No Bonuses for Utility Executives Act

Bill Number

H.R. 6590

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Energy

Status

Introduced

Latest Action

2025-12-11: Sponsor introductory remarks on measure. (CR H5805)

Last Updated

2025-12-12T16:38:57Z

AI-Generated Summary

Purpose

The "No Bonuses for Utility Executives Act" (H.R. 6590) aims to restrict bonus payments to top executives of certain state-regulated electric utilities that are not fully owned by U.S. citizens or entities. It ties these bonuses to controlled increases in customer energy rates and fair employee compensation, promoting accountability and preventing excessive executive pay amid rising costs for consumers.

Key Provisions

• Bonus Eligibility: Starting January 1, 2025, a covered utility (a state-regulated electric utility not wholly owned by U.S. persons) can only pay bonuses to executives if the average percentage increase in its customer rates for the fiscal year does not exceed the rise in the Consumer Price Index for All Urban Consumers (CPI-U, a measure of inflation tracked by the U.S. Department of Labor).
• Bonus Cap: Even if eligible, any bonus cannot exceed 25% of the median (middle value) annual pay for the utility's non-executive employees in that fiscal year.
• Reporting and Oversight:
• Utilities must submit data on rate increases and non-executive median pay to the Federal Energy Regulatory Commission (FERC) within one week after the fiscal year ends.
• FERC must decide within one month whether bonuses are allowed and the maximum amount permitted.
• Compliance and Penalties:
• FERC and the Internal Revenue Service (IRS) Commissioner jointly verify compliance.
• Violations result in forfeiture of the bonus to the U.S. government.
• Forfeited amounts are redistributed equally to the utility's customers as one-time "stimulus checks" issued by the IRS, using customer data provided by the utility.
• Definitions:
• Covered utility: State-regulated providers of electric energy (and possibly natural gas) not fully owned by U.S. citizens, permanent residents, or U.S.-based entities.
• Executive: C-suite leaders (e.g., CEO, CFO) or similar high-level roles as determined by FERC.
• Customer rates: Charges for electric energy sales, including related natural gas if applicable.

Significant Changes to Existing Law

This bill introduces new federal restrictions on executive compensation in the energy sector, which were not previously mandated at the national level. It amends oversight of state-regulated utilities under the Public Utility Regulatory Policies Act of 1978 by adding bonus limits and FERC's role in approving them. It also creates a novel penalty mechanism involving IRS-issued payments to customers, expanding federal intervention in private utility pay practices.

Potential Impacts

• Government Agencies: FERC gains expanded authority to review and approve executive bonuses, increasing its workload and requiring coordination with the IRS. The IRS will handle compliance checks and customer payments, potentially straining resources for data processing and distributions.
• Citizens: Customers of covered utilities may benefit from stabilized or inflation-matched rate increases and receive direct rebates from forfeited bonuses, acting like refunds to offset energy costs. Non-executive employees could see indirect gains through bonuses tied to their median pay.
• International Relations: By targeting utilities with foreign ownership, the law could deter non-U.S. investment in the U.S. energy sector or prompt scrutiny of foreign-influenced operations, potentially affecting trade or diplomatic ties in energy markets.
• Utilities and Executives: Covered companies face stricter pay controls, which might complicate talent retention for executives and influence corporate governance.

Main Stakeholders Affected

• Covered Utilities: Primarily state-regulated electric providers with partial or full foreign ownership, who must comply with reporting and face penalties.
• Executives: C-suite leaders at these utilities, whose bonuses are newly limited or prohibited based on performance metrics.
• Employees: Non-executives benefit from the bonus cap referencing their median pay, potentially promoting pay equity.
• Customers: Residential and business energy users of covered utilities, who gain protections against rate hikes and possible rebate payments.
• Government Entities: FERC (oversight and determinations) and IRS (compliance and distributions).
• U.S. Energy Sector: Broader implications for investor-owned utilities, especially those with international ties.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill imposes federal limits on private compensation, raising questions about federal authority over state-regulated industries under the Commerce Clause of the U.S. Constitution (which allows regulation of interstate commerce like energy). It could face challenges on whether it unfairly discriminates against foreign-owned entities, potentially violating equal protection principles or trade agreements.
• Constitutional: By forfeiting bonuses and redistributing funds via the IRS, it blends regulatory and tax enforcement roles, which might be contested as an overreach into state utility regulation without clear interstate nexus.
• Political: The focus on foreign ownership highlights national security concerns in critical infrastructure like energy, aligning with trends in protecting U.S. assets from foreign influence. It may spark debates on executive pay fairness, corporate accountability, and consumer protections in an era of rising energy costs and inflation.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Riley, Josh [D-NY-19]

Cosponsors (1)

Rep. Van Drew, Jefferson [R-NJ-2]

Recent Actions

• 2025-12-11: Sponsor introductory remarks on measure. (CR H5805)
• 2025-12-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-12-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-12-10: Introduced in House
• 2025-12-10: Introduced in House

Bill Versions

• No Bonuses for Utility Executives Act — issued 2025-12-10 — PDF (5 pages)