Jeffry E. Sterba

Jeffry E. Sterba was hired by American Water in August 2010 as president, CEO and board member, and received a $675,000 salary, a $200,000 signing bonus, and options to purchase 25,000 shares of the company. Over the past three years he has received $8,311,925 in compensation, including $3,787,715 in 2012.

Previously, Sterba worked in senior executive positions at PNM Resources (March 2000-March 2010), an energy holding company based in Albuquerque, New Mexico. Sterba’s career at the company spanned over 30 years, with him beginning as an intern in 1997.

While Sterba was chairman, president and CEO of PNM, the company was involved in litigation concerning the manipulation of energy prices during the 2001 energy crisis in California. California attorney general Bill Lockyer filed suit in 2005 against PNM and a Canadian company for alleged price fixing that cost Californians over $1 billion. Lockyer alleged that “Enron-devised trading schemes used to inflate prices” constituted collusion.

The case never went to trial in California courts because in 2006 Federal courts ruled that the Federal Energy Regulatory Commission held jurisdiction over electricity prices. In 2005, PNM agreed to pay $1 million to end a federal investigation of its practices during the California energy crisis.

In June 2006, Sterba was elected first vice chairman of the Edison Electric Institute, the energy industry’s largest trade group. Sterba also chaired EEI’s CEO Climate Change Task Force. The following year, EEI, set up a website for the “Water Advocacy Coalition” to oppose the Clean Water Restoration Act in 2007, which was introduced by Sen. Russ Feingold to clarify which bodies of water are subject to federal regulation. In 2007, while Sterba was at the organization, EEI spent $10,200,000 in federal lobbying,. and opposed even the Bush administration’s hesitant efforts to improve air quality standards.

In April 2011, when the West Virginia Public Service Commission refused to permit ratepayers to pay for any portion of incentive bonuses and stock awards for American Water executives, holding that “current economic conditions do not justify ratepayers bearing this expense,” Sterba attacked the PSC’s decision at American Water’s annual meeting the following month, declaring that it was inappropriate for “shareholders to subsidize customers” and threatening to leave the state.

Two weeks after the annual meeting, American Water announced it was laying off nearly 10% of the company’s workforce in West Virginia. This prompted a change.org petition campaign by the Utility Workers Union of America Local 537 demanding that Sterba stop the “union busting.” After a protest to the PSC, the commission blocked the layoffs in December. That year (2011) Sterba pulled down $3,111,138 in compensation from American Water, more than doubling his compensation from the previous year.

Under Sterba’s leadership, American Water’s labor relations have sharply deteriorated. In January 2012, the NLRB issued a complaint accusing American Water of illegally cutting healthcare, retiree health and disability benefits for 3,500 workers in fifteen states across the U.S. In October 2012, an administrative law judge issued a decision holding American Water responsible for the cutbacks and ordering the company to pay back pay. In June 2013, the NLRB found that Pennsylvania American Water, a subsidiary of American Water, violated the National Labor Relations Act by threatening employees in two bargaining units for their legitimate refusal to cross union picket lines at its facilities.