NRG Energy's David Crane said this morning he is stepping down as president and CEO, a role he’s held since 2003.
Crane's resignation was a direct response to investor pressure and a declining stock price. In recent months, shareholders worried that the independent power producer had invested too many resources into distributed energy, without much to show for it.
"During more than 12 years at the helm of NRG, Mr. Crane led the company from emergence from bankruptcy to its current position as leader in the wholesale and retail energy markets," said NRG Board Chairman Howard E. Cosgrove in a statement this morning. "The Board thanks Mr. Crane for his leadership that helped transform NRG into the company it is today."
Mauricio Gutierrez, who has served as executive vice president and chief operating officer for NRG since July 2010, will be taking the position of president and CEO. The change is effective immediately, although Crane will assist with the transition through the end of the year.
During his tenure, Crane became an advocate for customer empowerment and distributed energy -- saying last year that he wanted to create the Apple or Google of the energy industry. He also sought to engage millennials, and felt passionately about the need to combat climate change.
“There is no energy company that the consumer can partner with to combat global warming without compromising the prosperous ‘plugged-in’ modern lifestyle that we all aspire to -- not just for those of us who are so blessed to live a prosperous life in the United States, but for the billions of people who live in the developing world and aspire to what we already have,” Crane wrote in an op-ed last year.
“NRG is not that energy company either, but we are doing everything in our power to head in that direction, as fast as we can.”
But investors haven't been fully convinced.
Under Crane's leadership, NRG invested heavily in distributed energy through NRG Home Solar, NRG EVgo, and NRG Renew, among other businesses. The company made several acquisitions in the solar sector and set a goal to triple its rooftop solar business by the end of 2015.
But NRG has missed its rooftop solar installation targets and invested far more in marketing than planned. According to GTM Senior Solar Analyst Cory Honeyman, NRG has originated just one utility-scale project in the past two years.
NRG's acquisition of Roof Diagnostics has moved the power provider up the residential leaderboard (its market share grew 25 percent in 2015), but growth has not been as rapid as hoped. NRG’s commercial solar and community solar businesses have also seen slower growth than expected -- a trend for both of those sectors at the national level, as well.
NRG’s stock has fallen by more than 30 percent since the spring. The company’s YieldCo, NRG Yield, has plunged even further (although it’s not alone). Investors showed little tolerance for losing money to support the company’s emerging green business -- even with the potential for greater returns in future.
In September, Crane announced NRG would be “resetting” itself by separating its clean energy initiatives from its traditional fossil-fuel generation business. Crane formed a GreenCo for the company's distributed energy businesses with a spending cap of $125 million in 2016.
“There was a mismatch between what investors wanted us to do with our cash -- which was give it back -- and what we wanted to do, which was put it in growth businesses,” CEO David Crane recently told The Wall Street Journal.
NRG’s stock price trended upward this morning after news of Crane’s departure broke.
“During his tenure at NRG, David Crane was unique among his peers. The leader of one of the largest fossil-fuel generating fleets in the country, he increasingly dedicated his attention, strategy and rhetoric toward a cleaner, more distributed vision,” said Shayle Kann, vice president of GTM Research. “And while NRG has made a number of strides toward that aim, the promise largely remains just that -- promise, and not yet profit.”
“Unfortunately, NRG investors turned sour on the strategy and the company's actions to date have done little to convince Wall Street to change its mind, and David Crane lost his chance to see the vision through to fruition," said Kann.