CPUC Directs PG&E to Put $10M in Ratepayer Pension Pot

By Published On: April 29, 2011

The California Public Utilities Commission wants solid proof that Pacific Gas & Electric’s announcement that its shareholders, not utility ratepayers, will be on the hook for the $35 million retirement package of outgoing PG&E chief executive officer Peter Darbee. In an April 26 letter, commission energy division director Julie Fitch told PG&E to immediately credit $9.6 million of Darbee’s pension benefits to a ratepayers’ pension account and provide “an audited accounting” of the transfer. “CPUC staff reserve the right to audit PG&E’s pension accounting at any time in the future to ensure that PG&E’s corporate commitment is honored permanently,” Fitch also wrote. The other $25 million in Darbee’s golden parachute includes an estimated $21.2 million in stock vesting over the next three to five years, $2.8 million in deferred compensation and $1.1 million in a short-term incentive. The utility announced last week that Darbee was retiring, effective April 30, and that he would reap an estimated $35 million in benefits, stock, and awards. (Current, April 22, 2011). On April 25, PG&E Corp. announced that its board of directors approved shareholder funding for Darbee’s retirement package. “It is the right thing to do and is in the best interest of their customers, particularly given the difficult economic times and the tenuous economic recovery now underway,” Mike Peevey, CPUC president, stated April 25. “A $34.8 million retirement package for someone already receiving $8.4 million a year makes a mockery of the term ‘reasonable’,” said Carl Wood, Utility Workers Union of America director of regulatory affairs. The CPUC in PG&E’s general rate case covering 2007-2010 approved rate recovery for $417 million in pension costs--$98 million for 2007, $102 million for 2008, $106 million for 2009 and an estimated $111 million for 2010. PG&E seeks $163 million in pension and related costs for 2011.

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