Your Utility $$$: Avista CEA Earns $3M

21 comments on this post so far. Add yours!

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  Dan_at_Avista on March 31 at 11:27 a.m.

  OK, so normally I’d wait until a few others chimed in first, but since the question goes directly to me – here goes: Our recent rate requests were made mainly to recover infrastructure investments and to cover increasing power supply costs.

  If you’re of the mind that top-level executives (at any company) are paid too much – that’s your business. I don’t intend to change your mind about that.

  Just know that in our case, the two aren’t linked as plainly as some think. But we want you to know how executive compensation is factored: get all the details here: http://bit.ly/bNYIK4

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  Kage_Mann on March 31 at 11:44 a.m.

  It seems as if every year, there are rate increases and every year the power company will say: they have to upgrade their infastructure. Does the power company have to make upgrades every year? The problem with the local power companies is: they have no competition, they’re protected and it seems as if the PUD will give them any increase in rates they desire. People need to go to the yearly meeting and voice their concerns.
  Where’s Joseph Newman’s perpetual motion machine when you need it?

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  Duffer on March 31 at 11:54 a.m.

  The poll’s not fair! Scott Morris apparently voted for $3M four times!!

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  Cabbage Boy on March 31 at 12:10 p.m.

  Nice deflection Dan. What money actually goes towards the exorbitant salaries then?

  That is about like saying no taxpayer monies go to funding abortions at Planned Parenthood. Nice accounting tricks, they make sure the funds don’t mingle, but extra funds used for one division sure help other funds to be used in another division.

  Recover infrastructure investment? That sounds like the price of doing business to me. Basically we are paying Avista for the right to provide power to us, and then paying for the power too.

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  Don_Sausser on March 31 at 12:11 p.m.

  As in any labor market compensation is determined by supply and demand. Any company or individual uses the same criteria when hiring, whether a gardener or CEO.

  How many would like government (us) to set pay levels for gardeners or CEOs?

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  DFO on March 31 at 12:18 p.m.

  @ Dan_at_Avista; sometimes even a dyne-oh!-mite spinmeister such as yourself can’t polish a horse apple. Just sayin’.

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  OrangeTV on March 31 at 12:21 p.m.

  This is actually quite nauseating to me. My monthly Avista bill this last winter cost half of what my rent is on a monthly basis and I don’t have a roommate to help out with bills. It was nearly $100 more per month than last year and I didn’t do a darned thing different usage-wise. I make just a hair too much money to apply for assistance, which I wouldn’t really enjoy doing anyway.

  I nearly had to give up my house and move in with a parental until over it all, but was fortunate enough to be able to get a loan to cover it. I’ll be paying that off for a while along with the remained of my Avista bill, which is still outrageous. Now they’re raising rates again?!?

  It’s awful nice of Mr. Dan to come on here and make a lame attempt at doing some damage control, but I’m afraid there simply is no justification to this kind of f***ery. It REALLY makes my blood boil, and I’m pretty sure I’m not the only one.

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  spokelooneh on March 31 at 12:30 p.m.

  “Any company or individual uses the same criteria when hiring, whether a gardener or CEO.”
  -Don Sausser

  Right, hiring a CEO of a multi-million dollar company is just exactly like hiring a gardener.

  Wait ‘til they get on-demand metering in place, how much are you willing to pay for electricity when it’s below freezing outside?

  It does not appear Avista’s massive public relations campaign over the past several months has assuaged the feelings of Avista’s captive audience, errr, customers.

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  jt on March 31 at 12:32 p.m.

  Kage - “Does the power company have to make upgrades every year?”

  Yes, and they should. What is broken is that most private businesses plan for this and it is simply part of the operating expenses of the business. Avista (and others) take these regular improvements to the local PUC and use the expenditures as rationale for rate increases. It’s the PUC which needs to reevaluate how they justify the rate actions.

  Don Sausser - “As in any labor market compensation is determined by supply and demand.”

  One would hope but it no longer seems to be the case. Pick up a copy of John Bogle’s book, “Enough”. Bogle is the founder of the mutual fund industry (and Vanguard specifically). Executive compensation is a “ratcheting upward game” which he details explicitly.

  Every company needs a good front face to address the public, press and markets. In the case of large organizations are they truly worth the “big bucks”? Not usually since you can pretty much change them at will and the business continues.

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  Sisyphus on March 31 at 12:37 p.m.

  “As in any labor market compensation is determined by supply and demand.”—hahahahahahahahahahahahaha. You guys really believe this crap don’t you. Howzabout explaining how the inherently unequal economic bargaining position works into that scenario.

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  wheels on March 31 at 12:58 p.m.

  CEO’s hire people with like minds to serve on the Board of Directors from which members of the ‘Compensation Committee’ are picked.Executive commpensation is way out of line period but they all have ways to rationalize the process.This is a real good ole boy deal and those of you that don’t believe it know nothing about business.

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  Dan_at_Avista on March 31 at 1:08 p.m.

  There’s a funny thing that happened a few years back when the government standardized how companies report compensation. You can see it in our proxy. It ends up being called total compensation, but factors in many things that don’t actually go into that individual’s paycheck (value of stock even if it’s not sold, pension value, etc.). Those costs make the total comp number quite a bit higher than if you really compared numbers with another worker/employee. The story breaks out those costs and you can see its lower - even if the headline is $3M because that’s the total value/potential. The total is still a rather nice living - no question about it - but closer to what the poll is calling for.

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  spokelooneh on March 31 at 1:25 p.m.

  The linked story says that 35% of such Exec. compensation comes from rate-payer dollars. Mentions something about the rest coming out of retained earnings, which are simply operating profits that accrued and were not distributed to shareholders.

  Why the 35% figure?

  And by the way, natural gas futures prices have declined 29%, THIS YEAR, and are right at about an historical low of 4 cents per million BTU. Why didn’t Avista lock in low wholesale gas prices in the last few months, and why are they asking for an increase in customers’ (captives) natural gas rates?

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  spokelooneh on March 31 at 1:31 p.m.

  Correction, $.4.00 per million BTU.

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  Dan_at_Avista on March 31 at 1:59 p.m.

  Spokelooneh,
  You noted natural gas. Because its such a volitile price market and our rates are set by regulators (annually or longer), we do buy gas when we can at low prices. But there is only so much storage capacity for this gas. The increase request covers investments to expand our underground natural gas storage facility in Jackson Prarie, Wash. We currently store gas there to keep prices as low as we can. You can find out about the natural gas increase request here: http://www.avistainfo.com/Home/RatesInAction/WhatsHappeningWithNaturalGas.aspx

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  idawa on March 31 at 2:01 p.m.

  it is interesting that he was rewarded for, apparently, drastically reducing costs per customer, but then turned around and raised rates because of increased costs. Don’t spend too much time scratching your head trying trying to reason out the why. The vast bulk of his, and the other executive compensation plans, are based on EPS and comparative stock performance. It’s a pretty simple equation; if you can can cut costs and increase prices at the same time it is all the better for your stock, all the better for your pocketbook, and all the worse for you customers. It’s a win, win in exec comp.

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  spokelooneh on March 31 at 2:32 p.m.

  Dan, certainly you know its not simply a matter of buying natural gas in the short term, and having to store it. Contracts are procured for delivery of gas in certain months hence, some of them very long multi-year contacts. You take delivery of that gas when you need it to supply to customers. Perhaps you have to store some of it if it’s not needed due to weather, etc. Or perhaps you take a small financial hit for not being able to use all the gas you contracted for.

  Again, what is the rationale for 35% of executive compensation coming from the rate-payers?

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  Joker on March 31 at 3:43 p.m.

  I am wondering how big are the gaps between the CEO’s compensation and the rest of Avista’s employees. If he’s making a cool $3 million, what the worker bees taking in?

  Overall, it’s very hard for the public to swallow a rate increase smack dab in the middle of recession. Mr. Morris’ compensation smacks of “Let them eat cake.”

  Dan and the rest of the Avista underlings are trotted out to take the nasty cannon shots while the executives in Avista Corp slap each other on back and tip back champagne glasses and wipe their rear ends with $100 bill toilet paper. Infrastructure… Yeah right.

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  spokelooneh on March 31 at 7:38 p.m.

  Joker I have no idea how much the “average” Avista employee makes, but they’ve got around 800 IBEW affiliated employees, which at full Journeyman scale, should be making about $30 an hour.

  Generally speaking, utilities pay pretty well, even for their lowest-skilled employees.

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  Don_Sausser on March 31 at 9:55 p.m.

  @Sis, hahahahahahah

  Lots of hahas but through this dialogue no one answered my simple question, “How many would like government (us) to set pay levels for gardeners or CEOs?”

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  darkstar on April 04 at 7:40 p.m.

  when avista asks for a increase…lower this guys income exactly the percentage point of the rate increase of what they ask for. I dont know of any other item that we buy that has a constant and regular increase as avista does. These people are bandits.

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