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While authorizing Providence Gas Co., a natural gas local distribution company (LDC), to raise its rates by a total of $3.99 million, the Rhode Island Public Utilities Commission (PUC) reduced the LDC's proposed expense allowance for executive incentive compensation by 60 percent, to match the portion of a performance incentive award designed to reward shareholders. The PUC said that 40 percent of the
performance-based awards under the company's executive incentive payment rules were based on criteria related to cost of gas and operations and maintenance expense. It assigned shareholders the portion of incentive awards based on net income and rate of return as well as the "discretionary" portion of the award. In a dissenting opinion, Commissioner Kate Racine said that executives were fairly compensated without the awards and should need no further inducement "to do a good job." She added that any awards should be given to executives and staff on an equal basis, using similar criteria. Re Providence Gas Co., Docket No. 2286, Nov. 17, 1995 (R.I.P.U.C.).
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