PG&E Customers Should Not Pay Millions in Executive Bonuses
SAN FRANCISCO, July 10, 2014 – The Office of Ratepayer Advocates (ORA), the independent consumer advocate within the California Public Utilities Commission (CPUC), filed comments Tuesday on the CPUC’s proposed decision on PG&E’s 2014 general rate case. While ORA supports the CPUC’s proposal to appropriately decrease PG&E’s revenue request by $707 million, the proposed decision does not go far enough. ORA finds that, among other concerns, the CPUC should remove an additional $120 million in executive and management incentive program costs for 2014 - 2016.
The CPUC’s proposed decision would approve PG&E’s request to have customers fund the lion’s share of incentives paid to PG&E executives and managers, totaling $92 million per year:
- $89 million for its Short Term Incentive Program (STIP)
- $3.4 million in supplemental pension for highly compensated executives
ORA proposed customer funding of only $52 million for STIP and no customer funding for the supplemental pension program. The CPUC, therefore, should reduce PG&E’s revenue request by an additional $40 million per year. Historically, customers have funded no more than 50% of PG&E’s STIP which would amount to $65 million.
“Customers must bear increasingly higher energy bills to support utility programs that ensure safe and reliable energy service,” said Joe Como, ORA’s acting director, “but they should not have to pay millions of dollars more for executive and management bonuses. If the company wants to award such bonuses, they should be paid for by shareholders.”
The proposed decision is slated to be voted on by the CPUC’s five commissioners as soon as August 14, 2014. If adopted, the decision would cumulatively increase PG&E’s revenues by nearly $2.4 billion for 2014 - 2016. Customers are expected to see bill increases as soon as October 2014.
See ORA’s webpage on PG&E’s Rate Case.
For more information on ORA, please visit www.ora.ca.gov.