PG&E: Hanging on to a Ray of Hope

by: Andrew Hoffman

Publication Date: February 19, 2014
Length: 16 pages
Product ID#: 1-429-377

Core Disciplines: Strategy & Management, Sustainability

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Teaching Note

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Pacific Gas & Electric is the second-largest investor-owned utility in the country and the largest in California, serving 15 million people across 70,000 square miles in central and northern California. Revenues at the utility are sliding as Kent Harvey, the company’s CFO, considers legislation coming before the California legislature that will allow utility customers to purchase up to 100% renewable power from an offsite, local facility. The program is capped at 600 MW, but if it is amended to expand capacity, PG&E will face another hit to its bottom line. Students are asked to put themselves in Harvey’s shoes and decide whether the company should lobby against the bill or adjust its policies to integrate more clean energy into its portfolio.

Teaching Objectives

After reading and discussing the material, students should:

  • Explain PG&E’s dilemma with respect to solar power.
  • Describe some of the options PG&E is considering as it tries to chart a viable and successful path forward.
  • Compare and contrast PG&E’s experience with other industries whose core business models are being threatened.