In another high-profile leadership shuffle at a major U.S. power generating company, PSEG’s longtime president and CEO Ralph Izzo on Sept. 1 passed leadership of the regulated infrastructure company to Ralph LaRossa, who was previously PSEG’s chief operating officer (COO).
Izzo, who will continue to serve as executive chair of the PSEG board until December 2022, will also pass that role to LaRossa. LaRossa will become chair of the PSEG Board on Jan. 1, 2023, when he will also join the executive committee of the PSEG board.
The leadership milestone at PSEG follows several notable leadership changes across the industry in recent months. In August, Entergy Corp. Chairman and CEO Leo P. Denault announced he would retire in 2023, ending a decade-long role as the head of the New Orleans–headquartered power generating giant. Denault will be succeeded by Andrew “Drew” Marsh, Entergy’s current executive vice president and chief financial officer. Earlier in August, American Electric Power’s (AEP’s) long-serving Chairman, President, and CEO Nick Akins announced he would step down as CEO on Jan. 1, 2023. Akins will pass his role to Julie A. Sloat, AEP executive vice president and chief financial officer. Longtime Southern Co. CEO Tom Fanning is also reportedly planning to announce his retirement.
Izzo Led PSEG Out of Merchant Volatility
PSEG’s Izzo, who served as the Newark, New Jersey–headquartered company’s CEO for 15 years, announced his retirement in April. Under Izzo’s leadership, PSEG navigated a definitive period of transformation characterized by multiple industry disruptions. Changes for PSEG, a company established in 1903, were dramatic as it grappled with more stringent environmental policies, decentralization and electrification, a boost in shale gas production, a proliferation of renewable power and battery storage, and an increasing embrace of digitalization.
When Izzo succeeded E. James Ferland in 2007 as PSEG’s CEO and chairman, the company held a substantial generation business. It included PSEG Power, a major wholesale electricity supplier with generating facilities in New Jersey, Pennsylvania, Connecticut, and New York, as well as PSE&G, its 1924-founded electric and gas transmission and distribution arm, which is today New Jersey’s largest utility. PSEG Power was founded in 1999 after New Jersey embarked on its landmark electricity deregulation and restructuring—an event frequently cited as a crucial driver that led to the dramatic transformation of the state’s energy landscape.
PSEG Power owned the company’s merchant fleet, including three nuclear plants (Hope Creek, Salem, and Peach Bottom), and a vast portfolio of fossil assets, which competed primarily in the PJM, ISO-New England, and New York ISO wholesale electric markets. But owing to overall business risks and earnings volatility, and a concerted effort to improve its credit profile and enhance its environmental, social, and governance (ESG) position, PSEG in August 2020 decisively set out to divest its non-nuclear merchant generation business, which included 6,750 MW of gas-fired and solar assets. The company sold the assets to ArcLight Capital Partners LLC for about $1.92 billion in August 2021.
Izzo was also pivotal in reshaping the company’s generating fleet. Over the past decade, the company has retired or exited 11 GW of fossil power, much of it coal-fired. It shuttered its last remaining coal plant—Bridgeport Harbor Station 3 in Connecticut—in May 2021. Today, PSEG says, it is among the top 10 carbon-free energy producers in the U.S.
PSEG, however, held on to its merchant nuclear fleet, and under Izzo’s vocal backing, secured zero-emission certificates (ZEC) from New Jersey for its Hope Creek and Salem units. Along with accelerating its commitment to clean generation, the company has more recently accelerated its momentum to build offshore wind power, grid-connected storage, and solar power, as well as modernize its utility business’s infrastructure.
LaRossa: A PSEG Veteran
LaRossa, who PSEG’s board of directors elected as CEO and chair in April as part of a planned leadership succession process, steps to the helm of the company after a nearly 37-year tenure at PSEG. LaRossa joined PSE&G in 1985 as an associate engineer and advanced through a variety of management positions in the utility’s gas and electric operations.
From 2006 until 2017, LaRossa served as president and COO of PSE&G, and then as president and COO of PSEG Power from June 2017 until September 2022. He became COO of PSEG in January 2020. In his role as PSEG COO, he was responsible for overseeing all of the operating businesses of PSEG, including Public Service Electric & Gas Company, PSEG Long Island, PSEG Power, and PSEG Services Corp. functions, information technology, and cyber and physical security.
PSEG said LaRossa’s track record and in-depth knowledge of PSEG and the industry “enable him to take the helm of the company at a pivotal time, as PSEG, New Jersey and our nation look to pursue significant energy and climate programs to help customers and communities thrive in a challenging environment.”
Izzo agreed. “It has been a privilege to serve as CEO for the last 15 years, driving toward a sustainable energy future that is cleaner and more reliable than ever,” said Izzo. “For almost 20 years, Ralph LaRossa and I have worked side-by-side building out PSEG’s vision. I am proud of the accomplishments our 12,500 strong workforce has made, and I look forward to what PSEG will accomplish in the years to come,” he said.