safety performance and expenditures. The company’s compensation policies related to safety also should be included in the RAMP filing. RAMP filings should also cover the company’s organizational structure as it relates to safety. Each utility should analyze its successes and failures at improving its safety culture and describe its path forward toward a deep and pervasive safety culture. Beyond this, the Commission in proceedings has expressed its interest in ensuring that executive and senior management are not only engaged in the risk management process, but that these executives also have a defined stake in the safety outcomes of utility operations. For example, the pending PG&E Safety Culture OII has directly linked expectations regarding executive performance to a corporate culture that emphasizes safety and reliability: executive “PG&E’s and senior management should be serving as patient capital managers, with an appropriate emphasis on an organizational culture that prioritizes safety and reliability. Accordingly, PG&E’s Board of Directors should be holding its executive and senior management accountable for meeting these expectations through its governance and leadership in corporate culture. If PG&E’s Board and executive and senior management do not, then the Commission, in its regulation of public utilities, must act accordingly.” Taking this a step further, in the pending GRC for SDG&E/SoCalGas, the Commission has also suggested that executive compensation, particularly variable incentive compensation, should be based at least in part on safety performance:
safety performance and expenditures. The company’s compensation policies related to safety also should be included in the RAMP filing. RAMP filings should also cover the company’s organizational structure as it relates to safety. Each utility should analyze its successes and failures at improving its safety culture and describe its path forward toward a deep and pervasive safety culture. Beyond this, the Commission in proceedings has expressed its interest in ensuring that executive and senior management are not only engaged in the risk management process, but that these executives also have a defined stake in the safety outcomes of utility operations. For example, the pending PG&E Safety Culture OII has directly linked expectations regarding executive performance to a corporate culture that emphasizes safety and reliability: “PG&E’s executive and senior management should be serving as patient capital managers, with an appropriate emphasis on an organizational culture that prioritizes safety and reliability. Accordingly, PG&E’s Board of Directors should be holding its executive and senior management accountable for meeting these expectations through its governance and leadership in corporate culture. If PG&E’s Board and executive and senior management do not, then the Commission, in its regulation of public utilities, must act accordingly.” Taking this a step further, in the pending GRC for SDG&E/SoCalGas, the Commission has also suggested that executive compensation, particularly variable incentive compensation, should be based at least in part on safety performance: