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| UGI Utilities: A Hold on You |
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| Written by Ashley McGown | ||
| Saturday, 31 January 2009 23:00 | ||
The company was founded more than 100 years ago in 1882. At the time, all aspects of operation fell under one umbrella, but after several decades, business diversified, and the divisions were formed.  According to David Trego, president and CEO, UGI Utilities was one of the largest companies in the industry until the Public Utilities Hold Act was passed. Today, UGI Utilities operates as a wholly owned subsidiary of UGI Corporation, a holding company involved with a range of businesses in the energy industry. In the past few years, UGI Utilities has grown significantly through a pair of acquisitions. Three years ago, the company purchased the division now known as Penn Natural Gas from Southern Union. In October 2008, the company acquired Central Penn Gas from Pennsylvania Power and Light (PPL). The latter deal added 77,000 homes and businesses to UGI Utilities’ customer base. For a company that was looking to expand, these two acquisitions made sense because the area of operation concerning them bordered areas in which UGI Utilities was already doing business. “These two companies appealed to us because we were familiar with how they were run,”Trego said. “It was a strategic move that helped advance our business and expand our service territory,” he continued. “Penn Natural Gas surrounds our electric division, and it bumps against our original gas division, so we knew the area well. Both of the companies were very well run, which also helped make the transition a smooth one.” According to Trego, acquisitions are something he and his team wouldn’t be able to consider as freely without the help of a parent company. As a subsidiary of UGI Corporation, UGI Utilities has access to an abundance of resources, including capital. “We put a lot of thought into each acquisition before we go through with it,” Trego said. “As part of a larger company, we have access to a number of resources, including money, which allows us to invest in acquisitions. “If opportunities arise, we’ll take a good look at them, and if there is a good match, we’ll move forward with a deal,” he continued. “We want to be aggressive in seeking new business because we strive to provide our shareholders with positive returns.” A safe environment Because UGI Utilities operates in an industry that sometimes proves to be dangerous, safety measures—mainly in the form of employee training—are constantly evaluated and improved. As a result of the company’s hard work, the number of work-related accidents its employees were involved in last year was 27% lower than the year before. “We have an entire department dedicated to instilling a culture of safety in our employees,” Trego said. Like all businesses in the industry, new hires are enrolled in a comprehensive training program, but UGI Utilities’ safety department also emphasizes the use of caution among veteran workers. “If you’ve been in the business for 10 or 20 years, certain things become second nature,” Trego said. “But it can’t be assumed that the way something was done a decade ago is still safe by today’s standards. We want our employees to dedicate their full attention to a task, whether it’s the first or 50th time they’re performing it.” Trego said his goal is to have zero injuries in the coming year, and although he is aware that the chances of meeting this goal are slim (to say the least), he believes it’s an important number to strive for. Passing the torch Because a large portion of the 1,500 employees at UGI Utilities are baby boomers, employee development is something Trego and his team are set to focus on in the following years. The company expects to lose upward of 30% of its workforce to retirement in the next decade. In preparation, Trego and his team developed mentoring programs. Promising young employees are grouped with experienced personnel as often as possible, allowing them to learn from their leaders. Trego sees this as an important task because without a proper staff, the business will be unable to grow. “We have to prepare younger people to take on leadership positions,” Trego said. “Pairing younger and older people together is great because it allows experienced workers to transfer their knowledge to people who will be replacing them.” In addition to employee-geared programs, UGI Utilities recently invested in a string of IT advancements. “Some of the investments we made recently were crucial to the transition surrounding our acquisitions,” Trego said. “During an acquisition, you have to bring two different systems together.” Instead of switching the new companies over to the UGI Utilities system, Trego and his team invested in software that integrated the systems. The technology also allows employees at the company’s headquarters to transfer information to people out in the field more efficiently. Additionally, employees in the field now have access to computers on a regular basis. Many employees have computers installed in their trucks, which allows them to access information about specific customers and their gas distribution systems among other things. An automated meter reading system allows employees access to an entire neighborhood’s data without stepping outside their trucks. This system is currently in use with 80% of the company’s customer base. Within a few years, 100% of the customer base is expected to run from it. “The new technology has changed our culture dramatically,” Trego said. “In the field, we’re paperless.” Although the investments have made UGI Utilities a more efficient business, Trego carefully considers each purchase. “We don’t spend money just for the sake of being ‘cutting edge,’” he said. “We carefully analyze each purchase and pin point its advantages.” |