PG&E, in the midst of a nasty bankruptcy reorganization and major legal and political turmoil, has made a clean sweep of its top leadership. On Wednesday, the San Francisco electric and gas utility named Tennessee Valley Authority CEO Bill Johnson as the new CEO and president, while also unveiling a new board of directors. The Johnson hire had been widely rumored.
The Wall Street Journal reported that the move has angered California Democratic Gov. Gavin Newsom, who slammed the new board for reflecting too much Wall Street involvement and not enough safety focus. PG&E filed for Chapter 11 protection in January after it became clear the company’s aging transmission system in Northern California had a major role in causing the devastating 2018 Camp wildfire that resulted in 86 deaths and exposed the San Francisco-based utility to some $30 billion in liability claims.
When the company filed for bankruptcy, it unloaded CEO Geisha Williams, who had been promoted to the top job after her handling of the utility’s response to the 2010 San Bruno natural gas distribution pipeline explosion that destroyed much of a local neighborhood and killed eight. She had been CEO for only two years when the company’s board ousted her.
Johnson, 65, is retiring from TVA this month. It had been widely reported that several hedge funds had been promoting his candidacy at PG&E. Under the new leadership, seven current board members are stepping down, with three remaining, and 10 new appointments.
The new board members are current board chairman Richard Kelly, former Xcel Energy CEO; Nora Mead Brownell, a former Federal Energy Regulatory Commission member and former Pennsylvania utility regulator; Cheryl Campbell, a former Xcel executive; Jeffrey Bleich of the Dentons law firm and a former ambassador to Australia in the Obama administration; Richard Barrera, a founder of asset management firm Roystone Capital Management; Fred Fowler, CEO of Spectra Energy, a natural gas company; Michael Leffell, founder of the investment firm of Portage Partners; Kenneth Liang, senior managing director at Oaktree Capital Management; Dominique Mielle, partner at Canyon Management Advisors; Meridee Moore, founder of Watershed Asset Management; Eric Mullins, co-CEO of Lime Rock Resources, an oil and gas private equity investor; Kristine Schmidt, an expert in wholesale electric markets who advised FERC on its response to the California energy crisis of 2000-2001; Alejandro Wolff, a former U.S. ambassador to Chile and to the United Nations.
Last week, the Wall Street Journal reported, Newsom accused PG&E of attempting to stack the new board with financial experts, whose aims would be profits rather than a new safety culture at the troubled San Francisco utility giant.
With the Wednesday announcement, Newsom acknowledged that the company had made some changes, but not enough. “The utility needs to totally transform its culture and the way it does business,” he said. PG&E will likely need support for changes in the utility’s structure and culture from state legislators. Newsom could be key to winning that support.
A major PG&E investor, BlueMountain Capital Management, had proposed an alternative board. It said it would look at the new selections before the PG&E annual meeting set for May.
Johnson, 65, brings a depth of utility management to PG&E. A lawyer, Johnson had a long career at Carolina Power & Light, which became Progress Energy, becoming CEO in 2007. Duke Energy bought Progress in 2012. Under the mergers terms, he was to become Duke’s CEO. But the late Jim Rogers, then Duke CEO, orchestrated Johnson’s defenestration, so Rogers could keep the job. He reportedly walked away from that turmoil with $44 million. He then became head of TVA, the highest paid federal official.
In an anodyne written statement, Johnson said, “The 24,000 employees of PG&E are clearly dedicated to this state and are determined to provide safe, reliable, affordable and clean energy to 16 million Californians.”
— Kennedy Maize