Background
GO 77-K requires utilities to annually file certain compensation data for all executive officers. The GO additionally requires the same data be filed for all employees receiving annual compensation above defined amounts, based on the annual operating revenue of the utility. The data include employee names, compensation, expense accounts, contingent fees and reimbursed dues and donations. These data are primarily used in the rate-setting process to ascertain if executive and employee compensation is within prevailing standards and if any cross-subsidization exists where ratepayers are charged with costs unrelated to utility services (see D.96-07-052).
The annual utility operating revenue and employee compensation levels that trigger reporting were last reviewed in 1986 (GO 77-K) and were separated into three tiers:
Tier |
Utility Revenue |
Employee Compensation |
I |
$1 billion (minimum) |
$75,000 |
II |
$1 million - $1 billion |
$60,000 |
III |
$500,000 - $1 million |
$40,000 |
We instituted Rulemaking (R.) 03-08-019 as the result of Petition for Rulemaking (P.) 02-12-039, filed by G/LIF. In its petition, G/LIF suggested several changes be made to GO 77-K, including the reporting of holding company executive compensation, management diversity and philanthropic contributions. After review, we partially granted the G/LIF petition, narrowing the scope of the rulemaking to focus only on whether we should amend GO 77-K in the following three areas. All other aspects of the petition were denied.
1. Amend compensation levels that trigger reporting to the Commission under the GO, and establish an automatic annual change based on the U.S. Department of Commerce Gross Domestic Product Price Index (GDPPI).
2. Exempt CLECs and NDIECs from the provisions of the general order.
3. Determine if information on employee names should be filed as confidential material subject to Pub. Util. Code § 583.
We solicited comments, limited to these issues, from interested parties. Using the timetable proposed in the rulemaking, opening comments were filed on October 7, 2003 and reply comments on October 22, 2003. Sixteen parties filed comments. Each issue is discussed below, with a review of the relevant comments. The PG&E and G/LIF joint petition to modify the rulemaking is discussed in a later section.
