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

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

---

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-Amended.html

---

BILL NUMBER: AB 1266	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 31, 2015
	AMENDED IN ASSEMBLY  MAY 4, 2015

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 amended, 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  for
a period of 5 years  following a triggering event, as defined,
unless the utility obtains the approval of the commission. 
Following  The bill would provide that anytime within a
5-year period following  a triggering  event 
 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   an
application  with the commission containing specified
information.  If the electrical corporation or gas
corporation sought or received authorization prior to the triggering
event to recover excess compensation in rates, the commission would
be required to open a proceeding or expand the scope of an existing
proceeding to evaluate the advice letter and,   The bill
would require the commission,  following a duly  notice
  noticed  public hearing in the 
proceeding, to   proceeding to consider the  
application, to  issue a written decision determining whether
any expenses for excess compensation  that the corporation
was authorized to recover in rates   proposed to be paid
by the corporation should be recovered in rates, or if previously
authorized to be recovered in rates,  should be refunded to
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  annual  salary,
bonus, benefits, 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.   one
million dollars ($1,000,000). 
   (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   For a five-year period following a
triggering event, 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   Any time within a five-year
period 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 
 an application  with the commission that, with respect to
any officer  paid   to whom it seeks to pay
 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) Whether any of the compensation paid to an officer was
previously included or proposed to be included in rates and any
justification for the proposed compensation.
   (4) Any additional information required by the commission.
   (d)  If the electrical corporation or gas corporation
sought or received authorization prior to a triggering event to
recover excess compensation in rates, the commission shall open a
hearing, or expand the scope of an existing proceeding, to evaluate
the advice letter.  As part of the  proceeding,
  proceeding to consider the application,  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 any expenses for excess
compensation  that   proposed to be paid by
 the electrical corporation or gas corporation  was
authorized to recover in rates   should be recovered in
rates, or if previously authorized to be recovered in rates, 
should be refunded to ratepayers.
   (e) A person or corporation owning or operating a qualifying
facility pursuant to federal law or a facility that is an exempt
wholesale generator is not an electrical corporation due to the
ownership or operation of that facility. This subdivision is
declaratory of existing law.
  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.