On Tuesday, August 31, I was in the audience at the Haas School of Business at UC Berkeley as Peter Darbee, CEO of Pacific Gas & Electric Co., responded to moderator questions about the energy industry and the company’s stance on climate change.
The post below consists of Part 1 of my record of the conversation – all portions are included in chronological order.
An ellipsis (…) indicates that I was not able to capture the words or thoughts skipped. Moderator questions are paraphrased. Responses are included as accurately as possible – punctuation choices are mine. The moderators were Bev Alexander (BA) and Joey, a student.
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Over the last decade, you’ve led the industry through major turmoil…
I go different places, around the world and country, and I hear that a utility gets a guaranteed return, so anyone can run that place. Then why were we in financial distress ten years ago?
What’s happening in the industry is very dynamic…deregulation, reregulation…customer choice provides opportunity for others to take over…When government dramatically changes rules, there’s a mad scramble. And there’s the introduction of new technology all the time…these are disruptive technologies. This demands the most of management…
You’ve distinguished yourself on the issue of climate change…but you’re a business leader. Why is this a top priority?
You have to talk to your conscience. On January 1, 2005, I thought about the awesome responsibility of running a huge company… The question of climate change came up…
How would you feel if you were running this huge company and it had a dramatically negative impact on the planet?… How could you live with yourself if…you did not do everything you could to mitigate your impact?
Also, I owe a fiduciary responsibility to shareholders…so need to reconcile the two. So if we emit as much carbon as we can, and someone sues…the questions could be a problem… I have to do everything I can within the context of my role to reduce carbon emissions… We learned as much as we could about the issue and tried to change the industry… So what we did is called together some of the greatest scientists…put together top people in the country…tried to get to the bottom of the issue…came up with the statement “The earth is warming, mankind is responsible, and the time for action is now.”
I read your paper on climate change, but other folks in the audience might be concerned – why aren’t other companies on board?
… … … Why other companies don’t feel the same way… They love to moan, and say it’ll be horrible if we have to make that change… Folks at PG&E complained 30 years ago about decoupling… Everyone overreacts and creates a boogeyman… But this issue has become so political that we can’t have a conversation about it…and this is true in my own family.
… … I’ve never known anything good to happen when people are screaming at each other…and have lost the ability to listen.
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