Embattled PG&E replaces its CEO
Utility reportedly eyeing bankruptcy filing in wake of deadly wildfires
Geisha Williams, who presided over PG&E’s mounting woes in the wake of deadly and disastrous wildfires in 2017 and 2018, has been replaced as the embattled utility’s chief executive, the company announced Sunday, even as it reportedly was taking its first steps toward a bankruptcy filing.
Williams, the first female CEO in Pacific Gas and Electric’s history, took over the job in March 2017, brought on board as an expert in electricity operations. But seven months after beginning her tenure as CEO, a series of infernos scorched the North Bay Wine Country and nearby regions, and investigators eventually determined the company’s equipment was at fault in 17 of the blazes.
Then, in November, a deadly wildfire torched Butte County and essentially destroyed the town of Paradise, and PG&E disclosed it had suffered equipment failures in the origin area of the inferno.
The company has seen two-thirds of its market value wiped out since November’s Camp Fire, the deadliest wildfire in California’s history. Its debt has been downgraded to junk status, and state regulators have called for a management shakeup.
“While we are making progress as a company in safety and other areas, the board of directors recognizes the tremendous challenges PG&E continues to face,” said Richard Kelly, the board’s chairman.
John Simon, currently the company’s general counsel, was named interim CEO while a replacement for Williams is sought.
“We believe John is the right interim leader for the company while we work to identify a new CEO,” Kelly said.
The company’s deepening financial crisis has forced California regulators and policymakers to consider a bailout package, and PG&E is weighing whether to file for bankruptcy. The utility is planning to notify employees as soon as today that it may make a Chapter 11 filing within 15 days, people familiar with the plan said Satur-
day. Such a notice would be required under state law.
The San Francisco-based utility already was convicted by a federal jury in 2016 of crimes committed before and after a 2010 gas explosion that killed eight people and destroyed a San Bruno neighborhood.
“The only surprise is that Williams wasn’t removed as CEO earlier,” said state Sen. Jerry Hill, a Democrat whose district includes parts of Santa Clara and San Mateo counties and contains San Bruno.
When Williams, who joined PG&E in 2007, was announced in 2016 as CEO, it was thought she would represent a fresh start from the company’s missteps connected to the San Bruno explosion. PG&E touted Williams’ 30 years of experience in the utility industry as well as a long stint with Florida Power and Light Company, an electricity provider.
But Williams’ tenure was marred by the wildfire disasters of 2017 and 2018. Despite a state legislative bailout in August, the catastrophes raised the prospect of liabilities and financial woes that are so forbidding that the company now totters on the precipice of insolvency and bankruptcy.
“PG&E has been operating its electricity grid without using best practices and industry standards,” Hill said. “That is what I believe is what caused the devastating fires of 2017 and 2018.”
The company has been attempting to burnish its image as an increasingly safe provider of gas and electricity services. Those efforts, though, were overshadowed by fresh questions that have arisen about the company’s commitment to safety in the wake of the deadly wildfires in Northern California.
Williams is eligible for a golden parachute of some amount, depending on the precise nature of her departure as CEO.
According to a PG&E filing with the Securities and Exchange Commission this year, Williams was eligible to receive $10.1 million as her departure package if she was terminated without cause. If Williams resigned, the golden parachute would be $7.4 million. If Williams was terminated with cause, the exit package would total $3.1 million. PG&E described the end of the Williams tenure as a “departure.”
“Our search is focused on extensive operational and safety expertise, and the board is committed to further change at PG&E,” Kelly said.
But Hill believes PG&E still doesn’t have public safety as its top priority with its choice of the new CEO.
“PG&E’s decision to hire its general counsel as CEO means PG&E is acting in its own self-interest instead of thinking about what the public needs and what the ratepayers expect,” Hill said.