The chairman and chief executive of Pepco Holdings announced plans to retire from the utility provider in 2015, after a six-year tenure dominated by criticism of the company’s preparedness for and response to power outages caused by severe weather.
The board intends to name Joseph M. Rigby’s successor by September, when he will step down as chief executive, the company announced. Rigby, 57, will remain chairman of the board until Pepco’s annual shareholders meeting in 2015.
They weren’t the first storms to leave Pepco customers in the dark. A Washington Post analysis found that the utility’s aging infrastructure caused its customers to experience longer and more frequent outages than their counterparts in other major cities.
As the outcry grew, Rigby became more blunt in acknowledging Pepco’s shortcomings.
“A lot of that criticism was, frankly, deserved,” Rigby said in an interview Monday. “This company needed to recognize that we had a hell of a lot of work to do to improve the day-to-day reliability.”
Pepco Holdings doubled its budget for construction and infrastructure improvement from about $660 million in 2009 to $1.2 billion by 2012. The money was used to replace aging equipment and trim overgrown trees, among other projects.
The firm has since crafted a plan to pour $5.8 billion into construction projects between 2013 and 2018, meaning one of the new executive’s responsibilities will be to oversee those improvements.
“The challenge at that time was to keep the focus internally on the job at hand, which was as quickly as we can to improve day-to-day reliability,” he said.
The customer backlash from the service interruptions culminated in Pepco being named the “most hated company in America” in June 2011, based on data from the American Consumer Satisfaction Index.
Rigby said that Pepco continues to repair its image.
“Over a period of time, people have seen the impact of the investment [and] we have gradually rebuilt a core of confidence,” Rigby said. “But I think that’s somewhat tenuous, and that’s just a realistic view of the situation we’ve been in.”
Rigby began his career in 1979 at Atlantic City Electric, where he worked in several departments, including accounting, human resources and business transformation. He was on the transition team when the utility merged with Delmarva Power in 1996.
The combined company, then called Connectiv, was bought by Pepco in 2002. Pepco Holdings now consists of all three utility providers, which deliver electricity and natural gas to about 2 million customers in Maryland, the District, Delaware and New Jersey.
The world that Pepco and other utility providers power today is far different from the one Rigby started in 35 years ago. Consumer electronics, household appliances and workplace technology have become ubiquitous mainstays of daily life.
“Customers have, as they should, high expectations for reliability. Our lives are so dependent on a continuous source of reliable power that customers expect that,” Rigby said. “That’s different from when I started 30 years ago.”
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