Assemblywoman Gonzalez Bill Brings Accountability to Public Utility Executive Bonuses Advances
Reporting San Diego (2015-04-27) Nadine Abbott
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Media Link: http://reportingsandiego.com/2015/04/27/assemblywoman-gonzalez-bill-brings-accountability-to-public-utility-executive-bonuses-advances/
Monday April 27, 2015 (SACRAMENTO) –
A bill by California State Assemblywoman Lorena Gonzalez (D-San Diego) to require new accountability measures when executive bonuses are doled out by public utilities passed the Assembly Utilities and Commerce Committee today by a 10-5 vote. AB 1266 would require that public utilities to justify executive bonus compensation at a public hearing of the California Public Utilities Commission following any state or federal safety violation that results in a cost of $5 million or more to ratepayers. The bill now proceeds to consideration by the Assembly Committee on Appropriations.
To date, the CPUC has never conducted a public review of bonuses for utility executives to determine whether the compensation was justified, even in light of major safety violations that led to the $3.3 billion cost passed on to ratepayers when San Onofre nuclear power plant was shuttered or the 2010 San Bruno pipeline explosion in Northern California.
“As ratepayers have been hit with astronomical costs following major public utility failures, the least we can do is make sure that the public has a say before executives are rewarded afterwards,” Gonzalez said. “Today’s vote brings us one step closer to public accountability for huge bonuses handed out to executives who passed the costs of their own mistakes on to ratepayers.”
Under Gonzalez’s AB 1266, a utility such as Southern California Edison would be subject to the CPUC’s Tier 3 review process, which requires the commission to open a proceeding and hold at least one public hearing to review the proposed compensation. The CPUC would be required to determine what portion of the executive bonus, if any, the ratepayers should absorb.
Pacific Gas & Electric recently agreed to pay a record $1.6 billion fine for the deadly 2010 San Bruno gas line explosion and refund roughly $400 million to ratepayers, but the CEO who presided at the time of the disaster and over the preceding cuts to pipeline maintenance programs retired with a reported $38 million bonus.
The San Onofre Nuclear Generating Station went offline in 2012 after radiation leaks from faulty parts, and the decommissioning process has resulted in a $1.4 billion hit to stockholders and an additional $3.3 billion being passed on to ratepayers.