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The California Report

Large PG&E Shareholder Nominates Entirely New Board of Directors

Marisa Lagos
BlueMountain Capital, which opposed a utility's bankruptcy filing, nominates slate that includes a former California state treasurer and an ex-chair of the National Transportation Safety Board.
PG&E crews on scene of February 2019 gas line explosion on San Francisco's Geary Boulevard.  (Justin Sullivan/Getty Images)

One of PG&E's largest shareholders, BlueMountain Capital Management, nominated a full slate of directors Friday, saying the utility -- which filed for Chapter 11 bankruptcy in January -- needs an entirely new governing board.

The 13 nominees, which BlueMountain said were identified through an "extensive and rigorous search process," include former state Treasurer Phil Angelides; Kenneth Feinberg, who has overseen high-profile victims' compensation proceedings; and Christopher Hart, a former chairman of the National Transportation Safety Board.

Pacific Gas and Electric Bankruptcy

All three have experience in the public sector and dealing with consumers or victims. Angelides chaired the Financial Crisis Inquiry Commission, a body created by Congress in 2009 to probe the cause of the financial crisis. Feinberg oversaw the September 11th Victim Compensation Fund and the Deepwater Horizon oil spill fund, and advised other compensation funds.

Hart served 12 years on the NTSB and helped probe the 2010 San Bruno disaster, in which a PG&E natural gas pipeline blew up in the Peninsula suburb, killed eight people and destroyed dozens of homes.

"We believe the company must work collaboratively with the public sector and make safety, risk management, governance accountability and transparency its top priorities," BlueMountain said in a statement summarizing the qualifications of those three nominees.

BlueMountain said its search evaluated more than 170 candidates. The nominees also include five experienced utility executives and five Californians other than Angelides, including Jeffrey Ubben, founder and CEO of San Francisco investment firm ValueAct Capital.

Ubben announced Friday that one of his firm's funds had purchased 1 million shares of PG&E stock. In an interview with Bloomberg, Ubben said the utility “needs a restart to gain the trust of stakeholders,” and that a new board and management “can turn the page on a new beginning with customers, regulators, legislators.”

PG&E needs "experienced utility executives who will lead the development of a new strategic vision and ensure disciplined execution," as well as "directors with diverse backgrounds, prior board experience, financial and turnaround expertise, a commitment to clean energy, a track record of civic engagement and the proven ability to work with the public sector, as well as deep connections to the state of California," BlueMountain said in its announcement.

In a statement, PG&E said it intends to replace a majority of its board by the time of its annual meeting in May, and that it intends to continue "constructive dialogue" with shareholders, including BlueMountain.

The nominations come one day after PG&E acknowledged in an earnings filing that its equipment likely caused last year's devastating Camp Fire in Butte County. The company said it had taken a charge of $10.5 billion to cover potential liabilities from the fire.

The utility also warned that it is facing "extraordinary challenges" related to fires that its equipment caused in 2018 and 2017, and said management "has concluded that these circumstances raise substantial doubt about (PG&E's) ... ability to continue."

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