FirstEnergy retiree health care

Negotiations between FirstEnergy, unions center on retiree health care

by Arnold Platou



Just listening to them, it sounds as though there still are some wide gaps between officials of FirstEnergy Corp. and negotiators for the union local that covers the Tri-State area.

For instance, they don’t even agree on whether members of Utility Workers Union of America Local 102 currently are working under an active contract or one that’s expired.

But what is talked about most in interviews with The Herald-Mail and seems the biggest point of contention is FirstEnergy’s insistence that its retiree health care benefit be eliminated by Dec. 31, 2014.

“The retiree medical is definitely an issue,” said Robert Whalen, system president of Local 102.

Whalen said the company’s push to end the benefit jeopardizes health care for more than 200 older union members in FirstEnergy’s Potomac Edison and West Penn Power territories. Those members are within five years of reaching age 55, when they could retire and get the subsidized health care plan, he said.

Company spokesmen said FirstEnergy told all of its nonunion and union employees in 2009 that the company would eliminate the retiree health benefit by the end of 2014.

“The goal is to have all FirstEnergy employees covered by essentially the same basic benefits,” company spokesman Todd Meyers said. “We’re trying to have the same sense of equity and fairness for everybody.”

This is the first time Local 102 has negotiated with FirstEnergy for a labor contract. FirstEnergy merged with Allegheny Energy in 2011 — about a year after Local 102’s contract was extended with Allegheny in its Potomac Edison and West Penn territories.

The members of Local 102 are working as linemen, substation workers, meter readers and technicians.

The negotiations are complicated by the lockout FirstEnergy began in late November, barring 142 members of Local 180 in the Altoona, Pa., area from going to work. Whalen, who participates in negotiations for each of the two locals, said the company’s proposals to each are “very similar.”

Here’s a summary of what the company listed as its key proposals to Local 102 as talks continue for a new three-year contract.

• Wage increases of 3 percent in the first year, 2.5 percent more in the second year and 2.5 percent more in the third year. In all, that would total an 8 percent increase over the three years.

n Additional wage adjustments of up to $1.50 per hour for “certain types of job classifications.”

n Making Local 102 members eligible for the short-term incentive plan in which most FirstEnergy employees already participate. Through this plan, each employee can earn an annual bonus of up to 9.9 percent of his or her previous year’s base pay, depending on how well the employee worked and how well the company does financially and operationally.

Asked Thursday whether those proposals are acceptable, Whalen said the 8 percent increase “hasn’t been a big dispute among our group.” He called the company’s public mention of wage adjustments for certain jobs “an interesting piece of propaganda,” saying it only will affect a few people.

Whalen said FirstEnergy’s plan to stop paying a portion of the health insurance now given to retirees is unfair because the company recently extended that benefit for three years to another of its union locals.

Asked about that, FirstEnergy spokesman Scott Surgeoner said the Cleveland-area union was given that extension only because the company was closing “three or four” of its power plants there and because 150 of the union’s members were losing their jobs as a result.

But Whalen said what’s unfair to Local 102 and Local 180 members is that First Energy extended the retiree health benefit for all 1,300 members of the Cleveland union, not just the 150 who lost jobs.

Thus, Whalen said, the precedent has been set to also keep the benefit active for members of Local 102 and Local 180 for at least three more years.

Surgeoner said FirstEnergy has made a different offer to Local 102 members, allowing those who reach their 55th birthday and retire before Dec. 31, 2015, to receive the company’s retiree health care subsidy until age 65. Those who retire from 2016 on wouldn’t get the health care subsidy.

Local 102 was given that offer only because two of the power plants FirstEnergy closed last year were in 102’s territory, Surgeoner said.

But Whalen said documents the union just received from FirstEnergy weeks after requesting them cast new light on the situation.

Whalen said the documents seem to reveal an agreement that “predates most of us” through which FirstEnergy, with the union’s knowledge, set up a Voluntary Employee Benefits Association fund to pay retiree medical benefits. The fund has “grown now to $78 million,” he said.

The union has experts examining the documents to evaluate their significance to negotiations, Whalen said.

Among other issues Whalen listed is the disagreement over the union’s position, which he said was backed by a ruling by the National Labor Relations Board that FirstEnergy did extend Local 102’s last contract from May 1, 2013, to May 1, 2014.

“No, no,” FirstEnergy spokesman Meyers said when told Whalen said the contract was extended. “... Their contract expired April 30 of ’13. We were unable to nail down a contract, so the men and women of (Local) 102 have continued working under the terms of the expired agreement.”

Meyers said the supposed NLRB ruling was just “a recommendation from part of its staff.”

Told that, Whalen said the “only thing that remains to be settled in that case is whether the regional (NLRB) office will charge the company with a violation or not” for claiming workers didn’t have a contract.

Arnold S. Platou is a reporter for The Herald-Mail. He can be reached via email at arnoldp@herald-mail.com.

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