SAN FRANCISCO (CBS / AP) — 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 San Bruno 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.

KCBS’ Doug Sovern Reports:

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.

Photo Gallery: San Bruno Pipeline Explosion

“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.”

KCBS’ Doug Sovern Reports:

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.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)

Comments (12)
  1. Retire me too says:

    lmao $35 million retirement package…I would retire any job with that kind of package.

  2. Rob Chapman says:

    Wow. PG&E kills 8 people and destroys a neighborhood, and the guy responsible for running that incompetent company get $35 Million. How is that justice?

  3. Jena says:

    😦 my really good friend and her mom were 2 of the 8.

  4. dave smith says:

    American CEO compensations are out of line. CEOs of corporations from Japan and European countries do not make this sort of money. This is legalized stealing. However the rich have powerful friends in politics and media especially within the Republican establishment.

  5. Stacey says:

    It’s the same the whole world over,
    It’s the poor that get the blame,
    It’s the rich that get the pleasure,
    Ain’t it all a bloody shame.

  6. Stacey J. Weinberger says:

    It’s the same the whole world over,
    It’s the poor that get the blame,
    It’s the rich that get the pleasure,
    Ain’t it all a bloody shame.

  7. dave smith says:

    It will be very difficult to change the culture when the right-wing is beating the drum of “free market” and has enough poor right-wing drones convinced somehow they need to protect these rich people.
    Ask most people what an investment banker does and you will get a blank look. Especial if it is a right-wing /tea party supporter. If people like this exist how on earth will there be outrage in complex compensations and stealing in this nation?

    In summary, the CEOs will keep stealing…



  9. Martha Luehrmann says:

    To the Editor,
    Peter Darbee has resigned as CEO of PG&E, and TURN (The Utility Reform Network) has announced that it welcomes the resignation. Why? because, they say, “the company under his leadership has been responsible for several poor and consequential decisions” among which they mention the gas mail explosion in San Bruno and the decision to put in smart meters. While the explosion happened on Darbee’s watch, the explosion was the result of ancient mains, difficult to monitor and to maintain. The company’s response to the disaster was immediate — with help for those injured by the blast, compensation for those affected, and inquiries into what went wrong and how it could be prevented in the future. PG&E accepted responsibility for the disaster and did not try to shift blame. Instead it tried to compensate the affected people and to plan how to prevent future problems. For this, I think Darbee should be thanked, not villified.
    Then there is the matter of the smart meters. Good grief. Installing smart meters is a long-overdue decision. How can people argue against an innovation that saves the company (and the ratepayers) money, encourages users to use energy more efficiently, encourages users to move their use as far as possible into the off-peak hours, and itself uses energy less wastefully? Darbee should be praised for bringing in smart meters, as well as for his other moves towards a more ecologically friendly PG&E. Thank you, Darbee. I for one am very sorry to see you go. It is rare to get someone with your intelligence and foresight, and we will miss you.
    Martha Luehrmann

  10. Lawless says:

    PG & E is public utility company which is not profit institute, $35 million is outrageous, he should received $3.5 million not $35 million period. It’s lawless in California…

    1. Hugh Jardon says:

      no! They should have stuck him with the cost of all the family deaths under his watch. 35,000,000 shared amongst those families is a good start, but no dollar amount can buy back their lives while this assclown walks scott free with 35 mil..

      Ya just gotta love America, rewarded for failure and mayhem, he and Vick should start a college fund for the worthless.

  11. Mike Talbot says:

    If I murder 8 people and burn down some of my town can I get 35 mill???

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