The board of NB Power has fired its chief executive officer as Crown embarks on a plan to bring about “transformational change.”
The company released a statement Monday that President and CEO Keith Cronkite will be stepping down from the position and that Laurie Clark, the company’s senior vice president of operations, will be appointed to the role on the basis of representation.
In an interview with CBC News, Charles Firlotte, chairman of NB Power, confirmed that the decision to remove Cronkhite was made by the board of directors.
“The Board of Directors is looking to the future and the energy sector in North America – indeed globally – is undergoing massive, massive transformation-like change, and we need to follow suit.
“We’re also saddled with some pretty significant debt, so we’ve seen a sharp rise over the next few years and we’re looking toward a transformational change from what it is today NB Power, the last of the major monopolies, if you will, into an efficient power supply for all of the New Brunswickers.”
NB Power did not make Cronkhite available for an interview on Monday afternoon.
His exit comes just over two years after he took office in April 2020.
A brief resume on NB Power describes him as having over 30 years of experience in the industry.
The report does not mention his tenure with NB Power but he has held positions of increasing responsibility within the operations and corporate departments, including his previous role as Senior Vice President of Business Development and Strategic Planning.
By the time Cronkite became CEO, NB Power had just faced a flurry of public scrutiny for its investment in Florida-based Joi Scientific’s plan to turn seawater into electricity.
It was also facing pressure to reduce its $4.9 billion in debt, which New Brunswick’s auditor general said in 2020 represented 94 percent of the company’s equity.
The Blaine Higgs government ordered the Corporation to reduce its debt to 80 percent of equity by 2027, but in the 2020-21 fiscal year, its debt rose by $9 million.
Natural Resources and Energy Development Secretary Mike Holland was not available for an interview, but in an emailed statement he said he had reviewed the board’s recommendation to fire Cronkite, and eventually accepted it.
“The board has our full support as it embarks on this corporate transformation to improve performance,” Holland said.
Launching the strategic review
Alongside its decision to remove Cronkhite, NB Power has appointed PricewaterhouseCoopers to lead a strategic review, “which will include identifying immediate ways to improve the current cost structure and meeting debt obligations, as well as identifying alternative solutions to meet New Brunswickers’ energy needs in a cost-competitive, reliable and environmentally sustainable manner.” , according to its news release.
The board is also beginning the search for a new CEO, which is expected to take “several” months.
Speaking to CBC News, Firlotte said one example of new strategies to meet the county’s energy needs could look like what Saint John Energy has done through its Burchill wind turbine program.
“We have a big coal-fired plant in Peledon with a life expectancy of only six or seven years, at least burning coal, and Colson Cove, oil-fired as well,” Verlott said.
“So these are going to be basically stranded assets that we have to replace and we have to make this migration towards renewables as well to make sure.”
Changing is a good thing, says environmentalist
Louise Cuomo, director of climate change and energy solutions at the Conservation Council of New Brunswick, agrees that NB Power needs to pivot significantly into the way it operates.
“The whole world is moving towards using electricity every day in their lives, and NB Power is not ready for that future at all,” Cuomo said.
Cuomo said large electricity utilities tend to be “conservative” in the way they operate, which makes them slow to respond to challenges and new changes in technology.
She said as an example. The company pumped money into the Point Lepreau power plant, which resulted in much larger debt.
“This affects rates and limits our options for the future, particularly in terms of the need for renewable energy, more efficiency, and a more resilient energy system.
“We have a fairly traditional approach to that, and we need to think about a new way of generating electricity and managing electricity.”
surprise for some
Cronkite’s expulsion came as a surprise to Bathurst West-Beresford MLA Rene Legacy, who works as an energy critic with the Liberals.
He said he spoke with Cronkhett during the House committee meetings and found him to be intelligent and well-spoken.
In addition, he believed that NB Power was already heading in a new direction under his leadership, especially recent amendments to the Electricity Law that give the company the ability to pursue new revenue-generating projects.
“I think my concern has been in the last year and a half, there have been a lot of files that have been submitted to the legislature about setting a new direction, making plans,” Legacy said.
“And what I understand is that Mr Cronkite was the architect of all this, so how do we relate to the fact that the person who was primarily responsible for all these changes doesn’t exist anymore?”
Legacy said the NB Power board also appears to be sending a confusing message about its priorities, and whether paying its debts takes precedence over investing in new green technologies.
Regardless of who takes over as CEO next, Kent North MLA Kevin Arseneau said he hopes to chart a long-term vision that sees utilities generate all of their power from electricity using renewable sources.
“What is very important when we talk about NB Power is that it is a subsidiary of Crown, which is a public service,” he said.
“And so they need to be at the service of the people of the province, to move forward with the use of renewable energies in a realistic and sustainable way, and to clearly bring our solar and wind projects.”