- Pacific Gas & Electric Corp (PG&E Corp) President and CEO Bill Johnson plans to retire soon, the company announced Wednesday, bringing an end to his year-long stint at the bankrupt utility. Stakeholders say his successor will face a litany of challenges
- Johnson intends to retire June 30, the deadline for PG&E to resolve its wildfire-related liabilities and emerge from its ongoing bankruptcy. Current PG&E board member William Smith will serve as an interim CEO, until the company appoints a new head
- Johnson’s successor will take the helm at PG&E as the utility grapples with a reorganized structure, in the midst of Northern California’s wildfire season as well as the ripple effects of the COVID-19 pandemic. “I can’t imagine there being a more challenging time” for a new CEO, April Rose Maurath Sommer, executive and legal director of the Wild Tree Foundation told Utility Dive.
PG&E hired Johnson in April 2019, three months after it filed for Chapter 11 bankruptcy due to billions of dollars in liabilities connected to a series of Northern California wildfires that were sparked by its power lines. Johnson, who was previously head at the Tennessee Valley Authority, was “the right leader for PG&E as we work to strengthen our safety culture and navigate a complex and challenging period in our company’s history,” PG&E’s board members said at the time.
Johnson joined PG&E to get the company out of bankruptcy and stabilize operations, he said in a statement Wednesday. “By the end of June, I expect that both of these goals will have been met,” he added.
“As we look to PG&E’s next chapter, this great company should be led by someone who has the time and career trajectory ahead of them to ensure that it fulfills its promise to reimagine itself as a new utility and deliver the safe and reliable service that its customers and communities expect and deserve,” Johnson said.
Johnson will be replaced temporarily by Bill Smith, the retired president of AT&T Technology Operations, who said in a press release that he has been “deeply involved in the Board’s work helping to prepare PG&E for its successful emergence from bankruptcy.”
But some stakeholders say that Johnson was not the agent of change the beleaguered utility needed.
“They technically chose him from a governmental agency that was outside the state — I think there was very much an intentional selection to appear that he was an outsider that was going to come in and fix things,” Maurath Sommer said, adding, “I don’t see that that has happened at all.”
“We view his tenure as a failure,” Mark Toney, executive director of ratepayer group The Utility Reform Network told Utility Dive, adding that the challenge now is Johnson will not be held accountable for promises made to regulators after last year’s widespread power shut-offs and the safety work PG&E has committed to do.
“He’s just joining a long line of CEOs who oversaw criminal negligence and serious safety violations and got to walk away scot-free, with millions of dollars in their pocket,” he added.
On the other hand, Johnson’s exit opens up an opportunity for a PG&E CEO that is a visionary change agent, according to Toney — as well as someone with engineering and on-the-ground safety experience. A key issue for the new CEO to tackle would be figuring out how to promote safety and reliability in the most cost-effective manner, as well as reducing PG&E’s safety shut-off program to a much more surgical, last-resort wildfire prevention measure, he said.
“I don’t envy the person who takes that job — it doesn’t get much tougher than this!” Mike Florio, energy consultant and former CPUC commissioner told Utility Dive in an email.
“I’m guessing that it is probably not a particularly enjoyable role at this point to be the head of PG&E — they are a much vilified company, and completely deservedly so,” Maurath Sommer concurred.
She has doubts about the strategy of bringing in a new CEO at this point, especially given that the bottom has completely fallen out of the economy due to the COVID-19 outbreak. The company is going to require someone “who needs to look very differently at [the way] they are approaching ratemaking right now.”
Adding to the complexity is the fact that the new CEO will likely join PG&E in the middle of Northern California’s wildfire season.
PG&E has been investing heavily in trimming trees around its power lines and upgrading its infrastructure to prevent future wildfires. The company’s current strategy relies heavily on vegetation management and power shut-offs — which are not effective ways to stop utility-caused fires, according to Maurath Sommer.
“My overall chief concern is I do not think PG&E has a wildfire mitigation plan that puts it in the position it needs to be to prevent future disasters. So I think you’ve got a new CEO coming in and inheriting what I think is an already very problematic wildfire mitigation plan,” she said.
PG&E’s new CEO will be appointed by the company’s board, spokesperson Lynsey Paulo told Utility Dive in an email, adding that she does not have any information on timing.
Original source: Utility Dive