The board of directors at NB Power has removed its top executive as the Crown corporation embarks on a plan to bring about “transformational change.”
The company issued a statement Monday that president and CEO Keith Cronkhite would be stepping down from the position and that Lori Clark, the company’s senior vice-president operations would be appointed to the role on an acting basis.
In an interview with CBC News, Charles Firlotte, chair of NB Power’s board, confirmed the decision to remove Cronkhite was made by the board.
“The board is looking forward to the future and the energy sector in North America — indeed globally — is undergoing massive, massive change, transformational-like, and we need to follow suit.
“And we are also burdened with some pretty significant debt as well, and so we have a steep climb over the next few years and we’re looking toward a transformational change from what NB Power is today, which is the last of the great monopolies , if you will, to an efficient energy provider for all New Brunswickers.”
NB Power did not make Cronkhite available for an interview Monday afternoon.
His exit comes a little more than two years after he took on the role in April 2020.
A brief biography on NB Power’s website describes him as having more than 30 years of industry experience.
He doesn’t say how long he was with NB Power but that he 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.
At the time Cronkhite became CEO, NB Power had just faced a wave 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 debt, which New Brunswick’s auditor-general in 2020 said represented 94 per cent of the company’s equity.
The Blaine Higgs government has ordered the utility to reduce its debt to 80 per cent of equity by 2027, but in the 2020-21 fiscal year, its debt went up by $9 million.
Natural Resources and Energy Development Minister Mike Holland was not made available for an interview, but in an email statement said he reviewed the board’s recommendation to fire Cronkhite, and ultimately accepted it.
“The Board of Directors has our full support as it embarks on this corporate transformation for improved performance,” Holland said.
Launching strategic review
Along with its decision to remove Cronkhite, NB Power has hired PricewaterhouseCoopers to lead a strategic review, “which will include identifying immediate ways to optimize the current cost structure and meet debt obligations, as well as identifying alternative solutions to meet New Brunswickers’ power needs in a cost competitive, reliable and environmentally sustainable way,” according to its news release.
The board is also starting a search for a new CEO, which is expected to take “several” months.
Speaking to CBC News, Firlotte said an example of new strategies to meet the province’s energy needs could look like what was done by Saint John Energy with its Burchill wind-turbine program.
“We have a large coal-fired plant in in Belledune that has a life expectancy of just six or seven years, at least in burning coal, and Coleson Cove, oil-fired as well,” Firlotte said.
“So those are going to be essentially stranded assets that we have to replace and we have to make that migration toward, toward renewables as well, to be sure.”
Change a good thing, say environmental advocate
Louise Comeau, director of climate change and energy solutions with the Conservation Council of New Brunswick agrees NB Power needs to significantly pivot in the way it operates.
“The whole world is moving toward using electricity day-to-day in their lives, and NB Power is not ready for that future at all,” Comeau said.
Comeau said large electricity utilities tend to be “conservative” in the way they operate, leaving them slow to respond to new challenges and changes in technology.
She said as an example. the company has poured money into the Point Lepreau Generating Station, leading to much larger debt.
“And that affects rates and it limits our options for the future, particularly around the need for renewable energy, more efficiency, a more flexible energy system.
“We have a fairly traditional approach to that, and we need to think about a new way to generate electricity and to manage electricity.”
A surprise for some
Cronkhite’s firing came as a surprise to Bathurst West-Beresford MLA Rene Legacy, who serves as energy critic with the Liberals.
He said he has spoken with Cronkhite during house committee meetings and found him to be intelligent and well-spoken.
Plus, he thought NB Power was already heading in a new direction under his leadership, especially the recent amendments to the Electricity Act that give the company the ability to pursue new revenue-generating ventures.
“I guess my concern is in the last year-and-a-half, there’s been a lot of files brought to the legislature around essentially setting a new direction, setting plans,” Legacy said.
“And my understanding was Mr. Cronkhite was the architect of all this, so how do we tie in the fact that, you know, a person that was essentially in charge of all these changes is not there anymore?”
Legacy said NB Power’s board also appears to be sending a confusing message over its priorities, and whether paying down its debt takes precedence over investing in new green technologies.
Whoever takes over as the next CEO, Kent North MLA Kevin Arseneau said he hopes they plot a long-term vision that sees the utility generating all of its electricity with renewable sources.
“What’s extremely important when we talk about NB Power is that it’s a Crown corporation, it’s a public service,” he said.
“And so they need to be at the service of the population of the province, moving forward with renewable energies and in a realistic and sustainable way, and bringing, obviously, our solar and wind projects up.”