No Bonuses for Utility Executives

Full Title:
No Bonuses for Utility Executives Act

Summary#

This bill would limit bonuses paid to executives of certain state-regulated electric utilities that are not wholly owned by United States persons. Beginning January 1, 2025, a covered utility may pay a bonus to an executive for a fiscal year only if the utility's average percentage increase in customer rates for that year does not exceed the 12-month change in the Consumer Price Index for All Urban Consumers (CPI-U). Any allowed bonus cannot exceed 25 percent of the median annual pay of the utility's non-executive employees. Utilities must report rate-change and median-pay information to the Federal Energy Regulatory Commission (FERC) within one week after the fiscal year ends. FERC must decide within one month whether a bonus is allowed and the maximum amount. FERC and the Internal Revenue Service (IRS) will determine compliance. If a utility violates the rule, the improperly paid bonus is forfeited to the United States. The IRS must then issue a payment to each customer of the utility equal to the forfeited amount divided by the number of customers.

What it means for you#

  • If you are a customer of a covered utility, the bill ties executive bonuses to whether your utility's average rate increase is larger than inflation (CPI-U). If a utility pays a blocked bonus, the forfeited money is to be delivered to customers as equal payments.
  • If you work for a covered utility but are not an executive, the bill limits executive bonuses relative to your median pay (bonuses capped at 25% of the median non-executive annual compensation).
  • If you are an executive at a covered utility, your bonus eligibility depends on the utility's reported average rate increase compared with CPI-U and on the pay of non-executive employees.
  • If you are an owner or manager of a covered utility, you must report rate-change and median-pay data to FERC quickly after the fiscal year ends and follow FERC and IRS determinations about allowed bonuses.

Expenses#

The bill requires the IRS to issue payments to utility customers equal to any forfeited bonuses and assigns reporting and review duties to FERC and the IRS. The bill text does not include federal cost estimates or a budgetary analysis. No publicly available information on overall federal budget impact.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.