Australia’s biggest power producer, AGL Energy, has eased out its chief executive Andy Vesey, looking for a new leader at a time when it faces government pressure to slash energy bills and shore up a shaky grid.
AGL has appointed long-time Chief Financial Officer Brett Redman to the top job on an interim basis, saying it was in the final stage of hunting internally and externally for a new chief executive.
Vesey, 63, agreed to quit after nearly four years in the role, just two weeks after delivering a record $1.6 billion profit, along with a warning that its profit was unlikely to grow much this year as power prices are set to peak.
AGL declined to comment on why Vesey was leaving, other than to say he had successfully led a push to turn the company into a cleaner power producer over the long term and had improved customer service.
“He leaves the company in a robust financial position from which to continue to lead investment in our transitioning industry and in our long-term growth,” AGL Chairman Graeme Hunt said in a statement.
The sudden exit of the American comes at a difficult time for AGL and its peers EnergyAustralia, owned by Hong Kong’s CLP Holdings, and Origin Energy as they face political heat to slash household energy bills.
At the same time, the government’s push to end a decade of uncertainty for the industry with a policy to make power supply more reliable, cut emissions and lower prices collapsed this week and could become a big issue in a looming federal election.
“Whether it’s a new CEO or an existing CEO, it’s a tricky time for the utilities industry,” said Jason Teh, chief investment officer of Vertium Asset Management.
“It’s just tough in terms of what the government’s trying to propose.”
The government this week gave the competition watchdog authority to force the big retailers which own generation to spin off assets if they are found to be price gouging.
AGL has also been feuding with the federal government over the company’s plan to shut one of its coal-fired power plants in 2022 at a time when Australia needs coal- and gas-fired plants to back up wind and solar power.
On Friday, the Australian Energy Market Operator warned that the south-eastern states face heightened blackout risks over the next few years as ageing coal-fired power plants become less reliable.
Vesey and Redman were not available for comment.
By 1145 AEST, AGL shares were up 0.8 per cent to $20.55 in a firm Australian market.