TURN demands that shareholders, not ratepayers, pay for failed PG&E CEO Peter Darbee’s golden parachute.
SAN FRANCISCO Pacific Gas & Electric Corp.’s top executive is stepping down with a $35 million retirement package following a "challenging year" that included a gas pipeline explosion in a San Francisco suburb that killed eight and destroyed 38 homes, the company announced Thursday.
Chairman, chief executive and President Peter Darbee will retire on April 30, PG&E said in a statement.
Lee Cox, a former president and CEO of AirTouch Cellular and a member of PG&E’s board since 1996, will serve as interim chairman, CEO and president, the San Francisco-based energy company said. A new permanent chief will be announced in the weeks ahead, as federal and state investigations into the blast continue.
Darbee spent the first half of his career in the financial services industry before joining PG&E more than a decade ago, and now plans to devote himself to nonprofit work, said Brian Hertzog, a spokesman for the parent company’s utility division, PG&E Co. Darbee, 58, will leave with a $35 million retirement package, but the value of the executive’s stock holdings could fluctuate depending on future market circumstances, he added.
"Going forward, we have to regain the confidence that in some cases we’ve lost over the past year from some of our customers, regulators and others," Hertzog said. "Mr. Darbee thinks new leadership is the best way to do that."
The September blast on a 44-year-old transmission line in San Bruno ignited a fire that raged for an hour and 40 minutes and sent dozens of people to the hospital for burn treatment. The National Transportation Safety Board has yet to determine a cause, but said in its initial investigation findings that the initial blaze would have burned out much sooner had automatic shut-off valves been in place.
Consumer advocates said Darbee’s resignation was long overdue, and railed against a corporate structure that will direct some ratepayer money to pay for a portion of Darbee’s pension.
"PG&E not only needs to clean house, it needs to change priorities, and focus spending on safety, reliability and customer service, rather than executive perks and excesses," said Mark Toney, executive director of San Francisco-based The Utility Reform Network. "Not one more dime of customers’ money should be spent on rewarding Darbee’s failures."
In recent months, the California Public Utilities Commission has begun crafting new pipeline safety regulations, and federal transportation officials have pressed for pipeline companies to speed up efforts to repair and replace aging oil and gas lines. The commission approved a plan last week that requires PG&E to update officials on crucial safety work done on its natural gas pipelines over the next three years.
Darbee’s departure will hopefully allow the company to hire someone with long-standing experience in the energy industry, commission President Michael Peevey said Thursday.
"While obviously the company under his leadership has been responsible for several poor and consequential decisions, Mr. Darbee’s commitment to PG&E and its constituents is unquestioned," Peevey said in a statement. "The CPUC urges the company to return to its roots by hiring the most technically competent person."
The company has launched some initiatives to strengthen the management of its natural gas system, but could face fines if it cannot produce documents proving that its high-pressure transmission lines have been operating safely.
Earlier this month, the company’s chief operating officer and senior vice president of engineering and operations also announced they were resigning.