Energy industry loses an executive-suite maverick

The resignation of David Crane as chief executive of NRG Energy last week illustrates the risks that leaders of U.S. electric-power companies face in a changing industry.

Crane stepped down amid a nosedive in the company's stock, a slump that reflected investor discomfort over his efforts to transform the company from a traditional supplier of electricity to one increasingly focused on rooftop solar systems, electric-vehicle charging and home energy management.

"During more than 12 years at the helm of NRG, Mr. Crane led the company from emergence from bankruptcy to its current position as a leader in the wholesale and retail energy markets," Howard Cosgrove, the chairman of NRG's board, said in a statement announcing Crane's resignation. "The board thanks Mr. Crane for his leadership that helped transform NRG into the company that it is today."

But what NRG had become today is apparently not what shareholders wanted, and so Crane, one of the most outspoken of his peers in calling for a transformation in the industry, headed for the door at the biggest independent power company in the U.S.

The fact that his departure occurred while the U.S. and nearly 200 other countries attempt to hammer out an agreement to address climate change is notable, as Crane had been one of the first power industry CEOs to publicly call for mandatory measures to combat rising temperatures.

Still, Crane, 56, had seen the writing on the wall.

"Our company's stock has been under pressure, like all energy stocks," Crane said at a November 20 seminar held by the Columbia University Center on Global Energy Policy. "The common thing to do is criticize the short-termism of public markets – the familiar CEO refrain that, 'I've got all of these investors, and all they care about are quarterly earnings.' "

Crane declined to "whine like that," saying "a long-term future is made up of a lot of quarters. So, making money every quarter is a good thing."

But making money has proven to be difficult for NRG this year. In November, it posted its first quarterly profit of 2015, numbers that were down 60 percent from the same period in 2014.

Likewise, its stock had fallen more than 60 percent from one year ago, closing at $10.79 on Tuesday, one day before Crane's resignation was announced. Once he left, the stock inched up 1.6 percent to finish at $10.97 on Wednesday.

Crane tried to stem the investor revolt in September by scaling back the company's renewable-energy plans and focusing on its traditional power business, all to no avail, as the stock continued to tumble.

"So, we're in this surreal world where strategically no one is challenging us, but people say they hate it because it's too complicated," Crane said at Columbia. "A transformation is complicated, and that's the conundrum we face."

No so long ago, Crane professed confidence that NRG was on the right track.

"I'm very bullish on the idea that within three to five years, people will be able to go off the grid," he told me in May. "And whether it's the technologies we're investing in or not, ultimately I want to have the partnership with consumers where people who want to go off the grid will come to us for the best way to do it."

At the time, NRG's stock was selling at $25.97.

In his talk at Columbia, Crane, who took cues from Apple, Google and other Internet companies, recalled hearing Google CEO Eric Schmidt talk about "existential challenges" facing a number of industries in coming years, and how many executives were ignoring them.

"In our (industry), I would say most people are ignoring it," Crane said. "And when someone like us stands up to it and (then) gets not validated by the market, I don't think it encourages anyone else to sort of look over the horizon."

That comment will likely be disputed by some of his peers in the power industry, especially those with traditional utilities, which Crane often criticized as too set in their ways to change.

But without a doubt, it's lights out — at least for now — for one of the most colorful figures in the business.

Bill Loveless — @bill_loveless on Twitter — is a veteran energy journalist and television commentator in Washington. He is a former host of the TV program Platts Energy Week.