Pacific Gas & Electric Co.’s top dog has retired after “a challenging year” in which a company natural-gas pipeline exploded and killed eight people and the trajectory of its stock price changed from steady ascent to precarious decay.
Peter Darbee, who stood at PG&E’s helm since 2005, is the third executive to leave the utility in recent weeks. He will depart with a retirement package worth an estimated $35 million and be replaced on an interim basis by director Lee Cox, who will earn $150,000 a month.
Asked whether Darbee was taking the fall for PG&E’s recent woes, spokesman Brian Hertzog noted that the CEO and chairman repeatedly said he was ultimately accountable for company performance. “I’d leave it at that,” Hertzog said.
Company critics called the shakeup an opportunity for PG&E to clear its name, adding that management changes must be accompanied by cultural changes. “Today’s announcement is a good start, but the company still has a long way to go to regain the public’s trust,” Assemblyman Jerry Hill, D-San Mateo, said in a statement.
Under Darbee, PG&E began focusing on conservation and renewable energy sources and won praise from environmentalists for being an early supporter of climate change legislation. It also made friends in San Francisco by contributing to the No on Proposition 8 campaign.
But Darbee’s tenure was hardly trouble free. In addition to the Sept. 9 San Bruno pipeline explosion, PG&E took heat for the way it rolled out its SmartMeter program, and for spending tens of millions of ratepayer dollars to protect its monopoly through an unsuccessful 2010 ballot measure, Proposition 16.
Perhaps more important to Darbee’s bosses on the PG&E board, its stock price is no longer sailing upward.
Although the company earns a guaranteed profit margin from ratepayers, the price of its stock took a hit after the explosion. Although it bounced back a few months later, it has since plunged again as investigators and regulators delivered more bad news about possible vulnerabilities in the company’s pipeline system.
The president of the California Public Utilities Commission, which has been criticized for failing to properly regulate the utility, issued a carefully worded statement about Darbee’s departure, recognizing the CEO’s commitment but noting that “obviously the company under his leadership has been responsible for several poor and consequential decisions.”
“The CPUC urges the company to return to its roots by hiring the most technically competent person,” President Michael Peevey said.