Patti Poppe, current CEO of CMS Energy,
Following their $58 billion financial restructuring, PG&E Corp. and its utility subsidiary Pacific Gas and Electric Co. on Nov. 18 announced veteran utility executive Patricia Poppe to lead the next phase of transforming California's largest utility, known as PG&E, after a series of catastrophic wildfires between 2015 and 2018 led to the largest utility bankruptcy case in U.S. history.
Investors signaled their approval of Poppe's appointment as CEO of PG&E Corp. as well as board member of the holding company and utility, fueling an 8% jump in PG&E Corp.'s stock price to $12.65 per share, its highest close since March. Poppe, 52, currently president and CEO of CMS Energy Corp., parent of Michigan's largest energy provider, Consumers Energy Co., will take the reins on Jan. 4, 2021, under a five-year contract that includes a base salary of $1.35 million, a one-time "make whole" cash bonus of $6.6 million, stock-based compensation and other incentives.
"She's the perfect fit," Bob Flexon, chairman of PG&E Corp.'s board, said during a media briefing. "What we have to see is ... can we change the course of this company? I believe we can. I believe Patti can. ... This is the best executive in the country for this job."
'Huge boost to the future of our company'
Bill Smith, currently serving as interim CEO PG&E Corp., highlighted the favorable timing of the hire, coming as long-awaited rainfall finally appears to have ended California's 2020 wildfire season, giving Poppe a chance to digest the utility's unique operating conditions, including widespread precautionary power outages, ongoing safety challenges the company faced in 2020 and operational improvements planned for 2021.
"You don't change all of these things overnight," Smith added. "We're not naïve about that." Having Poppe at the helm, however, "will be a huge boost to the future of our company," he said, citing her strong safety track record at CMS and leadership skills.
As president and CEO of Consumers Energy, as well as its parent company, since 2016, Poppe has put the utility on a path to quadruple the share of renewable energy in its power mix by 2030 while slashing coal and natural gas generation, with a target of net-zero carbon emissions by 2040. That is five years ahead of California's deadline for completely decarbonizing retail electricity sales.
Poppe has also been an outspoken advocate for greater integration of power and transportation systems, including using excess renewable energy, a challenge California faces especially during periods of peak solar production, for electric vehicle charging.
PG&E customers, including victims of wildfires who make up the parent company's largest shareholder block through a trust created to compensate them, desperately want Poppe to succeed.
"Californians stand ready to be Ms. Poppe's biggest supporters, allies and collaborators if PG&E choses to embrace well overdue systemic change," Will Abrams, a wildfire survivor who participated in the company's bankruptcy proceeding, said in an email. "Certainly, the increasing frequency of PG&E wildfires means we are all in this together."