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PG&E’s $9.8M care package for CEO Darbee

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POSTED March 10, 2010 2:16 a.m.
The young man knocking on my door wanted to know if I knew about the PG&E CARE program and if I wanted to apply.

I told him I did and that my income was too high. He asked if I wanted to apply anyway and I politely told him no.

CARE happens to stand for California Alternative Rate for Energy. It is designed to help low-income people struggling to make ends meet. The PG&E website notes, “We’ll help you manage your energy costs – which can be helpful when there are financial challenges or unexpected changes in your situation.”

PG&E Chief Executive officer Peter A. Darbee knows a thing or two about financial challenges. When he isn’t busy outsourcing jobs putting downward economic pressure on rank-and-file PG&E workers or raising rates he’s got financial challenges of his own.

It’s not the same type of challenge struggling families have between trying to make ends meet paying for food, shelter, and some of the highest electric rates in the United States. Nor is it the same struggle that business folks have trying to handle three to four PG&E rate increases per year while trying to keep the doors open and pay checks going to loyal employees.

Darbee’s financial woes are similar to Paris Hilton and Sam Walton’s heirs which is how to spend money.

PG&E last year suffered a 10 percent decline in profitability. Before you start digging into your pockets to send PG&E whatever loose change you can spare, that meant they cleared only $1.2 billion last year as opposed to $1.34 billion in 2008.

Naturally, this meant that Darbee was entitled to increased compensation. Call it the Enron-PG&E rule which is always reward the guy at the top even if he sends the company crashing into oblivion or to the edge of bankruptcy.

For his Herculean efforts to roll out the biggest PG&E rate increase in history - $1.01 billion that will be flattening your pocketbooks on Jan. 1, 2011 with tons of pre-shocks and after-shocks in the form of smaller rate hikes - while at the same time cutting back rank-and-file PG&E workers and losing part of the gold mine Darbee got a 46 percent increase in his performance compensation.

That would be akin to your employer giving you a 46 percent increase when their business dropped 10 percent. It isn’t going to happen because unlike PG&E your employer doesn’t know whether he will make a profit in this economy let alone stay in business. PG&E has a government guaranteed return of 11.35 percent thanks to the California Public Utilities Commission. It is one of the highest guarantees for a regulated utility in this country.

Now if you’re a PG&E shareholder you’re probably wondering what’s going on. Well, you won’t be seeing a lot of that money for a multitude of reasons including extravagant spending on trappings and salaries of the upper echelon at PG&E.

Darbee also received a 2 percent increase in stock options plus a 4 percent hike in his base pay.  His overall compensation is now at $9.8 million including $1.1 million for his base pay and $1.9 million that is performance based which is basically payment for cutting company profits by 10 percent.

How, you might ask, can a man with a $9.8 million income cover higher PG&E bills in these trying economic times? No problem as Darbee qualifies for a 25 percent PG&E employee discount.

 Now we find out that PG&E – which obviously has more money than it knows what to do with – has taken the liberty of spending up to nine cents per share to try to convince voters to amend the California Constitution to guarantee PG&E of high profits by making it difficult for anyone else to compete against them.

PG&E plans to spend upwards of $35 million to convince Californians on June 8 to pass Proposition 16. If adopted, it will require a two-thirds vote for any public agencies to enter the retail power business – including the green energy community aggregation programs that PG&E backed a few years ago to get critics off their back and now are trying to kill.

Rest assured that with all the talk PG&E is giving now to carbon foot prints and being more green that Darbee is indeed serious.

The only problem is Darbee’s financial footprint is a 16 triple wide that he’s helping crush PG&E customers with while the green he is effective at securing is the color of money.
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