Greenlining Pulls PG&E Bonus Inquest in Apparent Quid pro Quo

The Greenlining Institute acknowledged this week that it pulled its motion asking the California Public Utilities Commission to investigate allegations that Pacific Gas & Electric hid general rate case costs for hefty executive bonuses. Greenlining dropped the motion in exchange for the utility?s pledge to boost charitable donations. PG&E spokesperson John Nelson denied there was a quid pro quo regarding the potential investigation. Greenlining, a San Francisco?based minority advocacy group, agreed to withdraw its January 15 motion in part because of PG&E?s promise to make a ?low-income commitment,? said Itzel Berrio, deputy general counsel for the group. Playing down this arrangement, Berrio stressed that the utility has also agreed to make future filings more transparent. The attorney said she was ?not at liberty? to provide further details of the deal beyond saying that PG&E will likely announce its charitable intentions in a few weeks. ?Greenlining believes, particularly with the strong support of PG&E, that the public will be better served by future corporate transparency . . . rather than dwelling on past history,? said the group in its filing to withdraw its motion. There is some precedent for companies settling disputes by offering charitable donations, according to Marcus Owens, tax attorney with Washington, D.C.?based Caplin & Drysdale. Owens served in the IRS division that oversees tax-exempt groups, including nonprofits and charities, for 25 years. Basing a regulatory dispute on the need for more transparency and then ?saying ?never mind? at the end of the day seems opportunistic,? Owens said. Another tactic that may be at play, he added, is that the utility thinks it can get more mileage out of a donation than a business expense since generous gestures can burnish a company?s image. The bonuses and low-income-assistance exchange is not a new idea. Last month, when the bonuses were making headlines, The Utility Reform Network issued a press release asking the executives in receipt of the funds to use part of their bonuses to help fund a low-income assistance program. Requests to PG&E for comment went unanswered. PG&E flatly denied that ratepayers funded the $84.5 million senior executive retention program through the utility?s revenue requirement. PG&E asserts the payouts came out of utility parent PG&E Corp.?s ?cash on hand.? The utility said it has not sought and does not intend to seek recovery of costs for bonuses through revenue requirements. Though the payout program was set up in 2001 to keep valued executives, PG&E defended its practice of continuing the payouts even after some of the top brass left the utility (see Energy Circuit , January 9, 2004). Each of the executives stayed with PG&E during a critical period of restructuring, and when they had completed their tasks, ?the services of these officers was no longer needed.? Having ?fulfilled their obligations, it was determined that a full payout was warranted.? PG&E Corp. paid all 17 officers covered by the programs. But questions about timing of the payouts remain. James Weil, attorney for the Aglet Consumer Alliance, said one reason the CPUC didn?t review the bonuses was because the perks matured at the end of last year and were paid out this year. The utility?s general rate case?from which the allegations first sprang?focused on 2003. PG&E could claim that bonuses count toward rate case costs in 2004 and, thus, there is no reason to look at costs for last year, Weil said.

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Greenlining Pulls PG&E Bonus Inquest in Apparent Quid pro Quo

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