Business Government and Society Forum Conversation with Patti Poppe, PG&E CEO

18 Apr 2024 (8 months ago)

PG&E's Transformation and Safety Culture

Patty Poppe, CEO of Pacific Gas and Electric Company (PG&E), discussed the challenges faced by the company, including the 2010 San Bruno gas line explosion, wildfires, and bankruptcy.
Poppe emphasized building a culture of safety, considering potential risks, and implementing safety buffers in every job and action.
She described PG&E's purpose as serving communities, protecting the planet, and leading with care and concern for employees and customers.

The speaker highlighted the commitment to safety and progress in reducing wildfire risks.
Climate-resilient infrastructure was discussed to address changing weather conditions and extreme events.
Undergrounding power lines was seen as a key strategy to reduce wildfire risks, despite its high cost.
The "simple affordable model" was introduced, aiming to balance infrastructure investment with customer affordability.
Undergrounding 8% of high-risk power lines can lead to long-term cost savings by reducing maintenance and vegetation management expenses.
Attracting capital from capital markets for infrastructure investments can lower operating expenses and stabilize energy costs.

The speaker emphasized the importance of regulatory oversight and public input in decision-making processes related to infrastructure investments.
Balancing the interests of customers and shareholders in the utility industry was discussed.
It was argued that investing in infrastructure and reducing operating expenses can serve both customers and investors, leading to lower prices and a return on investment.
Load growth through electrification of transportation, buildings, and data centers was highlighted as a means to reduce costs and decarbonize the economy.

The challenges of community solar and the need for appropriate pricing structures were acknowledged, especially for low-income communities.
The current net energy metering cost allocation incentivized investment in new technologies but is unsustainable in the long term.
A fixed charge for all customers was proposed to equalize the utilization of distributed resources and reflect ongoing maintenance and grid operating costs.
The proposed fixed charge has three tiers aligned with the existing income-graduated rate structure, with lower charges for low-income customers.
Community solar programs can provide access to clean energy for those without rooftop access or the ability to participate in traditional solar installations.

Nuclear energy was considered a part of the future energy mix, with small modular reactors seen as a promising technology.
PG&E's commitment to safety was reiterated, with efforts to enhance grid safety after the 2020 wildfires.

The speaker reflected on their role in co-leading the task force on business, government, and society at Stanford University.
Increased engagement between students, faculty, alumni, business leaders, politicians, regulators, and civil society leaders was encouraged to address complex questions about the role of business in society.
The positive impacts of business were acknowledged, but tradeoffs and decision-making challenges were recognized, requiring societal structures and government policies to shape the positive aspects of business and capitalism.
Disagreements among individuals within and outside the event about specific decisions and policies were acknowledged, emphasizing the need for respectful discussions and debates.

Gratitude was expressed to speakers, faculty members, GSB staff, Professor Joe Petrovski, and Maria France for their contributions to the event's success.
The event was an experiment to bring together a large group for discussions, and feedback will be sought to assess its effectiveness.
The speaker concluded by thanking the attendees and inviting them to continue the discussions during the reception.