PG&E streamlining management, implementing efficiency measures to keep customer bills affordable while investing in the future
PG&E Corp. and its unit Pacific Gas and Electric Co. announced new, streamlined management structures and a series of efficiency measures designed to support the company’s ability to continue to modernize and invest in the safety of its electric and gas systems while ensuring that its services remain affordable for customers.
“We are reducing support services costs to continue to invest in important safety initiatives and in modernizing our system to meet our customers’ future needs while keeping their bills as low as possible,” said PG&E’s Geisha Williams.
In addition to continuing to fund important safety initiatives, Williams noted that California’s clean energy goals call for significant increases in renewable energy, energy storage and energy efficiency.
As previously announced, Williams, who currently serves as president, electric, of Pacific Gas and Electric Co., will succeed Tony Earley as CEO and president of PG&E Corp. on March 1. Earley will continue to serve as executive chair of the board. Nick Stavropoulos, currently president, Gas, of Pacific Gas and Electric Co., will become its president and COO on March 1.
PG&E plans to reduce the number of officers by 15 percent, or eight positions, resulting in a flatter, more nimble decision-making structure.
The streamlined management structure is part of a broader plan to reduce costs in 2017. These projected cost reductions were reflected in PG&E Corp.’s guidance provided during its third-quarter 2016 earnings call held on Nov. 4, 2016.
The majority of the cost reductions will come from reductions in spending on materials and contracts, renegotiating terms with vendors, and reducing expenses for professional services and discretionary expenses.
In addition, PG&E will eliminate about 450 support services jobs from more than a dozen functional areas across the company. The company has identified new roles for about 60 employees, meaning that about 390 employees will be affected. The company also eliminated the roles of about 800 non-employee contractors from across the company and will not fill 500 open, non-critical positions.
Over the past four years, the company has increased its workforce by about 3,000 positions in support of safety and other operational improvements.
“None of these decisions were made lightly,” said Williams. “We greatly value the contributions of all of our employees, contractors and vendors, all of whom have made important contributions to the business. We understand that these decisions create personal hardships. At the same time, we recognize our responsibility to invest in the future to create value for our customers, our communities and our state.”
In the new organizational structure, effective March 1, reporting to Williams will be:
· Executive vice president John Simon, who will take on the role of general counsel and who will also have responsibility for environmental matters, regulatory affairs, enterprise records, and marketing and communications.
· senior vice president Steve Malnight, who will have responsibility for strategy; policy; grid integration and innovation; local, state and federal government affairs; and community relations. He also will have responsibility for energy procurement, which will continue to be led by senior vice president Fong Wan.
· senior vice president and CFO Jason Wells, who will expand upon his existing responsibilities with oversight of enterprise continuous improvement and project management.
· senior vice president of Human Resources Dinyar Mistry, and senior vice president and Chief Ethics and Compliance Officer Julie Kane, who will maintain their existing roles.
Reporting to Stavropoulos will be:
· senior vice president Pat Hogan, with responsibility for electric operations and fleet services.
· senior vice president Jesus Soto, with responsibility for gas operations and aviation services.
· senior vice president and Chief Nuclear Officer Ed Halpin, with responsibility for all generation operations.
· senior vice president Laurie Giammona, with responsibility for customer care and corporate real estate.
· senior vice president Karen Austin, with responsibility for IT and supply chain.
· John Higgins, currently vice president of Gas Transmission and Distribution Operations, will become vice president of Safety and Health for Pacific Gas and Electric Co., reporting directly to Stavropoulos in recognition of the importance of safety. Higgins’ responsibilities will include overseeing the company’s Enterprise Corrective Action Program. Todd Hohn, who joins PG&E from Underwriter Laboratories, will report to Higgins and serve as senior director of Safety and Health.