities Still Seeking 'One Company' [The Hartford Courant :: ]
[April 19, 2014]

Two Years Since NStar Merger, Northeast Utilities Still Seeking 'One Company' [The Hartford Courant :: ]


(Hartford Courant (CT) Via Acquire Media NewsEdge) April 19--BERLIN -- The process started two years ago by Thomas J. May was bound to be unsettling.

May, who became chief executive of Northeast Utilities when it merged with Massachusetts utility NStar in April 2012, has spent the intervening months navigating spats with electricians, lawmakers, regulators and information technology employees.



Among many of them, concerns focused on whether the nearly $20 billion deal, with its layoffs and facilities closures, was bringing more change to Connecticut than Massachusetts, where May had been a longtime utility executive.

Connecticut has had more merger-related job reductions, regulatory filings show. The company cut more of its Connecticut information technology workers when it outsourced its work to two Indian firms last year. And it announced most recently that it was closing nearly a dozen work centers in the state.


In an interview this week, May countered these claims with a list of changes that have upset many north of the border, including himself.

Massachusetts payroll and benefits work has been sent to Connecticut, along with some of the company's record-keeping. Bay State employees will not have off Patriots Day, one normally given for the Boston Marathon. And NStar employees, including May, recently switched their health care from Blue Cross Blue Shield to Northeast Utilities' provider.

"We now have Cigna," said May, 67. "It's a pain." May sat in a conference room at the company's Berlin offices, wearing a gray suit, a white-striped shirt and an orange tie. The room was chosen because May doesn't have an office here; he splits his time between Boston and Hartford.

"A year from now, two years from now, people won't be talking about, 'This one won' and 'This one lost,'" said May, who celebrated the merger's second anniversary on April 10, coincidentally also his birthday. "You want to get past the Hatfield and McCoy routine and have one company." May talks in references and analogies. Standardizing operations for the new company, which distributes electricity and natural gas to 3.6 million customers, he looked for the best ideas and implemented them across all six of its businesses.

"I want all my McDonald's to serve burgers and fries. I don't want some serving pizzas and some serving subs and calzones," May said. "So far, creating one culture out of two or three cultures has been fun, but it is all about communication." One example of change was the decision to outsource work from the company's information technology department. May said that he looked at both companies for a platform to be used across the board. NStar's information technology contract with IBM was ending soon. And Northeast Utilities' systems were lacking in areas.

"Neither of them had a platform to build off of, so we said, we got to start from scratch," May said. "We will never get ... what the customers want by trying to put one into the other." In October, Tata Consulting Services and Infosys were hired to take over most of the company's information technology needs, a decision later reviewed by regulators for its effect on storm readiness and cybersecurity defenses.

The merger, in addition to being large, has been played out publicly in regulatory reviews questioning May's and the company's decisions in a way that few other deals are scrutinized. If United Technologies Corp., for example, wanted to outsource its information technology department, it probably would not involve a public inquiry.

"I don't envy him," said Arthur House, chairman of the state Public Utilities Regulatory Authority, which regulates Northeast Utilities' electric and natural gas businesses.

"I look at today's utilities as being right at the center of public issues and major changes, climate change, energy costs, resilience, cybersecurity," he said. "These are very significant public issues, and he is managing a private-sector company with regulatory oversight and causing change in all those areas." More recently, May has led the company into a disagreement with its electricians union, the International Brotherhood of Electrical Workers Local 457, concerning adding a second shift of technicians overnight. The union and the company haven't found a mutually agreeable way to do that.

May said he hasn't seen a utility without a second shift of troubleshooter-technicians who can respond to power failures.

"I tell my own linemen when I talk to them, if their mother was having a heart attack in the middle of the night and they called in and the dispatcher said we'll call Charlie and Sue and Harriet and one of them will come in and pick up an ambulance and she'll be out there in two or three hours, what would you say?" May said.

Since the merger, electricity prices are up in Connecticut, but so is the company's stock price. May says that Wall Street loves the combined businesses. And he knows that they know energy in New England can be a good business when done right. Pushes for renewable energy, demand for low-cost natural gas, power plant retirements, calls for increased reliability in strong weather all translate to some type of work that Northeast Utilities can book.

Another thing May will tell you is that he reads every complaint or letter addressed to him.

In one, a customer returned home one day to find a note on his door, saying that a utility crew had disturbed a rock wall on his property while setting a pole. The note, to the customer's surprise, said as much and assured him that a crew would return to fix it.

Another note, May said, came from a woman who had a 20-minute power failure after a car accident on her street.

"She let me know her kids were doing their homework, and she was paying bills online," May said. After the outage -- the first in seven years for the account, May said -- she wrote and said she expected to be told in advance both that the power was being turned off during repairs and when it would be restored." "In seven years she experienced a 20-minute outage and she took the time to write me a long expansive letter. Now that tells you customers' expectations are changing," May said. "This was obviously a real burden on her." His goals for the next few years: To be in the top 10 utilities for customer service, improve the process for adding solar and other renewable sources to the grid and improve communication.

Soon, Connecticut Light & Power will launch a system that will let customers get a text, a phone call, an email or a tweet when outages are expected. The technology will later be rolled out for customers of NStar, Western Massachusetts Electric Co. and Public Service of New Hampshire.

"I tell our workers, our teammates, that our customers don't like to be in the dark, literally or figuratively," May said. "And it's the latter part, their desire to know what's going on, to control their destiny, what's going on in their world, what's happening and when it's going to get better." ___ (c)2014 The Hartford Courant (Hartford, Conn.) Visit The Hartford Courant (Hartford, Conn.) at www.courant.com Distributed by MCT Information Services

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