PG&E To Purge Most Of Board In Fallout From Bankruptcy
SAN FRANCISCO (CBS / AP) — PG&E Corp. will sweep out three quarters of its board of directors to start with a mostly clean slate when it emerges from a bankruptcy case triggered by deadly wildfires ignited in Northern California by the utility's neglected electrical grid.
The decision announced Friday will leave just three of Pacific Gas and Electric's 14 current board members in place if the San Francisco company is able to win bankruptcy court approval of its plan. The plan includes $25.5 billion to cover losses from 2017 and 2018 wildfires that devastated parts of its sprawling service territory.
The purge of its board of directors still falls shy of meeting the demands of Gov. Gavin Newsom and the head of the California Public Utilities Commission, PG&E's chief regulator. Neither Newsom nor the PUC immediately responded to requests for comment Friday.
The board departures include CEO Bill Johnson, who recently disclosed his plan to surrender the reins after just 14 months on the job.
When Johnson departs this summer, he will be replaced by former AT&T executive Bill Smith, one of the three current board members staying on. The others are two executives with past experience in the energy sector: Cheryl Campbell and John Woolard.
One of the departing directors, Jeffrey L. Bleich, left the board Friday. The others will depart after PG&E emerges from bankruptcy, which it's aiming to do by June 30 to qualify for coverage from California's new wildfire insurance fund.
Most of the departing board members assumed their positions after PG&E filed for bankruptcy 16 months ago.
PG&E's choices for its future board will be closely scrutinized. Newsom, PUC President Marybel Batjer and company critics are pushing for directors from California and want them to have safety expertise to help prevent the neglect under past management and led to the wildfires that killed nearly 130 people. PG&E plans to plead guilty this month to 84 counts of involuntary manslaughter for a 2018 fire that destroyed the town of Paradise.
Besides disclosing the board shake-up, PG&E also announced Friday its financial results for the first three months of the year. The company earned $374 million during the first quarter, more than doubling its profit from the same time last year.
PG&E would have made even more more money if not for $219 million in bankruptcy costs and another $226 million in expenses tied to past wildfires.
The company may soon be facing even more costs as part of an ongoing crackdown on its business practices. That's because a federal judge overseeing a five-year criminal probation from another lethal disaster caused by an explosion in its natural gas lines ordered PG&E earlier this week to hire more inspectors to check on potential problems in its transmission system and also wants other improvements made in the way it trims trees near its power lines.
PG&E has until May 28 to outline its plans for complying with U.S. District Judge William Alsup's order.
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