Michael F. Ryan
Position: President, National Grid, Rhode Island
Background: Ryan joined Narragansett Electric Co. in 1994 as vice president for public affairs, and rose to executive vice president before becoming, last spring, Rhode Island president for the company, which now uses its corporate parent’s name. He previously had been Rhode Island director for the late U.S. Sen. John L.H. Chafee for eight years, a special assistant and press secretary for former Gov. J. Joseph Garrahy, and a public relations manager for AT&T.
Education: B.A. in political science, 1974, Rhode Island College
Residence: Warwick
Age: 55
Utilities don’t tend to relish the spotlight. Tightly regulated by government, they face public scrutiny, but they also have monopolies on essential services, so they don’t need to promote themselves to get customers.
But this year, National Grid has been in the spotlight almost nonstop, due to rising energy prices, ambitious energy legislation, and the British company’s move to acquire natural gas distributer KeySpan and the Rhode Island assets of New England Gas Co.
Last week, just days after National Grid closed on the gas deal, Michael F. Ryan, the company’s top official in the state, spoke about what lies ahead for the merged utilities.
PBN: We’ve seen very dramatic increases in utility rates. How will this deal affect them?
RYAN: The increases that you’ve seen on both the gas and electric side have been due 100-percent to the cost of product. As the prices rise for gas and oil, that has obviously a direct impact on the gas prices in the region and around the country, as it does with electricity [35.2 percent of the power used by Rhode Island last year came from gas-powered plants, according to National Grid]. The local distribution companies, whether it’s National Grid gas now or National Grid electric, have no control over that. What they do have control over is the distribution costs, going over the wires and through the pipes. We’ve been able to freeze rates on the gas side since 2002 – and on the electric side, we’ve in fact decreased rates twice. And we have another rate freeze going out for another three or four years.
PBN: Will National Grid’s expansion and its planned acquisition of KeySpan give it more control of the supply side?
RYAN: I think where you might see some impact is in our buying power. The more customers we have, the more base load we have to go out there and purchase. We have about a half-million gas customers in upstate New York, we’re adding 245,000 in Rhode Island, and ultimately, if we’re successful – and we think we will be – on the KeySpan purchase, then we’ll have a dramatic increase. I think we’ll have upwards of 3 million customers. That puts us in a very strong position in terms of purchasing product.
PBN: How does it affect the market to have such a large utility company?
RYAN: That’s a question that naturally comes up. If we’re the company that owns the gas distribution and the electric distribution, does that put us in a position where we’re too big or where there’s a monopoly? In fact, it is a monopoly, and because it is, we are very highly regulated. … In fact, to get through this acquisition of New England Gas, we had to go through several approvals. … On the state side, we had to prove the acquisition would not be harmful to our customers. Obviously, we think the opposite: It’s going to be very much a positive.
PBN: How will it be a positive?
RYAN: We’re estimating that we’ll be able to save, in terms of cost of service, upwards of $1.5 million or $1.6 million on the natural gas side … [by consolidating] customer service operations, finance offices, accounting offices.
PBN: Is this going to mean jobs lost?
RYAN: No, we’ve had pretty good success with our other purchases and mergers of being able to – we never made a flat-out promise, but – to try to maintain the work force in place. We think some of these savings that will accrue will accrue naturally. Folks who may have a lot of years of service in may choose this time to take retirement. We’re sending out to non-union employees for New England Gas a voluntary separation package. There’s some incentives involved if they choose to take it. If they don’t, we’re fairly confident that we’ll be able to get through this without layoffs.
PBN: Do you have a particular target for how many jobs you want to cut?
RYAN: Not right now. We’ll wait to see.
PBN: How many people does New England Gas employ?
RYAN: About 600. … And we have about 500 National Grid employees.
PBN: National Grid has been much more aggressive in recent years in promoting energy efficiency than New England Gas. Do you expect to start doing similar work on the gas side?
RYAN: Yes, we had our eye on that anyway, but the General Assembly just passed legislation that mandates that, and gives us the focus to go into an energy efficiency program on the gas side. We think, ultimately, it’s going to be very beneficial to our customers.
PBN: Are there other cultural or operational differences between the two companies?
RYAN: One of the things that appealed to us about New England Gas was their employees. … They’re very goal-oriented, very customer-focused. So I think you won’t see a lot of change. We’re going to be doing what I think are fairly innovative things in coming months in the way we do work in city and town streets. … Right now, if you need to fix a gas line, you have to dig up a good portion of the street. There are some new technologies that are less intrusive.
PBN: Do you expect the energy situation to get any better?
RYAN: The way things are going, it appears that there’s some stability in the marketplace. Now, one hurricane could impact that very quickly. But we’re keeping our fingers crossed.
