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Storm Warning Merger Madness Volume 55 No.1 • Jan./Feb. 2006 One for the Birds 16 Storm Warning Merger Madness Leadership 2 in Utility Industry Poses Threat to Service Reliability in Negotiations by Eric Wolfe hortly after making landfall along the Gulf Coast of utility—but no one’s answering the phone in Texas or Tokyo. Member Letters: More 3 Florida last October, Wilma was downgraded to a Cat- Welcome to a world without PUHCA. Segory 2 hurricane with top winds around 100 mph. Never- It’s a world we’ve seen before, according to Lynn Hargis, a support for retirees theless, power outages were unprecedented. Over 3 million lawyer who spent 10 years at the Federal Energy Regulatory Florida Power and Light customers lost power, including 98% Commission and another 17 years helping companies com- Outside Construction: 6 of Miami-Dade and Broward counties. Ten thousand utility ply with PUHCA. Interesting times poles that were supposed to withstand winds of 119 mph “The last time there was no PUHCA we had a Great De- crumpled, 240 substations were knocked out, and Florida pression,” Hargis wrote in her 2003 monograph PUHCA for Bargaining Roundup: 7 regulators launched an investigation to find out why. Dummies. “PUHCA was enacted because huge holding com- RT, Lodi, EPA PROVCO, But you don’t have to be Sherlock Holmes to figure this one panies were using secure utility revenues to finance and out. Since 1991, Florida Power and Light has cut operating guarantee other, riskier business ventures around the world.” NCPA, Mirant and maintenance costs per customer by over 35%. Between In the seven years following the great stock market crash of 1995 and 2002 the Florida Power & Light workforce was 1929, 53 utility holding companies went bankrupt and 23 Transformation: 10 slashed from 14,500 to 9,800. Between 2002 and 2004 the others defaulted on interest payments. continued on page 4 Members review utility decreased per-customer tree trimming costs by 5%, PG&E’s plans accompanied by a sharp increase in tree-related outages. State regulators say that it would take the utility 60 years, at HAVING IT BOTH WAYS Dog Attack: Protecting 11 its current pace, to inspect all of its poles. You might think that Florida Power & Light, chastened by The Jefferson-Martin Transmission project will yourself in the field Wilma and under investigation, would embark on a crash increase power capacity while protecting delicate program to rehabilitate its infrastructure. The utility has the wildlife. Feature story begins on page 8. Retiree News: North Bay 12 cash—its stock price has performed almost 20% better than Chapter up and running the average electric company over the past five years. But Florida Power & Light has found a better use for its money. Sandoval Scholarship 15 Last month, the utility announced that its holding company, FPL Group, will purchase Constellation Energy Group and Trade School grants —familiar to Californians as one of the out-of-state energy pirates forced to settle with the state’s attorney general for The Coal Mine News briefs gaming California’s electricity market in 2000-2001. where 12 miners died this month has a history of serious safe- The FPL-Constellation marriage was made possible by the ty violations, but the mine’s owners repeal last August of the Public Utility Holding Company Act. have escaped significant fines, the But their merger is little more than the advance winds of a AFL-CIO reported. Since taking of- monster storm of utility consolidation now gathering on the fice in 2001, the Bush administration has cut funding and eliminated 170 The last time there was no PUHCA staff at the Mine Safety and Health Administration. we had a Great Depression Old Enough? The British govern- Lynn Hargis, PUHCA for Dummies ment said on Nov. 30 it will consider raising the retirement age as high as horizon. For the utility customer who expects reliable serv- 69, Labor Notes reported. Mean- ice, for the utility employee who depends on a stable em- while, in Belgium, tens of thousands ployer, for the retiree who relies on a regular dividend from a of workers held a one-day national “safe” utility stock, there may be no safe harbor when the strike in late October to protest their storm arrives. government’s plan to raise the na- tional retirement age from 58 to 60. A World Without PUHCA Well, Partly Human: A Delphi For generations, Americans have received electric service worker angry with his company’s re- from utility companies close to home. The mission of these cent bankruptcy filing offered Delphi companies has been to provide everyone with safe, reliable CEO Steve Miller up for auction on service at the cheapest possible price. State regulators, an- Ebay. “Do you have pensions, retir- swerable to the public’s elected representatives, have provid- ees and workers you need to dump into Third World wages?” the post- ed the oversight needed to make sure that utility companies ing asked. “Well, Steve is your do their job. man!” Bidding reached $1.50 before But imagine a different approach to electric service: Ebay removed the ad, the Detroit Your utility is no longer located in your home state, it’s Free Press reported. headquartered in Texas—or Tokyo. Your utility’s finances are The Right to Organize was the no longer made secure by a guaranteed rate of return on in- battlecry at rallies around the coun- vestment, but are controlled instead by global oil companies try last month that attracted about or venture capitalists. When your rates go up or your service Working the conduit deep in the trench are, from top to bottom, Groundmen Jacque 60,000 people, the AFL-CIO reported. takes a dive, your state legislator calls up the head of the Johnson and Treobia Battles, and Operator Patrick Wynkoop. ney, he is the person who guided these negotiations every step of the way. Journeyman PG&E Physical Tom is not the sort of person who seeks publicity. He is a quiet negotiator unit ratifies who never wavers in his focus on get- wage bump ting the most for our members. He not ocal 1245 has negotiated a 1% agreement only understands the mathematics of wage increase for all bargaining Members of the Physical bargain- negotiations, he has a keen sense of the Lunit members working in jour- ing unit at PG&E overwhelmingly dynamics that take place at the bar- ney-level classifications at Pacific Gas & ratified the new wage agreement for gaining table—the tactical considera- Electric. 2006-2008, the final count of ballots tions that are needed to make a bar- The wage increase, which will apply showed. Balloting had been gaining strategy succeed. He under- to approximately 4,000 members, takes extended to Jan. 3 to give members stands that bargaining, in the end, effect Jan. 1, 2006. Approximately 1,000 in General Construction an oppor- comes down to people. apprentices now in the system will also tunity to vote. GC members were By personal example, Tom always Leadership in benefit from this increase when they accidentally excluded in the original sets a professional tone for bargaining. reach journeyman status. mailing of the ballots. Final results negotiations His expertise and no-nonsense manner The timing of the increase assures for the Physical unit were 3,137 vot- earn the respect of management, and that the pension of all those working in ing yes, 1161 voting no, and 18 bal- his fall’s bargaining with PG&E set an example for our own committee journeyman classifications who retire lots unable to be verified. The Cleri- for wages in 2006-2007 was an members, whether it’s at PG&E or at in 2006 will be based on a wage that cal vote, announced Dec. 1, was Timportant achievement. We negotiations currently under his direc- includes this increase. 952-80 for approval. negotiated wage increases that exceed tion at the City of Santa Clara, the City “We are pleased that PG&E has taken what similar utilities have been offering. of Healdsburg, and Truckee-Donner this additional step to recognize the We insulated ourselves against medical Public Utility District. His method at essential contribution that journeymen A P P O I N T M E N T S takeaways by extending the current the bargaining table comes from long make to this company,” said Business agreement an extra year—through 2008. experience—he negotiated his first Manager Perry Zimmerman. We secured increases in LTD benefits. labor agreement for grape workers in Local 1245 sought comparable And, in related negotiations, we the Coachella Valley in 1974, and has adjustments for Gas Serviceman and PACIFIC GAS obtained an agreement from PG&E to led or assisted countless negotiations lead Clerical positions, but the company AND ELECTRIC pass on its Medicare Part D federal during his 25 years at Local 1245. would not agree to those increases. PG&E Ballot Committee (Wages) rebate directly to retirees in the form of At the end of the day Tom under- “We were disappointed that the Keith Hopp stands that Local 1245 is a union of the lower health care premiums. company did not extend these CITY OF UKIAH We did not get everything we hoped members, and during the PG&E negoti- increases to a wider group of employees ations he knew the exact moment to Bargaining Committee for. Retirees deserve a cost-of-living to encourage retention,” said Zimmer- Jim Lozano increase in their pension and greater stand aside and let the members make man. “But it is not our practice to turn assistance with their medical costs, a the final push.
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