- Pacific Gas & Electric (PG&E) parent company PG&E Corp has hired Patricia "Patti" Poppe — the current head of Consumers Energy — as its next chief executive officer, the company announced Wednesday.
- Poppe’s selection comes after a search that lasted several months and included candidates from inside and outside of the utility sector. The search began after former CEO Bill Johnson resigned from the company around the time it emerged from Chapter 11 bankruptcy. Poppe will take over from interim CEO Bill Smith on Jan. 4.
- One of the reasons for Poppe’s selection was her "demonstrated track record of implementing strong safety culture," Smith told reporters on Wednesday. Last year, the Edison Electric Institute ranked Consumers Energy in the top quartile for safety performance, "and that’s where we aspire to be," Smith said.
PG&E filed for bankruptcy in early 2019 after wildfires caused by its powerlines saddled it with billions in liabilities.
PG&E executives are hoping to see certain immediate improvements within the company, including strengthening its base business, tightening up business processes, as well as improving efficiency and communications, Robert Flexon, chair of PG&E Corp’s board of directors, told reporters Wednesday.
Flexon also noted that Poppe, who he called "an extremely likable person" will be able to form a good relationship with communities and regulators.
Poppe has signed on to a five-year term with the company, with a base annual salary of $1.35 million, according to a filing with the U.S. Securities and Exchange Commission. In addition, she will receive a one-time "make-whole" award of nearly 3 million restricted stock units and a one-time cash bonus of $6.6 million.
The decision to hire Poppe was made by PG&E’s board, but the company also gave a heads up to California Gov. Gavin Newsom’s office, "and they were very supportive," Flexon said. He expects that Poppe will spend a lot of time during her initial days getting to better know PG&E’s strategy around public safety power shut-offs, and how that has evolved over the last 24 months.
Poppe comes into the role with strong factors in her favor, including her track record on supporting renewable energy development, as well as her direct experience running a large combination gas and electric company, said Steven Weissman, a lecturer at the University of California, Berkeley's Goldman School of Public Policy.
At the same time, she could face challenges in implementing significant infrastructure improvements at PG&E.
"The new CEO is handed a company that’s highly leveraged in terms of having a much higher level of debt than the financial houses in New York generally would like to see, and with a share value that’s near historically low levels," Weissman said.
PG&E Corp’s share price increased by nearly 8% Wednesday.
"Every single response from everybody from the investment world has been incredibly positive," Flexon said, adding, "These are the people who actually know and follow all these different executives and utilities in the country…"
However, Mark Toney, executive director of ratepayer group The Utility Reform Network, remained skeptical, saying in an emailed statement that Poppe will be the fifth CEO PG&E has had in the last three years.
"Each one is brought in to great acclaim, and grossly overpaid, but none have managed to change the company from a felon guilty of negligence, massive wildfires and countless deaths to a provider of safe reliable electricity," Toney said.