PG&E Corp. said Friday that 11 of its 14 directors would be leaving its board, mostly complying with a demand from California Gov. Gavin Newsom and the president of the California Public Utilities Commission for a complete replacement of the board.
Among those exiting will be PG&E Chair Nora Mead Brownell, a former FERC commissioner and Pennsylvania utility regulator. Kristine Schmidt, a former member of CAISO’s Western Energy Imbalance Market Governing Body who was an adviser to Brownell at FERC, will also be leaving.
The announcement was part of PG&E’s first-quarter earnings report.
PG&E gave no date for its changes at the top. The holding company and its main utility subsidiary Pacific Gas and Electric Care trying to emerge from Chapter 11 bankruptcy by June 30, the deadline to participate in a state fund to insure investor-owned utilities from future wildfires.
CEO Bill Johnson, who recently announced he will be retiring at the end of June and intends to move on to academia, said in a news release accompanying the first-quarter earnings report that PG&E is on track to meet the June deadline. (See PG&E CEO Johnson Says He’ll Step Down.)
“We have developed a plan of reorganization that has the support of a broad coalition of stakeholders, including the governor’s office,” Johnson said. “Our plan compensates wildfire victims fairly, resolves our liabilities, assumes the collective bargaining agreements with our labor unions and is energy-bill-neutral for our customers.”
PG&E filed for bankruptcy in January 2019, after devastating wildfires left it owing an estimated $30 billion to fire victims and insurers. The company has agreed to pay $13.5 billion to victims of fires in 2015, 2017 and 2018 and $11 billion to insurance companies and hedge funds that hold third-party subrogation (insurance) claims. It will also pay $1 billion to local governments affected by wildfires.
The next round of leadership changes will be the second in about 14 months. PG&E hired Johnson as CEO on May 1, 2019, its third chief executive in two years. Ten directors were also replaced, with Brownell and Schmidt among those joining what PG&E called its refreshed board.
In the impending turnover, Andrew Vesey, CEO of Pacific Gas and Electric, will stay in his position, PG&E said.
PG&E said the three board members who will remain are Bill Smith, a retired AT&T executive who will become interim CEO when Johnson leaves; Cheryl Campbell, previously with Xcel Energy; and John Woolard, CEO of Meridian Energy. All were named to the board last year.
“Smith is the retired president of AT&T Technology Operations … and brings more than 35 years of experience in the telecommunications industry including overseeing operations, planning, engineering, construction, maintenance and a field workforce of more than 100,000 employees,” PG&E said.
Campbell brings safety experience, a qualification that Newsom and PUC President Marybel Batjer have insisted must be a major part of a revamped PG&E board. Newsom and Batjer called for a replacement of PG&E’s entire board with new directors, at least half of them Californians. (See CPUC President Wants More Control Over PG&E.)
Newsom and Batjer have yet to say whether PG&E’s plan to leave three current directors in place will meet their expectations. The CPUC must still approve PG&E’s Chapter 11 reorganization plan.
The company noted it received a proposed decision from the CPUC on April 20 that found its reorganization plan generally complies with Assembly Bill 1054, which created the wildfire insurance fund.
PG&E reported first-quarter GAAP income of $371 million ($0.57/share), compared with income of $136 million ($0.25/share) in 2019. The company said its GAAP results were impacted by $205 million in after-tax costs related to the bankruptcy.
Its non-GAAP earnings, which exclude non-core items, were $576 million ($0.89/share), compared with $546 million ($1.04/share), in the first quarter of 2019.