CEO Bill Johnson to retire from TVA

CEO Bill Johnson to retire from TVA

Tennessee Valley Authority board is expected to pick successor in early 2019

November 14th, 2018 by Dave Flessner in Breaking News

Tennessee Valley Authority president and CEO Bill Johnson speaks during an editorial board meeting Thursday, Feb. 8, 2018 at the Chattanooga Times Free Press.

Photo by Erin O. Smith

This story was updated Nov. 14, 2018, at 4:35 p.m. with more information.

Johnson's legacy

Ways CEO Bill Johnson has helped revamp the federal utility since joining TVA in 2012:

* He reduced TVA's debt by $3.5 billion to $24.3 billion — the lowest debt on more than 25 years.

* He reduced annual operating and maintenance costs by $800 million by cutting 3,000 TVA jobs and thousands of other contractor jobs at TVA plants.

* He was paid more than $6 million in total compensation, making Johnson the highest paid federal employee in America.

* He pushed a controversial new grid access charge to shift more of power costs to cover fixed expenses.

* He finished the Unit 2 reactor at the Watts Bar Nuclear Power Plant and upgraded nuclear plant performance while negotiating sale of unfinished Bellefonte plant in Alabama.

* He bought two corporate jets and an executive helicopter to improve safety and speed of executive travel. But TVA's Inspector General said the aircraft was not always cost effective.

* He improved reliability of service to its best rate ever in 2018 with an average time of load not served of only 3.28 minutes a year.

* He invested $15 billion in new gas plants, pollution improvements and nuclear and transmission upgrades.

Source: TVA

TUPELO, Miss. — America's biggest government utility is preparing for changes in 2019.

The Tennessee Valley Authority has begun a search for a new chief executive to guide the utility into a new era for electricity use and generation after TVA President Bill Johnson announced Wednesday he plans to soon retire after six years at the agency's helm.

Johnson, who turns 65 in January, told the TVA board he plans to step down once the board selects his successor, which TVA Chairman Richard Howorth said he expects it will name "in three to four months."

Johnson helped TVA cut annual operating expenses by $800 million and pay down its debt by $3.5 billion over the past five years by eliminating 3,000 jobs and paring the size of the agency's aging fleet of coal plants. After strengthening TVA's balance sheet, Johnson said, it is an opportune time for a leadership change. TVA is preparing a new long-range power plan for a more uncertain future in which power demand is expected to stagnate or decline and more power is self-generated by consumers from solar panels, windmills and batteries.

"It's time for me to bring this chapter to a conclusion," Johnson told the TVA board. "When I came to TVA, I didn't intend to stay this long, but I caught the bug. TVA is a unique critter and working here has been a unique experience in the most positive way."

Howorth said Johnson "has done a terrific job" in streamlining TVA and connecting the utility's various stakeholders to boost economic growth in the utility's seven-state region while keeping power rates relatively flat during his six-year tenure. Howorth said replacing Johnson, only the second CEO for TVA since the governing structure of the New Deal agency was revamped in 2005, "will be a very daunting task."

TVA Director Eric Satz, who is leaving the board next month after his five-year term expires, praised Johnson's leadership and said TVA is now "at a tipping point" as it looks for a new leader at a time when distributed energy generation and new technologies challenge the 85-year-old utility.

Bob Corker statement

"Bill Johnson took the helm at a very important time for TVA and has exceeded all expectations. With a focus on economic development, improving rate competitiveness, reducing debt, and increasing customer satisfaction, Bill and his team have ensured TVA will continue to play a critical role in the economic success of the Tennessee Valley for decades to come. I thank Bill for his service and look forward to continued strong leadership from the next president and CEO."
— Sen. Bob Corker, R-Tenn.

Johnson was hired in 2012 to replace the retiring Tom Kilgore. Johnson had briefly headed Duke Energy and was paid a $44 million severance package after he helped engineer the merger of Progress Energy, which he previously headed, with Duke Energy.

At TVA, Johnson was given a compensation package worth more than $6 million a year, making him the highest paid federal employee in America. But TVA directors said Johnson's pay, even with another 6 percent raise approved Wednesday, still ranks in the bottom 25 percent of of pay levels for comparable utility CEOs.

TVA's CEO compensation "isn't anywhere close to the pay" for executives of investor-owned utilities, TVA Director Gina Lodge said.

U.S. Sen. Lamar Alexander, the Tennessee Republican who helped push for the TVA governing reforms that led to the CEO job, thanked Johnson on Wednesday and said he has "provided sound management and set TVA in the right direction for the future.

"Electric power is reliable, rates are competitive, the debt is smaller and the air is cleaner thanks to the leadership of Bill Johnson and TVA's board," he said.

U.S. Sen. Bob Corker, a former Chattanooga developer and mayor who also has pushed TVA to operate more like a business, said Johnson "has exceeded all expectations.

"With a focus on economic development, improving rate competitiveness, reducing debt, and increasing customer satisfaction, Bill and his team have ensured TVA will continue to play a critical role in the economic success of the Tennessee Valley for decades to come," Corker said.

But critics of Johnson who have objected to his pay and use of executive aircraft greeted his departure as an opportunity to restore TVA more to its original public power mission.

"For the last six years, Bill Johnson has steered TVA in the direction of serving corporate interests over public interests, evident in preferential rates and rate restructuring for corporate customers which have caused residential and small businesses' energy bills to rise," said Stephen Smith, executive director for the Southern Alliance for Clean Energy, an environmental group critical of TVA for not doing more to use and promote renewable energy. "TVA has primarily been focused on serving large corporations' interest in renewable energy, leaving behind small businesses and households that also want to take advantage of this cleaner, more independent energy choice."

But Johnson said TVA has succeeded in reducing its carbon emissions by 50 percent since 2005 and should reduce carbon emissions by 60 percent by 2020 as the utility spends a projected $8 billion over the next 20 years on renewable power. More than 1.4 million customers in the Tennessee Valley, including Chattanoogans served by EPB, now have access to solar purchase options through TVA's local distributors.

"It turns out that reducing carbon emissions makes good economic and environmental sense," Johnson said, noting that natural gas and renewable power is able to replace older, dirtier coal-fired power plants with competitive rates.

TVA's seven nuclear reactors, 30 hydroelectric dams and other purchased wind and solar generation helped the agency get more than half of its total power output this spring from carbon-free generation. A generation ago, TVA got most of its power from its fleet of coal-fired power plants.

Anti-nuclear activists balk at TVA's claims that the shift in generation is necessarily cleaner and greener.

"It may be carbon free at the nuclear plant, but it's certainly not carbon free in how TVA gets the nuclear pellets to make its power," said Sandy Kurtz, a Chattanooga environmental activist who appealed to the TVA board this week to turn to more solar, wind and other renewable sources of generation. "You are trading carbon pollution for an even more deadly radioactive pollution threat from nuclear plants. That's not a good trade-off, especially when nuclear power is so expensive."

Johnson served as vice chairman and on the executive committee of the Edison Electric Institute and was chairman of the board of directors of the Nuclear Energy Institute, an industry advocacy group for nuclear power. He now is serving as chairman of the World Association of Nuclear Operations' Atlanta Centre Governing Board.

Johnson said he has no plans beyond his TVA career "except to stay in the South that I love."

Contact staff writer Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.


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