PG&E, confronting wildfire risk, names new CEO for California’s largest utility
Pacific Gas and Electric’s parent company named a new CEO on Wednesday, hiring a Michigan utility executive to run the nation’s largest utility as it confronts California’s mounting wildfire risks following a stint in bankruptcy.
Patricia K. “Patti” Poppe, who has been CEO of CME Energy Corp., will take over Jan. 4. She replaces William Smith, who is PG&E Corp.’s interim chief executive.
Pacific Gas and Electric Co. described Poppe as a leader on clean energy and public safety — two goals paramount for any California utility executive in an era of climate change. The Michigan company, the state’s largest utility, saw safety incidents decrease by 70% since 2008, according to PG&E; Poppe has run the company since 2016.
“She’s got a demonstrated, strong track record on implementing safety culture,” Smith said on a conference call with reporters.
She takes over a company that successfully emerged from bankruptcy in June but continues to struggle with the very issue that landed it in bankruptcy in the first place: wildfire dangers.
On Tuesday, the company was sued by eight local governments in Sonoma County over the October 2019 Kincade Fire, which forced the evacuation of nearly 200,000 county residents. Previously, PG&E has said it could face liabilities totaling $625 million from the Kincade Fire, which state investigators say was caused by a faulty transmission line.
PG&E also has told investors it faces a “significant liability” in connection with the Zogg Fire, which killed four residents of Shasta County in September. That fire remains under investigation.
The utility was driven into bankruptcy in January 2019 by billions of dollars in liabilities from the 2017 wine country fires and the 2018 Camp Fire. The Camp Fire destroyed much of Paradise, killed 85 people and left PG&E pleading guilty to manslaughter charges. The fires cost PG&E enormous credibility with regulators, elected officials and the general public.
Under pressure from Gov. Gavin Newsom, the company overhauled its leadership and safety protocols as a condition for leaving bankruptcy. The governor’s staff, after months of wrangling, eventually signed off on the changes pledged by PG&E, including a commitment to install more people with safety experience on the board of directors.
Robert Flexon, chairman of PG&E’s board, said the company gave Newsom’s staff “a heads-up” on Poppe’s hiring before it was announced. “They were very supportive,” he said.
He added, however, that hiring Poppe “was a decision that was 100% (made by) the board of PG&E.”
Poppe is an industrial engineer whose resume includes a stint at General Motors.
“It’s going to be a challenge,” Paul Patterson, an analyst at Glenrock Associates, told Bloomberg news. “It’s not an easy task to turn around a company the size and complexity of PG&E, but clearly she’s willing to take on the challenge and sees an opportunity there.”
Among other things, Poppe will have to wrestle with “public safety power shutoffs” — deliberate blackouts imposed by PG&E the past two years during fierce windstorms. The blackouts have proven unpopular with customers and government officials but — according to PG&E — has significantly reduced wildfire risks.
“As California’s largest utility, PG&E has the privilege of powering one of the world’s largest economies and the opportunity to help lead the state’s clean energy future. It also faces significant challenges,” Poppe said in a prepared statement.
She will be paid a base salary of $1.35 million a year and is eligible for bonuses and other incentives totaling almost $16 million, according to a filing with the Securities and Exchange Commission.
This story was originally published November 18, 2020 at 7:17 AM.