When Dennis Doll moved from a subsidiary of the U.K.-based Thames Water (Elizabethtown Water Company) to ultimately take on the role of President, CEO and Chairman at the New Jersey-based Middlesex Water Company, his goal was less to change the culture of the organization but rather build upon the high quality work already being done with the skills and experience he was able to bring from his prior post.
“With the regulated, investor-owned water utility business being a relatively small industry, I had a strong knowledge of Middlesex and its leadership before I joined, so I already had a great understanding of the culture and people, and their view of the business,” Doll told CEO Magazine North America in an exclusive interview. “I’ve been in the water industry virtually all of my career. I came from the accounting and finance side of the business as opposed to the engineering or operations side, but I had learned a lot from my prior experience working for larger utilities.”
Middlesex Water Company is a regulated, investor-owned, publicly traded water and wastewater utility based in the U.S. state of New Jersey that was first incorporated in 1897. The company provides regulated and non-regulated water related services in New Jersey and Delaware. These services include collecting, treating, distributing and selling water for domestic, commercial, municipal and industrial uses. Middlesex Water Company owns and operates regulated water utility and wastewater systems on behalf of municipal and private clients in New Jersey and Delaware, and in 2020 reported revenue of $141.6 million.
Perhaps as a result of his many years of experience in the sector, Doll takes a long-term view of the industry. “The water utility industry is evolving more rapidly now than I’ve ever seen it before in terms of increased regulation, increased customer expectations, and the increasing number of water professionals retiring from the workforce after long careers in the industry,” he highlighted. “So, the need to ensure that we capture that institutional knowledge and have the technical skills and the financial capability to manage all that is going to be absolutely critical to delivering service for not only our current customers, but also for the next generation.”
“Another focus is ensuring the reliability and resiliency of our systems,” Doll elaborated. “For example, under our current capital infrastructure investment program, ‘Water for Tomorrow®’ we’re designing and constructing projects today that will impact customers fifty or a hundred years from now, and we’re seeing the benefits today of all the planning and foresight that our predecessors did more than fifty years ago.”
INVESTMENTS IN INFRASTRUCTURE
Doll insists that the fundamental business model of the regulated utility industry hasn’t really changed much over the years, yet what has changed significantly is increased regulation, heightened customer service expectations, and an increased need to focus on workforce development and building skills as an industry. Nevertheless, Doll views the combination of these things as presenting not only challenges, but also opportunities. He cited Middlesex Water Company’s key areas of growth opportunity over the next years as infrastructure investments, mergers and acquisitions, and more interest in contract operations as government-owned utilities are increasingly exploring new ways to keep their utilities operating efficiently while meeting new regulatory requirements.
“There is a major focus on infrastructure of all kinds in the country right now,” Doll said by way of explanation. “We’re a company that’s been in business since 1897 and still have a lot of old infrastructure even though we’ve been very proactive in upgrading and replacing infrastructure over a very long period of time. We’re just now completing a large $70 million-plus ozone treatment plant which is designed to remediate disinfection byproducts and give us the ability to treat for various emerging contaminants. So, the organic growth and the investment in utility plants is certainly a growth opportunity for shareholders because we earn a fair return on those prudent investments.
“The flipside of that is that it does put upward pressure on customer rates so we’re very focused on ensuring that a) we’re not investing any more than is necessary, and b) that everything we do is based on ensuring continued resiliency and reliability of service, with an eye on the affordability aspect of that service,” he added.
A RESOURCE TO THE MUNICIPAL SECTOR
In the state of New Jersey, where Middlesex is headquartered, the Water Quality Accountability Act (WQAA) has been in place since 2017 and requires all utilities, both municipal and investor owned, to adhere to a list of protocols regarding operations, asset management, cybersecurity, and various other aspects that many municipal entities had not been adhering to previously, at least not to the level of detail that many investor-owned utilities were already required to by the New Jersey Board of Public Utilities.
“The WQAA is resulting in a number of municipal entities to think more seriously about whether or not they can remain in the utility business over the long term,” Doll highlighted. “So, personally, I’ve been having more conversations lately with municipal entities than I ever had before as they’re looking more at their options going forward. We’re quite open to working with a municipal government and operating their system under contract as opposed to outright purchasing it, because sometimes it’s not necessarily palatable for them to sell their system for political or other reasons.
“There’s a bit of a controversy on a national basis about the role that investor owned water utilities should play versus municipally run utilities,” he added. “One of the things that’s very important to us is that in addition to strong technical expertise, we believe we do a very good job at networking with local municipal officials and we offer to serve as a resource. That consistent dialogue and collaboration has also differentiated us over the years—we keep them informed of projects where we’re actively involved within their communities. These things are key to building mutual trust.”
Technology and innovation have been vital components in helping to guarantee smooth operating processes, cost reduction, better asset management, and increased efficiency for the Middlesex Water Company in recent years. Doll described some key ways in which the company is utilizing tech to its advantage in terms of facilitating internal processes and helping employees do the best work they possibly can.
“One of the things we did more than 10 years ago is we implemented an enterprise resource planning platform through Oracle which is a fully integrated suite of applications,” he said. “That system has helped integrate our various business processes and produced huge dividends in terms of our ability to operate more efficiently and be more responsive to our customers.”
Elsewhere, to preserve water resources and prevent unaccounted-for water loss, the company is using sophisticated acoustic leak detection technology to pinpoint and repair leaks faster before they become larger breaks causing significantly more service disruption.
“Twelve years ago, we also implemented an enterprise risk management program,” Doll outlined “We have oversight of that program all the way up to the board level. It’s designed to ensure that every employee in the company is comfortable identifying a) what risk looks like, and b) is comfortable to report it when they see it without any concerns about retaliation or how it may reflect on them individually. The ultimate goal is to ensure that anything that could potentially turn into a larger problem is identified early on, so we can remediate it early. It’s all about working for the greater good of our customers and the company.”
RELATIONSHIPS THAT LAST
Middlesex Water Company depends upon numerous outside contractors for a whole range of activities that occur within its supply chain from initial planning and design to construction of projects, as well as collaborating with partners to ensure such projects operate at their full potential and can emerge resilient in any emergency that has the potential to interrupt service.
“Whether they be engineering consultants, suppliers, or contractors, we made the decision early on in the COVID-19 pandemic that we were going to continue to move forward with our capital program, keep our contractors employed, and keep our key projects moving,” Doll highlighted. “So, maintaining those relationships with key vendors is absolutely critical, especially from an emergency and contingency planning perspective. They are essential partners in our mission to keep the water flowing.”
“Where we see that manifest itself directly is in our ability to complete our various construction projects on a timely basis, not only from the perspective of ensuring that we’re delivering the amount and quality of water, but also from a financial perspective,” he concluded. “It’s a critical balance between when we make investments in terms of utility plants and when we’re able to recover those investments through the support of our economic regulators. All of our vendors, suppliers, and regulators are incredibly important to helping us maintain that balance.”
By Paul Imison