New PG&E leader is na­tion’s high­est-paid fed em­ployee

The Tribune (SLO) - - Front Page - BY DALE KASLER [email protected]

PG&E’s newly ap­pointed chief ex­ec­u­tive of­fi­cer leaves his old job with a mixed record on re­new­able en­ergy, a po­ten­tially costly en­tan­gle­ment from an en­vi­ron­men­tal spill in Ten­nessee, and a sin­gu­lar dis­tinc­tion: He’s been the high­est-paid fed­eral govern­ment em­ployee in the coun­try.

As the head of the govern­ment-owned Ten­nessee Val­ley Au­thor­ity, PG&E’s new leader Bill John­son made

$8.1 mil­lion in to­tal com­pen­sa­tion last year, ac­cord­ing to pub­lic doc­u­ments. The Knoxville News Sentinel in Ten­nessee said that’s more than any other fed­eral em­ployee, any­where.

John­son was named CEO late Wed­nes­day as the util­ity, strug­gling in Chap­ter 11 bank­ruptcy, faces enor­mous pres­sure from Cal­i­for­nia reg­u­la­tors and elected of­fi­cials to im­prove its safety record. PG&E es­ti­mates that it could have to pay $30 bil­lion to cover li­a­bil­i­ties from the Oc­to­ber 2017 wild­fires and last Novem­ber’s Camp Fire, the worst fire in Cal­i­for­nia’s his­tory. He is wrap­ping up his ten­ure in Ten­nessee this week and takes over at PG&E in late April.

In a pre­pared state­ment ac­com­pa­ny­ing PG&E’s an­nounce­ment, John­son, 65, pledged a “stead­fast com­mit­ment to pro­vid­ing safe and re­li­able power.” PG&E said the Ten­nessee Val­ley Au­thor­ity “achieved the best safety records in its 85-year his­tory” dur­ing John­son’s six years as CEO of the TVA, which was founded dur­ing the New Deal to de­liver elec­tric­ity to parts of the South­east. He was un­avail­able for com­ment.

PG&E wouldn’t dis­close Thurs­day how much John­son will earn, other than to say it will be made pub­lic later and will be sub­ject to ap­proval of the bank­ruptcy judge.

The util­ity added that it sets ex­ec­u­tive pay in line with other com­pa­nies in its in­dus­try, and that more than half of John­son’s in­cen­tive pay “will be di­rectly tied to safety per­for­mances and met­rics.” Ex­ec­u­tives re­ceive a com­bi­na­tion of base salary and in­cen­tive pay.

For­mer CEO Geisha Wil­liams, who re­signed just be­fore PG&E filed for bank­ruptcy in Jan­uary, made $8.6 mil­lion in 2017, the last year for which com­pen­sa­tion records are avail­able. She also was el­i­gi­ble for a $2.6 mil­lion sev­er­ance pack­age. PG&E has been led by an in­terim CEO, John Si­mon, since Wil­liams left.

John­son and the re­for­mu­lated PG&E board of di­rec­tors – ap­pointed un­der a deal bro­kered

by three hedge funds that own a com­bined 10 per­cent PG&E stock – have al­ready re­ceived a luke­warm wel­come from some Cal­i­for­nia of­fi­cials.

Gov. Gavin New­som said the new board has too many “Wall Street in­ter­ests.”

John­son’s $8.1 mil­lion in com­pen­sa­tion last year rep­re­sented a 22 per­cent in­crease from the year be­fore, ac­cord­ing to fil­ings with the Se­cu­ri­ties and Ex­change Com­mis­sion. Other top TVA ex­ec­u­tives also got sig­nif­i­cant in­creases, in­clud­ing a 22 per­cent hike for the agency’s chief op­er­at­ing of­fi­cer and a 24 per­cent raise for its gen­eral coun­sel.

John­son has worked in the util­ity in­dus­try for decades, and has ca­reer has taken some odd but lu­cra­tive turns. In 2012 he was set to run North Carolina-based Duke En­ergy af­ter Duke merged with his old com­pany. His ten­ure at Duke lasted ex­actly one day but he walked away with an exit pack­age widely re­ported at $44 mil­lion. His abrupt de­par­ture from Duke hasn’t been ex­plained.

The TVA has been dogged by se­ri­ous prob­lems stem­ming from the cleanup of a ma­jor coalash spill in Kingston, Tenn., in 2008. Ja­cobs En­gi­neer­ing Group, the con­trac­tor TVA hired to clean the mess, is be­ing sued by work­ers over se­ri­ous health prob­lems that re­port­edly killed at least 40 em­ploy­ees.

The TVA isn’t be­ing sued, but dis­closed to the Se­cu­ri­ties and Ex­change Com­mis­sion in Jan­uary that it “could be con­trac­tu­ally ob­li­gated to re­im­burse Ja­cobs for some amounts” of the fi­nan­cial dam­ages. Mean­while, the Knoxville news­pa­per re­ported this week that em­ploy­ees at two other TVA plants are be­ing ex­posed to a form of coal ash and an­other dan­ger­ous sub­stance, flue gas.

Mag­gie Shober of the South­ern Al­liance for Clean En­ergy, an ad­vo­cacy group based in Ten­nessee, said the TVA isn’t blame­less for the cleanup prob­lems in Kingston. “The buck stops there; they have to be held re­spon­si­ble for who they hire,” she said.

In a state­ment re­leased a month ago, the TVA said it “put the safety of its work­ers and con­trac­tors first” in the coal spill cleanup. Jim Hopson, a spokesman for the TVA, said the cleanup was mostly com­pleted be­fore John­son joined the TVA in early 2013.

PG&E de­clined to com­ment on the coal cleanup.

Shober also faulted John­son’s com­mit­ment to so­lar power and other forms of re­new­able en­ergy – a po­ten­tially del­i­cate is­sue in light of Cal­i­for­nia’s pledge to wean it­self off fos­sil fu­els in the com­ing years. Ac­cord­ing to Shober, the TVA dur­ing John­son’s ten­ure has lagged other utilities in the South­east in shift­ing to re­new­ables.

The TVA gen­er­ated 13 per­cent of its power last year from hy­dro and so­lar en­ergy, plus an­other 40 per­cent from nu­clear. One third of PG&E’s power is 33 per­cent re­new­able, but clean-en­ergy ad­vo­cates are wor­ried that the util­ity will use the bank­ruptcy case to opt out of some of its pur­chase con­tracts with so­lar providers. PG&E has filed a court ac­tion de­mand­ing the au­thor­ity to sever some of those con­tracts, not­ing that much of its so­lar power is be­ing de­liv­ered at “above-mar­ket rates.”

With Cal­i­for­nia law re­quir­ing utilities to be 60 per­cent re­new­able by 2030, “that’s go­ing to re­ally re­quire procur­ing un­prece­dented amounts of re­new­able en­ergy, so­lar and wind,” said Adam Brown­ing at Vote So­lar, an Oak­land ad­vo­cacy group.

“We de­serve lead­er­ship that is both en­thu­si­as­tic about the goal and has a track record of be­ing able to de­liver on it,” Brown­ing said. “(John­son’s) re­sume is heavy on coal and gas.”

How­ever, Jan Smut­nyJones of the In­de­pen­dent En­ergy Pro­duc­ers As­so­ci­a­tion in Sacra­mento, which rep­re­sents re­new­able en­ergy com­pa­nies, said John­son’s abil­ity to straighten out PG&E is the most press­ing is­sue. With­out a healthy PG&E, the state can’t achieve its cleanen­ergy goals, he said.

“The No. 1 pri­or­ity ... is we need to get PG&E sta­ble and the fire sit­u­a­tion un­der con­trol,” he said.

The TVA gets 26 per­cent of its elec­tric­ity from coal, al­though that’s down from 58 per­cent in 2007. And the agency made waves in Fe­bru­ary by agree­ing to close a coal plant in Ken­tucky in 2020.

Bill John­son

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