UIL’s union deal doesn’t console PGW workers

March 11--The union that represents workers at UIL Holdings Corp.'s flagship utility is the same union that represents workers at Philadelphia Gas Works, which UIL has agreed to buy for $1.86 billion.

There the similarities end.

Moses Rams, president of the Utility Workers Union of America Local 470-1, which represents about 500 workers at United Illuminating Co. in Connecticut, said the labor group has constructive relations with UIL, leading to a six-year contract in 2012 that was ratified by 90 percent of workers.

"We have a shared interest," Rams said.

UWUA Local 686, which represents 1,140 employees at the city-owned PGW, wants nothing to do with UIL.

"I'm not going to say they're terrible to their employees over the years," said James F. Runckel, the lawyer for the Philadelphia local. "It's just that we don't want to be part of that."

UIL's agreements with six unions at its four operating utilities are likely to come under close examination in the forthcoming debate before City Council, which must approve any PGW sale. The Philadelphia local is pressuring Council to reject the deal negotiated by the Nutter administration.

The Philadelphia union fears that a private owner will want to cut costs by reducing benefits and jobs. PGW workers currently pay no out-of-pocket health-care costs and can retire with a full pension -- 60 percent of base pay -- after 36 years of service.

"The first thing on the agenda with this employer is trying to cut health care, trying to cut pensions, and trying to cut jobs," said Runckel, a Spear Wilderman partner.

UIL has agreed to hire all current PGW employees and not lay anybody off for the first three years after the sale.

"We're going to protect all of the PGW workers," said Michael A. West Jr., UIL's director of corporate communications. "That's essentially very, very rare" in similar transactions. He said PGW workers are not now protected from layoffs under their current contract.

"We're not corporate raiders," said West.

UIL's employees get fewer benefits, but the local says the package is above average for comparable workers in the region.

"We try to stay above market in the industry," said Rams. "We do a lot of benchmarking."

The Connecticut union agreed to end the defined-benefit pension plan for new employees hired after May 2005 -- UIL offers a 401(k) program that it matches up to 4 percent of pay. Its health-care plan requires employees to pay up to 20 percent of the cost of insurance.

Rams said the move away from a traditional pension plan recognized trends in private-sector labor agreements. UIL says that 58 percent of its employees are still on pension plans.

PGW workers say they have given up pay raises to keep their benefits.

On average, UIL's unionized employees are paid more -- $34.76 an hour vs. $26.31 an hour at PGW, though the averages are impossible to compare because of different employee classifications.

UIL's six-year contract includes annual pay increases of 3 to 3.3 percent.

UIL has agreed to honor terms of PGW's current contract, but the pact is scheduled to expire in May 2015, only a few months after UIL expects the deal to be finalized.

UIL's West says its contracts with other workers are not necessarily an indication of what's in store for PGW workers. "We don't take a cookie-cutter approach," he said.

The uncertainty is unsettling to the Philadelphia local.

In a letter to Council President Darrell L. Clarke last week, Local 686 president Keith Holmes said the fear that UIL will unilaterally impose new contract terms would cause senior PGW employees to retire en masse, "creating a brain-drain in PGW operations that will cause serious safety ramifications."

If PGW is sold, its workers will no longer be subject to city residency requirements.

BY THE NUMBERS

0%

Amount that PGW workers pay toward health-care costs.

20%

Amount that UIL workers pay toward health-care costs.

$26.31

Average union pay per hour for workers at PGW.

$34.76

Average union pay per hour for workers at UIL.

[email protected]

215-854-2947

@Maykuth

Inquirer staff writer Bob Warner contributed to this article.

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