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Home Town Boy Makes Good
After 28 years, Ardigliano ascends to top spot at Southern Conn. Gas
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Business New Haven
5/1/2000
By: BNH
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In February, Sal D. Ardigliano became president and chief operating officer of the Bridgeport-based Southern Connecticut Gas Co., now a subsidiary of the New York-based Energy East. (Energy East also has acquisitions pending of Connecticut Natural Gas and Berkshire [Mass.] Gas.) Ardigliano joined the company in 1972 as a member of its distribution engineering and systems-services department. A native of West Haven, Ardigliano progressed through a host of managerial positions including sales, marketing, energy and customer services, gas supply, information technology and HR. He holds a bachelor's in mechanical engineering from the University of New Haven and attended Cornell's Johnson School of Management.
Since the merger, what issues have you been concentrating on?
It's still a changing world for our business. Bot one of the things that doesn't change - and which we want to get back to - is that we have a history of being part of the Bridgeport and New Haven communities for 150 years, and we certainly intend to be here for another 150 years. In some areas I think we have to get back to developing that relationship, particularly in the New Haven area. I think quite frankly we have lost some of our identity, if you will, in New Haven. We want to show the community that even though we are now part of a much bigger company, Energy East, that the emphasis is more on becoming part of the community.
What makes you the right guy for that job?
First of all, I am from this community – not from Binghamton (N.Y.) or some place else. I've been at Southern for 28 years, raised and educated in this area.
Most business people probably still have low awareness of Energy East. What would you like them to know about your new parent?
The Energy East story is probably no different from that of any other electric company in the Northeast. Part of what happened to the electric industry [in the 1990s] was the decision to require the companies that had generation facilities - like New York State Electric & Gas, which is the utility of Energy East, or Northeast Utilities' Connecticut Light & Power subsidiary - to divest their generating plants. When you have the opportunity to do that, that [yields] a rather large sum of money. So when the companies generated those kinds of dollars, a lot of them got the idea that they wanted to become 'super-regional' companies, expanding into other things. Some, like Northeast Utilities, decided they were going to go back into the business they were in before, which was gas: Yankee Gas was spun off out of CL&P. In Energy East's case, they had a very successful experience distributing and selling electricity and gas, and they decided that this was an opportunity for them to be a larger player in a very attractive market, New England.
They've always sold both electricity and gas in New York?
Yes, although like any other combination company, the dominant side is the electric. That's just the way it is: Everybody needs electricity, but not everybody needs gas. But when you look at New England, the market is probably the most attractive market in the U.S. today for energy expansion?
Why?
The population is certainly there. The cities may not be growing, but the suburbs are growing, and there's still a tremendous amount of rural area in all of New England, Connecticut included, where there is room for people to expand. Plus, the economy is good. So it becomes an attractive area for companies that have the kinds of growth and expansion plans that Energy East and others have expressed [given] this new-found cash. When we look at our core business - which for Southern Connecticut Gas is natural-gas distribution - we traditionally have not had the market share in this part of the country. Oil has been the predominant fuel. But that is changing rapidly. There are so many new [gas] pipeline projects that are coming on line, starting in the early '90s with the Iroquois pipeline, which brings gas from western Canada.
Let's make sure we understand this: It's the distribution and marketing of natural gas which has been deregulated.
The deregulation of gas is really on the commodity side - the transportation, which is the pipes and wires, and the commodity [gas] itself. We have as a regulated utility never been allowed to make money on the sale of the commodity. That's something the DPUC [the state's Department of Public Utility Control] controls, and we have done a successful job of buying the most reliable and lowest-cost commodity for our customers. But whether we do it well or poorly, it's not something we can make a profit on. Therefore, why not give the customer the choice to shop around for the commodity?
So you're the pipes and wires. Do you also have a marketing arm that can generate a profit?
Yes, we do, but that is on the unregulated side. But on the regulated side, Southern Connecticut Gas is still very much a marketing company. Deregulation does not mean we're not interested in growing our customer [base] and expanding our service area. But we make our money on transporting [the gas].
What's the unregulated side called?
It's called CNE Energy Services, and it is a competitive retail supplier of the commodity to the commercial/industrial sector throughout the entire state. It's a subsidiary of Connecticut Energy, which is a subsidiary of Energy East.
How has deregulation driven all
the conglomeration taking place in the energy business?
There are different views on this. Our view is that we're very much in favor of customer choice, both residential and commercial/industrial. Customers should have the option to buy their commodity - whether it's electricity, gas or phone service - from whatever reputable company is out there. We also think people should have a choice in what fuel they choose to use. And that currently is not a level playing field. What deregulation does [in] that [regard] is it gives us the opportunity to focus on what we've done well in the past and been successful at - and that's going out, adding customers and providing the best possible service. So deregulation allows you to focus on [identifying] what really is your core business.
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