Westinghouse Plant Vogtle bankruptcy will cost Georgia ratepayers and workers

Westinghouse's bankruptcy will be very costly to the owners of Plant Vogtle -- Southern Company (through its subsidiary Georgia Power), Oglethorpe Power Corp., the Municipal Electric Authority of Georgia (MEAG Power), and Dalton Utilities -- but Georgia electricity users and workers will ultimately foot the bill.

On March 29, 2017, Plant Vogtle’s lead contractor, Westinghouse Electric Co., filed for Chapter 11 bankruptcy.

The contractor, which is a subsidiary of Toshiba Corp., continues to deal with large cost overruns in its building of two nuclear reactors in Georgia, and it is unclear whether Westinghouse will be able to proceed with the project.

Now Westinghouse is in the hands of a Federal bankruptcy judge who may void previous agreements with the utilities, allow contractors to renegotiate contracts for higher payments, and may allow Westinghouse to abandon the project altogether.

The judge has tentatively approved Westinghouse’s access to $800 million in debtor-possession financing so it can continue some work during the bankruptcy proceedings but raised questions during the hearing about whether some of those funds would go to support the company’s foreign operations that are not involved in the bankruptcy proceedings instead of only financing Westinghouse's U.S. operations.

The implication is that Westinghouse may use some of that $800 million to prop up their non-American projects and leave the Georgia and South Carolina projects starved for cash.

If Westinghouse is preparing to abandon Plant Vogtle, which may be the case, the utility owners have only a limited number of options, each of which involve large unexpected costs.

The utilities can attempt to bring in another contractor to take over construction of the two nuclear reactors, choose to turn the nuclear reactors into gas-fired plants, or close down construction and leave the site unfinished.

Southern Company's CEO Tom Fanning has asked Toshiba to continue work on Plant Vogtle, but Toshiba is under pressure from its stockholders to pull out of Georgia and South Carolina. 

What’s at Stake

The Plant Vogtle project employs more than 5,000 well-paid construction workers at the site, most of whom are working under union contracts.

If the site is abandoned, it will be a blow to those workers as well as all of Eastern Georgia. Plant Vogtle is located in Burke County near Waynesboro, Ga., and the Augusta, Ga. metro area, both of which have benefited from the influx of workers and money, as has nearby Aiken, S.C.

Even a temporary halt to construction will cause large layoffs and loss of a skilled workforce who will scatter to find comparable paying jobs.

Higher Electricity Bills are a Real Possibility

For customers of Georgia Power, Oglethorpe Power Corp., the Municipal Electric Authority of Georgia (MEAG Power), and Dalton Utilities; the threat is even higher electricity rates to cover the increased costs.

Any delays, including if a new contractor must be brought on site, will only increase costs in the project that is already more than $3 billion over budget.

In addition, Bloomberg reports that “U.S. taxpayers have already financed $6.5 billion in loan guarantees for Southern and its partners that were awarded in 2014 to build the Vogtle plant. The Energy Department followed up in June 2015 with an $1.8 billion loan guarantee for the project.”

"We think there is a lot of risk," said Autumn Hanna, a senior program director for the Washington-based watchdog group Taxpayers for Common Sense, a group that has been critical of the loan guarantees. "We are really afraid this puts the $8 billion on line even more for taxpayers."

“If Southern’s contract with Westinghouse is terminated and the project is abandoned, the Energy Department could require repayment of its investment over five years, according to Moody’s Investors Service analyst Michael Haggarty.”

Georgia is a "Utility-friendly" State

No doubt if the utilities must pick up extra costs stemming from Westinghouse’s inability to meet its obligations, they will be asking the Georgia Public Service Commission to pass along those costs by raising electricity rates.

Traditionally, the Georgia PSC is seen as very "utility-friendly" in allowing utilities to pass along higher costs to ratepayers, even for plants not yet producing electricity.

Ratepayers in Georgia have already contributed about $3,9 billion for the reactors, while the utilities are guaranteed a 10% return in profits, even in the case of cost overruns, according to Facing South.

Reuters quoted one advocacy group as stating that “electric bills in Georgia and South Carolina could rise more than customers expect if state utilities are left stranded by a Westinghouse Electric Co. bankruptcy filing.”

“People will either be forced to pay for something they never got or pay more to complete something that does not make economic sense,” said Liz Coyle, executive director of consumer advocacy group Georgia Watch.

Of course higher electricity rates will impact businesses in both states and discourage companies from moving or expanding in both Georgia and South Carolina, thus damaging economic development efforts.

South Carolina faces a similar problem because Westinghouse is the lead contractor for the V.C. Summer nuclear facility presently under construction in Jenkinsville, S.C.

The Aiken Standard recently editorialized that in their opinion the Westinghouse bankruptcy should not become a burden on ratepayers: “Ratepayers [in South Carolina] may wind up paying more in the long run should SCE&G raise rates. It's wrong to force power customers to pay higher rates for a facility that's years behind schedule and billions of dollars over budget.”

The Westinghouse-Plant Vogtle bankruptcy is getting relatively little local news coverage in the Atlanta media.

Bond Rating Services Are Negative

The Street.com says that “Fitch Ratings put the majority stakeholders of Westinghouse's Georgia and South Carolina projects on "negative watch." Those stakeholders are Municipal Electric Authority of Georgia, Oglethorpe Power Corp. (Ga.) and South Carolina Public Service Authority."

Moody’s Investor Service has issued a statement saying: “Westinghouse’s Chapter 11 bankruptcy filing and Toshiba’s ongoing financial weakness have raised new questions over their ability and willingness to complete the Summer and Vogtle nuclear projects under the terms of the fixed price contracts, placing additional financial pressure on the project owners.

“Our negative outlooks for these entities incorporated our expectation that a Westinghouse bankruptcy filing could occur, and reflect the likelihood that the projects won’t be completed under the current time and cost arrangements. We anticipate the project owners will evaluate alternatives for finishing construction, which in all likelihood would result in higher risk and additional costs.”

Oglethorpe Power, one of the partners in the project, has said that "the revised in-service dates of December 2019 and September 2020" for the two reactors "do not appear to be achievable."

Utility Owners of Plant Vogtle

Ownership in the two nuclear reactors under construction at Plant Vogtle is shared among several utilities in Georgia:

Georgia Power, a for-profit subsidiary of The Southern Company, serves 2.4 million customers in all but four of Georgia's 159 counties.

Oglethorpe Power Corporation is a nonprofit cooperative owned by 38 electric membership corporations.

The Municipal Electric Authority of Georgia (MEAG Power) is a nonprofit, statewide generation and transmission organization providing wholesale electricity to its 49 member communities, who own their local distribution systems.

Dalton Utilities provides electricity to the City of Dalton since 1898.

Bankruptcy Case

The case is Westinghouse Electric Co., 17-10751, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Workers Memorial Day – April 28, 2016

Workers' Memorial Day will be observed in Georgia and across the nation on April 28, 2016.

It is a day to honor those workers who have died on the job, to acknowledge the grievous suffering experienced by families and communities, and to recommit ourselves to the fight for safe and healthful workplaces for all workers. It is also the day OSHA was established in 1971. Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their workers. OSHA's role is to ensure these conditions for America's working men and women by setting and enforcing standards, and providing training, education and assistance. (From the OSHA web site)

In Georgia, the unions of the AFL-CIO observe Workers' Memorial Day to remember those who have suffered and died on the job and to renew the fight for safe jobs. The AFL-CIO has declared that "this year, workers will come together to call for work in this country that is safe, healthy, and pays fair wages."

On Workers’ Memorial Day, April 28, workers in all International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts (IATSE) local unions have been asked to pause and offer a moment of silence at 1 pm EDT / 10 am PDT on behalf of those in the entertainment industry and all workers who have paid the ultimate price in order to support themselves and their families.

A nationwide listing of events for April 28, 2016 can be found on the AFL-CIO web site. A listing of events scheduled for Workers’ Memorial Week (April 23 – 30, 2016) can be found on the National Council for Occupational Safety and Health web site.

Materials and posters to aid in the observance of Workers' Memorial Day may be downloaded here or ordered online here. 

MARTA to outsource absence management

On Sept. 3, MARTA’s Board of Directors authorized a contract with UPMC (University of Pennsylvania Medical Corp.) WorkPartners to manage MARTA’s short- and long-term sick leave, as well as family and medical leave, at a cost of $1.7 million over a three-year period for the transit system.

The 8 to 0 vote reflects the Atlanta transit system’s frustration over the in-house handling of its leave policies. The Board hopes that outsourcing absence management to a private company will cut costs through closer oversight of leave usage.

With added scrutiny, “the people beating the system right now will come to the forefront, and we’ve got a lot of people beating the system,” said Freda B. Hardage, a Fulton County representative on the MARTA Board.

According to the story in The Atlanta Journal-Constitution, the goal of outsourcing management of leave is to nearly double, from 8 percent to 15 percent, the percentage of requests for unplanned absence claims that are currently denied.

The newspaper is reporting that MARTA had been spending $3.1 million a year to manage different types of employee leave internally, including vacation, sick leave and disability programs. On any given day, one in three MARTA employees is absent from work because of an unplanned event. And for bus drivers, maintenance workers or train operators, that absence rate exceeds 50 percent.

In 2012, a consultant’s audit found the high rate of call-outs cost MARTA about $11 million a year. Another assessment by a separate consultant late last year found that those costs are rising. Unplanned absences now account for $13.6 million in MARTA’s budget.

A recent assessment by Sagewell Partners found that unplanned absences are costing MARTA 598,923 total lost work hours, equivalent to the work time of 291 full-time employees and about 6 percent of the transit agency’s overall payroll costs.

FMLA leave policy is so complicated that outside vendors are increasingly being brought in to manage these programs, said Phil LaPorte, a labor relations expert and professor emeritus at Georgia State University College of Law.

“They have greater expertise in dealing with it on a day-to-day basis, and they can spend the time to require the medical verification of the condition the employee is alleging,” LaPorte said.

MARTA RFP P35334

On Labor Day, Georgia Workers Should Demand a Better Life

The following opinion was originally published in the flagpole, a publication out of Athens, Ga.

By Steve Lomax

Labor Day was created to pay tribute to America’s hard-working men and women, but for many working and middle class families in Georgia, taking time off during the holiday is not an option. For too many Americans, Labor Day is just another working day when the realities and challenges they face only grow. 

Across our state, countless hard-working Georgians who help to feed, serve, clothe and build this country still struggle like never before in low-paying full- or part-time jobs. Nationally, wages have not kept up with inflation. In Georgia, wages have dropped by 12 percent between 2009–2014. Most Americans hope to improve their lives and their income annually, but in Georgia wages have dropped by 13 percent since the recession, a real figure of $7,374 lost, on average, to Georgia’s working families, from 2007–2013.

Erratic work schedules are becoming the norm, especially for workers in the service sector like those at Walmart and McDonald’s. This kind of scheduling makes it all but impossible for workers to control their lives, let alone go to school or take care of a child or a loved one. 

Even worse, as Bloomberg News just reported, irresponsible companies like Walmart promise to raise wages, and then turn around and cut hours—so workers actually earn less. And, to add insult to injury, trade deals supported by Democrats and Republicans offer false promises of better jobs, but we continue to ship good Georgia jobs overseas.

As a result, income inequality has risen to levels not seen since the “Roaring Twenties,” and the divide between the rich and poor continues to grow. According to the new book titled $2.00 a Day: Living on Almost Nothing in America, the number of U.S. residents struggling in poverty and trying to get by on only $2 a day has more than doubled since 1996.  

This Labor Day, every Georgian must really ask themselves: How long can this nation endure when so few have so much, and so many have so little?  

For the sake of all of our families, this must change. And that change must begin now. 

Our 17,000 member strong union family is more determined than ever to fight for a better life for all hard-working Georgians. Our message to every worker is a simple one: You’ve earned a better life.

Every day, not just on Labor Day, unions work hard to provide the better wages, benefits and protections that working men and women truly need. The results and benefits of joining a union nationally are quite clear. On average, union workers earn 27 percent more than non-union workers, and are more likely to have paid sick leave and a pension plan. 

More importantly, it is clearer every day that our nation’s broken political system is unlikely to address income inequality, and poor wages and benefits will not be addressed by irresponsible companies more interested in PR stunts. 

Real change will come from hard-working people joining together to fight for it. That’s what Labor Day must be about.  

Labor Day should be a day where hard-working people join together to demand a better life. It must be a day where workers, no matter where they work, whether they work, say enough is enough and call for better wages, better benefits, and a better life they deserve. 

But above all, Labor Day must also be when Georgians realize that there is no corporate or political hero coming to the rescue. Instead, hard-working men and women must seize the opportunity to define their own destiny. 

Doing so begins with every worker knowing that they have power, with our help, to negotiate a better life for themselves and their family. Because when all is said and done, no one in Georgia should have to fight for a better life alone. 

Steve Lomax is the president of United Food and Commercial Workers Local 1996, which represents 17,000 members in the Southeast, and an International President of the UFCW. Local 1996 represents retail workers; poultry, packaging and manufacturing workers; and health care workers, providing excellent part-time and full-time benefits as well as dignified treatment and a voice at work.

Delta pilots choose new leadership

Delta's pilots union has selected new leadership for its labor negotiations with Delta Air Lines. 

John Malone has been elected chairman of the Delta Master Executive Council at a special meeting of the Local Executive Councils of the Delta MEC, represented by the Air Line Pilots Association International. The meeting was held at the Renaissance Concourse Hotel in Atlanta.

In his address to the MEC, Captain Malone stated, “We need to own our mistakes, listen to the pilots, reconnect with them, encourage their participation and, most importantly, treat all our fellow pilots with respect – even the most ardent critic. ALPA is the only union that can deliver the services needed to restore our profession.”

“This weekend is Labor Day. On this weekend I want you to take real pride in your leadership role of protecting and promoting working people in America. What we – what ALPA does impacts all of labor in America.”

Captain Malone is an Atlanta-based 767-300ER pilot at Delta Air Lines, Inc., and will fill the remainder of the term beginning Sept. 15 through Dec. 31, 2016. He replaces Mike Donatelli, who stepped down as chairman.

The MEC also elected a new Negotiating Committee. Captain Steve Uvena was elected as chairman. F/O Ron Hay, Captain Heiko Kallenbach, and Captain Jeff Anderson were elected as members.

The committee will serve beginning immediately and for a period not to exceed six months after the signing of a new Section 6 agreement.

The changes come after 65% of Delta pilots voting in July refused to approve a proposed contract between the union and Delta Air Lines.

The Delta MEC is composed of 9 Local Executive Councils and acts as the governing body of the airline’s 12,000 pilots.

More information is available on the Delta MEC website at https://dal.alpa.org.

Police in Metro Atlanta and Georgia underpaid?

Pay for police in Georgia is around the lowest in the nation.

In 2014, police officers in the Atlanta metro area received average annual pay of $41,430, well below the average pay for comparable work done by officers in the Charlotte, N.C., and Dallas, Texas, metropolitan areas according to data from the U.S. Bureau of Labor Statistics Occupational Employment Statistics.

In the Charlotte area, police received an average of $48,150, while in the Dallas area officers were paid an average of $59,840. Both areas have been used by the AJC as benchmarks to compare Atlanta’s economic progress over the past year.

Low pay in the Atlanta Police Department has been highlighted in news articles running in The Atlanta Journal-Constitution that have focused on Atlanta police officers’ effort to gain a pay raise under Mayor Kasim Reed.

The low pay is showing up in turnover and lower morale among APD officers according to people interviewed by the AJC.

Police Statewide Georgia

While some officers may choose to switch to other jurisdictions in the state for higher pay, the unfortunate reality is that the low pay for Atlanta officers also reflects the low pay statewide for police in Georgia, which averaged $38,250.

In 2014, only Mississippi, with salaries averaging $32,740, reported lower average pay for police officers statewide than Georgia.  Pay for police in Arkansas at $37,730 and South Carolina at $38,630 were comparable to pay in Georgia.

Average salaries for police in the other 46 states all exceeded the average pay in Georgia.

For police looking to relocate to a higher paying state, New Jersey recorded the highest average pay for police at $88,530. Other states with high average pay included California, Alaska, New York, and Washington.

Firefighters

While pay for firefighters in the Atlanta metro area and statewide Georgia is also low, their pay relative to other areas is less dramatic.

Firefighters in the Atlanta metro area averaged $35,640 in 2014, while those employed in the Charlotte area averaged $34,930 and those employed in the Dallas metro received $50,390.

Statewide, Georgia firefighters averaged $33,810, and although among the 10 lowest paid in the nation, still equal or above 8 other states, including West Virginia, which recorded the nation’s lowest pay at $29,180.

New Jersey firefighters came in highest at $77,550 followed by firefighters in New York, California, and Washington.

Union wins election at PruittHealth-Virginia Park

The RWDSU has announced that it won a union organizing election held on Aug. 20 to represent health care workers at PruittHealth-Virginia Park.

The election was held by secret ballot under the supervision of the Regional Director of the National Labor Relations Board (NLRB) to determine the representative, if any, desired by the eligible employees for purposes of collective bargaining with their employer.

A majority of the valid ballots cast determined the results of the election.

The voting unit consisted of all full time and regular part time CNA’s, restorative aides, activity assistants, medical record clerks, and service and maintenance employees employed by the employer at its facility located at 1000 Briarcliff Road N.E., Atlanta, Ga., but excluding all RNs, LPNs, charge nurses, confidential employees, professionals, office clerical employees, guards and supervisors as defined by the National Labor Relations Act.

Workers were organized by Retail, Wholesale Department Store Union/UFCW Southeast Council.

PruittHealth-Virginia Park was represented by David Garraux and Marvin Weinberg of Fox Rothschild LLP.

In June, PruittHealth announced its official expansion in Atlanta by purchasing the Briarcliff Haven Healthcare and Rehab Center.

PruittHealth-Virginia Park spans 3.6 acres in an area of Atlanta known as Virginia-Highland. The facility includes a 40,302 square foot building and offers post-acute care services to 128 beds and 18 specialty vent beds.

At the time of the purchase announcement, Neil L. Pruitt, Jr., Chairman and C.E.O. of PruittHealth, said, "We are very pleased to welcome PruittHealth-Virginia Park into our PruittHealth family of providers. It is always exciting to expand our organization in other areas of the Southeast, and I am confident that we can build upon the solid foundation of health care services and resources that we have already integrated in the state of Georgia as a whole."

According to the company’s statements, PruittHealth has more than 170 provider locations throughout Georgia, North Carolina, South Carolina, and one center in Florida. The company claims that on any given day, 24,000 patients are cared for by PruittHealth's 16,000 employees.

The Atlanta Journal-Constitution has written that the Pruitt family was among Governor Deal's largest campaign donors in his successful re-election bid last year.

PruittHealth has not yet issued a statement concerning the union election.

UGA & Ga Tech football off the hook - athletes cannot form union

The National Labor Relations Board today declined to consider whether football players at Northwestern University were covered under provisions of the National Labor Relations Act (NLRA).

As a result, players at Northwestern University will not be allowed to form a union.

Since Northwestern University is a private institution, and not a state-run university, there was a possibility that its players might have fallen under the rules of the NLRA and be permitted to form a union.

Although any ruling would not apply to state universities, such as the University of Georgia and Georgia Tech, it was thought that a ruling in favor of the Northwestern players would put pressure on other NCAA Division I schools to provide some sort of similar "association" for their athletes.

Today's decision specifically indicated that the NLRB would be open to reconsider the issue at a later date.

From the National Labor Relations Board release issued today (Aug. 17, 2015):

In a unanimous decision, the National Labor Board declined to assert jurisdiction in the case involving Northwestern University football players who receive grant-in-aid scholarships. The Board did not determine if the players were statutory employees under the National Labor Relations Act (NLRA).  Instead, the Board exercised its discretion not to assert jurisdiction and dismissed the representation petition filed by the union. 

In the decision, the Board held that asserting jurisdiction would not promote labor stability due to the nature and structure of NCAA Division I Football Bowl Subdivision (FBS). By statute the Board does not have jurisdiction over state-run colleges and universities, which constitute 108 of the roughly 125 FBS teams. In addition, every school in the Big Ten, except Northwestern, is a state-run institution.  As the NCAA and conference maintain substantial control over individual teams, the Board held that asserting jurisdiction over a single team would not promote stability in labor relations across the league.

This decision is narrowly focused to apply only to the players in this case and does not preclude reconsideration of this issue in the future.

Additional information on this case can be found here. 

CWA bargaining with AT&T continues

Bargaining between AT&T Southeast and the Communications Workers of America (CWA) continues after their contract expired on Aug. 1.

Informational picketing is occurring at various sites around the Southeast including in Louisiana and Georgia.

This past Saturday, CWA scheduled an informational picket and rally at AT&T building in Midtown Atlanta.

CWA is reporting that AT&T "continues to insist on open-ended hiring of temporary workers and cuts in healthcare and retirement security. The company has not responded to workers' concerns about excessive amounts of forced overtime hours that make meeting family and personal needs extremely difficult, if not impossible."

Read more at: http://www.cwa-union.org/

Union organizing rally this afternoon at PruittHealth-Virginia Park

The Georgia AFL-CIO has announced a rally for Thursday, Aug. 13, in support of nursing home workers organizing at PruittHealth-Virginia Park.

In its announcement, the Georgia AFL-CIO writes that the rally is meant to support workers “in their organizing efforts to make a fair wage and decent benefits. And stand against excessive corporate greed.”

Organizers say that while the company received a rate increase this year approved by the State of Georgia, workers at PruittHealth are paid just a little more than minimum wage.

The Atlanta Journal-Constitution reports that the Pruitt family were among Governor Nathan Deal’s top donors to his re-election campaign last year.

PruittHealth had previously announced its official expansion in Atlanta.  PruittHealth – Virginia Park spans 3.6 acres in the historic area of Atlanta known as Virginia-Highland. When completed, the 40,302 square foot building will allow PruittHealth to offer post-acute care services to 128 beds and 18 specialty vent beds.

The rally at 1000 Briarcliff Rd NW, Atlanta, Ga., will begin after 2 p.m. 

AT&T and CWA workers in Georgia continue negotiations after contract expires

August 9, 2015, statement by the Communications Workers of America District 3, as 28,000 AT&T Southeast workers continue without a contract while negotiations continue.

Atlanta -- Today we are continuing negotiations with AT&T.  The issues that AT&T workers are facing have a direct impact on our communities and our families. We are your friends and neighbors, and our communities are important to us.  Often times in contract negotiations, we hear only about money.

But these negotiations are about respect, a better quality of family life and keeping good jobs in our communities.

AT&T is a very profitable company and our members do deserve to be compensated fairly.

But something that’s very important to workers at AT&T is a chance to spend more time with their families. Right now, AT&T forces employees to work an unlimited amount of overtime hours. That’s excessive and keeps parents from spending time with their children and balancing their work and family lives.

AT&T workers serve our customers on a daily basis and are the backbone and the face of this company. We all want to be treated with dignity and respect in the work place. That’s what these negotiations are all about.

AT&T is an extremely profitable company, with second quarter revenues topping $33 billion.  AT&T also recently completed a $48.5 billion acquisition of DirecTV.  Workers are being very reasonable, but AT&T is following a greedy agenda. Workers are committed to getting a fair contract and are holding actions and building support in communities throughout the nine southeastern states. It’s time for AT&T to do the right thing, and that’s to treat employees fairly.