Energy Firms Find Utility in Diversity Among Owners, Suppliers, Employees
The staff roster at Cook Inlet Energy Supply in Century City reads like a billboard for the workplace diversity movement: Encarnacion, Tran, Hessami, Khan, Canton, Chin, Ma, Bienstock, Sasaki, Yi, Jones and others. The energy-trading company’s 40 employees speak 25 languages.
For Cook Inlet, primarily owned until last year by 6,700 Eskimo shareholders in Alaska, diversity and inclusion are more than worthy goals. They are necessary components of success in the raucous, cutthroat world of deregulated energy sales, in which relationships with a broad base of customers and suppliers are all-important.
One of the fast-growing company’s key connections has been with Southern California Gas, which, along with San Diego Gas & Electric, is owned by Sempra Energy of San Diego. Last fall, Sempra won the Commerce Department’s Access to Markets award for its long-running efforts to help minority-owned vendors.
“Our first deal was supplying Southern California Gas,” said Cook Inlet Chief Executive Gregory L. Craig, who is half-Eskimo and holds an MBA from UCLA’s Anderson School. “I give the gas company a lot of credit for our success. They were very welcoming of our bids.”
Ten-year-old Cook Inlet, which last year achieved $1.2 billion in sales, feels a special bond with Sempra, Craig said. SoCal Gas has always been “a very encouraging mentor” that cleared the way for Cook Inlet to compete against such giants as Arco, Exxon and Chevron, he said.
“They are one of the best utilities in terms of truly caring about diversity,” he added.
Thanks in large part to the leg up provided over the years by Southern California Gas, Cook Inlet “graduated” last summer. The company’s other partners bought out the Eskimo shareholders, and Cook Inlet went from being the largest minority-owned energy marketing company in North America to being a mainstream gas and power marketing company. (One partner, Inupiat Energy Corp., is a nationally certified minority-owned business, with Native American owners.) Cook Inlet is nimble and entrepreneurial enough, Craig said, that it often can outmaneuver larger rivals.
The company also has lower costs--and a sense of humor. As Craig summed it up: “We’re the Southwest Airlines of the energy market.”
At the same time Sempra Energy collected its Access to Markets award last year, Commerce officials also honored Will Johnson, a Culver City entrepreneur who markets natural gas to Southern California Gas and other utilities in the state. The agency named him outstanding businessperson of the year for dreaming up a creative program to help energy-trading companies owned by women and minorities fund energy purchases.
Once again, Sempra Energy proved instrumental.
“Sempra had a lot to do with making that award happen,” said Johnson, a onetime banker who is chairman and sole employee of Visage Energy Corp.
A few years ago, Johnson described his idea for a unique financing and credit instrument to utility honcho Richard D. Farman, now chairman and chief executive of Sempra Energy. As it happened, Farman was on the board of directors at Union Bank of California, where he talked up the idea. A couple of bankers spent years developing the concept. Also helping to bring the idea to fruition was Jeffrey M. Thorsen, Sempra’s senior supplier-diversity advisor.
The concept, called the Funds Transfer Agent Agreement, has spread throughout the nation. It “breaks barriers that have long prevented small and disadvantaged businesses from competing in the natural gas marketplace,” the Commerce Department certificate read.
“It’s almost a perfect example of what happens when you find a company like Sempra that is sensitive to special circumstances and goes out of its way to assist,” Johnson said.
Indeed, Sempra has one of the nation’s most aggressive programs for helping minority-owned suppliers, said Margot A. Kyd, senior vice president, chief administrative and environmental officer.
“We believe that having suppliers and employees who reflect the communities in which we operate makes good business sense,” Kyd said. “The better perspective we have on the needs of diverse communities, the better it is for us competitively.”
Between 20% and 25% of everything Sempra spends on goods and services goes to companies owned by women and minorities, she said. In 1998, that amounted to $97.5 million.
The philosophy extends throughout the employee ranks as well. Last summer, Pacific Enterprises, now part of Sempra, ranked No. 1 on Fortune magazine’s list of “the 50 best companies for Asians, blacks and Hispanics.” A third of the company’s officers and managers and half its work force at the time were minorities.
“We have very aggressive programs to ensure those numbers,” said Joyce Rowland, Sempra’s senior vice president of human resources.
The company’s definition of diversity even includes white males, she said wryly, so that “no one feels excluded.”
Martha Groves can be reached by e-mail at firstname.lastname@example.org.