Bill Text: CA AB1266 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Electrical and gas corporations: excess compensation.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2015-10-08 - Chaptered by Secretary of State - Chapter 599, Statutes of 2015. [AB1266 Detail]

Download: California-2015-AB1266-Introduced.html

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BILL NUMBER: AB 1266	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Gonzalez

                        FEBRUARY 27, 2015

   An act to add Section 706 to the Public Utilities Code, relating
to electrical and gas corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1266, as introduced, Gonzalez. Electrical and gas corporations:
excess compensation.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations
and gas corporations. 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. Existing law requires
that any expense resulting from a bonus paid to an executive
officer, as defined, of a public utility that has ceased to pay its
debts in the ordinary course of business, be borne by the
shareholders of the public utility and prohibits any expense from
being recovered in rates.
   This bill would prohibit an electrical corporation or gas
corporation from recovering from ratepayers expenses for excess
compensation, as defined, paid to an officer of the utility following
a triggering event, as defined, unless the utility obtains the
approval of the commission. Following a triggering event and prior to
paying or seeking recovery of excess compensation, the electrical
corporation or gas corporation would be required to file a Tier 3
advice letter with the commission containing specified information
and the commission would be required to open a proceeding or expand
the scope of an existing proceeding to evaluate the advice letter
and, following a duly notice public hearing in the proceeding, to
issue a written decision determining whether, and if so, how much, of
each officers' compensation shall be recoverable from ratepayers.
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
   Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 706 is added to the Public Utilities Code, to
read:
   706.  (a) For purposes of this section, the following terms have
the following meanings:
   (1) "Excess compensation" means any salary, bonus, benefits, stock
options, or other consideration of any value, paid to an officer of
an electrical corporation or gas corporation that is in excess of 10
times the average compensation paid by the utility to the utility's
journeyman linemen.
   (2) A "triggering event" occurs if, after January 1, 2013, an
electrical corporation or gas corporation violates a federal or state
safety regulation with respect to the plant and facility of the
utility and, as a proximate cause of that violation, ratepayers incur
a financial responsibility in excess of five million dollars
($5,000,000).
   (b) No electrical corporation or gas corporation shall recover
expenses for excess compensation from ratepayers following a
triggering event unless the utility complies with the requirements of
this section and obtains the approval of the commission pursuant to
this section.
   (c) Following a triggering event and prior to paying or seeking
recovery of excess compensation, an electrical corporation or gas
corporation shall file a Tier 3 advice letter with the commission
that, with respect to any officer paid excess compensation, includes
all of the following:
   (1) The compensation history for the officer.
   (2) The proposed compensation to be paid to the officer, including
the compensation recovered from ratepayers and that paid solely by
shareholders of the utility.
   (3) Any justification for the proposed compensation.
   (4) Any additional information required by the commission.
   (d) The commission shall open a hearing, or expand the scope of an
existing proceeding, to evaluate the advice letter. As part of the
proceeding, the commission shall consider the costs to ratepayers of
the triggering event. The commission shall hold not less than one
duly noticed public hearing in the proceeding. The commission shall
issue a written decision determining whether, and if so, how much, of
each officers' compensation shall be recoverable from ratepayers.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.