This is your SolarWakeup for February 10th, 2020

Board Room Showdown. The CEO of Engie, Isabelle Kocher, was unceremoniously pushed out in a board meeting last week. Engie is the French utility that is 23% owned by the Government and has been pushing the 3 D’s, decarbonization, digitalization, and decentralization. The stock has been underperforming in recent times as the company has exited fossil generation in the US and elsewhere.

Why It Matters. Kocher is the only female CEO in the CAC 40, the largest companies in France. More importantly, it’s hard to imagine that the government wasn’t aware of the board room move in advance. Insiders are saying that the CEO was not doing enough to maximize the value of the power generation assets and too slow to move into renewables. Herein lies the problem, CEOs can’t be seen to look too far into the future, embracing the next era of clean economy for utility CEOs practically means that they are ready to leave their post. Much like David Crane during his time at NRG, Kocher was driving Engie into the future and it looks like half a decade of time passing and a Paris climate accord couldn’t give her the cover she needed to see the strategy unfold.

What Happens Next. I look forward to hearing what President Macron has to say about l’affaire Engie. If a quasi-governmental corporation with a global mission of the 3 D’s can’t give the CEO room to operate, no other CEO will take action. If Larry Fink’s BlackRock letter was meant to push executives and board directors into a clean economy, the move by Engie’s board is a big rebuttal. There are going to be a lot of powerpoint decks shown to board rooms putting the decision on the directors to point the ship in a direction of either status quo versus making a move towards fossil free. What does Kocher do next? Maybe there’s a private equity fund to look into the future backing Kocher/Crane for activism inside utility board rooms. Too bad I didn’t attend L’Ecole Polytechnique in Paris so I could put my hat in the ring at Engie.

The Takeover. Another week has passed in the PG&E negotiations that are happening behind the scenes. The debtors, courts, PG&E and State of California are talking about how the utility emerges from bankruptcy if at all. From a purely financial standpoint, the utility could emerge but the company knows it needs buy in from the State on the plan. Talk about a brilliant opportunity for the State to counter the failure by the Engie board and say, we want the utility of the future and we want the shareholders to put an executive in charge that lost their job trying to create one at the wrong place at the wrong time. It’s time to name some names and outline the plan, get the consumers to buy into a vision because when it comes to Government run utilities, PG&E already has the CEO of TVA at the helm and that won’t get us anywhere. 

Opinion

Best, Yann