At National Grid, we’re industry leaders in the clean energy transition. We take seriously our responsibility to help solve major energy challenges, while meeting our customers’ evolving expectations and ensuring that the cost of our service is sustainable for years to come. Our effort to keep costs reasonable for our customers has led to our current dispute with United Steelworkers Locals 12003 and 12012-04, which together represent 1,250 of our more than 10,000 unionized employees.
A portion of our customers’ bills support labor costs. On average, both our gas and electric customers are seeing a 5 percent to 7 percent annual bill growth without seeing significant changes in their level of service. We’re concerned about affordability for our customers.
To stay ahead in an ever-evolving marketplace and to control our customers’ costs, National Grid cannot continue to provide health insurance and new-hire retirement benefits to one segment of our unionized workforce that are inconsistent with the vast majority of our unionized employees, and also inconsistent with every other investor-owned utility in Massachusetts.
When it comes to the types of retirement and health insurance benefits that our customers ultimately pay for, those provided to employees represented by Locals 12003 and 12012-04 are the exception, not the rule. For example, 16 other local unions that represent National Grid employees have agreed that new hires will not be covered by traditional pension plans. These two locals have not. Further, employees in these locals still maintain health insurance coverage that includes no deductibles and no co-insurance.
Our inability to reach agreement on these issues resulted in the company’s difficult decision on June 25 to inform these two locals that their members could not continue to work without a comprehensive agreement that meets both our employees’ and customers’ needs. This work stoppage is the exception to our otherwise unblemished record of successfully negotiating scores of contracts with unions over two decades.
We’re proud to have always provided good jobs with competitive wages and benefits to our employees. Since 2016, we’ve added 140 more well-paying jobs in these two local unions alone. The average employee in these locals earns more than $120,000 a year, including overtime. If our offer to these locals of 14.53 percent in compounded raises was accepted on June 25, that average salary would increase by 2022 to more than $137,000 annually.
We want every employee at National Grid to be able to grow a career here. In recognition of the long hours they often work under challenging conditions and in emergency situations, we will continue providing good wages and benefits that help them today and during retirement.
But when less than 10 percent of American workers have pension plans themselves, and more than 50 percent have no employer-funded retirement plan at all, we’re simply asking our unions to adopt a competitive company-funded 401(k) plan for new hires – as they have done elsewhere.
Defined contribution plans like a 401(k) are more aligned with changing workforce demographics, providing a tangible benefit that employees can see grow. Our proposed company-funded defined contribution 401(k) plan, with contributions of 3 percent to 9 percent matched against base and overtime pay, is comparable to retirement plans agreed to by United Steelworkers for new hires at the other investor-owned utilities in Massachusetts – as well as at utilities in New Hampshire and Connecticut.
National Grid has not proposed that any current employees in these locals give up their pensions or move out of a traditional pension plan. In fact, we offered a 10 percent pension increase by 2021 for employees currently represented by Locals 12003 and 12012-04.
But these two locals have drawn a line between themselves and other United Steelworkers locals – as well as 16 other unions at National Grid, who have agreed that new hires would not be covered by traditional pension plans.
Why is it that these locals are so fundamentally opposed to changes their United Steelworkers brothers and sisters have made at other utilities? In fact, there is no reasonable answer to this question.
We will continue to negotiate in good faith and remain available seven days a week to try to reach an agreement with these locals that gets our employees back to work to serve the customers who depend on us. We look forward to our ongoing negotiation sessions with the locals, and to every day that gets us closer to resolving our differences.
Marcy L. Reed is the President Massachusetts and EVP Policy & Social Impact