Howes: Consumers Energy CEO plays it straight in natural gas crisis
In the ad called "Hard Hat" running recently on TV, Patti Poppe is first portrayed as a young girl watching her dad going off to work as a nuclear engineer for Consumers Energy Co.
She grows, heads off to college at Purdue University and in 2011 joins the Jackson-based company as vice president of customer operations. The circle of life culminates nearly three years ago when she becomes president and CEO of CMS Energy Co. and its Consumers utility, now at the center of Michigan’s Polar Vortex energy crisis.
The implied message: Poppe was born for this work. It's perfectly predictable sentiment for an ad, reality tempered by the fire at the utility’s Ray Compressor Station in Macomb County's Armada Township. It threatened natural gas delivery to homes, hospitals and industrial customers on the coldest days since temperatures have been recorded.
Instead of dispatching one of her executives to explain and occasionally dissemble, there Poppe stands Wednesday night in Consumers' Jackson control room to issue a plea over Facebook Live: turn down your thermostats to help stabilize the system by reducing gas consumption. “No one can do everything,” she said, “but everyone can do something.”
Aided by a Wireless Emergency Alert from the state of Michigan to mobile phones urging folks to set thermostats to 65 degrees or lower, more than a few of Consumers' 1.7 million customers — including 79 of its industrial ones — dialed it back. By Thursday morning, peaking demand for natural gas receded to 3 billion cubic feet from 3.3 billion.
“We needed it to be low enough to have a big enough effect,” Poppe said at a midday briefing Thursday, explaining their suggested 65-degree target. “And, again, as everyone heeded the call to act, we had a 10-percent reduction in the system. That was a game-changer for us overnight.”
She added: "Now I understand that people are angry about this. I would be, too. We plan for these extreme conditions. We had enough gas available. The unplanned fire at our major facility — we were not prepared for that. I am happy to report that no residential customers lost gas service as a result of this condition. Therefore, it worked."
Critics will find something to complain about: who or what maintenance oversight caused the fire that rendered inoperable two of three plants at the compressor station; why did Consumers feel compelled to use the state's Wireless Emergency Alert system, and was it appropriate; why does so much gas flow through the Ray station; how come residential customers are expected to dial it back — can't business ease the load?
Oy. When it's 65 degrees in April or October, folks don't think twice about walking around outside in T-shirts, so what's the big deal inside? Extreme weather that ups demand for electricity during hot summer spells and cold winter snaps stresses machinery, swells poorly protected water lines and drains less-than-robust batteries.
Credit Poppe with following a cardinal rule of leadership in a crisis: never ask your people to do something you aren't willing to do yourself. She offers the explanation, clearly pained that a critical part of the system failed at an extraordinary time. She answers the questions. She's plain-spoken, direct and transparent.
She doesn't hide behind corporate spin, doesn't field designated spokespeople to shield her from hard questions and frustrated customers, doesn't shy from asking the governor for help, doesn't use the trappings of a fancy office to reinforce distance from customers, regulators and political leadership. Good instincts, hers.
But the fire highlighted a potential vulnerability of Consumers' natural gas delivery system, with the Ray site accounting for 64 percent of the volume directed to paying customers. Poppe conceded that residential service "curtailments" (had there been any) first would have hit southeast Michigan, by far the state's most densely populated region.
That's why Gov. Gretchen Whitmer is ordering a review of the state's energy infrastructure, including electricity, natural gas and propane: "It is important that we get a handle on what's happened here," she said, "and how we make sure that we are in a stronger position the next time we confront something of this nature."
The governor's right on this one, as are such industrial customers as Detroit's automakers, Michigan State University and Hemlock Semiconductor who curtailed their demand and interrupted production schedules. Hours later, Poppe said Consumers would "fully support the review. We're very interested in partnering with the state to make sure the system is robust and resilient."
She should, if only because it's in the family.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.