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Peter Burg


Until last summer, H. Peter Burg might have been just another utility executive with environmental problems. The chairman and CEO of Akron's FirstEnergy (FE) Corp. had to shut down his Davis-Besse nuclear plant after corrosion was found in its reactor. And a federal judge ruled that the company violated the Clean Air Act by failing to install the latest pollution-control technology at an Ohio coal plant. But then, on Aug. 14, Burg and FirstEnergy really stepped in it -- as the utility played a leading role in North America's worst-ever blackout, which cut off the power supply to some 50 million people and cost $7 billion.

FirstEnergy released sketchy information about its plant and transmission-line failures two days after the crisis began. As criticism mounted, FirstEnergy tried to deflect blame. Testifying before Congress in September, Burg, 57, said: "Everyone is looking for the straw that broke the camel's back. But there is no one straw."

In fact, the utility's shortcomings could add up to a whole bale of straw. A joint report from U.S. and Canadian authorities released on Nov. 19 faulted FirstEnergy for not trimming trees near its power lines, failing to maintain a computer-warning system, and not adequately training its staff. FirstEnergy says the report "falls short of providing a complete picture" and suggests that independent power producers and traders overloaded the grid. Burg declined to be interviewed by BusinessWeek.

Not only did FirstEnergy bumble its way to a history-making outage on his watch, but Burg has seemingly written the book on how not to respond in a crisis. Which raises the question: Are First Energy's board members the ones asleep at the switch?


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