Dennis V. Arriola, the son of Mexican immigrants who first settled in a trailer home in Compton, has been named chief executive of Southern California Gas Co.
The 53-year-old becomes the company's first Latino chief executive, taking the helm of the largest natural-gas distribution firm in the country.
Arriola will oversee a utility that had $364 million in earnings last year, up from $289 million in 2012. The company, a subsidiary of Sempra Energy, serves nearly 21 million customers through 5.8 million meters at homes and businesses. Southern California Gas territory covers 20,000 square miles in Central and Southern California.
Arriola succeeds retiring CEO Anne Shen Smith, who has served in the position since June 2012.
In an interview at his office in the Gas Co. Tower in downtown Los Angeles, Arriola said he was excited to lead the company at a time when hydraulic fracturing, or fracking, has led to a natural gas resurgence.
The recent boom is a change from just a few years ago, when concerns about natural-gas shortages caused some utilities to import from other countries, he said.
Now, he said, there are decades' worth of natural gas deposits as the new mining technique has spurred exploration and extraction efforts in states such as Pennsylvania, Texas and North Dakota.
“It's reinvigorated industry,” Arriola said. He said that the resurgence is spurring new technology, and that companies are building more factories and cars that run on natural gas.
But even with a boom, challenges loom ahead for the 140-year-old utility.
Roughly half of its 8,200 employees will be eligible for retirement within the next seven years, Arriola said. He expects that shift will inject the company with new energy once it begins replacing outgoing workers, but he said finding qualified skilled labor will be difficult.
“You don't replace that experience overnight,” he said.
Still, he is optimistic. Arriola said he wants to steer the company toward greater innovation with new technology and to be more proactive in helping customers.
Arriola started his career at Southern California Gas nearly two decades ago, when he joined as the company's treasurer. He said he was hesitant to take the job because the company had a reputation of being an “old, stodgy utility.” He accepted the position, he said, because then-Chief Executive Bill Wood predicted that big changes would be coming to the industry.
He worked his way through the ranks in a variety of upper-management positions. He has served as vice president of communications and investor relations and was also general manager of Sempra's South American operations, traveling frequently to Peru and Argentina.
Arriola left the company in 2008 to help run a solar panel manufacturing firm in Silicon Valley, then returned in 2012 as president of the utility. He has held previous positions that include chief financial officer and senior vice president of both San Diego Gas & Electric and Southern California Gas Co. — sister subsidiary companies.
Arriola said he was drawn to leadership positions in his youth, serving as student body president of Gahr High School in Cerritos.
He said his parents, who toiled away after arriving in California to provide for him and his five siblings, instilled in him a strong work ethic. His father, who didn't have much of a formal education, worked various jobs including handyman and eventually for an electric company. His mother was largely a homemaker but also worked factory jobs to help make ends meet.
My parents always said, “Work hard, be proud of what you do whatever you do,” Arriola recalled. “I know my father didn't want to see any of us working in a factory — not that that's a bad thing, but he had come to this country, he had sacrificed, and he wanted more for his family.”
Arriola attended Stanford University to study economics, where he covered part of his tuition by working in the library and the cafeteria and by cleaning homes. He later attended Harvard Business School after a two-year stint as a
financial analyst for a local bank.
His broad range of experience — particularly in finance and his liberal arts school training — has been useful in the energy industry, Arriola said.
“What Stanford taught me was not what to think, but how to think,” he said. “And that continued at Harvard, too.”