National Energy Board approves retention bonuses for pipeline regulators

I have been in several forums where Nuclear Regulatory Commission leaders have cautioned the nuclear industry about recruiting its employees. Their pitch is that such actions could cause a logjam where license applications and other regulatory actions will be slowed due to a lack of reviewing capacity.

Apparently, regulatory capacity constraints are not limited to the US nuclear industry. According to Canadian Business Online, that same problem is plaguing the petroleum (a term that includes all products including natural gas, crude, refined products, etc.) pipeline industry. The regulator for that industry, the National Energy Board, has been experiencing difficulty in retaining skilled staff members because companies within the industry are luring them away with larger compensation packages. (My guess is that the companies may also offer better working environments and greater opportunities for growth.) The full article is available at National Energy Board gets cash to retain staff as pipeline proposals pile up.

Experienced regulators are valuable in any highly regulated industry, especially one that is growing. Their knowledge and experience can greatly assist their new employer in preparing new license applications, in responding to inquiries, and in preparing itself for regular audits. Since government agencies are often constrained in their ability to alter compensation packages by rules designed to ensure that all employees are treated the same, almost without regard to their value to the organization, they have difficulty in targeting retention efforts and compensation in such a way as to keep particularly useful employees from walking out the door.

After much discussion, Ottawa (translated: Canada’s national government) has given the National Energy Board the authority to pay bonuses to retain staff members. Part of the reason it took a long time was a concern that the action would set a precedent that would be used by other government employees and unions to demand higher pay.

In this particular case, the extra pay package is going to paid by fees collected from the energy industry since it pays about 90% of the operating budget of the National Energy Board.

I am going to try to find out some more details about this pay package. My initial questions regard the targeting of the bonus – who is eligible within the agency? Is the bonus awarded by seniority or by productivity? The other set of questions would be whether or not the pipeline constructors themselves will be the ones targeted for the increase in fees or whether all energy companies will see increases in their fees to cover a general increase in the cost of operating the regulatory agency. If any readers happen to know some of the answers or have opinions they want to share, please add your comments.