Regulator May Drop Executive Pay Disclosure Rule

By Beacon Staff

HELENA – The Montana Public Service Commission is considering repealing a requirement that the regulatory agency disclose how much utilities pay their top three executives, an unpopular rule among companies that say it violates their employees’ privacy rights.

Commissioners voted 4-1 Tuesday to send a repeal notice of the rule to the Montana Secretary of State for publication, a first step in striking it from the books. The commission will then take a final vote either in April or in May after a hearing and a public-comment period.

The PSC instituted the rule in 2010, saying the compensation of the three highest-paid, Montana-based utility employees cannot be treated as confidential information. Commissioners who backed the rule then said it meant more economic transparency for the companies that have monopolies in providing water, electricity or gas services to Montana residents and businesses.

Mountain Water Co., which provides water to the city of Missoula and surrounding areas, sued after the rule passed, saying it violates the Montana Constitution’s right-to-privacy provisions and exceeds the commission’s authority. The case has dragged on for nearly 2 ½ years, until District Judge Mike Manahan on Feb. 25 halted proceedings for six months while the two sides work out a settlement that hinges on the PSC repealing the rule.

Menahan said in his order that a repeal of the rule would make the lawsuit moot.

At least two of the five commissioners on the all-Republican panel said they are eager to see the disclosure rule gone. One, Bob Lake, said the commission should be able to collect salary information in making decisions about rates and regulations, but the panel must also protect the rights of privately held companies.

Another, Roger Koopman, said constitutional rights to privacy are at stake.

“Privacy matters, and if we’re going to err, let’s err on the side of personal privacy,” Koopman said.

Travis Kavulla, the one commissioner to vote against the measure, said utilities are different from other private companies in that their salaries are completely paid for by customers who don’t have any other choice in where they receive their services.

“As long as ratepayers are paying for … these salaries, I think ratepayers have a perfectly justified concern in having it exposed to the public,” Kavulla said.

Commission Chairman Bill Gallagher voted for himself and by proxy for the absent fifth commissioner, Kirk Bushman, to send the repeal notice to the secretary of state. He said this is only the beginning of the process, and he is looking forward to the comments the panel receives.

He left open the possibility that besides repealing or keeping the pay disclosure rule, the panel also could modify it.

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