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The Union Label: Electric Restructuring's Hidden Side

Fortnightly Magazine - September 15 1997

in a $4 billion total recovery is not a huge component."

The cost could be assessed to the new owners of the generation business, he says.

In Massachusetts, UWUA estimates put the stranded employees' charge at 2 mills, on top of the 2.82-cent, per-kilowatt charge for other stranded costs, a charge that increases by cents over the 10-year recovery period. Goldstein says the charge, calculated on $50 million in employee costs and $700 million in total stranded costs, would last a year.

NEES's Rhode Island employees won't be as protected, and Dowd explains.

"At the time of the [restructuring] legislation in Rhode Island, the worker protection issues were not as grave because in the Rhode Island statute the divestiture requirement was only 15 percent. We didn't get the full requirement to unload the entire generation business until September or October of '96. ... If we had the knowledge of September-October in June-July, we perhaps would have seen to it that there was greater protection for workers."

New York. About 11,000 utility workers at UWUA Local 1-2 in New York City were awaiting a Public Service Commission review of a settlement agreement that included worker protections. The agreement was signed by Consolidated Edison Co. and the union on March 12 (Case No. 96-E-0897).

Among other provisions, the agreement calls for a 50-percent divestiture of in-city generation by 2002, excluding nuclear assets.

According to Seth Goldstein, the local's staff attorney, the union's major employee concern is divestiture and what happens when generating plants are sold. There's a successor clause in the bargaining unit's most recent contract, but that pact expires June 24, 2000.

Under the settlement agreement, the new owner would have to recognize the union and the contract, which includes the successor clause.

But the union attorney insists the local is not finished with what it's seeking. Legislation pending before the state Assembly, called Competition Plus, would mandate the commission to require that generating plant sales must be contingent on their safe and reliable operation at least two years after the sale (em similar to California's protections. Two years would give the union and the acquiring company time to develop a relationship, Goldstein says.

The legislation also would call for recognition of successor clauses. While that issue was struck down and is on appeal in Illinois, New York is a different court circuit, and Goldstein feels the New York legislation is strong enough to withstand a challenge.

There also are protections in the bill against bringing unskilled workers into plants.

"How can you protect the worker without protecting their right to have a collective bargaining agreement?" Goldstein asks. "By not protecting the collective bargaining agreements, you're not protecting the employees. You can't separate the two of them. You just can't.

"We will not allow Enron or any other company to come in, take over plants and hire back or replace our employees for half the wages," he says. "These are hard-fought gains of collective bargaining that took 50 years."

Ohio. Like New York union reps, those in Ohio also are recommending the California