PG&E’s Peter Darbee is brimming with energy

Street smarts: The self-acclaimed “awful” elementary school student and poor athlete graduated magna cum laude from Dartmouth and was a state high school champion wrestler, going 23-0. (Cindy Chew/The Examiner)

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SAN FRANCISCO —

The global-warming battle in California could hinge on the Long Island boy who admits he was an awful grammar school student.

Peter Darbee — the meticulous president and chief executive officer of Pacific Gas & Electric Co., California’s largest utility owner — said he struggled in the fifth grade to bring decent marks home to his parents. At the time, he said he was reading at a third-grade level and turning in consistently dismal report cards. He even lacked an advantage in gym class.

"I was not a very good athlete at all," he said.

These are serious obstacles for any child, particularly one facing stiff expectations from his parents. Darbee’s father graduated from Dartmouth College, and his mother began Smith College at age 16. They were not the type to say their child could skip on a college degree.

"I realized [school] was critical for my success," he said.

What Darbee learned at a young age was that brains and outcomes are more earned than inherited. It is this principle that guides him today as he leads PG&E into the uncertain world of renewable energy — a costly endeavor that Darbee, even with his acknowledged conservative background, maintains is "the greatest challenge mankind has ever faced."

Darbee no longer faces pressure from his parents. Rather, the person who demands a vastly improved report card is Gov. Arnold Schwarzenegger, who enacted a law mandating that California utilities generate at least 20 percent of their power from renewable energy sources by 2010, and 33 percent by 2020.

It’s a daunting requirement that falls squarely on Darbee’s shoulders.

Currently, about 14 percent of PG&E’s energy output comes from renewable sources such as solar and wind power, not including a nuclear power plant the utility operates in San Luis Obispo County.

Closing the gap to 20 percent seems far-fetched, what with an ongoing recession that has stifled investments in new energy projects, along with existing technological barriers and typically stubborn defiance from the not-in-my-backyard crowd.

But it is possible, Darbee said.

"We will do it," he said, adding that the utility has already contracted to have 24 percent by 2013.

There’s no reason not to believe a Darbee-run PG&E can do it — "impossible" does not exist in the utility chief’s vocabulary.

As a not-so-book-smart 7-year-old growing up in Long Island, N.Y., Darbee, who was mesmerized by his father’s college reunion, said he mandated himself to attend Dartmouth. That meant setting aside a social life for his studies — he hit the books day-in and day-out, even dedicating the majority of Sundays to schoolwork.

Tired of the being nonathletic, Darbee even joined the wrestling team, spending his mornings during high school running, his afternoons at practice and late evenings weightlifting — each session squeezed tightly between his studies.

"Every minute of the day was utilized between study and athletics," he said, adding that social life was limited to a few hours on Saturdays.

It was a painful schedule with an astounding result: The "awful" elementary school student would eventually graduate magna cum laude from Dartmouth, and would finish high school a state champion wrestler with a 23-0 record.

Darbee has shown this same fervor for improvement as PG&E’s chief. Since he’s taken the helm, his green initiatives for the utility — clearly a topic du jour in Northern California — have morphed PG&E’s public image from a monopolizing energy hog to one of the state’s most important allies in the battle against global warming — a topic not agreed upon by all scientists.

"The sooner you start working on the problem, the cheaper it will be to resolve [in the future]," he said. "It’s like owning a car: ‘Change your oil, don’t destroy your
engine.’"

Darbee admits the work makes him feel like a schoolboy again who’s never received an A on his report card but is expected to attend an Ivy League college.

It’s easy to tell he loves the challenge. This past week, a beaming Darbee stood before reporters to announce a major PG&E plan to install 500 megawatts worth of ground and rooftop solar panels on its property during the next five years. That could power as many as 150,000 average homes annually and account for 1.3 percent of the utility’s electricity demand. The projects — half paid for by PG&E and the other half through power-purchase agreements with independent sources — would be one of the largest such undertakings in the nation,
Darbee said.

Darbee said more new clean-energy infrastructure projects may follow, and that PG&E has been aggressively hunting for ways to capitalize on a change to federal tax law last fall that offers significant credits for renewable energy development not previously available to utilities.

"We can now play on a level playing field with others," Darbee said.

And it is there, if not beyond, that seems like the place he has worked so hard to be.

Darbee finds global warming isn’t a myth, but is our ‘greatest challenge’

Peter Darbee said he didn’t buy the hype about global warming — rather, he set out to find out for himself whether climate change is a human-caused reality.

To do that, he brought in a group of the world’s best scientists and experts on both sides of the issue and had his top personnel at Pacific Gas & Electric Co. grill them on the validity of global warming.

"I said [to staff], ‘I want you to ask these guys the hardest questions,’" Darbee said. "‘If they don’t answer your question, I want you to tell them that.’"

What Darbee learned shocked him. The experts who said global warming was a problem had been politically diverse, had oodles of data that was "very persuasive" and were open-minded about what they knew and didn’t know, he said.

Those who who said global warming wasn’t a problem, however, did not appear to have done their homework, would not always share their data and fueled their argument with emotion more than fact, according to Darbee.

"They reminded me of traders on Wall Street who were always certain and sometimes right," he said.

The exercise — along with his own research and discussions with top scientists close to the issue — proved to Darbee that global warming is "the greatest challenge mankind has ever faced."

This is the reason Darbee has publicly endorsed a state law requiring utilities to significantly hike the output of renewable energy, and maintains support amid a stifling recession that is scaring away investors and funding for a renewable infrastructure.

He admits that expanding PG&E’s renewable-energy portfolio might lead to higher monthly bills for consumers, an added hardship for low-income households. But, he said, mankind has little choice but to make sacrifices.

"I have the most problem with people who say we can’t afford to deal with global warming because it’s too expensive," he said. "It’s like saying, ‘I know my barn is going catch fire in 20 years, and I’m not willing to put in place a sprinkler system in order to ensure that it doesn’t.’"

— Mike Aldax

Peter Darbee on ...

The issue of climate change:

What I find discouraging and disappointing is the issue of climate has become a political issue in the United States rather than a factual issue. I have many friends who are conservative or Republicans, I come from that background. ... I take the view and our company takes the view that, ‘Let’s go in and evaluate this with an unemotional open mind and come to a conclusion as to what the right answers are.’ On climate, we did that better than just about any other company. We said we’re going to look into this, we’re not going to have a point of view ... the answer became evident. Some people, you can’t even talk to them about this issue, they close their minds and saying it’s not happening, and no matter what’s happening, their minds are closed.

His role as PG&E chief in battling climate change:

What I feel is that I have one of the most important jobs that one could have. I’m engaged in a very important effort, and my job is to lead 20,000 men and women as effectively as possible to combat this challenge and to work as effectively as possible with policymakers in Washington, Sacramento and regulators here in California to convey the concerns about the problem and to outline solutions.

Why PG&E donated money to the No on Proposition 8 campaign:

We’ve always been a company that’s been focused on inclusion, and we felt that was consistent with the direction and orientation the company had on inclusion. Many say [we] shouldn’t be involved in politics, but the reality is we have to be involved. We are in the business of political affairs. We saw this issue and took a stand on it. We have also put a big focus on charity and community involvement. We give more dollars than any of the utilities in California, and probably are one of the largest corporate contributors in the state of California.

PG&E’s battles with S.F. ballot measures seeking public takeover of power operation:

In our experience, once voters learn the facts, we find they recognize that these initiatives are ill-conceived and not in the best interest of energy customers. As a result, they reject them, often by significant margins. The initiative in San Francisco this November was rejected by 60 percent of voters. The time, attention and effort it takes to get the facts out are considerable. We would much rather see that energy invested in finding ways to work collaboratively with The City to achieve our shared goals, including clean energy and reliability. We’re proud of our history in San Francisco and we believe there is no team more dedicated and more capable to deliver for our customers than the 20,000 men and women of PG&E.

Peter Darbee

Age: 56

Residence: East Bay

Family: Married, three children

Education: Dartmouth College (undergraduate and graduate); he has also completed the Nuclear Reactor Technology Program at the Massachusetts Institute of Technology.

Favorite bands, musicians: Billy Joel (he comes from and sings about the East Coast towns of my youth), and the San Francisco Symphony (on whose board I proudly sit).

Three books you love: Recently, I read "Team of Rivals," "Lincoln on Leadership" and "Killer Angels." (I’m a history buff and enjoy a number of books on Abraham Lincoln, his leadership and studies of the Civil War.)

One of your favorite movies: "Saving Private Ryan" (because of the deep camaraderie and selfless leadership it portrays).

How often do you eat out? "I try to eat in as much a possible, when not on business. I mostly enjoy eating at home with my family."

Community involvement: Darbee is active in The Business Council, the California Business Roundtable, the California Commission for Jobs and Economic Growth, the San Francisco Committee on JOBS and the San Francisco Symphony board of governors.