- In today’s CEO Daily: The CEO of a once-hated utility is looking to AI to fix the grid.
- The big leadership story: The Ford Foundation’s new focus.
- The markets: Up in Asia, down in Europe after at tech selloff on Thursday.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Patti Poppe knows about navigating pressure. As CEO of Pacific Gas and Electric Company (PG&E), she has one of the toughest leadership roles in business. When she took the job in January 2021, becoming the first woman to transition directly from one Fortune 500 company (CMS Energy) to another, she was handed a convicted corporate felon emerging from bankruptcy after its equipment had caused deadly wildfires, including the 2018 Camp Fire in Paradise for which it had pleaded guilty to 84 counts of involuntary manslaughter. Just as Poppe was building public trust with a laser-sharp focus on culture and safety, along came an AI boom, new regulations, and mandated grid investments that put rates back in the spotlight.
In the latest Fortune CEO Source segment, which you can watch in the second half of our Fortune Daily show, Poppe talks about what is working in this climate. To start, she welcomes having tech companies like Google step up to co-invest in energy infrastructure. “I think AI is the best thing that could’ve ever happened to the grid,” Poppe told me, noting that California has added 33 gigawatts of renewables and storage in the past five years, enough to power around 25 million homes, with 22 more gigawatts to be added by 2030. “The grid needs investment; AI and that whole revenue stream brings investment to the grid. AI equals growth and prosperity.”
What fuels Poppe’s enthusiasm is the potential for new technologies and energy sources to truly transform the grid. She is “pro, pro, pro” when it comes to deploying nuclear energy and, in a world that’s shying away from ESG, she’s vocal that “climate change has to be addressed.”
Still, when it comes to winning back friends and favor for a company that was once among the most hated in America, Poppe faces a long road. At $12.98 a share, PG&E stock is down a third from its 52-week high. The main reason is beyond her control: state lawmakers rejected Gov. Gavin Newsom’s push for new wildfire legislation that would prevent insurers from suing utilities over wildfire claims to keep rates in check. Meanwhile, San Francisco is trying to take over PG&E’s local distribution grid to lower rates, saying it would cost the city $3.4 billion. (On Wednesday, PG&E said the city’s plan would actually cost $22.5 billion.) And yesterday the utility released third-quarter earnings that missed Wall Street forecasts, earning $776 million on $6.18 billion in revenue.
Poppe reaffirmed profit targets and appeared open to the idea of breaking the company apart to isolate wildfire exposure while keeping costs down, saying “the status quo is not acceptable.” Her north star is to make PG&E the country’s safest and cleanest utility, and she counts herself lucky to have the opportunity. “I was born a girl in a little small town in Michigan, and by hard work and some luck, ended up in this chair,” she told me. “Do what you love, love who you do it with, and love who you do it for.”
She feels supported in her efforts to boost California’s grid. What’s unclear is the price her company will pay if anything goes wrong. Contact CEO Daily via Diane Brady at [email protected]
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