State Sen. Josh Becker, D-Menlo Park.
Utility executives’ salaries could become tied to their companies keeping electricity rates from rising faster than inflation if new legislation introduced by state Sen. Josh Becker passes.
Becker, D-Menlo Park, recently introduced Senate Bill 905, a major utility reform package intended to address rising electricity costs and create new standards to measure how well existing energy grids are performing.
Perhaps the most eye-catching part of the bill, however, would tie 20% of executive salaries to electricity rates, meaning that if costs rise faster than the rate of inflation over a rolling three-year period, those employees would not receive that portion of their paycheck.
“I started really thinking — what are the incentives here?” Becker said.
This piece of the bill would not apply to CEOs and other positions whose salaries are paid directly via shareholders, but would apply to vice presidents and above who are paid via ratepayers.
Becker, who has tangled with the utility companies in the past in an effort to reduce skyrocketing electricity rates, said he’s expecting pushback but is hoping to keep the provision in the legislation as it works its way through the California Senate.
“They’re not happy about it. They don't want the additional accountability, and they don't want this particular piece of accountability,” he said. “They’re going to fight this one for sure.”
SB 905 also contains provisions to establish performance metrics for the utilities, including measuring reliability, connectivity speed, greenhouse gasses and how effectively distribution grid capacity is being utilized, according to a press release from Becker’s office.
“Our goal is really, let’s get these clear performance metrics,” Becker said. “We can talk later about what we want to do with them.”
A previous Becker-authored piece of legislation was signed into law last year and aims to revamp parts of California’s utility structure, creating public financing opportunities for large-scale projects and returning climate credits back to customers.
As electricity companies develop the infrastructure to expand services and defend against wildfire, rates have skyrocketed. There’s been a 90% increase for Southern California Edison customers in the past 10 years and a 110% increase for Pacific Gas and Electric customers, including those in San Mateo County, Becker said previously.
The bill passed last year, Senate Bill 254, pushed back on that by limiting utility companies from increasing rates because of wildfire safety investments and expanding access to public financing for transmission projects, although it did establish a continuation account on the Wildfire Fund until 2045 that will require equal contributions from ratepayers and utilities.
The new legislation would take further steps to ensure wildfire-related costs are not dumped on ratepayers, the press release said, in addition to reducing excess utility returns on low-risk investments like undergrounding power lines to reduce wildfire liability.
The issue of sky-high electricity costs not only impacts California constituents who are struggling to pay their bills, but also makes it less likely that individuals will invest in clean energy like house electrification and electric vehicles, Becker said.
“This is a really important bill. One of my most important bills,” he said. “The utility affordability issue is really important throughout the state.”
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GoodCitizen said:
CA Is Burning said:
GoodCitizen said:
Just like Trump wrote 'Art of the Deal.' LOL.
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(9) comments
This made me think. Perhaps US senators and congressmen should not get paid when there is not a budget, just like DHS employees. One difference though , there would be no back pay once a budget is signed for the senators and congressmen. You snooze you lose. These political games need to stop
What about the Data Centers that use electricity? How much do they increase our bills? Senator Becker, are you working on that? ......"Northern California (especially the Silicon Valley / Bay Area) — This is the dominant cluster, driven by proximity to tech companies, dense fiber networks, and high demand for low-latency compute. It accounts for the majority of the state's capacity (over 160 facilities in some counts for the broader Northern California market)."
This is hilarious "also makes it less likely that individuals will invest in clean energy like house electrification and electric vehicles, Becker said." The dear senator is not really addressing the true reason for our sky-high rates. Few ratepayers are aware that the utilities offer energy efficiency programs that are heavily burdened with overhead. There is also a CARE program that allows folks to self report their income level thereby getting major discounts on their utility bills. In some utility regions almost 40% of the ratepayers qualify. Who do you believe is paying for all of this? Becker is a political hack and just caters to cheap solutions for his unaware or perhaps gullible constituents. PG&E's executives run a no-risk organization, yet get compensated as if they were in a competitive space. Perhaps if PG&E, SCE and SDG&E were to return to their core responsibility instead of having to placate the politicians and practicing social engineering, our utility rates would reflect what the market dictates. Senator Beck's efforts are not even band aid.
Thanks Mr. van Ulden for pointing some of these things out. Per a search..."Over 63% of California's ratepayer-funded energy efficiency and demand response programs fail cost-effectiveness tests, meaning their benefits (like energy savings or emissions reductions) do not justify the costs passed to customers."
Lou - I worked at PG&E during the transition from maximizing electricity and gas sales to getting more benefits from instituting energy efficiency programs. Rule making by the CPUC made that possible and PG&E, as well as the other utilities, found this to be more lucrative than pushing gas and electricity sales. Efficiency and utility operations are mutually exclusive. On top of that, the labor unions, e.g. IBEW, are essentially running the show with full support from our legislators and the governor. Heaven help us, and don't count on Becker, he is in on it.
Mr. van Ulden - Do you have any thoughts on privatizing PG&E? I believe it has been tried, and why hasn't it succeeded? Would it be a good idea if it could be accomplished? Also, I believe many people are paying $500-800/mo. for electricity bills. Any ideas on help to lower those?
Lou - the best way to reduce our energy bills is to look at how utilities operate in other states. They are still based on solid engineering, customer satisfaction and competitive energy procurement. In California, we have gone off the rails since Governor Brown Jr. decided that utilities need to control how the energy is used instead of leaving the decisions with the end users. The utilities then viewed those guidelines as an opportunity, made it their new business model, and dreamed up myriad programs to enrich themselves. That is where deregulation came in, which was unfortunately abused by Enron mostly because there were no strings attached to energy procurement.
During that time I was employed by Enron Energy Services after my stint with PG&E. There have been other DJ columns on this topic by experts but their advice has not resonated with our legislators and our governors because of political campaign contributions and other favors. A shareholder construct is preferred as long as we have non-political oversight and we may need the Federal Energy Commission to reach into local business practices.
Are you even aware that ratepayers finance TURN and their executives? These highly compensated stool pigeons ostensibly fight against rate increases but realize that their positions rely on lame protest actions that have never been taken seriously. TURN stands for Toward Utility rate Normalization, another joke that Becker appears to be emulating. If Becker were truly serious, he would have a team of experts develop legislation to overhaul the current utility industry gravy train. It would be a long overdue comprehensive effort. Don't hold your breath.
20% of their salary? Empty threat with zero impact. Easily evaded by taking most of their pay in stock or other benefits instead of "salary". Have to agree with Dirk on this one - Becker is part of the political machine, trying to position himself as helping citizens while enabling corporations to exploit residents.
quote: "Becker, who has tangled with the utility companies in the past in an effort to reduce skyrocketing electricity rates, said he’s expecting pushback but is hoping to keep the provision in the legislation as it works its way through the California Senate."
... and yet this is the county which produces NO cheap, renewable energy whatsoever. In 2015 San Mateo County created a full-blown, large organization called Peninsula Clean Energy to built out a local microgrid. The County is one of the most threatened counties in California as we are surrounded by rising water from two sides. We also have plenty of wind energy, basically blowing right through the peak hours of 4-9pm. And yet Josh Becker and PCE haven't even built one little windfarm, not even one wind turbine to create cheap, renewable power needed for a microgrid.
In a state where the threat of wildfires and equipment failures constantly cause power outages, where is the law that EVs MUST provide bi-directional charging?
This is all Political Theater, just like
- Becker, Papan, Mueller, and Speier's "fight on children with e-bikes" while totally ignoring drunk, distracted drivers.
- Becker's "let's buy energy from New Mexico" so SMC can keep greenwashing.
- Papan's "give me more money to fight sea level rise, while I go after bike lanes and e-bikes"
- Corzo's equity-warrior persona, while segregating San Mateo's schools AND rerouting homeless-funds to pension payments (Measure K).
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