The person to lead California utility giant PG&E Corp. out of the biggest utility bankruptcy in U.S. history may be Bill Johnson, the outgoing chief of the Tennessee Valley Authority, a federally operated utility.
Johnson is PG&E’s top pick for chief executive, people familiar with the situation said, while cautioning that the company hasn’t made a final decision and is still discussing the potential hire. The California utility — which is the parent company of Pacific Gas & Electric Co. — is also close to picking new directors for its board, they said, asking not to be identified because the information wasn’t public.
PG&E has been searching for a new chief since Geisha Williams resigned in January, two weeks before the company filed for Chapter 11 bankruptcy protection to deal with an estimated $30 billion in liabilities from wildfires that its equipment may have ignited. State officials and PG&E investors alike have been pressing the company for a management overhaul.
PG&E declined to comment. Johnson, who announced his retirement from TVA in November, wasn’t immediately available for comment. He is expected to step down to make way for a new chief executive at TVA who begins in April. TVA spokesman Jim Hopson said in a statement that the utility was unaware of Johnson’s plans after his departure.
Johnson is perhaps best known as the man who served as CEO of North Carolina power giant Duke Energy Corp. for less than a day. He was appointed as part of the company’s $17.8-billion takeover of Progress Energy in 2012 but was replaced eight hours later with James Rogers, the former CEO of Duke who was supposed to become executive chairman. Johnson was appointed that same year to his post at TVA, a federal agency that supplies electricity to power companies serving 10 million people in the Southeast.
While nailing down a CEO pick, PG&E is also nearing an agreement with investors represented by law firm Jones Day that could see the company’s board revamped in the coming weeks, people familiar with the matter said. They said the investors hold about 40% of PG&E’s stock and have discussed nominating at least nine members to the company’s board.
The new board probably won’t include candidates from a competing slate proposed by activist investor BlueMountain Capital Management, said the people. PG&E and Jones Day may announce an agreement by next week, they said, while cautioning that talks are ongoing and may still fall apart.
Representatives for Jones Day didn’t immediately respond to requests for comment. BlueMountain declined to comment.
The investors represented by Jones Day and BlueMountain have been wrangling for control of the utility’s leadership for weeks. BlueMountain nominated 13 directors, including Jeff Ubben, CEO of activist investor ValueAct Capital Management. Earlier on Tuesday, PG&E delayed the deadline for nominating new directors for the fourth time, giving shareholders until March 19 to propose candidates.
California’s chief utility regulator, Michael Picker, told interim PG&E CEO John Simon in a phone conversation Monday that the company will have to explain to the state why specific board members were selected. Picker said in a filing that he had called the company to “emphasize the critical importance” that PG&E be led by people who can ensure it “is operated safely and can manage the dynamic risks posed by climate change.”