Kathy Hochul Launches Audit of Con Ed Salaries Amid Double-Digit Rate Hikes for New Yorkers
The heat is on in New York as Governor Kathy Hochul takes action in response to Con Edison's proposal for double-digit rate hikes. Hochul has ordered a thorough audit of executive pay at the state's utility companies, particularly focusing on Con Edison, which is seeking to increase electric bills by 11.4% and gas bills by 13.3% for its 3.6 million customers. This move comes after a similar probe in 2023 seemingly approved the multimillion-dollar compensation packages of top executives.
The Public Service Commission, under Hochul's control, announced the audit on Thursday amidst public outcry over the proposed rate increases. If approved, New Yorkers could be facing an additional $1,848 in annual utility costs compared to five years ago. Notably, the PSC, which is filled with Hochul's appointees, will play a pivotal role in deciding the fate of these rate hikes.
Expressing her opposition to the rate increases, Governor Hochul stated, "This audit will ensure that utility compensation structures are in the best interest of New Yorkers. We are committed to holding utility companies accountable and ensuring that their primary focus remains on providing reliable, affordable, and high-quality service to the people."
Reports filed with the Securities and Exchange Commission and the PSC reveal the substantial compensation packages of Con Edison executives. Chairman and CEO Timothy Cawley leads the pack with a total compensation of $9.59 million, comprising a $1.3 million salary, $2.14 million in incentives/bonuses, and over $6 million in stock options and deferred compensation. Customers are said to cover approximately $1.3 million of his compensation.
Former Chief Financial Officer Robert Hoglund, who recently retired, received a package totaling $3.64 million, including salaries, bonuses, stock options, and deferred compensation, with customers contributing about $1 million towards his salary. President Matthew Ketschkes is not far behind, with a $3.1 million package that includes $1.7 million in stock options, $1.34 million in salaries, incentives, and deferred compensation, of which ratepayers cover around $707,000.
PSC Chair Rory Christian emphasized the importance of accountability in management compensation, stating, "This audit aims to ensure that utility values align with providing quality, affordable service to ratepayers." However, a previous independent audit conducted in 2023 by the PSC provided positive feedback on Con Edison's management practices and did not raise concerns about executive compensation.
The 2023 audit commended Con Edison for its efforts to comply with the state's environmental goals, including the transition to cleaner energy sources as mandated by New York's Climate Leadership and Community Protection Act (CLCPA). The utility now attributes part of the proposed rate hike to the costs associated with meeting these green mandates.
As Governor Hochul pushes for transparency and accountability in utility companies' compensation structures, the audit will shed light on whether the salaries of top executives are justified in the context of providing essential services to New Yorkers. The outcome of this audit could have significant implications for the future of utility pricing and the prioritization of consumer needs in the state.
