CA Pub Util Code Section 706


(a)

For purposes of this section, the following terms have the following meanings:

(1)

“Excess compensation” means any annual salary, bonus, benefits, or other consideration of any value, paid to an officer of an electrical corporation or gas corporation that is in excess of one million dollars ($1,000,000).

(2)

A “triggering event” occurs if, after January 1, 2013, an electrical corporation or gas corporation violates a federal or state safety regulation with respect to the plant and facility of the utility and, as a proximate cause of that violation, ratepayers incur a financial responsibility in excess of five million dollars ($5,000,000).

(b)

For a five-year period following a triggering event, no electrical corporation or gas corporation shall recover expenses for excess compensation from ratepayers unless the utility complies with the requirements of this section and obtains the approval of the commission pursuant to this section.

(c)

Any time within a five-year period following a triggering event and prior to paying or seeking recovery of excess compensation, an electrical corporation or gas corporation shall file an application with the commission that, with respect to any officer to whom it seeks to pay excess compensation, includes all of the following:

(1)

The compensation history for the officer.

(2)

The proposed compensation to be paid to the officer, including the compensation recovered from ratepayers and that paid solely by shareholders of the utility.

(3)

Whether any of the compensation paid to an officer was previously included or proposed to be included in rates and any justification for the proposed compensation.

(4)

Any additional information required by the commission.

(d)

As part of the proceeding to consider the application, the commission shall consider the costs to ratepayers of the triggering event. The commission shall hold not less than one duly noticed public hearing in the proceeding. The commission shall issue a written decision determining whether any expenses for excess compensation proposed to be paid by the electrical corporation or gas corporation should be recovered in rates, or if previously authorized to be recovered in rates, should be refunded to ratepayers.

(e)

A person or corporation owning or operating a qualifying facility pursuant to federal law or a facility that is an exempt wholesale generator is not an electrical corporation due to the ownership or operation of that facility. This subdivision is declaratory of existing law.

(f)

In every decision on a general rate case, the commission shall require all authorized executive compensation to be placed in a balancing account, memorandum account, or other appropriate mechanism so that this section can be implemented without violating any prohibition on retroactive ratemaking.
Last Updated

Aug. 19, 2023

§ 706’s source at ca​.gov