‘Leading with love’: CEO of PG&E talks wildfire reduction, energy bills, healing the planet

Humanizing a utility company. That’s what Patti Poppe has been trying to do since she took over as CEO of Pacific Gas & Electric Co., Northern California’s largest utility, in January 2021.

While the gas and electric company is often viewed with hostility given its role in catastrophic wildfires throughout Northern California, and for increasing rates without consumers feeling they having much say, Poppe uses a word not often found in corporate America — love.

“We bring love to the workplace in a lot of ways. It starts with safety for sure,” the 55-year-old Poppe said. “I attended the funeral for a co-worker a few years ago and it occurred to me on that day that we often wait until it’s too late to express our full emotions.”

She said showing love for customers, the 27,000 employees and 14,000 daily contractors, is accomplished by speaking up when knowing something isn’t right, isn’t safe, or when someone just doesn’t understand something.

“In that way we protect one another,” Poppe said.

On the rate side, residential PG&E customers on average will see their bills go up 12.8% this month or $32.50. (The utility had requested a 17.9% increase.)

When the California Public Utility Commission delayed its decision about the four-year (2023-26) general rate case until last November it resulted in the 2023 and 2024 increases being combined starting in January.

This series of adjustments will have residential gas and electric bills going up an average of 3.6% over three years (2024-26). Bills will increase on average another $4.50 in 2025, and then decrease by almost $8 in 2026.

The bulk of the millions of dollars that will be collected with the latest increases are slated to fund wildfire risk reduction projects, upgrades to support new business connections, and meet climate resiliency goals.

Poppe defends the increases by saying they are nowhere near the 6% to 8% inflationary spikes in other sectors, adding she was able keep them lower by making internal cuts.

The following is a Q&A between the Business Journal and Poppe that has been edited for clarity and space.

What do you believe are PG&E’s best solutions to curtail wildfire ignitions from its equipment?

At PG&E we have made a stand that catastrophic wildfires shall stop, and I’m proud of the progress we’ve made toward our goal. We’ve reduced wildfire risk with what we call our layers of wildfire protection, which we’ve continued to refine since 2017.

Let me share a few of those protections: Our 10,000 miles of undergrounding effort is well underway. We buried 350 miles of power lines last year in the highest fire threat areas — the most we’ve ever buried in a year and we did it for less cost than we had forecast.

Also, our Enhanced Power Line Safety Settings turn off power automatically in one-tenth of a second if a hazard is detected on the lines that could cause a fire, helping to keep our customers in high-fire risk and surrounding areas safe.

As of November 2023, we had reduced CPUC-reportable ignitions in our high-risk areas by 27% from the previous year and 67% from 2017. Overall, we’ve reduced wildfire risk from our equipment by 94%.

Is there anything you are doing specifically in the North Bay to reduce the threat of your equipment starting a wildfire?

Absolutely. Every day, we’re making our system safer, more reliable and more resilient for all of our customers including those in our hometowns across the North Bay. Let me name a few examples of what we’ve done across Sonoma, Napa, Marin, Lake, Mendocino and Solano counties: We’ve buried 68 miles of electric distribution lines to date, hardened 298 miles of overhead lines, installed 139 high-definition cameras to watch for fire activity, and installed 327 weather stations to improve our weather forecasting capabilities, particularly during wildfire season.

The California Public Utilities Commission recommended a $45 million penalty in connection with the 2021 Dixie Fire, the state’s second largest wildfire. How will this affect ratepayers?

We are not seeking cost recovery from our customers for this. We continue to make it right and make it safe for our customers and our hometowns by resolving claims from past fires and through our work to make our system safer every day.

What are your thoughts about the CPUC wanting to create a rate structure based on customers’ income?

I want to assure our customers that the affordability of our service is top of mind for me and all my co-workers at PG&E. We know that energy costs are very important for our customers and for our state’s economy. We are taking actions now to keep annual customer cost increases at or below assumed inflation between 2% and 4%.

As required by California Assembly Bill 205, we submitted a joint proposal last year to the CPUC along with Southern California Edison and San Diego Gas & Electric to separate fixed infrastructure costs from the usage cost of electricity on residential customers’ bills.

Our joint proposal would decrease electric bills for lower-income residential customers, improve bill transparency and predictability, and advance clean energy goals. The CPUC will have a thorough and open process for evaluating the proposal in the coming years.

PG&E has filed for bankruptcy more than once. What is the solution to staying solvent?

We continue to focus every day on safely operating our gas and electric system for our customers and our hometowns. A safe utility is a financially healthy utility, and a financially healthy utility is essential to affordably meeting customer needs and keeping people safe.

Do you believe it would be better if utilities were not publicly traded?

I’m a big believer that the investor-owned utility model has significant customer benefits. Capital from our investors is essential to fund investments today in our climate-resilient infrastructure, so we can spread out the cost to customers over the life of the assets. That means customers get the full benefit today and pay over the long run.

Between salary, bonuses and stock options, you receive about $15 million a year.

How do you justify that compensation package when ratepayers’ bills keep going up?

The latest data, from 2022, shows that among the top 20 U.S. electric utilities, we are in the middle of the pack for CEO-to-median employee pay ratio. It’s important to note that our 2023-2026 general rate case application did not seek cost recovery from customers for my compensation and benefits.

Investor groups such as Climate Action 100+ believe compensation for utility executives should be tied to emission-reduction goals. What are your thoughts about this philosophy?

We align executive compensation with safety and operational performance, which we think are important indicators of how we’re delivering for our hometowns. At the same time, we are committed to reducing our carbon footprint, reaching net zero energy and doing our part to heal the planet.

Already, 95% of the electricity we deliver to our customers is from greenhouse-gas free resources, and we continue to add more renewable energy along with battery storage, microgrids and other solutions aimed at further advancing our climate goals.

You started your career in 1990 at General Motors as an associate manufacturing engineer. Why the switch to energy?

I had a great career at General Motors, and when I was there, I got a call from DTE Energy in Detroit with a job offer. My husband and I took a big leap of faith for our family and made the decision for me to move to DTE to run power plants, which was a great way to learn the energy industry.

Is this the job you wanted when you were young? If not, what were your early career aspirations?

I wanted to be a TV news broadcaster, but my father, who was a nuclear engineer at Consumers Energy in Michigan, guided me in a different direction. I was the youngest of seven girls and his final attempt to get an engineer. And he did! He knew I was good at math and science, and really took a stand for my future by encouraging me to go to engineering school. We went to an engineering career fair at Purdue University together that left quite an impression on me. I ended up studying industrial engineering at Purdue.

What concerns and goals do you have for your business and industry for the next five years?

The energy industry is at an inflection point. We’re working to build an energy system that is resilient to climate challenges, and we have an incredible opportunity to do this the right way for the future.

That’s why we created our 2023 Research and Development Strategy Report, which outlines nearly 70 of the highest priority challenges we face in building California’s energy future and invites innovators to join us in solving them. For example, in the next 20 years, we expect our electric load to grow by 70%; much of that from new electric vehicles.

That’s astounding growth, particularly after years of relatively flat demand. Growth on this scale will touch every corner of our system and requires a re-imagining of the grid. We need to make the smartest investments in the right way at the lowest cost for customers.

What companies in your industry do you admire and why?

Recently, I was delighted to attend the opening of a new facility in our service area focused on removing carbon from the atmosphere—an exciting new climate technology solution. A key take-away from the event was how all of us need to be a part of the solution to not only help reach net zero emissions, but to begin to heal the planet..

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How do you motivate people?

When I started at PG&E, fundamental changes were needed both operationally and culturally. A focus on leading with love has been a key ingredient for that change. A loving, joyful co-worker experience translates to how we can serve our customers, our hometowns and our planet. I believe the world needs more love and we can be a force for it in the hometowns we serve.