PG&E CEO to Leave With Utility at Brink of Bankruptcy
PG&E CEO to Leave With Utility at Brink of Bankruptcy
(Bloomberg) -- PG&E Corp. Chief Executive Officer Geisha Williams is leaving as California’s largest utility owner nears potential bankruptcy.
The San Francisco-based company has begun a search for a new CEO following Williams’ departure, according to a statement issued Sunday. PG&E general counsel John Simon will take the helm in the meantime. Williams, 57, took over as CEO in March 2017 and is leaving after a catastrophic three months for PG&E.
“I will be leaving PG&E,” Williams said in a separate email, without providing a reason for her departure. “I value the opportunity I’ve had to lead PG&E and wish all of my colleagues well.”
The company has seen two-thirds of its market value wiped out since November’s Camp Fire -- the deadliest wildfire in California’s history. Investigators have been probing whether the power giant’s equipment ignited the fire, along with its potential liability for blazes that devastated Northern California’s wine country in 2017 -- costs that may tally as much as $30 billion. Its debt has been downgraded to junk and state regulators have called for a management shakeup.
“While we are making progress as a company in safety and other areas, the board recognizes the tremendous challenges PG&E continues to face,” Chairman Richard Kelly said in the company’s statement.
The company’s deepening financial crisis has forced California regulators and policy makers 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 Monday that it may make a Chapter 11 filing within 15 days, people familiar with the plan said Saturday. Such a notice would be required by state law.
The departure of Williams -- one of the world’s most powerful women in business -- thins the ranks of the roughly two dozen women running S&P 500 companies. She was one of a group of women occupying the C-suite at power companies -- including Duke Energy Corp.’s Lynn Good, El Paso Electric Co.’s Mary Kipp, PNM Resources Inc.’s Pat Vincent-Collawn and Sunrun Inc.’s Lynn Jurich.
The daughter of Cuban political refugees, Williams became the nation’s first Latina CEO of a Fortune 500 company when she took over PG&E. Her departure follows the exit of three PG&E executives earlier this month -- Patrick Hogan, senior vice president of electric operations at PG&E’s utility unit; Kevin Dasso, vice president of electric asset management; and Gregg Lemler, vice president of electric transmission.
Under Williams, PG&E spent millions of dollars trying to convince state lawmakers to change a legal doctrine known as inverse condemnation, under which utilities are liable for damages if their equipment is found to have sparked a wildfire, even if they weren’t negligent. Williams called the doctrine bad public policy that made utilities the default insurer in the state. She said the wildfires were a symptom of climate change with hotter and drier conditions sparking more frequent and intense blazes.
While state lawmakers rejected PG&E’s request to change wildfire liability law, they did pass legislation in August that will help PG&E pay for lawsuits arising from the wine country fires. Three months later, however, the utility’s equipment again was being looked at as a possible source of the Camp Fire, which killed 86 people and destroyed the town of Paradise.
Support for PG&E’s management eroded even further in December when state regulators accused the utility of falsifying records related to locating and marking underground gas lines from 2012 through 2017 -- years in which the company was trying to convince the public that it had cleaned up its act after a 2010 pipeline blast that killed eight in San Bruno, California.
The disclosure prompted a key state lawmaker, Bill Dodd, a state senator from Napa who helped draft the fire legislation that was helpful to PG&E, to call for a management shakeup at the company.
“Enough is enough,” Dodd said.
--With assistance from David R. Baker and Peter Blumberg.
To contact the reporters on this story: Mark Chediak in San Francisco at mchediak@bloomberg.net;Kiel Porter in New York at kporter17@bloomberg.net
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Alexander Kwiatkowski, Ramsey Al-Rikabi
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