LOOMING IBEW UNION CONTRACT EXTENSION THREATENS CHUGACH ELECTRIC EFFICIENCY PROMISE TO CUSTOMERS

CHUGACH CONSUMERS PROTEST STOPPED BY CO-OP LAWYERS

Chugach Electric Association has extremely high International Brotherhood of Electrical Workers Union labor costs (both in terms of compensation levels as well as restrictive and archaic work rules embedded in labor contracts).

The current labor contracts expire on 6/30/2003. The Chugach board for the first time in 13 years has the flexibility to negotiate a fairer deal for the public in this member owned cooperative that has a monopoly to provide electric service in all of Anchorage except downtown and midtown. Since 8/8/1990 binding interest arbitration has prevented Chugach from any effective way of changing these costly contracts, but now that Chugach management has a free hand to negotiate it doesn’t want to and is urging the Chugach board to accept the IBEW’s first offer giving raises to all employees in the contracts.

The IBEW and Chugach management claim not giving full CPI adjusted raises is a savings.  Only $300,000 a year is being offered on $25 million in annual contracts.

Previous studies have demonstrated ten times that amount or more in annual labor inefficiencies and overcharges to consumers (excessive salaries & benefits, featherbedding, overtime, over staffing) that should be addressed.

After protest by Chugach Consumers at the previous day's board Operations Committee meeting, the Chugach board pulled the proposal from its 3/20 agenda.  Ray Kreig with Chugach Consumers and IBEW Union business manager Gary Brooks addressed the board both days. 

Kreig's 3/20 presentation was stopped by Chugach attorneys who didn't want potential cost savings that could come from a full labor contract negotiation mentioned.  Achieving these savings would be impossible if the current contracts are simply extended without negotiation.   

Kreig says, “If the board approves this contract extension without even attempting to negotiate, it will throw away an opportunity to get a better deal for the public that has been over a decade in the waiting.  Customers will continue paying the grossly excessive costs in these contracts for another four years.  Chugach members expect management to negotiate for a better deal with the IBEW Union, not just accept their first “list price” offer.  If the board does this it might as well forget about Chugach efficiency goals adopted in 1995 of being in the top 10% of electric utilities nationwide in economic efficiency and delivery of value to customers.”

Mr. Kreig is a former president of Chugach Electric Association, Alaska’s largest electric utility serving more than 58,000 customers.

Indications are that our community and state have some hard times ahead. Already Alaska has made a stunning fall from having the highest per capita income in the country to now below average. Yet these below average incomes must support the highest paid electric utility worker salaries in the nation, even after cost of living adjustments. 

Chugach Electric Association -- as a member owned cooperative and provider of a basic service that affects everyone’s cost of living and the competitiveness of our state -- has an important obligation and the membership’s trust to do everything it can to be as efficient as possible.

There is plenty of time to properly consider these labor contracts. There is absolutely no reason to rush through their extension almost a year and a half before they even expire on 7/1/2003.

Direct link to summary of the contracts:   http://www.chugachconsumers.org/Lib/Comp/contracts.htm  

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