Bill Aims to Cut Executive Bonuses, Increase Fines

By Published On: May 18, 2012

The Assembly passed and sent to the governor a controversial bill aimed at easing the way for K Road Power to convert its 600 MW solar thermal project slated for the Mojave Desert to photovoltaic technology. The legislation, AB 1073, is by Assemblymember Felipe Fuentes (D-Arleta). The Calico project, initially proposed as a massive Dish Stirling engine solar project in the Pisgah Valley, was permitted in December 2010 by the California Energy Commission. Subsequently, the project changed hands and the technology is being switched to photovoltaics. The developer wants a permit revision handled by the Energy Commission, not local officials, because of ongoing opposition, particularly from environmental organizations. In other news, legislation to have utility shareholders pick up the tab for utility executive compensation and to retroactively slash bonuses if violations of state law are found was introduced May 15. AB 861 by Assemblymember Jerry Hill (D-San Mateo) was gutted and amended to rein in company executive bonuses, particularly when wrongdoing is uncovered, and to prohibit rate recovery of incentives. Under Hill’s overhauled bill, bonuses would not come out of ratepayer pockets, but shareholders’, because utility income--unlike most other private enterprise operations--is regulated by the California Public Utilities Commission. “Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable,” states a revised AB 861. In addition, the measure requires that any executive from Edison International, Sempra, or Pacific Gas & Electric Corp. reimburse the utility parent for any bonus if in the preceding five years the remunerated officer was found by the CPUC to have knowingly aided and abetted a violation of state laws, codes, or the constitution. Penalties for wrong doing could be up to $1 million per violation. The bill may be heard next month in the Senate Energy, Utilities, & Communications Committee. Also this week, the Senate energy panel passed on a 10-0 vote a bill increasing natural gas pipeline safety. Hill’s AB 578 directs state regulators to review and assess the applicability of federal pipeline safety recommendations. “The CPUC must be proactive and not reactive,” Hill told the committee May 15. The legislation, passed by the Assembly 57-19, is in response to the September 2010 gas explosion in San Bruno and other gas pipe accidents, including in Rancho Cordova and Roseville. Following its investigation of the San Bruno explosion that killed more than three dozen and caused considerable property damage, the National Transportation Safety Board issued 39 safety recommendations to state and federal agencies and officials. The Senate energy committee did not approve a bill trying to restrict consultants who advise cities on community choice aggregation. AB 976 by Assemblymember Isadore Hall (D-Compton), which was opposed by the CPUC, was granted reconsideration.

Share this story

Not a member yet?

Subscribe Now