A couple of months ago, the PSC attracted
attention when its members
launched criticism of such practices. They complained about supposedly high
salaries and compensation for key employees but, more controversially,
excessive remuneration paid to directors. Each of the 11 chartered coops must have
members appoint a board of directors to oversee management.
A few PSC members fulminated about this, questioning
whether pay, travel expenses, and benefits like health insurance for part-time
board members were excessive, and ordered the coops to provide that kind of
information. Members wished to review such documents for consideration in
setting future rates of these utilities that it regulates.
But some became upset because the information came under court seal, meaning the PSC can’t release it to the public. The coops pointed out that they legally and reasonably could do this, as it contains proprietary information that potential competitors could use.
Predictably, north Louisiana’s Foster Campbell
split a gut over this. “That really makes me sick” he vented a few days before
the PSC’s monthly meeting last week. “How come they don’t want to tell their
members how much they pay their people? I don’t like the way that smells.”
At
that meeting, at Campbell’s behest the PSC began a process of regulatory reform
that would produce more open election of directors, term limits, and
restrictions on compensation. Over the next several months, its staff will draw
up new regulations that increase transparency and decrease incentives for boards
to assign themselves outsized compensation, whether directly.
And some figures do provoke closer scrutiny. Using
2016 data for ten coops, the hourly compensation figures they reported for
directors ranged from just under $33 an hour to a whopping over $238.
Yet none of this was a mystery. As nonprofits,
each coop must file an Internal Revenue Service Form 990 annually, which in
part requires financial information including compensation for board members
and key employees. This legally is a public record, and several aggregators
collect this online for free. Guidestar,
for example, posts the forms of four, three, and two years ago (but not the
past year’s, which it and other information it sells).
In about an hour looking through these and the
websites of the coops, I gathered some key information about the 11, such that
to compute as the hourly rate. Admittedly, the information has some gaps; it doesn’t
contain meter or member numbers, it only asks for key employee information for
those paid more than $100,000 that year, it may omit former directors who
receive less than $1,000, and the number of hours a week may overlap,
understating the numbers above.
Still, it has enough to draw conclusions about pay
levels. So, when the likes of Campbell rant and rave about alleged secrecy,
that’s more a reflection of their past inattentiveness than of any nefarious
activities of coop boards: they have been making this information public for
decades, and long ago experienced commissioners like Campbell who have served on
the PSC for multiple terms could have had the wit to have reviewed those data and
started this process.
(Well, there is Concordia Electric, which not only
failed to file its 2016 report, but on its 2015 report failed to indicate the number
of hours per week each director spent on coop business. However, it also racked
up the lowest total director compensation in 2015 and was second-lowest in
terms of such dollars spent per meter.)
Commissioners should skip trying to make
themselves look like ratepayer guardians now when they actually could have been
them years ago. But, better late than never.
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