Pacific Gas & Electric has named Patti Poppe as its next CEO, tapping the longtime Michigan utility executive to help restore public confidence in its ability to safely operate its Northern California grid and rebuild investors’ trust in its post-bankruptcy financial prospects.
Poppe will take the lead at California’s largest utility in January, six months after it emerged from bankruptcy under a $59 billion reorganization plan that’s saddled it with billions of dollars of debt. In a prepared statement, the 52-year-old CEO of Consumers Energy and parent company CMS Energy said she was honored by the “opportunity to help lead the state’s clean energy future” and eager to “join in the critical work of strengthening PG&E for California’s next generation and earning back the community’s trust.”
PG&E has been under intense pressure from California Gov. Gavin Newsom and state lawmakers and regulators to improve its safety after a string of deadly wildfires in 2017 and 2018. The November 2018 Camp Fire, the state’s deadliest to date, was sparked by a poorly maintained PG&E power line and caused tens of billions of dollars in liabilities that drove the company into Chapter 11 bankruptcy protection.
The utility is moving quickly to invest billions of dollars in hardening its grid to reduce the risk of sparking future fires, as well as to reduce the scope and severity of the power outages it has used to reduce wildfire risk over the past two years. Those public-safety power shutoff events have left hundreds of thousands to millions of the 16 million people PG&E serves without electricity for stretches of hours to days at a time, driving demand for backup power systems to help worst-hit communities ride through outages.
Poppe’s experience at Consumers Energy bodes well for taking on these challenges, PG&E interim CEO Bill Smith said during a Wednesday news conference.
“She has a proven track record of implementing a strong safety culture,” he said. Under Poppe’s leadership, Consumers has improved its safety performance to stand in the top quarter of U.S. investor-owned utilities last year, according to trade group Edison Electric Institute.
The 6.7-million-customer utility committed to retire coal-fired power plants by 2050 and increase its share of renewable energy to cut carbon emissions by 90 percent by 2040. Consumers also expanded smart-thermostat-enabled demand response to hundreds of thousands of customers and took other steps to improve customer communications and outreach. These actions fit in well with PG&E’s imperatives to meet California’s aggressive decarbonization goals, Robert Flexon, chairman of PG&E Corp.’s board of directors, said during Wednesday’s conference.
Poppe’s five-year contract with PG&E also provides stability for an organization that’s seen turnover in its top ranks since its January 2019 bankruptcy filing. Smith took on the interim CEO position after Bill Johnson, the former Tennessee Valley Authority chief who joined PG&E in early 2019 to guide it through reorganization, stepped down in June.
PG&E is under criminal probation for convictions related to the 2010 San Bruno natural-gas pipeline explosion and pled guilty to 85 counts of involuntary manslaughter stemming from the 2018 Camp Fire. It’s also facing years of continued grid improvements before it expects to be able to stop preemptively shutting off power to reduce wildfire risk, although it was able to reduce the length and scope of wildfire-prevention outages this year compared to last year, Smith noted.
The utility faces many near-term challenges, including executing on a $1 billion cost-savings plan, improving grid management to reduce outages and finding “more innovative ways to deliver energy,” such as microgrids for remote communities, Flexon said.