Committee approves limit on ratepayer recovery of utility supervisor pay in HB 1

The Environment and Transportation Committee on Thursday approved House Bill 1, which prevents investor‑owned electric and gas companies from passing to customers any portion of supervisor compensation that exceeds 110% of the maximum annual salary payable to the chair of the Public Service Commission (PSC). Chair Fraser Hidalgo presented the bill as amended and said the measure also requires each company’s board to adopt a company‑wide policy placing reasonable cost limits on certain expenditures and to file updated policies with the PSC.

Why it matters: Sponsors said the bill is designed to keep bonus and executive compensation costs off ratepayers’ bills and to make the PSC and utilities more transparent about what costs are included in rate requests. The committee advanced amendments that clarified which pay elements count toward the threshold and tightened reporting requirements to the PSC.

What the bill does: As amended, HB 1 (1) sets the rate‑recovery cap at 110% of the PSC chair’s maximum salary (the sponsor said that equates to roughly $249,812), (2) extends the recovery prohibition to compensation paid by parent companies or affiliates, and (3) explicitly excludes vision and dental insurance from the compensation total used to calculate recoverable costs. Chair Fraser Hidalgo said, “We are not in any way saying what the utilities can pay or can't pay their supervisors, their employees, or their executives. We're just saying that the ratepayer is going to pay for the first, in this case, $2.50. After that, it's up to them.”

Committee debate and amendments: The panel adopted subcommittee amendments that staff described as technical and clarifying. Delegate Kelly Foley asked what customers might see on their bills as a result; Hidalgo said staff’s quick estimates vary and that final savings depend on classifications and how companies report costs. Delegate Emmet Delia Grammer moved a separate amendment aimed at rolling back portions of Senate Bill 1 (2024) to revive retail competition in parts of the market; Grammer argued SB1 led to the exit of some providers and higher prices, saying “we're likely to actually do the opposite” by limiting options. Hidalgo and other members said SB1 addressed bad actors and that broader changes to SB1 should be considered in standalone legislation. That amendment was debated and put to a committee vote.

Vote and next steps: The committee conducted a roll call and the chair declared HB 1 passed. Members were invited to be added as cosponsors by a post‑vote 'pile on' procedure; several delegates asked to be added. The bill will move forward to the next step in the legislative process.

What the committee did not resolve: Committee members noted the PSC already exercises authority in rate cases and that the precise dollar impact on consumers depends on forthcoming data from utilities and classifications; witnesses’ specific cost estimates were not finalized in committee. The statute’s practical effect will become clearer when utilities file rate cases and when the PSC reviews affected filings.