The Courant is reporting that CL & P is asking state regulators to change the rules that say that executive bonuses should be paid out of earnings to executive bonuses should be paid by rate payers. Millions of dollars of bonuses.
In the past, shareholders - not electricity customers - have paid for the often six-figure incentive plans for top officers of both Northeast Utilities and its CL&P subsidiary, including NU’s president and CEO, Charles Shivery, and CL&P President Raymond Necci.
Money from electric rates traditionally has covered only the salaries of company officers. Money for bonuses typically has come from company earnings.
Now CL&P is arguing that incentive bonuses are part of its costs, so customers should start paying them.
But consumer advocates and large-scale electric users are promising a fight, saying electric rates shouldn’t be used to fatten already lucrative executive pay packages.
“To develop a new stream of revenue from ratepayers to reward already highly paid executives seems outrageous,” said Tom Swan, executive director of the Connecticut Citizen Action Group.
Those opposed to the request also ask: Why now? State officials are investigating reports of poor customer service at CL&P and inaccurate electric meters. At the same time, consumers are angry over electric rates that have risen 90 percent in the past seven years, though that is mainly due to wholesale electricity prices over which CL&P has no control.
“How do you justify bonuses?” asked Attorney General Richard Blumenthal. “I’m tempted to say they really are their own worst enemy.”
As part of its proposal to increase electric rates on Jan. 1, CL&P asked the state Department of Public Utility Control to let it pass on to its customers the $3.5 million cost of annual executive bonuses. Ratepayers also would pay nearly $1.5 million in additional costs to enhance executive retirement plans, according to filings with the DPUC by consumer advocates.
Utility officials said a group of about 15 executives would qualify for the $3.5 million bonus pool to be funded by ratepayers, including Shivery and other top NU and CL&P officers. Shivery’s total pay package in 2006 was $4.2 million, according to federal filings.
Money for bonuses and additional retirement pay represents only a sliver of the $189 million in new revenue CL&P is asking to collect through an overall rate increase of 4.6 percent. That would amount to about $6.25 a month for a typical household.
But one consumer advocate described the bonus request as a “lightning rod” during deliberations about the larger rate increase. The DPUC is expected to decide on CL&P’s request in late December.
“As long as companies are allowed to pass on the extra compensation and benefits to ratepayers without any limitations, the companies will continue to add benefits that your typical ratepayer does not have,” Helmuth W. Schultz III and Donna M. Deronne wrote in recent DPUC testimony. The two are regulatory consultants who were testifying as expert witnesses on behalf of the Office of Consumer Counsel, a state agency that represents electric ratepayers and has been leading the fight against the bonuses.
SO what can you do? Well you can send a letter to the DPUC. The names of the commissioners are here..
Phone: 860-827-2802.
The address is: Ten Franklin Square, New Britain, CT 06051
FAX # (860) 827-2613
There’s also your usual state legislative delegation too.
source: The Courant, CL&P Bonuses Spark Fight By MARK PETERS. November 5, 2007
