Stone Introduces Bill to Prioritize Consumer Interests over Utility Company Executive Pay
SACRAMENTO—Assemblymember Mark Stone (D-Monterey Bay) has introduced Assembly Bill 1363, a measure that will ensure utility executives make wildfire prevention decisions that align with their customers’ interests.
While last year’s passage of AB 901 attempted to prevent insolvency for investor-owned utilities, it did not ensure that utility executives would make decisions with their customers’ best interests in mind. Instead, in order to cover wildfire damages, utilities can now issue bonds that will be repaid by passing costs onto customers through higher monthly bills. The ability to use these bonds combined with a history of excessive executive compensation and retention bonuses puts consumers at risk of facing unnecessary rate hikes.
“Utility executives should not make decisions prioritizing executive pay over their customers’ interests. Every dollar an executive receives in compensation is a dollar that could be used to satisfy their liabilities, thus preventing the use of rate-payer backed bonds. As seen previously, utility executives have received shocking increases in compensation and could collect equally shocking retention bonuses. AB 1363 will ensure that as utility executives make decisions on compensation and wildfire costs, they too will feel the consequences of their actions,” said Stone.
By requiring that excess executive compensation remains in a separate fund for a 5 year escrow period, AB 1363 will help protect utility customers. If the California Public Utilities Commission issues an order to support the issuance of recovery bonds, the excess compensation funds would be taken out of escrow and used for wildfire recovery.
With the increase in wildfires and ensuing costs, customers should have a sense of security that utility executives will make decisions that are in their best interest. AB 1363 ensures that utility executives will share in California’s risks moving forward.