PG&E Corp. CEO Bill Johnson announced Wednesday he would retire at the end of June, by which time the utility is hoping to exit bankruptcy.

The news came after most of the major obstacles to PG&E’s Chapter 11 reorganization plan appeared to have fallen by the wayside. The only significant issue the utility faces now is how tens of thousands of wildfire victims will vote on its restructuring proposal.

“I joined PG&E to help get the company out of bankruptcy and stabilize operations. By the end of June, I expect that both of these goals will have been met,” Johnson, 66, said in a news release. “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.”

The utility said Bill Smith, a retired AT&T executive and current PG&E board member, will serve as interim CEO after Johnson’s departure and until a new chief executive is appointed.

Andrew Vesey, CEO of Pacific Gas and Electric, the primary utility subsidiary of PG&E, will continue in his role, PG&E said.

“Mr. Johnson’s resignation … does not involve any disagreement on any matter relating to PG&E Corp.’s or the utility’s operations, policies or practices,” the company said in a filing Wednesday with the U.S. Securities and Exchange Commission.

Johnson’s Tenure

Johnson, the former head of the Tennessee Valley Authority, joined PG&E on May 1, 2019, with a mandate to lead the company out of the bankruptcy it had entered 15 weeks before. He replaced former CEO Geisha Williams, who led the company during the worst of its fires and stepped down in January 2019.

Johnson served for six years as head of TVA, the federally owned electricity supplier in the Southeastern U.S. He was previously president of Progress Energy, which merged with Duke Energy in 2012. Johnson served as CEO of Duke for less than a day before leaving with a $44 million severance package, according to news reports at the time.

His compensation at PG&E has included a $2.5 million base salary, a one-time transition payment of $3 million and an annual equity award with a target of $3.5 million.

He also received performance-based stock options that could become valuable if PG&E’s stock price increases to more than $25/share in the next four years, according to PG&E’s 2019 proxy statement filed with the SEC. If PG&E stock were to return to its prior worth of roughly $47 to $70/share, he could make tens of millions of dollars by exercising his options.

PG&E also said Wednesday it would release its first-quarter earnings report on May 1 before the market opens and will host an earnings call with financial analysts.

The company’s stock has been on a roller coaster since Johnson took the reins, based largely on news of how PG&E was faring in its fight to exit bankruptcy.

The stock fell as low as $5/share on Oct. 25, 2019, as a wildfire its equipment was suspected of starting burned through Sonoma County wine country, and the company instituted massive blackouts throughout Northern and Central California to prevent additional fires. Johnson bore the brunt of heavy criticism from the public and elected officials over the blackouts. (See PG&E Stock Plummets amid Wildfires, Shutoffs.)

PG&E stock rose to nearly $24/share last June, after California Gov. Gavin Newsom pitched a plan to insure PG&E and other utilities against wildfire liabilities going forward. PG&E is trying to exit bankruptcy by June 30 to participate in the $21 billion insurance fund under the terms of last year’s Assembly Bill 1054. The program will be paid for equally by ratepayers and utilities.

PG&E’s stock price stood at exactly $11/share at 4 p.m. ET Wednesday, having fallen precipitously since the COVID-19 pandemic-induced economic slowdown took hold in late March. The stock price has been buoyed in recent weeks by developments indicating PG&E is on track to leave bankruptcy by June 30.

Obstacles Falling

Newsom, who had been an outspoken critic of PG&E and repeatedly threatened a state takeover of the utility, withdrew his objections to PG&E’s restructuring proposal, provided it wraps up its Chapter 11 proceedings by the end of June. PG&E and the governor signed an agreement in mid-March creating a streamlined process for the state to buy the utility if it doesn’t leave bankruptcy by June 30. (See PG&E Deal with Gov. Allows for Utility’s Sale.)

On Monday, the California Public Utilities Commission, which must approve PG&E’s reorganization plan, suggested it would accept the plan with some adjustments. A proposed decision by an administrative law judge incorporates a program of enhanced oversight and enforcement for PG&E first proposed by CPUC President Marybel Batjer. PG&E has already agreed to most of Batjer’s terms.

Also on Monday, Commissioner Clifford Rechtschaffen contended the CPUC should raise its penalty against PG&E to nearly $2 billion — the largest fine the commission has ever levied — for its role in starting the catastrophic wildfires of 2017 and 2018.

The fires included the massively destructive North Bay, or wine country, wildfires of October 2017 and the Camp Fire, which killed 85 people and leveled much of the town of Paradise.

PG&E filed for bankruptcy in January 2019 in the aftermath of those fires.

Rechtschaffen’s proposal would modify a prior settlement agreement between PG&E and the CPUC’s Safety Enforcement Division, effectively “increasing the penalty amount in the settlement by $262 million because of the strong evidence of pervasive violations and unprecedented harm, including loss of life, that resulted from the wildfires,” the CPUC said in a news release.

The CPUC noted that PG&E agreed to plead guilty last month to 84 counts of involuntary manslaughter from the Camp Fire, the deadliest wildland blaze in state history. The utility reached an agreement with prosecutors to pay nearly $4 million in fines and costs related to the fire. (See Judge: PG&E Can’t Pay Criminal Fines from Victim Trust.)

The commission will take up PG&E’s reorganization plan and Rechtschaffen’s proposed penalty at its May 21 voting meeting.

If the CPUC approves the plan, and PG&E accepts the increased fine, it would leave the federal bankruptcy court in San Francisco as the company’s major remaining obstacle. U.S. Bankruptcy Judge Dennis Montali has said he wants PG&E to meet the June 30 deadline, but he has refused before to take steps against the wishes of wildfire victims.

Those victims — about 70,000 to 80,000 — are among the 250,000 creditors and interested parties who must vote on PG&E’s bankruptcy plan by May 15.

Some victims have argued against the proposal. PG&E intends to fund a $13.5 billion trust for wildfire victims with half cash and half stock, and victims worry about the company’s stock declining in value with no guarantee of its worth at the time of dispersal. They also argue the restructuring provides insufficient assurance that PG&E won’t be a “killer company” in the future.

Whether those encouraging a “no” vote can sway enough of their fellow victims to defeat the plan remains to be seen.