No Bonuses for Utility Executives Act
- Sponsor
- Rep. Riley, Josh [D-NY-19]
- Committees
- Ways and Means Committee (primary)
- Last action
- Dec 11, 2025
Bottom line
The "No Bonuses for Utility Executives Act" aims to tie executive compensation at certain electric utilities to customer rate stability relative to inflation, with penalties redirected to customers.
What it actually does
This bill prohibits certain state-regulated electric utilities from paying executive bonuses if their average customer rate increase for a fiscal year exceeds the Consumer Price Index for All Urban Consumers (CPI-U) for the same period. If bonuses are allowed, they are capped at 25% of the median annual compensation of non-executive employees. The Federal Energy Regulatory Commission (FERC) and the Commissioner of Internal Revenue are tasked with oversight and enforcement, with forfeited bonuses being distributed as stimulus checks to affected customers.
Proponents argue
Proponents argue this bill protects consumers from excessive rate hikes by linking executive bonuses to responsible pricing practices. They contend it incentivizes utilities to keep customer rates in line with inflation, preventing executives from profiting while customers face rising costs. This measure promotes fairness and accountability in the utility sector, ensuring that executive compensation reflects the financial well-being of the customers they serve.
Opponents contend
Opponents might argue that this bill interferes with private sector compensation practices and could disincentivize top talent from working at covered utilities, potentially impacting operational efficiency and innovation. They may also contend that linking bonuses solely to CPI-U and customer rates oversimplifies the complex financial realities and capital investments required for utility operations, potentially hindering necessary infrastructure upgrades and grid modernization efforts.
The bill is very short and uses relatively straightforward language, making it accessible for a quick read and evaluation by an informed reader.
Section 2(a)
Executive Bonus Limitation
Starting January 1, 2025, certain electric utilities cannot pay bonuses to executives if their average customer rate increase for the fiscal year exceeds the Consumer Price Index for All Urban Consumers (CPI-U) for that year. If bonuses are permitted, they are capped at 25% of the median annual compensation of non-executive employees. This directly links executive pay to customer rate stability.
Supporters argue
Supporters argue this provision ensures executives are accountable to customers, preventing them from receiving large bonuses while customers face significant rate increases. It aligns executive incentives with consumer interests.
Critics contend
Critics might argue this provision unfairly penalizes executives for rate increases that may be necessary for infrastructure investment or operational costs, potentially discouraging leadership in a critical industry. It could also make it harder for utilities to attract and retain top executive talent.
Tradeoffs
This provision balances the desire for executive accountability and consumer protection against potential impacts on executive talent retention and the financial flexibility of utilities to manage necessary rate adjustments for operational stability and infrastructure investment.
Section 2(b)
Regulatory Oversight and Enforcement
The Federal Energy Regulatory Commission (FERC) is responsible for determining whether a covered utility can pay bonuses and the maximum allowable amount, based on information provided by the utility. FERC, jointly with the Commissioner of Internal Revenue, will determine compliance. Any bonus paid in violation of the limits must be forfeited to the United States. The Commissioner of Internal Revenue will then distribute these forfeited amounts as "stimulus checks" to each customer of the non-compliant utility.
Section 2(c)
Key Definitions
This section defines critical terms used in the bill. A "covered utility" is a state-regulated electric utility (as defined in 16 U.S.C. 2602) that is not wholly owned by United States persons. "Customer rates" include charges for electricity and natural gas. An "executive" includes C-suite officers and similar titles. A "United States person" is defined as a U.S. citizen, permanent resident, or an entity organized under U.S. law.
Defines "covered utility" as a State regulated electric utility (as defined in section 3 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602)) that is not wholly owned by United States persons.
Section 2(c)(1)
Why it matters:The use of external statutory references is standard legislative practice for brevity and consistency. However, the "not wholly owned by United States persons" clause is a specific policy choice that might be less prominent in the bill's title or summary, potentially limiting public understanding of its true scope.
Case for: Proponents might argue this specific targeting addresses concerns related to foreign-owned utilities or those with significant foreign investment, ensuring that the bill's provisions are applied where perceived vulnerabilities or different corporate governance structures exist.
Case against: Opponents could argue this clause introduces an arbitrary distinction, potentially creating an uneven playing field for utilities based on their ownership structure rather than their operational practices or rate-setting behavior. It could be seen as discriminatory or as an attempt to target specific entities without broader justification.
Estimated impact: Significantly reduces the number of electric utilities nationwide that would be subject to these bonus limitations, focusing the impact on a smaller, specific subset of the industry.