senate Bill S1049

2011-2012 Legislative Session

Requires the public service commission to review compensation paid to certain high level policy making employees of gas or electric corporations

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to energy and telecommunications
Jan 05, 2011 referred to energy and telecommunications

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S1049 - Bill Details

Current Committee:
Senate Energy And Telecommunications
Law Section:
Public Service Law
Laws Affected:
Add §5-a, Pub Serv L; amd §§1004 & 1020-e, Pub Auth L
Versions Introduced in 2009-2010 Legislative Session:
S4034

S1049 - Bill Texts

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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.

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BILL NUMBER:S1049

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.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1049

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (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  of

S. 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.

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