A Publication of WTVP

Scott Cisel is chief operating officer of AmerenCILCO. He received his bachelor’s degree from Culver-Stockton College and his master’s degree from Bradley University.

He began his career with CILCO as a meter reader, and eventually worked in various positions throughout the company such as sales, marketing, customer service, legislative and public affairs, acquisition, regulatory matters, and energy trading.

Cisel serves on the boards of Eureka College, Tri-County Urban League, Community Foundation of Central Illinois, Illinois Energy Association, Heartland Partnership, and the St. Jude Midwest Affiliate.

Cisel and his wife, Susan, live in Elmwood with their three children.

Tell about your background: schools attended, family, etc.

I grew up and still live in Elmwood, a community of 2,000 25 miles west of Peoria. I worked with my dad at his full-service gas station since I was old enough to clean the windshield of a car. That’s where I learned the basics of business and the importance of honoring commitments, providing real customer service, and how to run a business profitably. The station was called "Cisel’s Mobil-Home of Friendly Service." That slogan might sound corny today, but we meant it and lived by it. I learned so much from my father, who had little formal education. But he was a very wise businessman because he understood what real customer service was. I married my high school sweetheart, Susan, and we have three children-Derek, Abbey, and Drew. I graduated from Culver-Stockton College with a bachelor of science degree in business administration and economics and received my master’s degree in liberal studies from Bradley University. Today I’m the chief operating officer of AmerenCILCO.

Your career began at CILCO as a meter reader. Is that a typical starting point for utility executives? Did you anticipate spending your career at CILCO?

Most executives probably started at their companies directly in a management position. Certainly, beginning as a full-time meter reader isn’t a typical career path for a utility officer. But that experience really reinforced what I learned at my father’s service station about being customer friendly and being a dependable worker. Meter reading is a key utility function. It’s where the billing process begins for the energy used by customers. Accurately reading the meters on schedule avoids customer complaints. It also provides a regular safety check on company equipment at businesses and homes. As a meter reader, you’re likely the only employee the customer comes in contact with on a regular basis.

Concerning my longevity as a CILCO employee, on the first day I read meters, I was cornered in a back room of a business by a watchdog. I found refuge on top of a stepladder until the owner retrieved the dog. After leaving the premises, I thought long and hard about working at CILCO. Fortunately, the rest of my first day went smooth. And I’ve stayed ever since.

What changes in ownership/management/organizational style have occurred at CILCO in the last decade with CILCO, AES, and now Ameren?

There have been two ownership changes in the past 10 years as our company became more efficient and prepared to meet the challenges and opportunities brought about by deregulation of energy markets in Illinois. CILCO was founded in 1913 and remained an investor-owned company until AES purchased us in 1998. Earlier this year, the sale to Ameren, headquartered in St. Louis, was completed. In 1985, CILCO took a bold step by forming CILCORP, the first utility holding company in the state. That move paved the way for us to progress into business diversification, an important effort at the time. The holding company allowed CILCORP to be instrumental in the formation of the Agricultural Research and Development Corporation (ARDC). This was the first successful collaborative effort to bring government, university, and business entities together to pursue commercial products through biotechnology research. CILCORP led the effort to develop and pass legislation that was signed into law by President Reagan. I was very much involved in this initiative, serving as project director on special assignment from CILCO. Del Schneider and Dick Neumiller were instrumental and provided the vision for this initiative, which laid the foundation for much of the work being done today under the PeoriaNEXT banner.

Under AES, the management style was quite different. CILCO was the first U.S. integrated utility acquired by AES. Their prior experience was with power plants in the U.S. and a variety of energy-related properties around the world, with a focus on emerging countries, where energy reliability was poor and jobs scarce. AES was unorthodox in their approach to management, particularly when compared to a traditional utility style. Supervisors weren’t allowed to make decisions, but to just give advice. Employees made decisions, even against management’s best advice and experience. Through the AES experience, we have a good feel for what works and what doesn’t when it comes to trying new management styles. AES also had problems with community relationships, and didn’t live up to commitments made when they purchased CILCO. That brought about a great deal of distrust and made life more difficult for CILCO employees. We were able to somewhat minimize the difficulties because we still had good personal relationships with key community leaders, but even those were severely tested because of AES’ lapses.

Today, Ameren is a good fit for us, our customers, and the communities we serve. Ameren is much more traditional in its approach and takes great pride in operating natural gas and electric utilities in Illinois and Missouri. Ameren, which also owns two utilities like CILCO-Central Illinois Public Service (CIPS) and Union Electric (UE)-has been successful in maintaining stable and competitive electric prices, something CILCO also worked very hard to do. Ameren believes in community involvement, and it’s an active participant and contributor to communities it serves.

From a service standpoint, Ameren is committed to make CILCO a performance leader in the state, and that addresses many of the concerns expressed by community leaders during AES’ ownership. Some of these enhancements include using new technology and operating systems, including a new outage management system capable of knowing automatically when a customer experiences an electric outage and when power is expected to be restored. That will certainly benefit our customers. Ameren has a Midwest focus and is committed to the basics of operating utilities. Ameren is also committed to meet the growing needs of its customers and to assist communities in maintaining and attracting new business through economic development services.

What different positions did you hold during the management changes?

I advanced through various management positions in sales, customer service, marketing, and operations. In 1995, I was elected vice president. Since then, my responsibilities have included marketing, sales, customer service, public affairs, electric and natural gas supply acquisition, state and federal regulatory and legislative matters, and legal matters. In 2001, I was named senior vice president, and in January of this year, with the sale of CILCO to Ameren, I was named chief operating officer for AmerenCILCO. I’m fortunate to have experienced many different job functions during my career at CILCO, and I’m grateful for the many lessons learned from so many talented and dedicated colleagues.

In your opinion, why wouldn’t AES’ unconventional management methods work in a traditional utility environment?

AES’ management style developed in the power plants they owned and operated throughout the world. The team concept worked well in smaller, confined settings where there were many similar job duties and few direct customers. CILCO, however, represented a challenge to their management style because we were a utility with many facets of operations integrated into one company serving approximately 250,000 customers. Serving this many customers proved to be more of a challenge than AES anticipated. In short, AES’ management style lacked accountability and the sensitivity in working with external customers. Eventually, changing world energy markets and the impact of laws and regulations resulting from their purchase of Indianapolis Power and Light Company (IPALCO) led to their decision to divest their holdings of CILCORP.

What are the greatest challenges facing the delivery of natural gas and electricity in central Illinois?

I like to refer to challenges in business as opportunities to develop solutions. Primarily from a delivery standpoint, we strive to safely and reliably deliver energy at reasonable prices while keeping up with improvements in technology. Today, Ameren serves 2.2 million customers in Illinois and Missouri and uses its outage management system to provide accurate accountability when responding to service interruptions. Being able to know where, when, and how to isolate problems is key in providing enhanced customer service. Ameren has a proven successful track record of outage management, which we’ll strive to achieve.

In the deregulated energy market, the synergies between the Ameren companies will be most obvious to our customers through offering reasonable prices for electricity and natural gas. As a side note, CILCO hasn’t had an increase in its base electricity price (excluding fuel costs) in more than 22 years, longer than any other investor-owned utility in the United States. This accomplishment is unprecedented in the industry. In Illinois, retail electricity prices are frozen until 2007, providing even more price stability for consumers in Illinois. For natural gas, Ameren’s ability to purchase large quantities of gas to serve customers in two states brings added value to our customers in central Illinois by keeping the price of natural gas at reasonable levels.

What are the greatest challenges being faced by utility companies today?

Some of the greatest challenges will be to keep operating costs down, controlling health costs for employees and retirees while providing quality benefits, satisfying customers, assisting communities with economic development services, and evolving with the deregulated energy market. Complying with the Clean Air Act will also require additional capital investments to meet environment performance standards.

With the passage of deregulation in 1998, consumers have the opportunity to alternative electric suppliers. How has that affected AmerenCILCO?

We’ve been successful during this transition market. We’re selling electricity and providing customer satisfaction to customers outside our defined service territory. We’re continuing to grow within our service territory, and AmerenCILCO customers continue to select us as their provider of electricity. AmerenCILCO is also the preferred electricity supplier to a consortium of participating Illinois schools. Through our efforts, we’ve saved the schools more than $1.5 million during the past three years. We also supply electricity to a wide variety of industrial and commercial customers, predominately in northern Illinois.

The wholesale price of natural gas isn’t regulated, but priced according to supply, demand, and other factors. How was central Illinois affected last winter?

Last year’s average all-inclusive price of natural gas was 74 cents per therm for a residential customer, compared to 96 cents the year before. AmerenCILCO has implemented a number of strategies to help protect against price volatility. We’re seeing higher costs for natural gas this summer, when many utilities normally put lower cost gas into storage for use during higher priced periods in the colder months. Instability in the Middle East contributes to energy prices fluctuating, as we see almost every few days at the gasoline pump. We work hard to keep the price of natural gas as low as possible. That surprises some people because they logically think that we make a profit on the price of natural gas. But we don’t. Our profit comes only from what we charge for delivering the gas to the consumer, and the Illinois Commerce Commission regulates that cost.

After hearing about the "rolling blackouts" a couple of years ago, the public became more concerned about utilities possessing adequate resources to accommodate customers during the summer months. Is that an issue in central Illinois?

CILCO has never implemented a rolling blackout. Balancing customer needs with available supplies is a difficult process. We utilize a variety of ways to meet our customers’ electric needs, including our own generation, purchases from other generating facilities, encouraging wise use of energy, and the use of interruptible contracts with some of our larger customers that allow us to reduce their supply of electricity on peak use days in exchange for a more favorable price for the customer. All of these techniques have helped CILCO keep the power flowing during the hottest days of summer.

During the tornadoes and storms of April and May, some people were upset electricity wasn’t restored more quickly. How would you respond to that? What were the particular challenges of those events?

During those storms, there were a number of tornadoes and straight-line winds that inflicted tremendous damage on our electric system, as well as to personal property of many people and businesses. We responded to these situations well, dedicating the necessary resources to restore power safely and quickly. A recent storm in June knocked out power to 18,000 customers, uprooted trees, and brought down power lines throughout the Peoria area. From the time the storm hit until the last customer once again had power was only 24 hours.

During these times our employees do amazing things. They work under extremely difficult circumstances for many long hours. It’s also very dangerous work. Yet during the repairs from the storms in June, we didn’t experience one personal injury. That’s very important to us and to the families of the employees. Since then, we’ve received many calls and letters from customers thanking us for our quick response. We also believe we can and will do better. One customer without service is one too many. We understand the importance of service reliability, and we’ll deliver on our commitment to provide outstanding service as AmerenCILCO.

Tell about the various programs available to help businesses patrol their electricity costs and maintain top quality service?

Besides having some very competitive rates for business, we have CILCORP Infraservices, Inc. (CII), an affiliate of AmerenCILCO, which offers a wide variety of energy-related services to commercial and industrial customers that help maximize energy efficiencies, equipment reliability, and productivity while reducing energy costs and downtime. The services include, but aren’t limited to: infrared thermography, machinery laser alignment, energy audits, transformer testing and evaluation, switchgear breaker maintenance inspection and testing, and ultrasonic testing of pressurized piping and bearing systems.

CILCO has always been involved in the community. Ameren has said it’s committed to the community as well. Explain why utility companies should play such an important role in community affairs?

Utilities’ roots are literally in the ground in the communities we’re privileged to serve. We aren’t going to pick up our poles and gas lines and move someplace else. Because of that, we have an extra incentive, above and beyond the normal good business practices, to see our communities are economically strong and well positioned to grow. Another reason is that virtually everyone is our customer. So the right thing to do is to assist our communities. We do that in many ways, and we want to set an example for others to follow. We can’t, of course, provide financial help or volunteers for every good cause in the 4,500 square miles where we do business. But we can play a big part, and we do. Not only do we use our financial resources, but our employees are involved as well. Our employees often are in leadership roles in community projects, and they do that with the company’s support. We’re gratified that in July we were recognized by Peoria Mayor Dave Ransburg and the Peoria City Council for our Summer Serenades music series, which is in its 14th season in Peoria and eighth season in Springfield. The mayor noted the music series was a very visible way AmerenCILCO shows its support for the community. And it’s just one of many. It’s our objective to make central Illinois a better place for everyone to live. We do that first through providing good service and reasonable prices, and then through giving back to the communities.

What changes are being implemented since the buyout by Ameren? What changes do you expect in the future?

We’re in the process of integrating our operations with Ameren Corporation. We’re consolidating our financial group and administrative services into St. Louis, which is the corporate headquarters. We’re analyzing Ameren’s best operating practices so we can implement those within AmerenCILCO. Training for employees has been much greater these last few months because of learning the new Ameren operating systems. We’re in the process of implementing Ameren’s business strategies and setting new expectations. We’re being frank about our challenges, and meeting with employees to share information. A new leadership team is in place and working diligently to realign our businesses. Not only will our employees benefit from these changes, but so will our customers in terms of better performance and improvements in customer service.

What misconceptions, if any, are there about the utility industry in general? In central Illinois?

Perhaps the number one misconception in the past was that utilities were guaranteed a profit. Rather than guaranteeing a profit, regulation actually put a cap on how much money a utility could make. There also seem to be misconceptions about rate increases. During the times when filings were made with the Illinois Commerce Commission for increases, it would take almost a year for an increase to be approved. That was only after dozens of hearings, hundreds of hours of testimony, and hundreds of pages of documents. Yet many times people thought we received three or four rate increases during that time because the proceedings were frequently reported in the media. It was hard to keep straight that it was all the same increase request.

There also is a misconception that utilities make a profit on the price of natural gas. As mentioned earlier, we buy the gas and pass on the actual price to our customers. Our profit comes through the delivery process of getting it to homes and businesses. So when the price of gas shoots up all across the nation in the winter, most people assume utilities are making a percentage profit from a higher price. That’s not the case at all. Many people also tend to think the prices they pay for utilities are the highest in the state or region. We fought that misconception for years at CILCO. We’re proud of the fact that our prices for electricity are some of the lowest in the state and among the lowest in the nation. Our natural gas prices are about average for the state and region.

Another misconception is we don’t give people a chance to make payment arrangements before their service is disconnected. This is one that’s really unfair. We go to great lengths to help customers with their payments before disconnecting service. There are many different payment plans and many different ways to make arrangements. Disconnecting services is only a last resort and is a step taken only when the customer either hasn’t communicated with us or has broken their agreement for payments. And finally, I know some people think utility employees get free natural gas and electricity. As attractive as that might sound, it’s not a benefit we can provide. In fact, unlike many employees who get a discount for buying company products, we pay the same prices as all of our customers for gas and electricity. 

What else would you like our readers to know?

With all of the changes we’ve undergone in recent years, we continue to be a successful company that provides a needed product to customers at reasonable prices. We’re proud of that, and it couldn’t have happened without the hard work of our employees. We’ve gone through a lot, as have many in other industries where change is now a way of life. We’re working hard to regain the confidence and respect from the customers we serve. It won’t be achieved overnight, but through constant improvement, we’ll obtain that goal. We’ll once again become a performance leader. We acknolowledge we’ll be judged by what we do rather than what we say. There’s much work to be done, but building on CILCO’s history of success since 1913 and our new relationship with Ameren, we’re well underway. I have every confidence we’ll achieve our goals, and as that happens, AmerenCILCO employees, customers, and communities will benefit. IBI