David Crane steps down as NRG Energy CEO
- NRG Energy announced on Thursday morning that President and CEO David Crane is stepping down effective immediately, according to a news release.
Mauricio Gutierrez, who was the executive vice president and chief operating officer at NRG since July 2010, has been named as the company's next president and CEO. Gutierrez is expected to be appointed as director of the board.
Crane will stay on through the transition until the end of the year.
David Crane, who has served as CEO at NRG since 2003, led the company through its spinoff from Xcel Energy during bankruptcy proceedings in 2004.
Crane led the transformation of NRG from a traditional wholesale power company with a large fossil fleet into one with a substantial utility-scale renewables portfolio, a retail arm, and business units dedicated to emerging areas like rooftop solar and home energy technologies.
Under Crane, NRG no longer saw itself as a "conventional" power company. The company tried to position itself to capitalize on what Crane saw as the gradual crumbling of the electric utility monopoly through new technologies and services that empower the American energy consumer.
"We have made no secret in recent years of our belief that the future of competitive retail energy supply lay in providing a broader range of energy and energy related products and services, both inside the home and on the home," he said.
Ultimately, the $12 billion corporation was reorganized into three divisions. NRG Energy remained the core wholesale power generation business with a 49,400 MW total generation capacity. NRG Renew covered utility-scale renewables, with 1,300 MW of solar and 3,200 MW of wind, as well as the company’s microgrid business. Finally, NRG also created NRG Home, a unit devoted to home energy solutions that was made up of its retail electricity business and a constellation of “much smaller but much faster businesses” in residential solar, electric vehicle charging infrastructure, portable power, home security and the connected home, and natural gas, NRG Home CEO Steve McBee told Utility Dive in an interview.
Despite Crane's ambitions and the speed at which he tried to transform a massive corporation like NRG, with tens of thousands of megawatts of generation in its portfolio, Wall St. was not always patient with Crane. The company faced increasing pressure from investors to show how it planned to balance investments in the renewable sector with its holdings in conventional coal and gas-fired plants, according to Bloomberg.
NRG Energy stock started a gradual freefall in the middle of 2014, and by mid-September, was the worst-performing member of the S&P 500 Utilities Index this year. As a result of investor pressure, NRG Energy announced plans for a major corporate restructuring in September, separating its clean energy business from its traditional generation and electricity retailing subsidiary.
NRG's new "GreenCo" unit will include its rooftop solar business, electric vehicle charging initiatives, and its large-scale renewable energy developing business. Beginning in January 2016, that division will operate separately from the company's traditional wholesale generation and retail business.
The dissatisfaction from the investor community appears to be what led to Crane's ouster today. After the news was announced that Crane would no longer lead NRG, the company's stock price rose 6% in early trading.
“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,” Howard E. Cosgrove, chairman of the NRG Board, said in a statement. “The Board thanks Mr. Crane for his leadership that helped transform NRG into the Company it is today.”
When reached by Utility Dive for comment on why Crane stepped down and what the company's strategy moving forward will be, NRG spokeswoman Karen Cleeve said the company was not providing any further information at this point.
Crane was one of the more colorful characters in the power sector, and was well-known for his memorable quotes, such as this one:
“We don’t know which companies will helm the future of the electricity industry. However, the only thing I am sure of is that our sector can no longer defend the status quo. Put simply, we can’t act like utility companies anymore.”
Here are some of the early reactions from the energy community on Twitter:
David Crane tried to turn a huge fossil IPP into a next-gen clean energy superpower. Sad that Wall St. didn't allow time to see it through.— Shayle Kann (@shaylekann) December 3, 2015
David Crane had a bold vision for a reinvented NRG via new clean energy solutions. Unfortunately, the board reverted to the old model.— Rob Day (@cleantechvc) December 3, 2015
NRG Investor Relations:
David Crane Steps Down as CEO of NRG; Mauricio Gutierrez Becomes CEO
Utility Dive: NRG will separate renewable, fossil generation in major reorganization
Utility Dive: What happened when NRG Energy disrupted its own business model
Utility Dive: Facing decline, NRG Energy forges new business models