Executives' extra pay was based on job performance in 2000
Portland General Electric handed out $2.5 million in bonuses last year at the same time it was raising its customers' electricity rates by more than 30 percent.
Peggy Fowler, president and chief executive officer, received $765,000 last year, of which $450,000 was a bonus and $315,000 was salary. Fowler's base salary has since risen to $353,305.
The bonuses were awarded for executives' performance in 2000, when PGE REPORTED NET income of $141 million on revenues of $2.2 billion.
Thirteen other PGE managers got bonuses, ranging from $200,000 for Fred Miller, executive vice president of retail and distribution services, to $130,000 for Steve Quennoz, head of nuclear and thermal operations.
The Portland utility, which reported a $5 million loss on $900 million in revenue last quarter, has not produced nuclear power since Trojan closed in November 1992.
'When you look at the bonuses they were paid, clearly there is a disconnect between utility executives and the rates' impact on customers,' said Bob Jenks, executive director of the Citizens Utility Board.
'The rate increase had an effect on Oregon's economy. What are they being rewarded for, their ability to raise rates? They should be rewarded for holding rates down, not raising them.'
PGE spokesman Kregg Arntson said all of the company's employees are awarded bonuses based on meeting certain goals.
By the same token, PGE 'has been dealing with issues of its parent company as well as the power crisis,' he said.
Fowler declined to comment for this story.
PGE's parent company, Enron Corp., filed for bankruptcy last year. It got its subsidiary into hot water when it failed to pay millions in federal income tax, which PGE had collected via customers' bills.
Although Enron initially agreed to sell PGE to NW Natural for $2.8 billion, the energy trading company now is less certain about its commitment to the deal. Officials said they would inform the bankruptcy court in mid-April if the company would accept the sale, now under review by the Oregon Public Utilities Commission.
Because of the uncertainty about PGE's status, Standard & Poor's said last week that it was leaving the utility on the credit watch it imposed last October when NW Natural announced it was buying the company. S&P threatened to lower PGE's credit ratings further if Enron decided to retain PGE.
The 2001 bonuses are separate from the retention bonuses that Enron intends to pay top PGE managers for remaining with the company during the NW Natural sales transaction, Arntson said.
In a study of salaries of the top 100 electric utilities nationwide, Fowler's salary was about 20 percent or $154,000 above average, according to McCullough Research, a Portland energy consulting company.
The highest-paid utility executive in the study, the chief executive officer of the Public Service Electric & Gas Co. in Newark, N.J., was paid $2.37 million last year. The utility had $5.9 billion in revenues. Arizona Public Service Co., whose $2.7 billion in revenues is comparable to PGE's $2.25 billion, paid its chief executive $664,484.
Jenks pointed the finger at Enron for the higher-than-average salaries at PGE.
'Enron seemed to be about getting executives rich rather than serving shareholders or customers,' he said. 'It's not a surprise that PGE senior management is rewarded better than that of other companies.'
Fowler earned more than her one-time boss at PGE, NW Natural CEO Richard Reiten. Reiten was paid $662,000 last year, of which $230,000 was bonus. Both executives also exercised stock options during 2000.
'This is just common sense Ñ if you are basing on the size of the industry revenues, she'd be paid quite a bit less,' said Robert McCullough, president of the Portland-based consulting group that bears his name. The 2002 industry salary increases, by comparison, are 'low to middling,' he said.
Salary increases for 2002 range from 1.7 percent for Fowler to 14.6 percent for Mary Turina, vice president of power supply. Turina now earns $203,000.
The Oregon Public Utilities Commission looks at executive compensation when considering proposed rate increases. In the past, it has requested that PGE reduce its labor expense before approving a rate change, said PUC staff member Ed Krantz.