When Congress repealed the Holding Company Act, it gave states greater authority to regulate utilities. New Jersey picked up the baton and enacted rules to protect ratepayers.
When Labor's Locked Out
ConEd, public safety, and the regulatory response.
Consolidated Edison Company of New York made history in July 2012, when it imposed the largest-ever labor lockout in New York state. Following the expiration of a collective bargaining agreement between ConEd and the Utility Workers Union of America Local 1-2, ConEd sent home the 8,000 craft union employees responsible for operating and maintaining the utility’s electric, gas, and steam services to more than 3 million customers in New York City and Westchester County. The company undertook to provide service through a makeshift workforce of management employees, retirees, and contractors, but ConEd admitted that it suspended certain significant utility services. As the lockout dragged into a fourth week and summer temperatures soared, New York Governor Andrew Cuomo expressed concern that “there is a real possibility of a safety or reliability issue if [the lockout] situation continues. This is especially true as our region faces an ongoing heat wave which places significant stress on the power grid and requires all parties to devote the highest level of attention to the energy system.” 1
After 27 days, the lockout ended with the completion of a new collective bargaining agreement. The final negotiations involved Governor Cuomo, who had entered the talks the day after a State Assembly hearing in Manhattan on the crisis. That hearing included testimony concerning the scope of the authority of the New York State Public Service Commission (PSC). The union had asked the PSC to end the lockout on the ground that ConEd could not continue to provide safe and reliable service without its skilled and experienced workforce. That PSC proceeding terminated only when ConEd and the union agreed to a new contract.
And while that agreement obviated any need for the PSC to take immediate action against ConEd, the case raises a broader issue: How should state utility commissions address the conflicts between enforcing the statutory service obligations of regulated entities and their right to use economic weapons to resolve labormanagement conflicts?
At a minimum, ConEd’s decision to lock out its employees, and thereby seek an advantage in its labor negotiations, did not excuse the company of its statutory obligation to continue to provide utility services. Similar to other public utility statutes across the nation, New York law provides that it is the “policy of this state that the continued provision of … gas, electric and steam service to all residential customers without unreasonable qualifications or lengthy delays is necessary for the preservation of the health and general welfare and is in the public interest.” 2 In furtherance of this policy, ConEd has the statutory obligation to “furnish and provide such service, instrumentalities and facilities as shall be safe and adequate and in all respects just and reasonable.” 3
To be sure, the affected ratepayers view questions concerning labor negotiations and