Em­bat­tled PG&E re­places its CEO

Util­ity re­port­edly eye­ing bank­ruptcy fil­ing in wake of deadly wild­fires

The Mercury News - - Front Page - By Ge­orge Ava­los gava­[email protected]­yare­anews­group.com

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.

Wil­liams

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.