N.L. Hydro cuts 7 executive positions amid Nalcor integration, eliminates bonuses
The process of integrating Nalcor into N.L. Hydro has taken a significant step, with a major leadership shakeup Tuesday that saw three executives terminated, and three others removed from the leadership team.
It's all part of a restructuring that will see the executive team at N.L. Hydro trimmed from 18 to 11 positions, with the Nalcor CEO position now officially eliminated as well.
"I am absolutely committed to moving this company forward, to rebuilding trust, and to meeting the expectations of the people of this province," N.L. Hydro president and CEO Jennifer Williams told reporters Tuesday afternoon.
The new leadership team will include 10 vice-presidents, led by Williams.
Williams would not disclose the identity of those on the leadership team, or those who were removed, saying it was a difficult day at Hydro — she was directly involved in the terminations — and she wanted to wait a few days before revealing that information.
"This is hours old for some folks," she said of the terminations.
The terminations will cost $1.5 million in one-time severance payouts, but Williams said N.L. Hydro expects to save $2.2 million annually in compensation costs.
Executive vice-president and senior vice-president titles have been removed as part of a new compensation formula for executives, and vehicle allowances and performance bonuses have also been eliminated.
As a result, executive compensation will be reduced by 35 per cent, said Williams.
"My accountability is to become a more efficient and leaner organization. So a lot of thought has been put into this. This team will now work together to continue to evolve the organization and to bring the operations together, finish the [Muskrat Falls] project, and to streamline even more [going] forward," she said.
With the troubled legacy of the controversial and Nalcor-led Muskrat Falls project continuing to cast a dark shadow over the province, the provincial government announced in June that it would remove the Nalcor brand, a Crown-owned energy corporation launched in 2007 to develop and manage the province's energy resources, and integrate its operations under Hydro.
Williams said the priority will be on operating a steady-state utility with a focus on providing safe and reliable electricity, while reducing costs and removing duplication.
"Newfoundland and Labrador Hydro has been providing an essential service to the people of this province since 1954," she said.
"Now is the time for us to renew and strengthen this company, to become the steady Crown utility that customers can rely on. Led by the new executive team, Hydro will continue to identify opportunities to reduce our operating costs, without sacrificing safety or reliability and through appropriate organizational change."
Work continues to complete the Muskrat Falls project, and integrate its assets into the provincial electricity grid, with Williams saying last month that she expects an overall completion date for the over-budget and delayed project early in 2022.
She said Hydro is committed to reducing costs wherever possible "to keep electricity rates from escalating beyond what has been committed through rate mitigation."
She said further measures will be taken next year "to ensure the organization is structured appropriately."
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