May 17, 2020

Are Utility Company Unions Still Powerful?

3 min
Labor unions
By Tina Samuels Since the 1970s labor unions have been in a steep decline. Public unions have been at about the same density since 1985 (around 35 perc...

By Tina Samuels

Since the 1970s labor unions have been in a steep decline.

Public unions have been at about the same density since 1985 (around 35 percent), though privately-owned corporations are far less likely to be unionized. At a little more than 6.0 percent density, the privately-owned sector can be said to have virtually no unions to “have the backs” of workers.

During the 2008 presidential elections, unions donated funds to help President Obama become elected. Over time, many of the bills proposed to help unions stay organized and help workers never made it to the voting floor.

Since then, many of the unions that donated to Obama's campaign have faded away.

Wages of many union workers are far less than in previous years, a shocking 11 percent of total wage pool of all working Americans.

Electrical Unions

While deregulation of electrical suppliers have helped Americans find different sources of electricity, it has also created a problem for workers.

Those companies that had existing unions or are owned by public companies still have unions. These unions are all tentatively connected or at least associated. Members must pay dues (as with any union) and are represented by union leaders. Rates of pay or cost of living adjustments (COLA) have decreased over the years.

Electrical unions are more prevalent in the Northeast and Mid-Atlantic states, though there are some unions in other regions. California has unions for electrical workers and so does Georgia.

In the Northern states the unions are more powerful with companies as they have been established longer and people are less likely to accept the “employer knows best” attitude.

Losing Ground

Some political movements have been chipping away at unions around the nation for years, including electrical unions.

Opponents of unionized workers point to higher costs, lack of corporation viability in a competitive market, and less choice of employees as reasons to avoid or dissolve unions.

Some backers of this school of thought will threaten to fire employees that speak of forming unions. This is technically illegal, though the practice exists and will probably persist.

In 2012, after the devastation of Hurricane Sandy, some politicians used unions as a way to push the point of 'union thugs' to media consumers.

Groups of non-union electrical employees from Southern states were supposedly turned away from areas in New Jersey affected by Hurricane Sandy by union workers. This was proven to be a false accusation, but due to the media coverage and recording manipulation the damage was done. Many in the public believed electrical unions cared more about their pockets than their customers without power.

Unions are losing power, not just in utility companies, but all across the country.

As a result, no one can be 100 percent sure what the future holds for unions or American workers, including those in the utility industry.

About the Author: Tina Samuels writes on David Kiger and other small business personalities.

Share article

Jul 26, 2021

Ofwat allows retailers to raise prices from April

Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

Share article