While Energy Bills Skyrocketed, RI Energy’s Top CEO’s Salary Jumped 31% to $12M

While Energy Bills Skyrocketed, RI Energy’s Top CEO’s Salary Jumped 31% to $12M

Since Pennsylvania’s PPL bought Narragansett Electric and rebranded it RI Energy, energy prices both for gas and especially electricity have skyrocketed in Rhode Island.

In each of the past two winters, Rhode Islanders have seen electricity costs for homeowners and businesses jumping as much as 50% in a single year.

The increase in electricity costs jumped 47% in 2022 after regulators approved RI Energy’s rate increase.

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At the same time Rhode Islanders were getting hammered, the CEO of RI Energy’s parent company, PPL, saw a massive increase in his compensation package.

Vincent Sorgi, the CEO and President, realized a 31% increase to $12 million a year, according to PPL's financial reports.

In 2022 Sorgi’s full compensation was $9,146,575. 

PPL said in a statement to GoLocal said, "Regarding Mr. Sorgi’s compensation, specifically, CEO compensation is set by a committee of PPL’s Board of Directors, one comprised entirely of independent directors. More than 85% of our CEO’s compensation is at risk, based on performance against operational and financial goals aligned with increasing value for customers and shareholders."

 

PPL Defends The Increase in Rates

PPL defended the rate increases. "... a large portion of customers’ bills is made up of fluctuating commodity prices beyond our control. Unfortunately, as market prices have driven wholesale energy prices higher in recent years, the cost of energy we buy for customers who don’t choose a supplier has risen. We pass this cost through to our customers without profit and will continue to prioritize reliability and efficiency in the areas we do control – the delivery of power.

According to PPL’s financials, the finances of RI Energy improved in every segment from 2022 to 2023.

 

Rhode Island Regulated Segment

PPL's Rhode Island Regulated segment consists of the regulated electricity and natural gas operations of Rhode Island Energy, which was acquired on May 25, 2022.

Reported earnings in 2023 increased by $0.19 per share compared with a year ago. Earnings from ongoing operations increased by $0.12 per share compared to a year ago, primarily reflecting PPL's ownership of Rhode Island Energy for a full year in 2023.

Reported earnings in the fourth quarter of 2023 increased by $0.03 per share compared with a year ago. Earnings from ongoing operations in the fourth quarter of 2023 increased by $0.02 per share compared with a year ago. Factors driving earnings results primarily included higher revenues from capital investments, partially offset by higher interest expense.

 

Forward-Looking in 2024

PPL said it expects to maintain a balance sheet that is among the best in the U.S. utility sector. PPL continues to project a Funds from Operations (FFO)/Cash Flow from Operations (CFO) to debt ratio of 16% to 18% throughout the updated business planning period without the need for equity issuances through at least 2027.