Recent reports on salaries paid to top Western New York executives in 2010 show two individuals from National Fuel Gas — a public utility — ranking first and second. David F. Smith, chairman and CEO, was paid $7.1 million. Ronald J. Tanski, president and CFO: $5 million. Altogether NFG paid $15 million to top management last year. Apparently the company can afford these salaries. Earnings in 2010 were $225 million.
In comparison, approximately 35 percent of workers in WNY (most of whom are NFG customers) earn only $25,000 per year. As of the last U.S. Census, the median income in Erie County was $46,739 per household, and 13.9 percent of our population was living below the poverty level. Every day, attorneys handling bankruptcy filings see families struggling to pay increasing heat bills, food and health care costs.
While (according to the Public Service Commission) NFG’s executive salaries are not paid exclusively by ratepayers, in light of those salaries there are two issues on which we feel the utility should be brought to task.
National Fuel collects over $10 million per year for the “Conservation Incentive Program” (CIP) through a hidden charge on bills. CIP was a response to state requirements to promote lower energy prices, reduce greenhouse gases, and create green jobs. Yet, less than one-third of CIP funds are spent on housing weatherization, the best way to reduce utility bills and greenhouse gases. Two-thirds go to advertising (with National Fuel’s logo), or rebates for high-efficiency furnaces that are prohibitively expensive for most Western New Yorkers.
Also, according to the NFG website, the money donated to charitable organizations by the National Fuel Gas Foundation since 2005 (when earnings totaled more than $1 billion) was $7 million. This Foundation money was raised through the donations of NFG employees matched dollar-for-dollar by the company. So in reality, NFG itself donated far less than $7 million. And, this money was not distributed solely in Western New York, it was given to more than 700 organizations throughout the country.
The handling of CIP funds will be investigated during three hearings scheduled after 15 local nonprofit organizations joined forces to form the National Fuel Accountability Coalition. The Coalition is requesting NFG stop using CIP funds for advertising and put the entire $10 million they collect from customers towards the conservation fund, plus match those funds with another $10 million from NFG profits. These investments would cut utility bills for thousands of WNYers while creating hundreds of green jobs. This would be at least one step toward NFG becoming a good corporate citizen. The next would be to implement a local charitable giving strategy more commensurate with the company’s earnings and the salaries paid to top executives. It’s time NFG stopped neglecting its responsibilities to NY’s energy efficiency programs, to its consumers, and to this region.