Requires the public service commission to review at least once every three years, compensation paid to certain high level policy making employees of gas and/or electric corporations where such corporations have a gross annual income in excess of fifty million dollars.
TITLE OF BILL: An act to amend the public service law and the public authorities law, in relation to requiring the public service commission to annually review the compensation and benefits paid to certain officers, directors and high-level employees of certain gas or electric corporations
PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to provide a basis upon which reviews of compensation and benefits given to utility officers, directors, or high-level employees may be made to assure the ratepayer that his or her dollars are being spent in a fair and equitable manner. The review will be conducted at least every three years or upon any major rate increase. The bill requires the New York Power Authority trustees to review the salaries and benefits paid to officers, employees and the representatives in high-level managerial positions within the New York Power Authority every three years.
SUMMARY OF SPECIFIC PROVISIONS: This bill would add a new section to the public service law, § 5-a. It would require the public service commission to review proposed salary and benefits of officers, directors and high-level managerial positions within the authority to determine that such salaries and benefits are just, reasonable and in the public's best interest.
JUSTIFICATION: Public utilities are granted the privilege of exercising a monopoly over their service territories. With this privilege comes the responsibility to provide safe, reliable, and affordable service to their customers. To continue financing "over compensated executives" with revenue generated from ratepayers places an undue burden on the public in the form of higher rates.
As employee salaries stagnate, it is neither fair nor equitable to raise utility rates further to provide top executives with unjustified levels of compensation. It is obviously in the public interest to establish controls over levels of compensation and benefits paid to high level policy making employees of public utilities.
PRIOR LEGISLATIVE HISTORY: 2009-10: S.4034/A.7410 - Referred to Energy & Telecommunications 2007-08: A.250 - Rules 2005-06: A.7281 - Corporations, Authorities and Commissions 2003-04: A.10905 - Corporations, Authorities and Commissions 2001-02: A.5213A - Corporations, Authorities and Commissions 1997-98: A.1501 - Passed Assembly
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 1049 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________Introduced by Sens. PARKER, PERKINS -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Tele- communications AN ACT to amend the public service law and the public authorities law, in relation to requiring the public service commission to annually review the compensation and benefits paid to certain officers, direc- tors and high-level employees of certain gas or electric corporations THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The legislature hereby finds and declares that the compen- sation and benefits provided to certain officers, directors, and high- level managerial employees of certain gas or electric corporations may be excessive and out of proportion with objective measures of perform- ance, equity, and fairness. Some top executives of certain gas or elec- tric corporations have inflated their compensation, even as the custom- ers they serve continue to struggle with the burdens of wage stagnation. Establishing control over levels of compensation and benefits paid to high-level managerial employees of certain gas or electric corporations is clearly in the public interest. By doing so, the state will be able to provide assurance to the ratepayer that his or her dollars are not being spent on exorbitant salaries for top executives of gas or electric corporations. It is the purpose of this legislation to require the public service commission to review the proposed salary and benefits of officers, directors and high-level managerial executives of certain gas or elec- tric corporations and, based on enumerated criteria, either approve, modify or reject such proposed salaries and benefits. S 2. The public service law is amended by adding a new section 5-a to read as follows:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02124-01-1 S. 1049 2
S 5-A. REVIEW OF COMPENSATION AND BENEFITS PROVIDED TO OFFICERS, DIRECTORS AND CERTAIN EMPLOYEES OF GAS OR ELECTRIC CORPORATIONS WITH GROSS INCOME EXCEEDING FIFTY MILLION DOLLARS ANNUALLY. 1. THE COMMISSION SHALL REVIEW THE PROPOSED OR EXISTING SALARY, BENEFITS, INCLUDING RETIREMENT BENEFITS, BONUSES, CONSULTING CONTRACTS AND ANY OTHER FORM OF REMUNERATION PROPOSED TO BE PAID TO ANY OFFICER, DIRECTOR OR EMPLOYEE OF THE GAS OR ELECTRIC CORPORATION IN A HIGH-LEVEL MANAGERIAL POSITION TO DETERMINE IF SUCH PAYMENTS ARE JUST, REASONABLE AND IN THE PUBLIC INTER- EST. SUCH REVIEW SHALL OCCUR EACH TIME A GAS OR ELECTRIC CORPORATION RECEIVES A MAJOR RATE INCREASE BUT SHALL NOT OCCUR LESS FREQUENTLY THAN ONCE EVERY THREE YEARS. IN MAKING SUCH DETERMINATION, THE COMMISSION SHALL CONSIDER: (A) THE COST TO THE RATEPAYER OF THE SERVICE PROVIDED BY THE GAS OR ELECTRIC CORPORATION COMPARED TO THAT OF OTHER GAS OR ELECTRIC CORPO- RATIONS IN THIS STATE, OTHER STATES AND OTHER REGIONS OF THE COUNTRY, PROVIDING THE SAME OR SIMILAR SERVICE; (B) SERVICE RELIABILITY, FREQUENCY OF INTERRUPTIONS IN SERVICE AND DURATION OF TIME BEFORE RESTORATION OF SERVICE; (C) RELATIVE PRODUCTIVITY OF MANAGEMENT AND LABOR; (D) COST EFFECTIVENESS OF PLANT OPERATION AND MAINTENANCE; (E) LEVEL OF EXPERIENCE IN THE BUSINESS OF THE OFFICER, DIRECTOR OR HIGH-LEVEL MANAGERIAL EMPLOYEE IN A POLICY MAKING POSITION; (F) GENERAL EFFICIENCY OF THE ORGANIZATION; (G) GENERAL ECONOMIC CLIMATE OF THE REGION SERVED; (H) THE NUMBER OF CONSUMER COMPLAINTS; (I) THE RATE OF RETURN PROVIDED TO THE STOCKHOLDERS; (J) THE COMMENTS OF ANY INTERESTED PARTY; (K) THE EFFECT UPON THE MORALE OF OTHER EMPLOYEES; (L) THE IMPACT UPON THE FINANCIAL HEALTH OF THE GAS OR ELECTRIC CORPO- RATION; AND (M) ANY OTHER FACTORS WHICH WILL FAIRLY BALANCE THE INTERESTS OF THE RATEPAYERS AND THE STOCKHOLDERS. 2. AFTER SUCH REVIEW THE COMMISSION SHALL EITHER ACCEPT, REJECT OR MODIFY THE COMPENSATION, BENEFITS AND CONSULTING CONTRACTS AND THE DECI- SION OF THE COMMISSION SHALL BE BINDING UPON THE GAS OR ELECTRIC CORPO- RATION, SUBJECT TO REVIEW PURSUANT TO ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES. 3. THE COMMISSION SHALL PROMULGATE RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS OF THIS SECTION. 4. FOR PURPOSES OF THIS SECTION, THE TERM "GAS OR ELECTRIC CORPO- RATION" SHALL INCLUDE EITHER A GAS OR ELECTRIC CORPORATION OR BOTH SUCH CORPORATIONS, WITH A TOTAL GROSS INCOME EXCEEDING FIFTY MILLION DOLLARS ANNUALLY. S 3. Section 1004 of the public authorities law, as amended by chapter 506 of the laws of 2009, is amended to read as follows: S 1004. Officers and employees; expenses. The trustees shall choose from among their own number a
[chairman]CHAIRPERSON and [vice-chairman]VICE CHAIRPERSON. They shall select such officers and employees, including a chief executive officer whose appointment shall be subject to confirmation by the senate in accordance with section twenty-eight hundred fifty-two of this chapter, and such engineering, marketing and legal officers and employees, as they may require for the performance of their duties and shall prescribe the duties and compensation of each officer and employee. They shall adopt by-laws and rules and regulations suitable to the purposes of this title. As long as and to the extent that the authority is dependent upon appropriations for the payment ofS. 1049 3
its expenses, it shall incur no obligations for salary, office or other expenses prior to the making of appropriations adequate to meet the same. NO LESS FREQUENTLY THAN ONCE EVERY THREE YEARS, THE TRUSTEES SHALL CONDUCT A COMPREHENSIVE REVIEW OF THE SALARIES, BONUSES AND BENE- FITS, INCLUDING RETIREMENT BENEFITS, OF OFFICERS, EMPLOYEES AND REPRE- SENTATIVES IN HIGH-LEVEL MANAGERIAL POSITIONS WITHIN THE AUTHORITY TO DETERMINE IF SUCH SALARIES AND BENEFITS ARE JUST, REASONABLE, AND IN THE PUBLIC'S INTEREST. THE TRUSTEES SHALL REPORT THEIR FINDINGS TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY WITHIN NINETY DAYS IMMEDIATELY FOLLOWING COMPLETION OF SUCH REVIEW. S 4. Section 1020-e of the public authorities law, as added by chapter 517 of the laws of 1986, is amended to read as follows: S 1020-e. Officers and employees; expenses. The board, or the
[chair- man]CHAIRPERSON pursuant to authority duly delegated to him, from time to time shall hire, without regard to any personnel or civil service law, rule or regulation of the state and in accordance with guidelines adopted by the authority such employees and consultants, including with- out limitation those in the areas of engineering, marketing, finance, appraisal, accounting and law, as it may require for the performance of its duties and shall prescribe the duties and compensation of each offi- cer and employee, provided, however, that if any such employees are hired as a consequence of an acquisition of all the stock or assets of LILCO, they shall be hired subject and be entitled to all applicable provisions of (i) any existing contract or contracts with labor unions and (ii) all existing pension or other retirement plans. Notwithstanding the provisions of any general, special or local law, the board may determine that, if any pension or retirement plan becomes inapplicable or is terminated, all or such class or classes of employees of the authority as the board may determine may elect to become members of the New York state employees' retirement system on the basis of compensation payable to them by the authority. NO LESS FREQUENTLY THAN ONCE EVERY THREE YEARS, THE BOARD SHALL CONDUCT A COMPREHENSIVE REVIEW OF THE SALA- RIES, BONUSES AND BENEFITS, INCLUDING RETIREMENT BENEFITS, OF OFFICERS, EMPLOYEES AND REPRESENTATIVES IN HIGH-LEVEL MANAGERIAL POSITIONS WITHIN THE AUTHORITY TO DETERMINE IF SUCH SALARIES AND BENEFITS ARE JUST, REASONABLE, AND IN THE PUBLIC'S INTEREST. THE BOARD SHALL REPORT THEIR FINDINGS TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY WITHIN NINETY DAYS IMMEDIATELY FOLLOWING COMPLETION OF SUCH REVIEW. S 5. This act shall take effect immediately.