Electrical corporations: financing wildfire expenses: executive compensation.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical 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 prohibits an electrical corporation from recovering from ratepayers any annual salary, bonus, benefits, or other consideration of any value paid to an officer of the electrical corporation, and requires that compensation to instead be funded solely by shareholders of the electrical corporation. Existing law authorizes the commission, upon application by an electrical corporation and in specified circumstances, to issue financing orders to support the issuance of recovery bonds to finance costs in excess of insurance proceeds incurred, or that are expected to be incurred, by an electrical corporation, excluding fines and penalties, related to wildfires. This bill would condition electrical corporation recovery from its ratepayers of the costs incurred due to the liability of the electrical corporation for damages to third parties from a wildfire or any other safety-related failure, if those costs are not determined by the commission to be just and reasonable, on the negotiation of an executive compensation structure that meets prescribed principles. The bill would require the Governor to appoint a special master for executive compensation to engage in this negotiation with the electrical corporation and its executive officers. The bill would require the special master to submit to the commission for approval the executive compensation structure. The bill would require the commission to approve the executive compensation structure, contemporaneous with the approval of recovery of those costs from the electrical corporation's ratepayers, if it determines that the executive compensation structure meets those specified principles. This bill would make legislative findings and declarations as to the necessity of a special statute for the Pacific Gas and Electric Company. 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 a violation of the approved executive compensation structure would be a violation of an order or decision of the commission, which 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.