No Bonuses for Utility Executives Act

What it does

• •Prohibits state-regulated electric utilities from paying bonuses to C-suite executives unless the average percentage increase in customer rates for that fiscal year does not exceed the Consumer Price Index for All Urban Consumers (CPI-U) for the same period.
• •Caps any permitted bonus at 25 percent of the median annual compensation of non-executive employees at the utility for that fiscal year.
• •Requires utilities to notify the Federal Energy Regulatory Commission (FERC) within 7 days after each fiscal year ends with information on rate increases and median employee compensation, and requires FERC to determine within 30 days whether bonuses are permitted and the maximum allowable amount.
• •Establishes a forfeiture and penalty mechanism: bonuses paid in violation of the rules, those not pre-approved by FERC, or those based on false information are forfeited to the United States, and utilities must pay a civil penalty equal to the forfeited bonus, which is then distributed to customers as individual payments.

Why it matters

• •The stated purpose is to tie executive compensation to rate increases, preventing utilities from raising customer rates while paying large bonuses to executives.
• •Forfeited bonus amounts are returned directly to utility customers rather than retained by the utility or government, creating a direct ratepayer benefit mechanism.

Who is affected

• •State-regulated electric utilities (as defined under the Public Utility Regulatory Policies Act of 1978) and their C-suite executives.
• •Utility customers, who benefit from refunds if bonuses are forfeited, and who may be affected by utility compliance costs.

What happens next

The bill was introduced in the Senate on August 6, 2026, read twice, and referred to the Committee on Energy and Natural Resources; the effective date of the bonus restrictions is January 1, 2027.