Eddy Collier’s office, five floors above Dublin’s leafy Grand Canal banks, is a comfortable affair: a large desk, a snug couch big enough for a power nap, a framed picture of his boat. Nice but not outlandishly so.
It is the huge, south-facing terrace that makes the Ireland managing director of Centrica, which owns Bord Gáis Energy (BGE) and British Gas, one of the luckiest company bosses in town.
Collier steps on to it to show off one of the finest office views in Dublin, taking in the Aviva Stadium, Ballsbridge and every major landmark all the way south to the mountains. Leaning on the balcony rail, the Oxford-educated Englishman recalls bringing Sr Stanislaus Kennedy, founder of homeless charity Focus Ireland, on to the terrace. BGE is a major donor to Focus.
“I was able to point out all the power stations,” says Collier, sweeping his hand in the direction of Poolbeg’s twin chimney stacks. Breaking into a grin, he nods towards the famous green dome in Rathmines. “Sr Stan could point out all the churches.”
Bookish, wry-humoured and exceedingly well spoken, Collier, who is the son of a British military historian, looks and sounds like an Oxford graduate should do, ordering tea and cake for his guest.
Since moving to Ireland in early 2014, after leading the Centrica consortium that bought much of Bord Gáis for €1.1 billion, is he in danger of going native?
“My family is still in the UK, but everything else is here,” says Collier, who has bought himself a house in one of Dublin’s best southside neighbourhoods. He jogs around Herbert Park every morning and, during the summer, he can sometimes be found roller skating his way through the city.
“I love Ireland. It’s easy to live here.”
He even smiles about the terrible weather. A few more months and he might be declaring it a “soft day” and panicking about whether he remembered to turn off the immersion.
It is 18 months since Centrica got the keys to BGE, and the company is keen to go public with its determination to grow in the cut-throat Irish gas and electricity retail market. Earlier this year it claimed to be the lowest-priced dual-fuel supplier, and has cut prices twice this year.
Centrica is also rumoured to be considering a bid for Viridian, the Northern Ireland power company that owns Energia, which is reputedly on the block.
“It has been reported that there is apparently a sale process, but we would never comment on that,” says Collier.
About 90 of BGE’s 300 employees took up the option of remaining in the State gas company following the sale, and most of those have since been replaced by new hires. From the remaining staff – Collier calls them the “volunteers” – 25 employees from all levels of the business were selected to help develop its strategy over the course of eight weeks.
Three themes
Three main themes emerged from this process. “Firstly, we decided to fix the basics on customer service. Secondly, we resolved to get the business back to growth in the market. Finally, we committed ourselves to investing in the future.”
He says BGE has worked hard on the first aim: “Energy companies don’t always wow the customer, but we would like to be that operator.” Innovations in the Irish market since Centrica took control include the introduction of Hive, which allows customers remotely control their home heating via smartphone or computer.
The second aim – getting back to growth – remains an everyday battle in a tough market with up to seven retail suppliers. The third is effectively proof that Centrica is on the lookout for power-generating assets and customer books in Ireland.
“We have identified several targets we are working on,” he says.
The Government sold BGE only because the troika demanded privatisations. In a process that ran for most of 2013, it was a forced sale near the bottom of the market, and this was reflected in the price. Since the British company took control, BGE has performed “ahead of expectations”, Collier says. No wonder, as the price paid suggests barely any expectations at all.
A Canadian fund took on BGE’s wind assets, while a UK fund bought its Northern Ireland business. Centrica, meanwhile, snapped up BGE’s retail book of close to 650,000 customers, along with the recently constructed Whitegate gas-fired power plant in Cork, for a net consideration of just €150 million.
Whitegate had cost €400 million to build less than four years earlier, but was written down to €176 million prior to the sale. So Centrica bought the plant for less than its book value, and effectively got BGE’s book of customers for “free”.
Just €129 million of its consideration was payable up front, with the rest depending on performance. In the first six months of this year, Centrica’s Irish purchase contributed £23 million (€33 million) to group operating profit from its £400 million in revenue.
He might be polite, but Collier clearly negotiates with a knife between his teeth. Didn’t the Government sell BGE to Centrica for a song? He smiles at the suggestion. But he doesn’t deny it: “It was a very competitive auction process. There were five credible players, but we paid the top dollar and that’s why we won.”
Venerable brand
Centrica even got to keep the Bord Gáis brand all to itself. The State had to cough up €3 million to rebrand its remaining gas infrastructure business to Gas Networks Ireland, which along with Irish Water comprises State-owned Ervia.
Keeping such a venerable old brand while the State company changed its moniker of three decades was surely a negotiating coup?
“Would you buy a consumer business without the brand?”
Fair point. But the Government’s acceptance of such a modest overall deal must surely have been a result of the its desperation to sell to get the troika off its back? He says nothing, smiles politely, and keeps stirring his tea.
Collier hails from Sussex, where he attended a public school before going to Oxford to study mathematics. After Oxford, he joined a software development company – it gave him a job and also paid for him to do another masters, this time in computer science.
A few years later he entered the comfortable world of consulting, working first for EY's investment banking consulting division. After a stint at Mercer, he became chief executive of Logica, the consulting company.
Centrica tapped him up to join British Gas, where he held a variety of senior roles until 2009, when he was sent to Canada to run the parent group’s Direct Energy subsidiary. This business provides home services to customers all over North America.
“We had brands like [plumbing company] Benjamin Franklin and Mister Sparky, ‘America’s on-time electrician’: ‘Always on time or you don’t pay a dime.’ I loved it.”
He once went in-line skating from Toronto to Niagara Falls in a single day for charity. That’s about 130km. . . on a pair of blades. Was he mad?
“It took me 13½ hours. I had a few swims in the lake [Ontario] along the way to cool me down.”
He returned to the Centrica mother ship in 2013, straight into preparations for its bid for BGE. He has been in Ireland full-time since it agreed the buyout.
Collier keeps good relations with the energy regulator and the Government. But he has concerns over the implementation of the new integrated single electricity market (I-Sem) for the island, North and South, which will change the rules about how the market works.
Collier is also concerned about the perceived dominance of the ESB when it comes to the ownership of power-generating assets and the possible effect this could have on market liquidity – the amount of power available for purchase by rivals. The ESB also owns Electric Ireland, the main power retail company. Should Electric Ireland be completely split from the ESB?
“It’s not for me to recommend it should be segregated. But if I was them I’d come up with a mechanism, a radical solution, to satisfy the market. I don’t think the status quo is enough.”
Presumably, if the ESB was forced to offload generating assets, Centrica would be waiting to bid. It is also clearly hungry to buy more customers, although Collier won’t confirm if it will try to buy Viridian, which also owns Power NI up north.
Smart power meters
Centrica has designs on winning contracts for the smart power meter rollout, which could be tricky when you consider what has happened with water meters. But, for now, Collier is happy enough striving to win more customers for BGE the old fashioned way – through discounts, better customer service and cashback deals. He intends to stay in Ireland to see the strategy through.
He finishes up with a genuinely passionate discussion about the hot-button problem of homelessness, where BGE is working with Focus to try to identify families at risk before they lose their homes.
“You need to catch people early . . . You’re looking for situations where people are put at risk by things, such as high rents or illness, that really shouldn’t make them homeless at all. You can’t go spreading large families around B&Bs, it leads to family breakdown.”
There is a certain symmetry in a company that provides people with power to heat and cook getting involved in a homeless charity. Collier recently took part in a one-night “sleep out” for Focus, along with many of his staff. He spent the night in a sleeping bag in the Christchurch area.
“I knew I had a warm, dry house to go home to, so it can’t help you feel what it is really like to be homeless. But it does give you an insight into what homeless people face.”
All went well until it started raining on him at 4am. As he gets to know his second home better, Collier will come to realise being rained on is a national sport. CV Age: 54 Home: Dublin and Oxford Family: Married, two daughters Something we should expect: He is keen to emphasise that he loves living in Ireland
Something that might surprise: He does a bit of speed skating. He also sailed a boat to the Azores this year with his daughter: “Neither of us walked the plank.”
