His Name Is Mud


Here are a few items that Con Edison boss Kevin Burke probably won’t include on his curriculum vitae:

  • The 11.6 percent electricity rate hike that the utility asked for in May.
  • The June 27 blackout that affected power to 385,000 people and shut down six subway lines.
  • The July 18 steam-pipe blast in the heart of midtown that killed one person, shut streets, and resurrected images for some New Yorkers of September 11, 2001.

  • And who could forget the July 2006 Queens blackout, which left 174,000 people without power for up to a week and cost businesses tens of millions of dollars. Last February, the state Public Service Commission concluded that the cause of the outage was the company’s failure to “operate, maintain, and oversee the
    Long Island City network.”

    Burke, 56, made $4.7 million last year in salary, stock, and incentives, according to a May SEC filing. That may sound like a lot of money, but it’s only a third of the $12.7 million salary earned last year by Con Edison’s chairman, Eugene McGrath. Five other executives made a total of $11.5 million in 2006.

    “It’s remarkable they pay them so much to do so little,” says Councilman Eric Gioia, a Democrat from western Queens. “When I hear numbers like that, it’s adding insult to injury.”

    Gioia and a bunch of Queens business owners are still steamed about the utility refusing to pay for lost revenue following the 2006 blackout. The company has declined to change that policy, which only pays up to $7,000 for spoiled stock.

    But is it fair to lay the blame at Burke’s feet? After all, it’s an enormous, complex, and aging system. How much can one person do?

    “It is a big and complicated system, but Con Edison relies on that fact to avoid responsibility,” Gioia says. “But this company has paid
    out dividends to shareholders 33 years in a row, paid exorbitant salaries to its executives, and soaked ratepayers. The question is, do they owe an obligation to their shareholders or the people of New York?”

    Assemblyman Mike Gianaris, another aggrieved Queens pol who represents Astoria, says the aftermath
    of the steam-pipe explosion is once again following a flawed pattern. “Con Ed presides over a disaster, investigates itself, claims no wrongdoing, and shortchanges its victims,” says Gianaris, who has co-authored a bill that would increase state oversight of the utility. “We pay the highest rates in the country, and yet Con Ed would rather pay dividends to shareholders than improve its infrastructure.

    “We cannot continue to coddle this company as their failures stack up.” Democratic Councilman Dan Garodnick, who represents the area affected by the steam explosion, says he’s frustrated that the cause is still unknown nearly three weeks afterward, and he’s somewhat irked that Burke wouldn’t attend a council hearing August 7. “I think it’s not a complete hearing without him,” Garodnick said. “New Yorkers need to feel confident in the steam system, and I see real questions that need to be answered.”

    Con Ed spokesman Alfonso Castillo says the the utility has learned its lesson from last year’s crisis, and he notes that city and state representatives are involved in the investigation of the steam explosion. “We haven’t gotten all of the infrastructure out of the hole and we have to document the whole thing,” Castillo says. “We’re trying to work as quickly as possible.”

    As for the rate hike, the proposal is still pending with the state Public Service Commission, and a decision won’t come for as long as a year. Thus far, the public comments sent to the PSC have been rather unfriendly. Some of the comments claim that the 11.6 percent increase would actually work out to a 17 percent increase for residential customers.

    Bayside resident Mildred Weinstein wondered, “Is it the duty of the Public Service Commission to approve Con Edison’s increase regardless of their performance?”

    Gene Oleson of Chelsea wrote: “Top executives of Con Edison NY have been given lavish salaries and most likely bonuses and yet have done a terrible job. It seems very unfair that the average citizen of New York must bear the cost for the company’s ineffective management of its infrastructure.”

    Castillo counters that the salaries of Burke and McGrath are in line with the industry norm. And he says that because of increased usage, the utility plans to spend $7.5 billion over the next five years on the electrical infrastructure. “Customers are using 20 percent more electricity now than 10 years ago,” he says. “We are projecting 15 percent more over the next 10 years.”

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