In a move that underscores the complexities of energy costs in New York, Governor Kathy Hochul has set in motion an unprecedented audit of utility company management salaries. This comes as part of her broader strategy to mitigate the impact of surging utility costs on residents across the state. In a statement provided to the governor's official website, Hochul declared, "New Yorkers deserve fair and transparent utility rates," adding that the audit "will ensure that utility compensation structures are working for New Yorkers, not rewarding expected behavior."
The directive for this review originated from Hochul herself, who tasked the New York State Public Service Commission (PSC) with the review. The PSC's focus will be on the compensation for non-union utility management employees, a concern particularly exacerbated by Con Edison's and the New York Power Authority's rejected rate proposals. Even though this step is designed to protect consumers from unfair rate increases, the battle against the inflation of utility costs is still far from over.
Remarkably, past audits of utilities, such as Central Hudson, have brought to light practices where bonuses were tied to financial performance while barely meeting minimum service quality metrics. This probe will incisively examine the compensation practices at 13 major utilities serving a customer base of 12.4 million New Yorkers. As stated by Commission Chair Rory M. Christian, "This audit is about accountability," as quoted on the Governor’s website. He added, "Management compensation is a reflection of a company’s values, and we expect utility values to mirror our own and be focused on providing quality, affordable service to ratepayers."
Hochul has been vigilant over the past four years in advocating for energy affordability through various initiatives. Programs such as the Energy Affordability Policy enhancements and a pioneering pilot program like the Energy Affordability Guarantee are part of her efforts to ensure low-income New Yorkers aren't overburdened by electricity bills. Assemblymember Didi Barrett expressed support for the Governor Hochul’s initiatives, acknowledging the necessity "to take a close look at utility company salaries to ensure our constituents across the state are not shouldering the burden of inflated salaries," as mentioned on the Governor's website.
The findings from this groundbreaking audit are poised to impact future rate cases, providing the PSC with invaluable insights into best practices and potential measures for cost reduction.
