Despite the substantial change sweeping through the energy industry, NiSource CEO Joe Hamrock believes success in the business still comes down to people.
NiSource CEO Joe Hamrock has been working in the energy business for almost 36 years and has two key convictions on the future of the industry: one, that things are changing faster and more dramatically than they ever have before, and two, that amid such sweeping change, success in the industry still comes down to the talent and dedication of the people working on the job and the company’s commitment to the communities it serves.
“As I look at the opportunities now, they’re even more extraordinary than those I saw six years ago when I first stepped into this role,” Hamrock told CEO Magazine North America in an exclusive interview. “For us, sustainability is all about people, our communities and employees. Through the energy transition that’s underway, we see exciting opportunities in the way energy is produced, delivered and how it’s used, and how those opportunities can benefit our communities, employees, and the company simultaneously as we move toward a more sustainable energy future.”
NiSource Inc. is one of the largest fully regulated utility companies in the United States, serving approximately 3.5 million natural gas customers and 500,000 electric customers across six states through its local Columbia Gas and NIPSCO brands. The company, based in Merrillville, Indiana, has nearly 7,500 employees. In 2020, NiSource enjoyed revenue of $4.68 billion.
“We serve a wide swathe of the Midwest and the Atlantic seaboard,” Hamrock emphasized. “As a company, it’s increasingly important for us to understand the diverse needs and interests of our customers and our employees. We’re charting a new path in our industry. However, what sets us apart is our commitment to the future of energy, which relies on input from our customers, employees, and key stakeholders.”
YOUR ENERGY, YOUR FUTURE
Under Hamrock’s leadership, NiSource has undertaken a framework the company calls Your Energy, Your Future, which serves as a customer-focused blueprint for delivering a safe, sustainable, affordable and reliable mix of energy for its customers, both now and into the future. Yet he does not believe, as some do, that the transition to clean energy will mean a lack of growth opportunities compared to levels the industry has historically enjoyed. Quite the contrary.
“Over the past several years, we’ve been assessing what the opportunities are to transform how energy is produced and delivered,” Hamrock elaborated. “And what we’ve seen from that is just a phenomenal growth opportunity. As we transition from coal to renewable energy, which includes a cleaner portfolio on the electric side and steps to reduce carbon emissions in our gas business, we see terrific opportunities to invest in the safety and reliability of our systems, driving growth for our investors. We’ve laid out a 7-9% earnings growth through 2024, which is among the best in the industry, and have identified approximately $40 billion of long-term investment opportunities.”
Hamrock described the current mission of NiSource as a company dedicated to being relentless champions of safety, service, and comfort. At its core, he said, NiSource is motivated by enabling its customers to pursue their energy and sustainability preferences—safely, reliably, and affordably—while meeting the increasing expectations of investors and regulators. A bedrock to this approach is taking a balanced perspective on sustainability. For the company, this means addressing environmental stewardship, safety performance, workforce and economic development, social responsibility, and innovative technology in a measured way.
“Energy affects everyone,” Hamrock elaborated. “More importantly, safe, reliable, affordable, and clean energy is critical. We’re already on course for a 90% greenhouse gas emission reduction by 2030. Included in this is a 50% reduction in methane emissions from our gas business by 2025. These are not goals that we’ve planted at some point in the future with no clear plan to achieve; we have clear visibility into achieving these goals and implementation of our plans are well underway.”
“The retirement of our coal fleet continues to gather pace with two units being retired this year and two more in 2023,” he highlighted. “We have our final coal retirement staged for 2028 and we’re reevaluating that timetable with our stakeholders as we speak. Along that same timeline, growth will come from investing in wind and solar, and of course, energy storage. When you look at a company like ours, that’s an enormous opportunity for investment and sustained growth.”
PEOPLE AT THE CORE
As a CEO who cares about people, Hamrock is all too aware that the dramatic changes coming in so many different aspects of the energy industry will affect the workforce, with many traditional jobs disappearing and many new ones emerging. Yet he believes strongly in supporting NiSource’s employees in enabling them to make that transition, as well as bringing new people aboard as new opportunities present themselves.
“While jobs like coal plant operators may exist today, we know that there are a lot of new opportunities emerging as we digitize and overlay our systems with more intelligence,” he insisted. “As we prepare for the future, we’re working very carefully to ensure that that transition is as smooth as possible. Therefore, it is critical that we provide support and training to our employees, so they can navigate toward the next chapter of their professional life and are included, not left out, of a more sustainable future.
“But even more importantly, when you look at the long-term view, we have an incredible opportunity to invite more people into the industry, particularly from marginalized communities. There are so many great jobs in this industry that many people don’t even realize are there, and our success includes fostering a diverse workforce to meet the needs of our customers today and future generations alike.”
Many of these new opportunities will involve embracing innovation as energy companies like NiSource look to deploy a variety of new technologies to ensure an increasingly more efficient and affordable service, whether that means utilizing technology in the field, digitizing customer service, or helping with supply chain functions. All of those capabilities fall under what Hamrock calls NiSource Next, the company’s new internal transformational program for innovation, collaboration, and capability building.
“For example, as we look at core operations and think about a gas field or an electric field worker, the data that they need in their hands on the job site so that they can quickly assess what’s needed is growing more sophisticated,” he explained. “We’ve got big initiatives underway to digitize work enablement and scheduling, along with ways to get all the information—mapping, records, data about a customer and about the assets we service—in an employee’s hands on an iPad or other device.
“The other key area is the digital experience for our customer service teams as we move from a world where historically people would call in and talk to somebody to one where our customers can participate in self-service with web-enabled or mobile-enabled technology. And finally, how we source different services from our providers. Some of them are so advanced with technology that by simply changing how you source key functions, you can get a big pick up in terms of capabilities and the cost profile.”
Hamrock cited two main areas in which NiSource is keen to cultivate partners and already boasts some vital relationships, namely the technology and innovation space on the one hand, and the development of renewable energy sources on the other—whether they are suppliers of clean energy, or joint-owned ventures to build renewable projects.
“The kind of technology we’re looking for includes things like the use of augmented reality as it relates to a field worker being able to literally see into the ground as they’re working on a job site with underground assets,” Hamrock said. “It’s absolutely foundational for us that we leverage partners’ expertise, experience, and the scale to build more innovative capabilities than we could ever build on our own.
“Scale is often used as a cost lever, but I really view it differently,” Hamrock added. “Many of our partners are innovators, and they help us to move the frontier of opportunities for how technology or energy projects are developed. That drives real advancement in innovation for us. And the value captured is shared.”
By Paul Imison