Watch: Extended one-on-one interview with PG&E CEO Patti Poppe

we appreciate your time I know you don't do these often why now why decide to jump into this yeah I would do more if uh people wanted to hear more from me I I'm happy to talk and share what's going on at PG we've got a really good story to tell and I'm happy to be here to do that uh what do you think the perception of PG is oh we know that the perception um uh has been challenged you know I think um the company is on uh a a path to rebuild trust with the people that we serve and in fact uh our theme for this year is trustworthy we know that uh we need to earn the trust of our families our friends our neighbors that we serve who are our customers we have to earn that trust every day what's your biggest challenge uh as CEO I think the biggest challenge at for at PG has evolved over time uh when I first arrived here uh 3 years ago uh Wildfire risk was our greatest risk for the citizens for the State of California uh for our customers and we needed to make it safe and make it right given the damage that had been done and now I'm um excited to be focused on the future and what we can do to enable the clean energy transition in California I consider myself a climate Optimist I believe that our path forward is bright and so I think that's our biggest opportunity to truly help people engage in and participate in the clean energy transition well since 2019 rates have gone up essentially double more than 100 or about 100% since 2019 22% just last year Alone um PG literally is bringing a lot of families to tears how can you justify this yeah I think it's really important number one that our customers know that we know that we are doing our most current increases are based on some up cost recoveries that was necessary work to make our system safe we also know that bills can come down and that's what we're working on we see a path forward where prices can start to fall and that will be driven by modernizing the methods of our work and rethinking mandates that exist in the state 31% of our bill is driven by state mandates I think it's time to rethink some of those do you feel what families are going through you say you hear them but 100% increase in 5 years that's that's really hard for people yes and we know that we have uh an obligation to make sure that the work that we're doing is both necessary and it's done well which is a big area of focus for us I don't want people to um be afraid of their infrastructure we need to make sure that our Energy System is safe and that does cost something the good news is we see a light at the end of the tunnel we see these catch-up costs and some of these annual recurring expenses coming off the bill bill ultimately and we want to change the way that work happens which is why we are modernizing our methods it is why we have implemented a lean operating system at pg& there's a big transformation underway and well underway on how we do work we've reduced 94% of the Wildfire risk on our system that Wildfire risk definitely cost the state of California and cost many people we now can rethink and use technology more modern methods reimagine how that work gets done so we can save customers dollars as someone just at home watching right now PG made more than $2 billion in profits last year where's that money going right back into the system right back into the system you know most utilities pay a dividend we have not paid a dividend so when we make profits we put that back into the system so we for the last several years have taken all of the profits and put it back into Investments for customers now we have just reinitiated that dividend and I would like to think that profits is not a bad word for a utility a utility needs to attract Capital so that we can spread out the cost for customers over time when when we are able to attract lowcost Capital we can save customers money so a financially healthy pg& actually enables lower costs for customers you talk about returning those profits back in to for Investments here there are plenty of analysts that say uh what you're doing is very expensive and you know this undergrounding the the power lines they say you could actually insulate the power lines at a much cheaper rate therefore saving people money why not go the less expensive rate which is also effective and save people money it's a great question insulating lines in our highest dense or our highest vegetation dense areas which are our highest fire risk areas rele leaves 35% of the risk still on the system I don't know about you but I don't want to live in a place where I have 35% risk of a wildfire undergrounding actually when you combine that with the overhead when you compare undergrounding power lines to overhead lines with covered conductor and all the vegetation management that goes with it it is less expensive to bury the lines when someone's watching this they're not hearing lower price they just look at their monthly bill and see it's 100% increase how do you communicate that we need to rethink some of the mandates we have mandates today on vegetation management and vegetation management has been and was originally the best form of risk mitigation we could do we have new modern ways that are more effective and lower cost we've implemented something called enhanced power line safety settings it's a huge driver in our 94% Wildfire risk reduction performance We are continuing however to be mandated to do more vegetation management even though our technology is more effective and so we think it's time to rethink those mandates you're making some key decisions for everyday families here yes um under your watch is pg& mismanaged or has it been I think it's really important for me to help your viewers know that there has been a significant change at pg& this is not the pg& of the past this is a new PG we have a new leadership team we have a new Leadership Model we've delivered real improvements at the company and we have made significant progress in Wildfire risk reduction in greenhouse gas free energy delivery in performance for customers reliability we've got projects that we're doing in the Bay area that are making a difference for reliability and funding growth and prosperity there's a new story to be told about PG I'm thankful that I'm here to be able to help tell that story I want your viewers to know Raj that it is a new era at pg& and our progress we're going to continue to show our progress so your viewers know that they can count on and Trust the people of PG to get up every day to serve them well appreciate the the optimism there but there are still actual facts that there's been mismanagement under your watch I'm a lot of examples uh the mule fire in 2021 under you I believe PG admitted your contracted crew had an inadequate response um the Dixie fire in 2021 that was the big one most destructive fire in State history a tree fell on a line starting this fire Regulators say E's response was inadequate you talk about things are getting better we appreciate that um but when these mistakes happen why do the rape payers have to pay yeah when the Dixie fire occurred I was six months on the job and it uh was a green tree that fell on our normally operating line uh we had a a coworker who took Valiant efforts to attempt to put out that fire by himself in the Feather River Canyon I don't know if you've ever been there but I went there to see exactly where and how that happened we have since that time innovated and implemented new technologies that would prevent that from ever happening again I think what's most important is people are willing to learn and people can learn and pg& is making real progress as we continue to learn about the hazards that our new extreme weather conditions create for all of us we all have a lot to learn about reimagining the right kind of infrastructure to keep people safe and energized you talk about vegetation management there was a more recent audit um I believe from the office of energy infrastructure uh that uh PG mismanaged or is mismanaging the vegetation management that's recent stuff I think we can definitely agree that there's some additional modernization we need to do in how vegetation management is done and how much of it we're doing that it was the only tool in the toolkit and under pressure of course people are going to expect us to use the one thing we understood that you can take out trees but we're not going to take out every tree in California we spend $1.8 billion dollar a year on vegetation management that is three times what we traditionally have spent and it is the largest vegetation Management program in the nation we are doing too much vegetation management there is a right sized amount of vegetation management that we should be doing it's time for us to rethink those standards and those mandates you get the the the disconnect here for for people just paying the high bills seeing the mistakes and companies make mistakes but why do we the great payers keep get penalized I think that's just kind of a general sense for pg& customers yeah I think it's really important for our customers to know that the work that we are doing where their dollars are going is important and necessary work and yet we are challenging every dollar of it in fact last year alone we we did new technologies to do inspections and in fact we're carrying those through to this year and and um combining work one of the things that pg& uh has always been good at engineering equipment but not necessarily engineering how we do the work we're redoing how we do the work and we're saving customers dollars by doing that let me give you some examples hold on I have to jump in you say you're saving customers dollars I don't see it we don't see it for the last five years our rates have gone up double 100% And I get it in 10 years from now perhaps that's the truth but right now no one's saving any money in fact it's costing us more I think what customers can't see is all of the cost savings that we are putting into the system while we are rebuilding it when do we see when do we benefit from that we are forecasting prices falling in 25 and again in 2026 so that's 25 is next year 2026 is two years from now that is exactly what we're working on so we've gone up 100% in the Last 5 Years so in the next 3 to 5 years will we go down 100% 20% 50% we're working on forecasting what those reductions are going to be but we're going to drive those reductions we need some work we need to work with the state on some of these mandates 30 over 30% of our bill is State mandated work that those are new mandates that we are putting into place and following our Regulators direction we need to rethink some of those mandates and we're very interested in working working with the state to rethink those mandates while at the same time we are doing more work for customers the right work for customers that we needed to do and maybe we should have been doing before we are doing that work now that's necessary to have a clean and resilient Energy System of the future that is also safe for the citizens of California is there at any point in your power you can say I'm the CEO I want to put a stop to this madness for everyone here and freeze our rates or roll a back substantially what is my top priority is making sure our system's safe Raj I don't want people to forget what happened we have an obligation to have a system that is safe and resilient and that takes investment we're going to make those necessary Investments and at the same time I want people to know and learn that they can trust that we are making progress that will reduce prices in time but first and foremost and it will always be my number one and I cannot apologize for putting the safety and wellbeing of the citizens of California first you brought up trust which is a big issue PG it's it's hard to trust from years prior to your arrival um also $2 billion in profit how do you sell trust to people when you have to deal with something like this I think something to remember about profits for a company like pg& is is number one because we have not been paying a dividend those profits go back into the system but number two the people who invest in PG are Pension funds retirees police teachers firefighters Pension funds are our shareholders that's who invests in pg& when they hand over their life savings to us we use their life savings to invest in the infrastructure so customers don't have to pay for it all upfront we pay for it over time those shareholders the pensioners the retirees deserve a return on their asset they are investing in California I don't object to a model where customers win and investors win I don't think there has to be a tradeoff I think we need to shift the narrative that profits automatically equal bad profits are a necessary part of building the infrastructure for a system that is safe and resilient and clean for the citizens of California that's a fair point um and this is for any CEO the balance the delicate balance who do you answer to the investors or the customers you don't have to choose there is no sucker's choice that it's customers or investors when we do the right work and we do make the system safe for our customers that then serves investors investors want us to be safe and they want us to be affordable we're not profit maximizers we have prices that are regulated and transparent and go through legal processes by Regulators here in the state and a lot of interested parties can intervene in those procedures we have the opportunity to both serve customers and investors and that's good for California investors have built the state of California it's their Capital that fuels our prosperity and our progress PG has made you a very rich woman your compensation this year last year I believe 17 million the year before that 14 million before that 51 million that's what 28 to 30 million on average per year in compensation uh is there an Optics issue there the CEO and the company is making so much yet we're all stuck with these high bills yeah a couple things to know about compensation number one it's market-based I was the CEO of another company and so when I came to uh pg& I was made whole for compensation I had received but would be forfeiting that was my first year true up if you will and now my compensation is 90% at risk my compensation depends 100% on the success and well-being of the company and when I say at risk it's based on our safety performance it's based on our Wildfire risk reduction performance it's based on customer and customer satisf action and reliability and financial performance because that's what a well-run company is measured against and so I'm on par with peers Across the Nation and I actually think for the citizens of California to have the top leadership Talent the team that I hired when I came here are the top industry leaders from across the country we all came here to California to make a difference because we knew how essential pg& is to the clean energy transition and how essential California is to helping model for the world what a clean energy system can look like we all left good jobs to come here to be part of the solution and in time I think our customers will see that it was worth the investment because we've made the right changes and we'll continue to make more and more progress to the benefit of the citizens of California you talk about in time again is that a next year 5 years from now 10 years from now and is there any guarantee that our rates would stabilize or even come down we are working on reducing prices in 2025 and 2026 uh I think there's an exciting future for in energy as we grow demand for electricity we can lower the unit cost of energy with new and better Technologies and load management that we've never been able to do before but we have to start by having a safe and resilient grid to fuel the progress of that clean energy transition and I can't wait over the coming years to share our progress with you share the stories so that people can know that the pg& today is not the pg& of yesterday and it's a pg& that they can be proud of to call their own when can we we be proud of this pg& we've made progress already and I think it's time to tell that story a 94% reduction in wild fire risk is dramatic Improvement states are now coming to us to learn how we did it and how did we do it so fast and so we are making progress there are the the way that we're improving the work and the way that we do our work the way that we have reduced costs by using technology and what customers are feeling in their bill today is the amount of vegetation management that we are trying to do we need to reduce that and invest in the infrastructure so customers bills are more affordable if you're sitting in the living room right now of of a typical Bay Area Family who a few years ago was paying we'll say $200 for pg& now it's double to 400 what do you tell them you can tell them what you told me and it sounds great in a boardroom perhaps or 5 years down the road but what can you tell them right now in their living room I can tell them that every single day the people of PG their friends their families their neighbors are getting up to modernize our methods we're working to rethink these mandates and bring them the most affordable cleanest and safest energy they deserve that and we can deliver that and we have made progress we will continue to make more and as CEO could you also tell them we will freeze your rates for the next two or three years we can't freeze the rates when we have to make this investment in the infrastructure people don't want me to make short-term decisions that put people at risk that's what pg& was criticized for we are not doing that we are building the infrastructure that will keep people safe and will deliver the clean energy transition uh is there a warning as we head into the summer as CEO to all your customers for PG need that our bills might be spiking just due to the summer months well summer always drives customers usage and when you use more energy of course you're going to pay more for that energy so what if I'm using the same amount of air conditioning or whatever that I was using last summer am I going to see a big spike in my bill will be higher than last year because of the new rate design yes substantially higher it will it will depend on your your household and your usage and your patterns but I will offer that we have programs to help customers make sure they've got the right Energy Efficiency make sure they have that smart thermostat so they're not using energy at the most expensive times getting the rates right there's a lot of things that we can do with customers to help them minimize the impact of hotter weather just in the short term of the next few months what's the biggest challenge for you I think making sure that we find ways to make our bills more affordable is a top priority and making sure that we're not missing the moment to be ready for the clean energy transition a financially healthy PG is essential to that that can enable us to serve our customers better and deliver a Energy System that heals our planet and I don't know about you Raj but getting up every day knowing that my job is to enable healing our planet and creating an ecosystem that serves our children and our grandchildren that motivates me as we wrap it up here um you talk about as a leader you're trying to find ways to reduce costs um you are at the top of the food chain at pg& so people look to you as what are those answers right now in the next several months or the next couple of years instead of kind of these big broad Strokes what can we do now to lead our bills to go lower or stabilized that kind of progress is happening every day at PG that's how I can be confident to say we will see prices drop because we are rethinking and modernizing all of our Methods at the same time today we need to be in Sacramento working with our legislature to rethink some of these mandates to rethink some of our former policies that are not serving us they served us at one time they're not serving us now and they're costing customers too much okay thank you thank you appreciate your time yeah my pleasure I'll come back anytime Raj

Channel: NBC Bay Area

Views: 3,332

Keywords: PG&E, California, NBC Bay Area, Bay Area news

Id: UBb6j_lWX8E

Length: 22min 26sec (1346 seconds)

Published: Sat Apr 27 2024