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Some question FirstEnergy's decision to cut jobs


Tom Breckenridge
Plain Dealer Reporter

FirstEnergy Corp. has shed more than 3,100 jobs in recent years while evolving into one of the country's largest investor-owned utilities.

Most of those cuts were white-collar positions, paring the ranks of engineers and information-technology positions to eliminate redundancies. About 500, however, were skilled workers whose duties include vital upkeep of electrical lines and power plants.

In the flurry of finger-pointing following the largest blackout in North American history, critics, including former and current employees, say the Akron utility may have cut too deeply in the wrong places.

No comprehensive list of cuts by job classification is available, but nearly 400 fell on union members who handle line, substation and power plant jobs in the Cleveland territory. At the same time, FirstEnergy's backlog in Ohio of common, or routine, problems, had grown to 11,000 since last year, and safety complaints more than doubled between 2001 and 2002.

FirstEnergy flatly denies that job cuts have threatened service or reliability.

"We wouldn't sacrifice that work to save money," said spokeswoman Ellen Raines. "However, we try to do that work as cost-efficiently as possible."

She attributed the "vast majority" of cuts to trimming redundant duties when northern Ohio utilities merged to create FirstEnergy in 1997 and when First Energy acquired New Jersey-based GPU Inc. two years ago.

Charges that FirstEnergy utilities have let maintenance slide come as a binational investigation into the blackout focuses attention on utilities across the country and their race to offer the lowest energy prices in the deregulated, highly competitive industry.

FirstEnergy already suffers from a poor image, in part as a result of notoriety at its Davis-Besse nuclear power plant, where a long-undetected corrosion hole in the reactor lid forced a shutdown that has reached 18 months.

And the company remains under pressure to bolster its maintenance efforts in both Ohio and New Jersey.

By some standards, Raines said, FirstEnergy's performance is improving. For example, the number of momentary outages that Ohio customers experience has dropped from nearly eight a year in 1996 to fewer than three last year, Raines said.

And FirstEnergy scores well above average on planning and operational standards, according to Ray Palmieri, a manager with the East Central Area Reliability Council, a group of utilities and power producers that works to ensure the flow of electricity through the region.

But the Public Utilities Commission of Ohio is concerned about the utility's backlog of 11,000 common problems. While most fixes are cosmetic, such as placing visibility tags on guy wires, others are more critical, such as repairing broken cross arms on poles.

FirstEnergy has said it wants to clear the backlog by the end of the year.

The company also reported that complaints of voltage, reliability and safety reached 1,355 last year, more than double the number from 2001.

Raines said that such complaints are often tied to bad weather and that the number is minuscule, considering the utility has more than 2 million northern Ohio customers.

FirstEnergy's problems are more acute in New Jersey.

A FirstEnergy utility agreed to add 40 jobs in line operations, forestry and maintenance after regulators criticized the utility's balky response to a storm-related outage in August 2002.

The utility, Jersey Central Power & Light, also agreed to spend $60 million more on transmission and distribution. The problems existed before FirstEnergy acquired Jersey Central, Raines said.

Union leaders were among the first to draw attention to job cuts and maintenance issues after the blackout and urge government officials to address deregulation problems.

A council of the International Brotherhood of Electrical Workers, which represents 4,300 FirstEnergy employees, said in a recent statement that maintenance of electric lines and substations has suffered "tremendously."

"We fear that major blackouts will become more frequent and more severe," the statement read. "The time for policy makers to come to grips with the issue is now."

The Cleveland-based Utility Workers Union of America Local 270 lost 385 jobs since the creation of FirstEnergy. Local President Bob Fronek said his members report "that maintenance is not being performed as it has been in the past."

For example, 36 multistation operators, who did line switching and other specialized tasks in substations, took on more general duties. Line switches could be dispatched to those who usually worked on poles or underground wires, Fronek said. Raines described the job changes as cost-effective, putting the Cleveland territory in line with others. Operators have been retrained to take on more duties, including maintenance, Raines said.

"This frees up maintenance people at substations to do maintenance at other facilities," she said.

Willis "Chubby" Wardell, a union official representing 1,300 FirstEnergy workers in New Jersey, said his members are bending under the stress of constant overtime.

In a letter last January to FirstEnergy Chief Executive Officer Peter Burg, Wardell said 10 workers were off because of stress and 60 others have left through attrition. Understaffing was hurting system reliability, Wardell wrote.

Both Fronek and Wardell say deregulation, and not FirstEnergy, is the culprit in job cuts.

"What FirstEnergy is doing is no different than what other utilities are doing," Fronek said.

Energy analyst Jim Halloran of National City Wealth Management said FirstEnergy may deserve some criticism for Davis-Besse and the New Jersey problems. He agreed, though, that all utilities "are cutting jobs like crazy" because of deregulation.

"You could probably find some issues that they could have handled better, but not capital offenses," he said.

Plain Dealer reporters Teresa Dixon Murray and Susan Jaffe and news researchers Patti Graziano and Cheryl Diamond contributed to this report.

To reach this Plain Dealer reporter:, 216-999-4695

2003 The Plain Dealer. Used with permission.
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