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David Crane exits NRG with a warning: ‘There is no growth in our sector outside of clean energy’

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Greentech Media

In March 2014, David Crane sent a letter to shareholders outlining his plan to transform his company, NRG Energy.

rsz_david_crane_nrg_xl_410_282_c1As CEO of the competitive power provider for over a decade, Crane diversified NRG after its exit from bankruptcy in 2003, partly through an expansion into retail markets. The next growth phase for the company, he argued, would be to harness that retail business to become a distributed energy powerhouse.

“We are positioning ourselves to succeed during a prolonged period through which the traditional centralized grid-based power system co-exists with the fast-emerging, high-growth distributed generation sector,” he wrote. He then went on a spending spree to make that vision a reality.

Crane didn’t just argue the business case. He passionately laid out the moral case for addressing climate change: “And make no mistake about our children. They will hold all of us accountable — true believers and climate deniers alike.”

But he was ultimately accountable to NRG’s shareholders. As the company’s stock price plummeted in 2015 due to pressure in the wholesale markets, investors became wary of Crane’s spending on solar, electric-vehicle charging and home efficiency products.

By fall of last year, he was forced to spin off the company’s green assets into a separate public company. “I know my credibility…isn’t great,” he said to investors at the time.

By December, he was forced out after 12 years leading the company. (We also learned this week that Steve McBee is stepping down as CEO of NRG Home.)

On January 4, Crane left NRG. Once again, he penned a passionate letter about the future of energy — this time to employees, not shareholders.

Crane’s tone was dramatically different from the spring of 2014, when he called for a radical transformation in the energy business.

“I did not succeed in leading you, as I said I would, to making NRG that shining city on the hill, that beacon of light in the energy industry that would guide the way for the rest to follow,” he wrote.

But he did offer a veiled warning to shareholders and other energy executives only thinking about short-term profitability.

“The new frontier of the energy business that I pushed the company into, [was] then, and [is] still now, in the long-term best interest of the company’s employees, its shareholders, its customers and the earth we all inhabit. As a company that aspires to growth, there is no growth in our sector outside of clean energy; only slow but irreversible contraction following the path of fixed-line telephony,” wrote Crane.

Below is David Crane’s entire departure letter outlining his laments and his hopes for the future. (Hat tip to Greenbiz for being the first to obtain and publish the letter.)

For a full accounting of Crane’s legacy, read Julia Pyper’s reporting.

***

Dear NRG Colleagues:

During the challenging market environment we faced together over the past several months, I was always well aware that a personal outcome for me might be my departure from the company and indeed, yesterday, Jan. 4, was my last official day as an NRG employee.

Yet it never ever occurred to me over these past months that I might not get a chance to say goodbye to you personally and face to face, the way goodbyes are meant to occur, or even by emailed departure memo, as has always been the custom for exiting NRG employees. But that is the situation I find myself in now.

While emphatically not of my choosing, it almost certainly is for the better that I will not have had the opportunity to say goodbye. I would have made a mess of it, burdened as I am by the sense of loss and separation from all of you. More than that, I am impacted by the knowledge that I let you down. I did not fulfill my end of the bargain. I did not succeed in leading you, as I said I would, to making NRG that shining city on the hill, that beacon of light in the energy industry that would guide the way for the rest to follow.

Remember this: I let you down; you did NOT let me down.

I emphasize this point because some observers, since the public announcement of my termination, have suggested to me that NRG’s ambition may have been hindered by a reluctant or recalcitrant employee base, unalterably resistant — as the supposition goes — to reaching for the clean energy future.

That is simply not true.

I find myself repeating, time and time again, that I had all 11,000 NRG employees with me every step of the way and that indeed all of you “had my back” each and every day of my tenure at the company. There was no CEO on the face of earth who is as proud as I am, or who was as well served by, the people I worked with at NRG.

So, I say thank you … profoundly … thank you.

To all of my colleagues who believed, as I did, that NRG was truly a purpose-driven company, trying to build a great and value enhancing business for our shareholders while saving the planet for our children, I say to you: keep the faith. I was in Paris last month; the world is moving and the global business community is moving with it. The dream has not died with my separation from the company; the dream lives on in each of you!

To all of my colleagues who had their doubts about my outspoken advocacy on climate change and a variety of other topics, thank you so much for your loyalty and faithful service to me and to the company. I am sorry to the extent I ever said things or did things that you were not comfortable with, but I hope you appreciate that the steps I took, the new frontier of the energy business that I pushed the company into, were then, and are still now, in the long-term best interest of the company’s employees, its shareholders, its customers and the earth we all inhabit. As a company that aspires to growth, there is no growth in our sector outside of clean energy; only slow but irreversible contraction following the path of fixed line telephony.

So, in closing, let me tell you something that may seem out of place in the context of the indelible sadness of this message: I am optimistic about what lay ahead for all of you. You will achieve great things.

For my part, I intend to continue to do everything within my power to bring about the clean energy future as fast as quickly and as completely as we can achieve it. That the clean energy future is going to happen is, at this point, inevitable, but as we have seen with my own personal experience, timing is everything and the earth, as we know it, is running out of time. We need to act now.

Whatever I do, however I choose to proceed, it is hard for me to imagine that it will compare in terms of personal impact on me as has my life experience at NRG. As it happens, I was let go during the same week that I started at NRG 12 years ago — that’s 4,383 days roughly — and I want you to know I tried my hardest each and every one of those days to make us a better company.

It was a lot of work, but as I turn this page on my career, I don’t regret any of it. Working with all of you to accomplish all that we accomplished was the greatest experience of my life. We came up a little short this time, but we will not the next.

Stay safe.

David Crane

Source: Greentech Media. Reproduced with permission.

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  • Alex Rogers

    Lovely to read about an energy company CEO with true moral and ethical values. Such a pity to hear about it on his forced departure from the company. I’d work with him any day.