{"id":23957,"date":"2020-12-27T08:00:10","date_gmt":"2020-12-27T08:00:10","guid":{"rendered":"https:\/\/www.ceo-na.com\/?p=23957"},"modified":"2020-12-24T21:39:42","modified_gmt":"2020-12-24T21:39:42","slug":"a-utility-company-for-the-future","status":"publish","type":"post","link":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/business\/management-leadership\/a-utility-company-for-the-future\/","title":{"rendered":"A utility company for the future"},"content":{"rendered":"
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Chairman and President Richard Mark sees Ameren Illinois enabling better technology to serve the customers of today and tomorrow.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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For Chairman and President, Richard J. Mark, Ameren Illinois is an energy company like few others thanks to the unique way the energy sector in Illinois has been deregulated in recent years.<\/p>\n

Not only do customers have the freedom to choose from whom they acquire their electric supply, but Ameren Illinois and its fellow public utilities also operate under the principle of performance-driven formula rate making\u2014enabling the company to both stay focused on its investment strategy, and benefit customers by improving electric and natural gas service reliability and keeping costs stable.<\/p>\n

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\u201cI joined Ameren Illinois in June of 2012, about a year after Illinois passed strategic legislation aimed at modernizing the electric grid,\u201d Mark told CEO Magazine in an exclusive interview. \u201cIt not only made our delivery system harder and more storm resilient, but it was also about looking into the future of what businesses wanted in terms of how automation and a smarter grid could bring economic development to the state. I remember telling my team that we\u2019re going to build the grid that our kids\u2019 kids will need and utilize 50 or 60 years from now.\u201d<\/p>\n

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Ameren Illinois is part of the Ameren Corporation, an American power company created on December 31, 1997, by the merger of St. Louis, Missouri\u2019s Union Electric Company and the neighboring Central Illinois Public Service Company (CIPSCO Inc. Holding) of Springfield, Illinois. Based in St. Louis, Ameren Corporation now acts as a holding company for several power and energy companies, with Ameren Illinois serving 1.2 million electric and 816,000 natural gas customers across 43,700 square miles in the southern four-fifths of Illinois. Looking at a map of the United States\u2019 Midwest, Ameren Illinois\u2019 footprint is larger than the state of Indiana.<\/p>\n

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In 1995 shareholders of both CIPSCO Inc. and of its neighboring utility of twice its size, the S&P 500-listed Union Electric Company, approved the merger of the two companies, which were to then be combined as Ameren Corporation. Both of those former utilities had traded publicly on the New York Stock Exchange. At the time of the merger, Union Electric had assets of nearly $600 million and CIPSCO about $210 million. Following the merger, Union Electric began doing business as AmerenUE, now known as Ameren Missouri. Today, with nine power plants Ameren Missouri serves over 1 million million power customers and 110,000 gas customers, in Missouri, where more than half of its customers reside in St. Louis.<\/p>\n

In 2004, Ameren acquired from Dynegy Inc. its third partner from the 1952 Midwest Power Pool system, Illinois Power Company. That utility had traded publicly on the NYSE through the 1980s, and paid dividends since 1947. As of the late 1980s, the company generated electricity and natural gas, almost entirely from coal plants, with less than 1% fueled from oil and gas. In 1991, with about $360 million in assets, Illinois Power became the subsidiary of holding company Illinova Corp. In a merger completed in 2000, Illinova Corp. became a wholly owned subsidiary of Dynegy Inc., in which Chevron Corporation also took a 28% stake. Dynegy in turn had been created in June 1998, from the merger of Chevron\u2019s natural gas and natural gas liquids businesses with Dynegy\u2019s predecessor, NGC Corp.<\/p>\n

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Following the 2004 Ameren acquisition of the IP utility, that subsidiary became AmerenIP. In 2010, all utilities merged to become Ameren Illinois Company.<\/p>\n

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\u201cWe cover approximately two thirds of the state, so there\u2019s a lot of opportunities for manufacturing and industrial expansion in Illinois,\u201d Mark explained. \u201cOne of the things companies look at when they\u2019re thinking about expanding is whether there\u2019s land available at a good price. Secondly, is the electric and natural gas infrastructure going to be there to meet their needs? That\u2019s where we come into play. Not only are we making sure we have the smart infrastructure ready, but that it\u2019s robust, reliable, and above all, affordable.\u201d<\/p>\n

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Strategic investments<\/h1>\n
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Mark credits the unique performance-driven formula rate making system in Illinois for giving Ameren the regulatory certainty to make investments in the energy grid and earn a predictable return on those investments.<\/p>\n

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\u201cWe\u2019re one of the few states in the country that has performance-based rate reviews with the public utility commission,\u201d he explained. \u201cSo, we have to meet certain metrics for things such as reliability, affordability, and a number of different operational objectives. And we have to make these improvements while keeping rates from increasing by 2.5% each year. If we meet these criteria, our return on equity\u2014our profit, if you will\u2014is based on the 30-year treasury, plus a base rate of 5.8%. That\u2019s pretty unique in this country. We\u2019ve made significant upgrades to the grid, and yet our all-in rates are about 20% below the national average.\u201d<\/p>\n

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For Mark, future growth for Ameren Illinois means making smart and strategic capital investments to expand and improve its electric and natural gas infrastructure. The company\u2019s engineering teams work with regional site development organizations to gauge what the future will hold for business and the wider economy to make sure they are making the right investments in order for their customers to have the energy resources that they need.<\/p>\n

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\u201cFor example, recently, on the eastern side of the state, one of our key industrial customers needed reassurance that our natural gas service would provide the capacity they needed to expand production,\u201d Mark said. \u201cIt was a big factor in their decision whether to stay in that community or relocate. We were able to allocate the capital and make a strategic investment to upgrade the pipeline and keep the company, and the jobs, at home.\u201d<\/p>\n

Deploying technology<\/h1>\n
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Key to the viability of these investments has been Ameren\u2019s willingness to embrace automation and digital technology to reduce its operating costs and boost efficiency. Mark pointed to everything from the use of iPads by the company\u2019s gas and electric service workers in rural areas\u2014to enter and update work orders and send them back to the processing department and customer service representatives in real time\u2014to Ameren\u2019s use of sensors to collate the information needed to detect and identify technical problems within the infrastructure and make the suitable replacements to components before they fail.<\/p>\n

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\u201cWe use drones to carrying out some power line and infrastructure inspections,\u201d he explained. \u201cAnother exciting thing we\u2019re doing is reducing cost and energy losses by optimizing our voltage levels. We\u2019re finding that by installing sensors, we can moderate the voltage we deliver to our customers to eliminate line loss. In turn, their electric bills are lower and the grid is cleaner and more energy efficient.\u201d<\/p>\n

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Nevertheless, Mark refuses to underestimate the importance of human capital to the ability of Ameren Illinois to maintain standards, grow efficiencies, and meet the needs of its customers. \u201cYou have to make sure that your team stays focused on the basics,\u201d he said. \u201cThe basics of good communication and coordination\u2014particularly when it comes to your field resources and how you allocate them\u2014is absolutely crucial.\u201d<\/p>\n

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Vital partnerships<\/h1>\n

Ameren Illinois also achieves operating efficiencies by utilizing a group of key strategic vendors.<\/p>\n

Implementing hundreds of infrastructure projects a year, as the company does, requires deployment of trusted partners that can meet Ameren\u2019s quality standards and deliver projects on time and on budget. \u201cOne of the keys is how we manage those resources,\u201d Mark stressed. \u201cIt requires a greater level of oversight, coordination, and project management. We have to make sure that projects are being carried out efficiently and cost effectively. That\u2019s also where our diversity and inclusion program comes in. These investments are being paid for by customers through their utility bills, and we feel it\u2019s very important that the companies we put out there in the field, as well as our own teams, look like the communities we serve.\u201d<\/p>\n

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\u201cThe relationship that we have with our strategic partners is very much a collaborative one,\u201d he added. \u201cWe recently completed a major natural gas transmission project that we would not have been able to complete without utilizing outside resources, so these partnerships are absolutely vital for us.\u201d<\/p>\n

Ultimately, Mark continues to believe that in the utilities industry, it is the customer that matters most\u2014even as their needs, and those of business and the wider world, begin to change dramatically. \u201cWhether we\u2019re talking about electrification, or economic development in the state more generally, we\u2019re charting a new future for the energy industry,\u201d he stressed.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Chairman and President Richard Mark sees Ameren Illinois enabling better […]<\/p>\n","protected":false},"author":22,"featured_media":23958,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52,43],"tags":[3004,99,1385,1079,2156,3005],"class_list":["post-23957","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-executive-interviews","category-management-leadership","tag-ameren-illinois","tag-ceo","tag-ceo-northam","tag-executive-interview","tag-printed-issue","tag-richard-mark"],"_links":{"self":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/23957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/comments?post=23957"}],"version-history":[{"count":4,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/23957\/revisions"}],"predecessor-version":[{"id":24121,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/23957\/revisions\/24121"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media\/23958"}],"wp:attachment":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media?parent=23957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/categories?post=23957"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/tags?post=23957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}