Sponsors (2)
The bill aims to protect ratepayers by limiting and reclaiming executive bonuses tied to above‑inflation utility rate hikes and speeding enforcement, but it risks higher compliance costs, regulatory uncertainty, and potential utility responses (like reduced investment or workforce pay) that could shift costs or degrade service over time.
Middle‑class and low‑income utility customers receive prorated direct payments from forfeited executive bonuses when a covered utility pays bonuses that violate the rate‑cap rule.
The bill limits executive bonuses tied to customer rate increases above inflation, deterring large pay increases that would otherwise be linked to higher utility bills.
Requires timely reporting to FERC (one week) and a FERC determination within one month, improving transparency and enabling quicker enforcement to protect customers.
Utilities that are wholly or partly foreign‑owned may offset restricted executive pay by raising non‑rate costs, cutting employee compensation, or reducing investment, which could degrade service or increase long‑term costs for customers.
Covered utilities may incur administrative and compliance burdens from rapid reporting and FERC/IRS coordination, potentially increasing operational costs that could be passed to customers.
Targeting utilities based on ownership (not whether they are wholly U.S.‑owned) may invite legal or trade challenges, creating regulatory uncertainty with downstream impacts for companies, customers, and taxpayers.
Based on analysis of 2 sections of legislative text.
Restricts executive bonuses at state‑regulated electric utilities not wholly owned by U.S. persons unless customer rate increases do not exceed CPI‑U and caps bonuses at 25% of median non‑executive pay.
Introduced December 10, 2025 by Josh Riley · Last progress December 10, 2025
Limits when state‑regulated electric utilities that are not wholly owned by U.S. persons may pay executive bonuses: beginning January 1, 2025, bonuses are allowed only if the utility’s average customer rate increase for the fiscal year does not exceed the 12‑month CPI‑U, and any bonus cannot exceed 25% of the median annual pay of non‑executive employees. Utilities must report rate-change and median-pay data to FERC within one week after the fiscal year ends; FERC (with the IRS for compliance) determines eligibility and the allowable amount. Bonuses paid in violation are forfeited and distributed pro rata to the utility’s customers by the IRS.