RFP to Conduct Operations Audit to Examine Management Incentive Compensation Programs at Electric, Gas, and Water Utilities

Background
The New York State Public Service Commission (PSC) is initiating a focused operations audit to examine the management incentive compensation programs at electric, gas, and water utilities in New York.

The audit aims to analyze and compare the variable pay programs of various utilities including Consolidated Edison, Orange and Rockland Utilities, and others. The goal is to ensure that these compensation programs are aligned with industry standards and provide demonstrable benefits to ratepayers. This initiative follows concerns raised in previous audits regarding the effectiveness of these programs in promoting safety, reliability, and customer service.

Work Details
The consulting firm selected for this audit will be responsible for:
1. Assessing each utility's approach to setting management compensation levels against industry standards, including the tools used for benchmarking and the adequacy of compensation studies.
2. Evaluating the effectiveness of incentive pay programs in driving performance that benefits ratepayers, focusing on safety, reliability, customer service, and environmental goals.
3. Developing actionable recommendations based on findings from the audit that can improve utility performance and better utilize variable pay programs.

Deliverables include a Work Plan, Draft Report, Final Report, Benefit/Cost Analyses (BCA), status updates during the audit process, and briefings with stakeholders.

Period of Performance
The contract term is expected to last between 12 to 18 months from the date of contract award.

Place of Performance
The audit will be conducted across all New York State counties where the utilities operate.