British Energy gets rid of chief exec

BRITISH Energy, the heavily loss-making nuclear power generator rescued from bankruptcy last year by taxpayer support, has ousted its chief executive amid recriminations in the City that he may not have been the right man for the job.

Just two years in the job, Mike Alexander is likely to leave with a pay-off in excess of £500,000. Alexander, 56, was headhunted by British Energy chairman Adrian Montague from British Gas group Centrica in 2003.

He was hailed as the executive capable of turning round the company's operational fortunes as it embarked on a multi-billion pound financial restructuring.

However, in a shock announcement today, British Energy said Alexander had stepped down and would be replaced with immediate effect by Bill Coley, a 61-year-old veteran of the US power industry who has been in semi-retirement for the last two years, including a role as a non-executive director of British Energy.

The unorthodox appointment - just two months after the company had relisted on the Stock Exchange - had City analysts speculating that Alexander had been replaced by someone with greater experience of running a nuclear power plant. Coley was 37 years at American nuclear generator Duke Energy, retiring in 2003 as chief executive of utility arm Duke Power.

One City source said: 'It is interesting that they have appointed someone who so obviously has experience of running plant.'

Alexander's curriculum vitae includes previously being chief operating officer under Sir Roy Gardner at Centrica. Though he had earlier been managing director of the group's energy dealing business British Gas Trading and had senior roles at oil and gas explorers BG and BP, Alexander had not previously run a power-producing business.

His departure raises questions over Montague's original decision to hire him. Montague, the £300,000 a year Government-fixer parachuted into British Energy by the Treasury, said of Alexander's appointment in 2003 that he had 'just the right combination of skills and experience'.

Only last month, however, Alexander was forced to unveil increased losses at the group and took a swipe at the previous management's years of underinvestment. Coley's appointment is unlikely to be long term and Montague is set to instigate the search for a new chief executive.

Mired deep in the red

WHILE the rest of the power industry racks up record earnings - profits at Mike Alexander's old firm Centrica last year topped £1bn - British Energy, the largest producer of electricity in the country, is deep in the red with losses of £349m for the nine months to 31 December.

It has spent the last two years avoiding bankruptcy and last autumn was saved by a temporary delisting from the stock market and a debt-for-equity swap that all but wiped out its private shareholders. Its main problems have changed little: its fleet of nuclear generators are high-maintenance and unreliable and cost more to run than they get from selling the electricity they produce.