Chairman and chief executive officer, KeySpan Corporation and KeySpan Energy Delivery Corporation
Born: February 1, 1937, in Brooklyn, New York.
Education: City College of New York, BME, MME.
Family: Married; children: five.
Career: Brooklyn Union Gas, 1958–1974, junior engineer; 1974–1977, assistant vice president; 1977–1981, vice president; 1981–1984, senior vice president; 1984–1986, executive vice president; 1986–1990, chief operating officer; 1990–1991, president; 1991–1996, president and chief executive officer; 1996–1997, chairman and chief executive officer; KeySpan Energy Delivery, 1997–, chairman and chief executive officer; KeySpan Corporation, 1998–, chairman and chief executive officer.
Awards: Ellis Island Medal of Honor, 1998; named Professional Engineer of the Year by the New York Society of Professional Engineers, 2000.
Publications: The CEO and the Monk: One Company's Journey to Profit and Purpose (with Kenny Moore and Glen Rifkin), 2004.
Address: KeySpan Corporation, 175 Old Country Road, Hicksville, New York 11801; http://www.keyspan energy.com.
■ Robert B. Catell became chairman and CEO of KeySpan in 1998 when the company was created through the merger of Brooklyn Union Gas, which Catell headed, and the Long Island Lighting Company. After assuming the reins at Key-Span, Catell developed the company into the largest distributor of natural gas in the Northeast United States and the largest investor-owned electric generator in New York State. Industry analysts have noted that Catell was a prime mover in KeySpan's aggressive efforts to convince many private homeowners in the Northeast to convert from oil to gas heat. Catell also coauthored The CEO and the Monk: One Company's Journey to Profit and Purpose , which outlined his corporate philosophy of building a strong company but not at the expense of its customers, employees, or the communities in which it operated.
Born and raised in Brooklyn, New York, Catell dreamed of playing baseball for a living but realized he did not have the talent needed to become a professional. Catell's father died when Robert was young, and he got a job at 14 working in a neighborhood drugstore stocking the shelves. In a profile in Utility Business , Catell noted, "I understood what it meant to work for a living. I also learned the importance of getting a good education" (June 1, 2001).
Catell attended City College of New York and admitted that he probably had to work harder at his studies than many of his fellow students. In addition to his studies, he worked to help supplement his mother's disability income after she became sick. He credited these responsibilities with helping him develop a strong work ethic that he maintained throughout his career. Catell eventually received his bachelor's and master's degree in mechanical engineering. Although he would go on to attend Columbia University's Executive Development Program and the Advanced Management Program at the Harvard Business School, Catell noted that his college training in engineering provided an important foundation for his later success in management and business. As he observed in an article in the Long Island Business News , "The technical education I received has been helpful. It taught me how to approach problems, and how to solve them" (July 21, 2000).
Catell joined the utility company Brooklyn Union Gas in 1958 and worked in various engineering departments at a variety of jobs that included fixing meters. He eventually advanced to hold management positions in regulation, marketing, and customer service and finance. Catell noted that the opportunity to cross-train in many areas of the company during his early career gave him a comprehensive understanding of all aspects of the energy business.
In 1991 Catell was named president and CEO of Brooklyn Union. He soon began to emphasize the need to promote the use of natural gas and alternatives to other fuels. He stressed that natural gas was the fuel of the future because it was environmentally friendly and economically efficient thanks to its abundant supply. In his 1994 incoming-president's speech to the American Gas Association, as reported by Gas World International , Catell noted that he believed environmentalists and businesses could work together and that both were culpable in not trying to come to a middle ground that benefited both the economy and the environment. He told the AGA members, "I believe we must spread the word that natural gas is the primary fuel most able to clean up our environment as well as charge up our economy" (November 1994).
By 1995 Catell had helped turn Brooklyn Union into a $1 billion company. By this time, the energy market was under-going deregulation, and Catell saw in that the possibility for many new opportunities. The New York company began trading gas and pipeline capacity outside of its territory to customers in 17 states. Catell also oversaw the building of the Grumman and Stony Brook gas-fired cogeneration plants in New York. He then positioned the company as the leader in developing the Iroquois pipeline to bring additional natural gas to the Northeast.
Although the company's business territory had stopped growing, Catell kept Brooklyn Gas thriving. He credited much of his success to the company's intense focus on community support and economic development. The company's most successful effort in this area was the Cinderella program, which worked with local shopping districts and business owners to improve their stores with the help of Cinderella grants and which also helped start a brownstone renovation movement in Brooklyn. Catell saw that fostering growth in the community meant better business for Brooklyn Union.
By the end of 1997 Catell was strongly supporting a merger between Brooklyn Union and Long Island Lighting Company. He saw the companies as having a strategic fit that would result in numerous economic advantages, including $1 billion in synergy savings during the first ten years of the company's existence. He noted that customers would also benefit. As he told Lisa Josefak for the Long Island Business News , "This will be accomplished by eliminating redundant activities and consolidating functions" (August 11, 1997).
The merger took place in 1998, and industry analysts credited Catell as being fundamental to its success by supporting a no-layoff agreement with the union that was crucial to the merger. The merger of the two companies resulted in the creation of the KeySpan Corporation, the holding company formed by the merger of Brooklyn Union's parent company and Long Island Lighting. Brooklyn Union became KeySpan Energy Delivery Corporation, and Catell was elected chairman and CEO of both KeySpan entities.
As chairman and CEO of KeySpan, Catell set out to build the business into a leading company in the Northeast. KeySpan's stock, however, went down 20 percent during the first fifteen months after the merger while the rest of the utility sector flourished. Some analysts blamed the poor stock performance partially on the $1.7 billion in cash that the company had received from the sale of Long Island Lighting assets. The money had been sitting around unused and earning only Treasury bill returns. Nevertheless, investors and analysts remained high on the company's prospects based on Catell's past history in management.
In November 1999, when KeySpan announced it was going to acquire Boston-based Eastern Enterprises, analysts commended Catell for taking an important step in bolstering the company's prospects. The acquisition made KeySpan the largest gas distribution company in the Northeast. It further brightened the growth outlook for KeySpan because many of the households in New England were heated with oil, providing a fertile ground for Catell's efforts to recruit converts to gas heat, thus expanding the company's customer base. In an interview with Philip Lentz in Crain's New York Business , the retail energy analyst Ethan Cohen noted, "Regional players in the deregulated energy market need to reach a critical mass to compete, and that's around 2 million customers. That's what KeySpan has accomplished by taking over Eastern Enterprises" (November 15, 1999).
Catell and KeySpan Energy also ratcheted up a campaign to convince thousands of homeowners in New Jersey to convert their oil furnaces into natural gas furnaces. Part of this campaign included offering free gas boilers or a $750 credit to homeowners. Growing a customer base, however, meant the need for more gas lines and Catell and KeySpan initially proposed a gas pipeline through the environmentally unique area of the Long Island Pine Barrens. The proposal brought outcries from environmentalists, but Catell was able to defuse the hot-button issue by agreeing to reroute the line to reduce environmental damage.
Catell continued to build KeySpan through acquisitions and partnerships, including acquiring Energy North of New Hampshire and a stake in Houston Exploration. He then took KeySpan into telecommunications by creating a fiber optic network. The market analyst Gordon Howald told Claude Solnik in the Long Island Business News , "He's built a great company. He's transformed KeySpan into one of the premier natural gas distribution companies in North America" (December 14, 2001).
Although Catell's efforts at KeySpan were largely successful, the company's track record was not perfect. Unfortunately, KeySpan followed Enron into energy trading and stumbled just as Enron did. However, unlike Enron, Catell and KeySpan maintained their focus on hard assets instead of the "asset light" strategy taken by Enron. As a result, KeySpan came out of the crisis relatively unscathed while Enron collapsed. Catell's efforts at global expansion also did not pan out, and he authorized efforts to sell off much of the company's global assets. In addition, the merger cost of paying $2.5 billion for Eastern Enterprises and Energy North led to a debt load, low rates of return, and negative cash flow. Another misstep was KeySpan's acquisition of Roy Kay, a large contracting firm that had underestimated its costs on completing projects, which led to reduced earning projections for KeySpan in 2001.
Catell's career was marked by an unparalleled dedication to his job. His typical routine consisted of leaving home by 6 a.m. and then spending time between his offices in Brooklyn and Hicksville before returning home by 10 or 11 p.m. each night. Industry analysts have also noted that Catell was sensitive to workers' needs and had the ability to compromise with workers, communities, and environmental groups. Even though he was the manager of a large corporation, Catell noted that he saw himself as part of the residential and small business communities and that the company needed to work in groups with these communities.
In the book The CEO and the Monk: One Company's Journey to Profit and Purpose , Catell wrote about his views of management and building a better company through employee input, caring, and community service. Coauthored with his company's corporate ombudsman Kenny Moore, a former Catholic clergyman, and the writer Glen Rifkin, the book outlined how KeySpan made it through two major mergers in two years by creating new corporate cultures that were sensitive to its workers needs. Catell described how he and Moore helped the company "hold on to its soul" through various human resources initiatives in which employees meditated, created murals, and vented their feelings in other ways. Catell and Moore also instilled the idea that mistakes happen and that ethics should be a mainstay of the corporate culture. As reported by Claire Poole in the Daily Deal , Catell wrote in the book that he had made mistakes and added, "But I do feel extremely comfortable that I will leave behind a very clear set of beliefs about the ethical way to conduct business and treat people" (March 15, 2004).
Although Catell's term as CEO of KeySpan was slated to end in July 2003, his contract was extended through July 2005. In October 2003, he called for the federal government to reduce regulatory impediments on gas drilling and transportation in order to improve the nation's gas supply while continuing to improve energy efficiency and conservation. In December 2003 KeySpan reaffirmed its 2003 earnings forecast of $2.45 to $2.60 per share for the year and forecast 2004 consolidated earnings of $2.55 to $2.75 per share, driven by what Catell expected to be strong contributions from both its natural gas and electric businesses. In addition to his duties at KeySpan, Catell served on the board of numerous companies, including Alberta Northeast Gas, the Houston Exploration Company, KeySpan Facilities Income Fund, Edison Electric Institute, New York State Energy Research and Development Authority, Independence Community Bank Corp, and J. and W. Seligman.
See also entries on Brooklyn Union Gas and KeySpan Energy Co. in International Directory of Company Histories .
"AGA Raises the Environmental Stakes," Gas World International , November 1994, p. 30.
Josefak, Lisa, "Key Authority Q&A: Robert Catell," Long Island Business News , August 11, 1997, p. 34.
"Leading the Charge," Long Island Business News , July 21, 2000, p. 5A.
Lentz, Philip, "Investors Await Payoff from KeySpan," Crain's New York Business , November 15, 1999, p. 3.
Poole, Claire, "Values 101," Daily Deal , March 15, 2004.
"Robert Catell: Chairman & CEO, KeySpan Corp.," Utility Business , June 1, 2001, p. 80.
Solnik, Claude, "In the Big Leagues," Long Island Business News , December 14, 2001, p. 5A.