FPL CEO Retiring Amid Probe Into Utility’s Political Actions
Credit to Author: Darrell Proctor| Date: Thu, 26 Jan 2023 17:13:40 +0000
The president and CEO of Florida Power & Light (FPL) announced he will step down from his role as leader of the utility. Eric Silagy, who became FPL’s president in 2011 and was named CEO in 2014, on Jan. 25 said he will move into a transitional role with the utility next month.
Silagy, 57, will be replaced by Armando Pimentel Jr., the former head of NextEra Energy Resources, a clean energy company and like FPL a subsidiary of NextEra Energy. Pimentel earlier served as CFO of NextEra in addition to other executive roles with the company. FPL said Silagy will leave his position on Feb. 15, and assist Pimentel in the leadership transition, before Silagy retires in May.
Silagy’s departure comes amid controversy about his and the company’s role in campaign financing in the state. Silagy and FPL have been shown to have worked with political consultants and other politically-connected groups, including some advising Republican Gov. Ron DeSantis. Reports, including from the Orlando Sentinel and Florida Times-Union newspapers, have said the company provided more than $10 million to what are characterized as dark-money groups, in efforts to control news coverage and influence elections.
“It has been an honor and privilege to lead the FPL team for more than a decade and I couldn’t be more proud of the accomplishments we have delivered to our customers and the state of Florida,” Silagy said in a statement that made no mention of the campaign finance or election allegations.
New Generation Portfolio
FPL under Silagy’s watch moved away from coal-fired power generation, shifting much of its electricity production to natural gas-fired facilities and expanding its use of solar energy. It also announced plans to develop hydrogen-fueled power. The utility has made a pledge for net-zero carbon emissions by 2045.
John Ketchum, NextEra’s chairman, president, and CEO, in a conference call Wednesday said his group is “not making a connection” between Silagy’s decision and a possible investigation by the Federal Election Commission (FEC) into the utility’s actions. Ketchum said the FEC claims against FPL would at most involve about $1.3 million in campaign contributions.
Ketchum during Wednesday’s call said he does not think FPL would be held liable under Florida law for other allegations against the utility. He said the FEC could take as long as 18 months to decide whether to launch a formal probe of the utility’s actions.
Said Ketchum: “We think that a claim like this, that’s based solely on media reports and allegations, is not the type of a claim the FEC should take up. We do not believe that the federal allegations, taken as a whole, would have a material impact on our business.”
Notably, though, the NextEra board agreed to pay Silagy his 2022 incentive payments as well as a portion of his stock and option awards, with Silagy releasing potential claims against the company. Silagy also was asked to honor two-year non-compete and non-solicitation agreements.
SEC Filing
NextEra in a filing with the Securities and Exchange Commission on Wednesday said its investigation into allegations made by the two newspapers “is substantially complete” and “based on information in our possession, we believe that FPL would not be found liable for any of the Florida campaign finance law violations.” NextEra in the filing also said it thinks FPL would be cleared of any federal elections code violations.
Silagy, speaking on Wednesday’s conference call as part of a discussion of NextEra’s fourth-quarter earnings, said that while he previously did not have a timeline to step down, he had told Ketchum early last year he would commit to staying in his role into 2023.
“When John became CEO of NextEra Energy last year, I committed to him that I would stay in my role for at least one more year and I’ve now satisfied that commitment,” Silagy said. “While saying goodbye to such a great organization is always difficult, I know that now is the right time for me to hand over the reins of FPL.
“This is the kind of job that you have to plan ahead and we’re getting ready to go in another rate case cycle,” Silagy said. “That’s a multi-year type of approach. And so to go forward longer means I’m really committing through 2026.”
“I want to thank Eric for his 20 years of dedicated service to our company, our customers and the communities where we do business,” said Ketchum. “Eric is a passionate advocate for continuous improvement and under his leadership FPL has transformed into the nation’s largest electric utility, providing our customers with the country’s most reliable service with bills significantly lower than the national average. His commitment to putting customers first was on full display last year during hurricanes Ian and Nicole, where his dedication, commitment and compassion drove the FPL team to restore power in record time and quickly put the state of Florida back on its feet. Eric has been a devoted supporter of the state and his work for a variety of organizations has helped to foster Florida’s economic growth, strengthen the state university system and grow the next generation of Florida leaders. I wish Eric and his family all the best on this next chapter in life.”
The two executives each said the past year brought many challenges for FPL, in addition to the allegations around campaign financing. Hurricane Ian caused more than $50 billion in damage along with more than 150 fatalities. Ketchum also mentioned inflationary and supply chain issues that impacted operations.
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).
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