Earth Day 2011: PG&E – Change or PR Charade? (Part 3)

I’m hanging out at Asilomar, surrounded by nature. With Earth Day itself in the rear view mirror, I guess I’m basking in an Earth Week glow which began a week ago at San Diego’s gigantic EarthFair and has continued here at one of my favorite places in the world. It seems that every newspaper I pick up has another article pertaining to the Solar Tribe. In Part 1, I wrote about National Solar Quote Month, the EarthFair in San Diego and Lawrence Berkeley National Laboratories’ new study that shows how much value solar adds to solar home prices. In Part 2, I wrote about the benefits of group purchases of solar (exactly the way we do it at WholeSolar) becoming more broadly understood and put into practice. Here, in Part 3 of the Earth Day blogs, we’ll take a slight departure and suspend judgment as to whether this subject calls for Solar Tribe celebration.

Earth Day afternoon was spent at the Monterey Aquarium. What a wonderful place of learning, most of which is interactive in a way that captivates attention and leaves the child or adult with knowledge about the ocean, its living creatures and the climate change challenges it faces. We ended up spending several hours there. We could have spent another day there, as well. If you have not yet experienced the Monterey Aquarium, I highly recommend putting it on your list. As we left the aquarium and walked down Cannery Row, I saw the headlines of the Earth Day edition of the San Francisco Chronicle: “Pacific Gas & Electric CEO Resigns.” My first thought was, “It’s about time. What took him so long?” Then I bought and read the paper and started thinking.

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.

$35 million for a voluntary resignation. Hmm. I wonder what Californians would think of that, particular the affected PG&E ratepayers. We didn’t have to wait long to read a response (from mercurynews.com):

With outrage growing over PG&E’s plan to award outgoing CEO Peter Darbee $35 million as he retires under a cloud of controversy, Gov. Jerry Brown said Friday that ratepayers should not be required to pay any of Darbee’s retirement package.

“At a moment when so many Californians face foreclosure, unemployment and depressed wages, it’s about time for corporations to rein in executive compensation,” Brown said. “At the very least, California ratepayers should not be footing the bill for this.”

As Brown weighed in on the controversy, however, the California Public Utilities Commission, which regulates PG&E and other utilities, acknowledged late Friday that ratepayers will pick up nearly one-third of the bill for Darbee’s retirement.

It turns out, that with recently issued stock options, Darbee’s actual payoff will be nearer $40 million. I guess this makes up for the $2 million cut in pay that Darbee was forced to take for being CEO during such a tough year for PG&E as 2010. In addition to the San Bruno disaster, Darbee supposedly led the a $45 million spending spree on a statewide initiative to hamstring local competition to PG&E’s power business and followed that losing debacle with a very clumsy roll out of wireless Smart Meters. So, are we to believe that with Darbee gone that PG&E will “straighten up and fly right?”

The irony of all of this was that Peter Darbee had such a promising start as PG&E’s CEO. He was billed as an outsider, a guy with “fresh eyes.” The San Francisco Chronicle wrote it well today in its editorial:

There were striking and bold steps at the start such as his conviction that climate change was real and that PG&E should adopt policies on renewable energy to meet the problem.

What happened? Was the initiative decision his or that of the PG&E Board of Directors? Was Darbee really the problem or was he one of two sacrificial lambs? So far, the PG&E CEO and COO have resigned. Its President, Christopher Johns and its Board remain in their entirety. One of the Board members, Lee Cox, will serve as Interim Chairman and CEO. Cox has been on the PG&E Board for 15 years. According to the Chronicle, speculation is that the search for Darbee’s permanent replacement is nearing completion. Michael Peevey, head of the California Public Utilities Commission, is encouraging that Darbee’s permanent replacement be someone with deep experience in the utility industry. State Assemblyman Jerry Hill, who represents San Bruno, has a totally opposite point of view:

“It has to be someone from outside, someone who can come in with no baggage,” said Assemblyman Jerry Hill. ” The utility industry and the regulators seem to have an incestuous relationship.”

Clearly, it remains to be seen whether Darbee’s resignation is good news or not. Earth Week certainly has not been uneventful.