Opinion ID: 1330179
Heading Depth: 1
Heading Rank: 1

Heading: salaries

Text: C & P sought management wage level increases of $5,036,000 as going-level adjustments. [2] These increases would have been implemented over the years 1980, 1981 and 1982. In Case No. 80-182, C & P's prior rate filing, the Commission allowed management wage increases for 1980 and 1981 of $536,000 and $779,000, respectively. In this case, C & P requested management wage increases of $1,343,000 and $2,335,000, respectively for 1980 and 1981. The Commission approved an increase of 20.1 percent over the 1980 test year levels, [3] and granted a wage level increase of $3,808,000. The Commission's disallowance of $1,228,000, does not reduce the increase previously approved in Case No. 80-182, and the Commission found that it permitted C & P to meet other competitive salaries in the utility industries. Finding of Fact No. 34 of the Commission's final order reads: C & P needs to pay reasonable wage levels to its management level employees in order to retain and hire qualified managers, and compete on a nationwide basis for qualified employees.... In Conclusion of Law No. 15, the Commission decided: While C & P is entitled to a reasonable level of management wages, it is unreasonable to approve an increase in those wages in excess of the inflation adjustment approved as reasonable for C & P by the Commission in this case given the current economic climate of this State. In the text of the final order, the Commission explained its position more clearly: The Commission is of the opinion that the C & P management levels which are included in this salary increase are entitled to higher levels than those approved by this Commission in Case No. 80-182-T-42T. Common sense indicates that for all citizens, the cost of living has increased and C & P's employees are not exempt from these increases. However, this Commission also recognizes that currently the State and the entire nation are undergoing a period of economic downturn, in which both union and management employees in companies across the nation are accepting either lower wage increases, no increases, or even wage reductions in return for continued employment. The Commission is of the opinion that C & P's proposed management salary increases should be approved only to the extent that they are not in excess of the inflation adjustment approved by the Commission previously in this order. Thus, we will adopt the Company adjustment up to the level of the inflation adjustment adopted previously in this order but will disallow those management salary increases, amounting to $1,228,000 which exceed the level of the inflation adjustment we have approved in this case. This decision reasonably reflects both the need of C & P employees for reasonable salaries and a recognition that in this current economic period, unlimited management salary increases may not be justified. We are mindful of C & P's arguments that its proposed salary levels are the minimum necessary to hire and retain qualified management; however, we are of the opinion given the occurrences set forth previously in this section (i.e. union and management employees across the nation accepting small or no wage increases, or even wage reductions), a management salary level increase up to 20.1 percent over the levels approved in Case No. 80-182-T-42T adequately meets C & P's need to pay competitive salaries. The Public Service Commission has balanced the financial integrity of C & P with appropriate protection to the relevant public interests and we cannot say their conclusion is contrary to the evidence, arbitrary, or results from a misapplication of legal principles. Virginia Electric and Power Company v. Public Service Commission, W.Va., 242 S.E.2d 698 (1978).