Report Targets Edison Bonuses
Southern California Edison Co. should be forced to return $94 million in bonuses earmarked for managers as a result of fabricated reports inflating the utility’s customer service record and downplaying workplace injuries, a state official said Thursday.
Edison has already offered to return nearly $50 million in state-approved bonuses it earned on the basis of the phony customer service and workplace safety reports.
But a unit of the state Public Utilities Commission is recommending that the utility return an additional $84 million in bonus money that Edison managers earned beginning in 2003 for meeting safety and customer service targets plus $10 million that had been designated for managers but not yet paid out.
“This is blatant fraud,” Aaron Johnson, deputy director of the PUC’s Division of Ratepayer Advocates, said Thursday. “The question becomes how expensive does the commission want to make this [for Edison]?”
Edison executives declined to be interviewed Thursday or to say whether the utility planned to return the management bonuses. In a statement, the company said it was cooperating with the PUC.
Johnson said his department determined that the bonuses were paid in connection with the trumped-up reports, but he said it was not clear how many managers earned the bonus money, or what the average bonus was.
He said the bonuses were funded out of the bills paid by Edison’s 4 million customers in Southern and Central California.
According to his department’s report, the $94 million was given to Edison under a “results-sharing” program that spans all levels of management, from the top executives at the utility down to lower-level department and district managers.
However, the report said Edison could not break out the distribution of the payments.
Edison admitted in 2004 that it gave state regulators falsified data from 1997 through 2003 in a scheme to collect tens of millions of dollars in ratepayer rewards for good service and fewer employee accidents.
The Rosemead-based utility’s admission came shortly after an anonymous whistle-blower wrote a letter to Edison executives and state officials complaining about the fraud.
The company said its internal investigation determined that employees in Edison’s electricity planning department boosted customer service grades by doctoring the database of customer phone numbers used by outside surveyors to gauge their performance.
Driven by Edison supervisors eager to win bonuses and promotions, some employees substituted their phone numbers or the phone numbers of friends or family members who could be counted on to give glowing reports about Edison’s service.
Others left off phone numbers, transposed digits or used nonworking numbers to keep surveyors from interviewing unhappy customers.
Consumer advocates have criticized Edison, a unit of Edison International, for not agreeing to return the entire $83 million it earned in bonuses for customer service and workplace safety at the time the false reports were filed.
Edison contends that it legitimately earned more than $34 million in bonuses and should be allowed to keep that money.
The San Francisco-based Utility Reform Network contends that Edison should be forced to pay $118 million, a figure which includes the customer service and workplace safety bonus money, as well as penalties.
Anything short of that would be “a slap on the wrist for years of lying and cheating,” said Marcel Hawiger of the Utility Reform Network.
Hawiger declined comment on whether Edison should be forced to return the management bonus money as well.
