For Aqua CEO DeBenedictis, there's no treading water

Few of us are fond of mild, rainy summers like the one the Philadelphia region experienced last year. Nick DeBenedictis is definitely not a fan.

DeBenedictis is chairman and CEO of Aqua America, the Bryn Mawr water utility that operates in eight states, including Pennsylvania and New Jersey. Wet summer weekends dampen demand: Too much free product falls from the sky. Gardeners don't water; cars don't get washed.

"Two straight years, we've had pretty depressed sales," he said in an interview last week. "Cold winters, wet summers, rainy weekends."

But fear not, shareholders: The affable DeBenedictis, a fixture of regional boards and business and civic functions whose influence is felt far beyond Aqua's territory, will not step down this summer after a 23-year reign with his hitting streak unbroken.

"He's the Joe DiMaggio of utility executives," said Wendell F. Holland, former chairman of the Pennsylvania Public Utility Commission and current Aqua board member.

Under DeBenedictis' leadership, Aqua transformed from sleepy Philadelphia Suburban Water to a multistate company with a $4.7 billion market valuation. It has reported record earnings for the last 15 years; it has increased dividends 24 times in 23 years.

Aqua achieved those enviable results by diligently focusing on efficiency, growth, and, critics say, political outreach and rate increases.

"Our shareholders are sticky and loyal as long as you show consistent earnings, and that there are no surprises," DeBenedictis said. "They all truly believe in the mission. They use our product."

The Lansdowne native is a former state environment secretary and Greater Philadelphia Chamber of Commerce chief. He serves as chair of the Philadelphia Convention and Visitors Bureau, where he played a key role completing the Convention Center.

"It was a labor of love working behind the scenes to get the Convention Center built," he said. "Now, we're getting it run so it stays successful. I think that does more for the economy of the city than people realize."

DeBenedictis, 69, plans to stay on after his contract expires June 30 as nonexecutive chairman - if elected, he added diplomatically. Aqua's board is interviewing candidates, and DeBenedictis hopes a new CEO is named by May 8's annual meeting.

Aqua has made DeBenedictis a wealthy man. He was paid a salary of $694,000 last year, and with bonus, stock options, and other perks, his compensation amounted to $3.4 million.

But he maintains his remuneration is modest by corporate standards.

"I drive a Buick, not a Lamborghini," he said.

He portrays himself as hometown Everyman executive, in touch with customers, shareholders, and ditchdiggers alike.

"I'm frugal, and that permeates through the organization," he said. "When I go out in the field, employees don't say, 'Mr. DeBenedictis.' They say, 'Hey Nick, I think you should be doing it this way.' "

Aside from delivering steady financial returns, the secret of DeBenedictis' longevity is his deep understanding of the interdependence of regulated business and government, and how to navigate between those worlds. The recipe, he said, is hiring good people.

He earned a business degree from Drexel University and then a master's in 1969 in the emerging field of environmental engineering. After serving in the Army Corps of Engineers, he was hired as "Employee No. 28" at the Environmental Protection Agency. He was a deputy regional administrator while still in his 20s.

The Thornburgh administration recruited him to Harrisburg after the 1979 Three Mile Island nuclear power-plant accident. He became environment secretary in 1983.

That was followed by stints at the Chamber of Commerce and at Philadelphia Electric Co. as a senior vice president for corporate and public affairs when the utility, now called Peco Energy Co., was sailing choppy waters after building its costly Limerick nuclear reactors.

A Republican, DeBenedictis is unapologetic about working with politicians of any denomination.

"You end up getting friendly with people, and you understand what makes them tick, and it's not often what you read about in the papers," he said of elected officials. "They do care, but they also care about getting elected. And you see what makes them move, and you just have to be aware of that."

One of his biggest achievements is as invisible to the public as a buried water main.

DeBenedictis was instrumental in persuading the Pennsylvania legislature to approve in 1996 a rate mechanism called the distribution system improvement charge. "Nick's Bill," as it was dubbed, allowed water utilities to immediately raise rates to recover the costs of preapproved infrastructure spending.

With the new funding, Aqua has replaced hundreds of miles of aging water mains, improving water quality and reducing outages. Other states, including New Jersey, have since adopted the mechanism. In 2012, Pennsylvania extended it to gas and electric utilities.

"It's a huge regulatory tool, a game-changer," said Holland, the former PUC chair.

Even his adversaries, who opposed the infrastructure surcharge, say DeBenedictis is a pleasure to work with.

"He was probably on the opposite side of the fence from me on just about everything in the last 20 years, but I don't think we've ever had a cross word," said Irwin A. "Sonny" Popowsky, Pennsylvania's former consumer advocate.

Popowsky praised Aqua for agreeing to absorb some of the state's small, troubled water companies that struggled to meet modern purity standards.

"Philly Suburban and Aqua have stepped up on a number of occasions to take over those companies," he said. "They got compensated for it, but that was something of value to the commonwealth."

After DeBenedictis steps aside as CEO, one of his continuing duties as nonexecutive chairman will be maintaining Aqua's relationships in the public arena, "because, as you know, a regulated business lives and dies by the communities it serves."

And don't expect him to disappear from public life. He plans to step up his involvement on corporate boards and nonprofit governing bodies. He already is a board member at Exelon Corp. and P.H. Glatfelter Co., a York paper-products company. He's also on the boards of Independence Blue Cross and Drexel.

"I'm toying with working with private equity and starting with something small and building it again," he said. "That's really what I did here."

215-854-2947 @maykuth