December 2018, Vol. 245, No. 12


Retiring Stavropoulos Leaves PG&E a Safer Utility

By Richard Nemec, Contributing Editor

The floor-to-ceiling office window views of San Francisco Bay at the headquarters of one of the nation’s largest natural gas and electricity utilities, Pacific Gas and Electric Co. (PG&E), are a stark contrast to the gritty streets of Cambridge, Mass., where Nick Stavropoulos was born and raised.

Still, the two coastal locations have a common denominator for the recently retired president and chief operating officer of PG&E – at different points in his long gas industry career, he was responsible for the safety and reliability of the gas pipeline networks traversing both his native Massachusetts and his adopted City by the Bay.

When Stavropoulos speaks with his thick New England accent, there is a strength, sincerity and compassion in what he has to say. As a result, people have listened to him throughout the years since the days in the 1980s when he was a fresh college accounting graduate and MBA recruit at Colonial Gas Co. An early mentor, Colonial President Gene Hart, told him he would be a CEO of a gas utility one day. 

“My first priority when I came to PG&E was to instill a safety-first culture in the organization and instill a sense of pride in the employees,” said Stavropoulos, 60, who retired at the end of September. When he was hired in 2011, PG&E Interim Chairman of the Board C. Lee Cox said Stavropoulos had a “mandate for change and a clear mission to overhaul the company’s gas operations,” and he was given broad authority to get the job done. Cox said the board was impressed by “his down-to-earth, hands-on style and his intense focus on safety.”

He was viewed as a “no-nonsense guy who knows every aspect of gas operations inside and out, and knows how to get things done,” said the one-time chair of the Rhode Island Public Utilities Commission, Elia Germani. “He helped us tackle the very difficult matter of aging gas infrastructure, replacing hundreds of miles of cast iron and steel gas lines that needed to be changed. Residents of Rhode Island were extremely well-served by his leadership.”

Stavropoulos notes when he joined PG&E it was in the wake of the San Bruno, Calif., gas transmission pipeline explosion that killed eight people and injured scores more, while leveling a residential neighborhood south of San Francisco. It was “a very difficult time,” he recalled, requiring that utility management work closely with the two principal unions, IBEW Local 1245 and Engineers and Scientists of California (EFC) Local 20 to focus on the workers.

Eight years later, the giant San Francisco-based combination utility and the natural gas industry, more generally, have held up Stavropoulos as a leadership role model for a job well done, and he left the company with a sense of pride in what had been accomplished by the overall utility workforce to elevate PG&E and its stakeholders since the dark days when a cadre of federal officials, utility workers, emergency response teams and nonprofit volunteer organizations swarmed over the suburban San Francisco Peninsula.

Eventually, PG&E verified the rupture occurred three feet below ground in its 30-inch steel transmission pipeline, but it was painfully slow in identifying the incident and reporting it during the early evening hours of Sept. 9, 2010. At noon the following day, remnants of fire still burned in the undeveloped hills west of the residential area, and emergency officials were prevented from getting close enough to the source of incident to identify a cause.

Central casting could not have chosen a better choice to pick up the pieces at PG&E than Stavropoulos, who began working at age 12 in his uncle’s restaurant on Cape Cod and was president of KeySpan Energy when a significant over-pressurized gas pipeline event took place in Lexington, Mass., knocking out service to 1,800 customers. The man who began his gas industry career with Colonial Gas and would later be executive vice president/COO at National Grid knew exactly what to do even then.

“Nick did a fantastic job in restoring the faith of the community in KeySpan,” recalls one of Stavropoulos’ early mentors, Robert Catell, long-time CEO at Brooklyn Union Gas and later KeySpan, said of the widespread outages. 

“When Nick arrived at PG&E, he audited the entire gas organization,” according to a PG&E spokesperson. “The challenge he faced was later described in a trade industry publication [P&GJ] as ‘Herculean,’ and he sought to find out every detail. “One of his very first stops was to meet with the IBEW [union leaders] in Vacaville, Calif., where he sat before an angry group and heard their concerns. At that time, Stavropoulos committed to them that he would do everything necessary to ensure that the company would be the safest, most reliable gas company in the nation.”

IBEW Business Manager Tom Dalzell said Stavropoulos brought to PG&E a “deeper knowledge of the natural gas business that we had been sort of guessing at in the past.” And in addition, Dalzell said he brought collaboration. “It wasn’t something he had read about in a book, it was something he knew.”

Stavropoulos and long-time work associate Lori Traweek of the AGA. (photo: PG&E)

A long-time industry colleague, Lori Traweek, COO at the American Gas Association (AGA), said that Stavropoulos’ passion for instilling a safety mentality in everything was not just focused on PG&E, but also included making sure the industry understood the lessons learned by the California utility were applicable nationwide.

“Nick has been actively involved on safety everywhere, and at PG&E it has obviously been a focus, but we have a board committee on safety, and he has been actively involved in it,” said Traweek, who added that as an offshoot of his leadership abilities, he also has a knack for knowing the best restaurants and chefs spread across the nation in various cities. 

“He was also instrumental in the development of a safety management system standard by the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) and other stakeholders,” Traweek added, speaking as a long-time admiring friend and colleague. “The public and the workers in the industry are all a bit safer because of Nick’s contribution.” 

Traweek recalls that just after Stavropoulos joined PG&E he spoke at AGA’s annual operations conference, which draws several thousand people. “He talked about the tragedy of San Bruno, and the challenges lying ahead and the responsibility for making sure another event doesn’t happen. By the time he finished, the attendees gave him a standing ovation. Nick just exuded that kind of compassion and caring about safety and the industry, and all of the customers served by the industry.”

Stavropoulos built a safety culture mentality at PG&E aimed at preventing another San Bruno. He thinks now that reliability and safety are embedded in the PG&E work force DNA. The relationship he forged with the two principal unions bears this out. He evokes a passion and relentlessness in talking about the transformation at the giant utility. Under Stavropoulos’ direction, workers have been given the authority and the tools to get the job done, although in some cases that requires taking some risks.

“The job of safety is never done, never,” said Stavropoulos, calling it a “mantra we’ve drilled to instill in our DNA.” 

PG&E’s work force oversees what Stavropoulos calls “an amazing network of underground facilities,” and he calls it a “living, breathing organism” that requires loving care and constant monitoring. 

Stavropoulos notes that the chances of another San Bruno incident happening are far less likely than eight years ago, and if, or when, one happens, PG&E is much better equipped to respond rapidly and effectively.

“The work we have done the last seven years regarding our asset management process, starting with understanding what you own, making sure you understand the condition of the assets and the threats they face, and making sure you understand the tools available to mitigate the risks,” he said. “Finally, you must have a way to assess the best risk reduction steps and implement them in an ongoing and continuous fashion. This isn’t a guarantee, but we have been able to deploy a lot of risk reduction by replacing pipe, hydro-testing, pigging pipe, and installing 310 automated valves. It’s been a massive undertaking.”

PG&E officials give Stavropoulos a large amount of credit for third-party global verification of the utility’s gas system that has been obtained since Stavropoulos took over the operations. So far, PG&E’s gas business has earned or qualified for international certifications including ISO 55001, PAS 55-1, API (American Petroleum Institute) RP 1173, and RC14001.

Further third-party feedback has been provided by the post-San Bruno completion of 11 of 12 safety recommendations from the U.S. National Transportation Safety Board (NTSB), of which PHMSA is a major unit. As an offshoot of satisfying these recommendations over the past eight years, Stavropoulos created a world-class Gas Safety Academy, described by a utility spokesperson as a “one-of-a-kind centralized training operation” that standardizes all training for PG&E gas employees.

NTSB requirements fulfilled by Stavropoulos’ gas operations team included validating maximum allowable operating pressures (MAOP) on gas transmission pipelines in populated areas, expanded public awareness plans to ensure communities are aware of gas pipeline safety information and the search of 3.5 million paper documents to meet the federal requirements for “traceable, verifiable and complete records.” There was also the establishment of a comprehensive “response procedure” outlining how to deal with an emergency on a gas pipeline.

A recent example of how PG&E is dealing with the latter is offered by Stavropoulos when he mentions a high-pressure gas transmission pipeline that was struck by a soil tilling machine operator on a farm near Fresno, Calif., in the upper central valley. 

“Within four minutes the controller identified the issue and initiated the remote shut down of the line through two remote valves,” he said. “Fifteen minutes from start to finish the incident was handled. Our controllers can see much more of what is happening on the network overall these days, and we empower them to do the right thing.”

Stavropoulos oozes pride when talking about PG&E’s supervisory control and data acquisition (SCADA) system and the Gas Control Center that SCADA helps make possible. A major flaw identified in the San Bruno tragedy was the long time it took to shut the gas flow in the ruptured line. 

“We’ve spent a lot of time on training and massively increased the number of data points on our transmission system,” Stavropoulos said. “We have at least 500 times more visibility than we had eight years ago.” 

When it comes to leadership, Stavropoulos is an advocate of the “servant/leader” model in which the executive/leader is the enabler/playmaker for the team. In words, deeds and results, his approach has paid dividends for both PG&E and the industry, and it is not hyperbole to categorize his results as a “winning formula.” 

Citing a leadership model built on providing vision, engagement and clarity, Stavropoulos said, “When you can provide a clear vision in leading large teams, you need to make sure everyone understands where you want to go and empower them to make decisions every day on their own.”

Instinctively a doer, Stavropoulos is a roll-up-the-sleeves executive. His vision has been very clear – PG&E strives to be the “safest, most reliable gas and electric company, period.” Not No. 2 or No. 3, but No.1! “So, when you’re doing your job keep that in the back of your mind,” he tells the team. He considers engagement crucial and practiced what he preached by “answering every phone call or e-mail I receive.”

According to some of the people in the gas operations team, early on Stavropoulos’ mandate to all the team members was the same – find and implement any process, operational or safety improvement that could help positively impact public and employee safety. Some of the adopted approaches included the creation of a daily operations call across the entire gas organization; nonpunitive, self-reporting of problems; and the addressing of process safety. The procedures were adopted from the aviation, railroad/aviation and chemical industries, respectively.

Stavropoulos has personally weighed in on a wide range of issues using his AGA industry-wide experiences, reaching out to the nearby Silicon Valley startups and other organizations to bring in technology and innovation at PG&E to improve its approach to safety. When state legislators, a few years ago, failed to put more teeth in laws requiring contractors to call before digging, the PG&E COO developed in-company programs to engage the biggest offending contractors and draw help from the state contractor licensing board and insurance companies.

“I always ask folks, ‘What do you need from me?’” he said. “How can I help you do your job better. Too many leaders have too big an ego, and they think they are smarter than everybody and tell everybody what to do.”

AGA’s Traweek said Stavropoulos is the type leader that others want to follow. 

“He exudes passion and a caring and enthusiasm that results in unabashed loyalty from whomever is working for him,” she said. “He listens, motivates and doesn’t use command-and-control approaches, but he makes sure everyone has an opportunity to be heard and contribute. He is the kind of motivational leader that inspires people to speak their minds.”

When former CEO Tony Earley joined PG&E following San Bruno in 2011, he said the dealmaker for him was knowing that shortly before Stavropoulos had agreed to run PG&E’s gas operations as executive vice president. 

“I have to say I had some reservations about becoming CEO, but once I heard Nick agreed to run the gas system that made my decision so much easier because I knew he was one of the best in the industry,” Earley said, calling Stavropoulos’ work at PG&E “absolutely transforming.” 

Current PG&E Corp. CEO Geisha Williams has said that Stavropoulos’ leadership in driving a safety culture throughout the utility cannot be overstated. “Nick’s focus and success made him an obvious choice for leadership of utility operations, and he brought the same passion and commitment to this broader role as well.” 

From the first time she encountered Stavropoulos as part of his interviews for the EVP gas operations position, Williams said she knew he was special. “He had a laser-like focus on looking at every aspect of the gas business – all of it,” she said.

In retrospect, Stavropoulos was inspired and felt he had received a “higher calling” when the opportunity to join PG&E running its gas business surfaced not long after the San Bruno tragedy. He was at a crossroads of sorts in both his personal and professional life. His epiphany happened a decade ago after a family-shattering event that has shaped his outlook on life. He said he lost his purpose in life for a while, and taking on the challenges of the big, beleaguered PG&E gas system was a perfect fit.

On a Friday night, during a family dinner in 2008 with his wife and his 26-year-old daughter, Nicole, the unthinkable happened. His daughter began choking on meat she was eating, and Stavropoulos and his wife, Patrina, were unable to save her; neither were the paramedics and hospital personnel who tried later. Stavropoulos and his wife experienced what is every parent’s nightmare. They buried their daughter. 

“When PG&E asked me to run this gas operation, I just felt like with my 30 years of experience at the time that was my purpose in life. I wanted to make sure that nothing like San Bruno ever happened again, because I know what it feels like to lose someone you love. Suddenly they are not there anymore.

“So that’s what we really try to do; we try to value life above all else, and to understand our responsibility for a system transporting a flammable product under pressure and in front of numerous homes, businesses and rural areas. It is vital for our economy and our customers that the system is run safely and reliably. We also know that if it’s not handled properly, bad things can happen.”  P&GJ 

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