Spokane7
55°
July 3, 2011 in City, Idaho
As rates rise, so does workers’ pay
Company rewards employees when goals are met
Wages for Avista Corp.’s rank-and-file workers grew by an average of 2.5 to 3 percent this year.
The workers also collected about $8.4 million in bonuses through a program that rewards all Avista employees when the company achieves set goals related to customer service, operational efficiency and cost savings.
Nearly 1,500 people work for the Spokane-based utility, which provides electricity and natural gas to customers in Washington, Idaho and Oregon. Information on Avista’s pay raises and incentive bonuses is outlined in documents submitted as part the company’s latest request for a rate hike for Washington customers.
• Union employees, nearly half of the utility’s workforce, got 3 percent raises this year. Their contract also provides for 3 percent wage hikes in both 2012 and 2013.
• Non-union employees received an average raise of 2.5 percent this year, and Avista anticipates 2012 raises for non-union employees to be at least 2.5 percent. The company uses a pay-for-performance system, so individual pay raises vary.
• The amount paid in bonuses averaged about $5,700 per worker, but amounts vary by department. Union workers averaged $817 in bonuses.
Wage increases at Avista have caught the attention of the Washington attorney general’s Public Counsel Section, which advocates for residential customers and small businesses in rate cases. In other industries, workers aren’t getting raises, said Sarah Shifley, an assistant attorney general.
“I know at least in the public sector, there isn’t anything along those lines,” she said. “We’re all under wage freezes, and next year we’re taking cuts.”
Wages paid by utilities get scrutinized during rate cases, said Mike Parvinen, assistant director for energy at the Washington Utilities and Transportation Commission, which regulates how much Avista can charge its customers.
Most utilities are highly unionized, which influences wages, Parvinen said. In addition, many utility workers have specialized skills and companies compete for them, he added. Avista and other utilities typically submit detailed salary surveys and industry statistics to support their wage levels.
But why, said Parvinen, are “utilities able to give increases year after year when everyone else … is getting (wage) cuts?” That’s a question that the commission staff is asking, he said.
Karen Feltes, Avista’s senior vice president for human resources, acknowledged that the company’s pay hikes and bonuses look generous during the current economic downturn. But she defended Avista’s pay raises and bonuses as consistent with other utilities, both nationally and in the Northwest. Avista aims to be in the 50th percentile for wages among its peers, she said.
Avista executives have mulled freezing wages and ending the bonus program, Feltes said. But company officials figured that the long-term costs would outweigh short-term savings, she said. “There really are perverse consequences to wage freezes,” Feltes said.
When the economy rebounds, good employees leave for other jobs, and the company has to train new people to fill vacancies, said Jessie Wuerst, an Avista spokeswoman.
Eventually, Avista would have to catch up with market-rate wages for the utility industry, Feltes said. In the meantime, wage freezes lower employee morale, she said: “You’ve lost their hearts along the way.”
While Avista prides itself on providing living-wage jobs, Feltes said, the utility has contained payroll costs by keeping its workforce lean. The number of customers served by Avista grew by 51 percent between 1993 and 2010. During that time, Feltes said, the number of Avista employees grew by only 8 percent.
She also credited the incentive bonus program for spurring efficiency and innovation at the company. Bonuses are only awarded when Avista meets certain benchmarks.
The $8.4 million in bonuses paid to rank-and-file workers this year was the highest amount in six years. Feltes said the bonuses reflected a $10.9 million savings in Avista’s operations- and-maintenance costs in 2010, compared with the amount budgeted for the year.
Although Avista ratepayers pay for the majority of the bonuses, Wuerst said the cost of the incentive payout is recovered through efficiency gains and cost savings.
Seventy-five percent of the bonus depends on Avista lowering its per-customer service costs during the prior year. Another 15 percent of the bonus is tied to customer satisfaction ratings. Avista must receive ratings of 90 percent or above, as measured by an independent firm, for employees to qualify. The final 10 percent of the bonus is tied to the utility’s reliability of service, including the number and length of power outages.
Incentive pay programs are common in the utility industry, said Marilyn Meehan, a spokeswoman for the Washington Utilities and Transportation Commission. The commission allows them as long as the programs benefit ratepayers. However, the commission doesn’t allow incentive programs that boost corporate earnings to be included in customers’ rates, because those programs benefit the utility’s shareholders, she said.
Miners to return to Lucky Friday 
drywitt99 on July 03 at 5:45 a.m.
Call me old-fashioned…..but…..I HATE the concept of BONUSES!!
It seems to me that KEEPING YOUR JOB…..particularly during hard-times…..should be bonus enough.
As for having your wages frozen during tough times……that’s a hell of a lot better than being laid off.
oneanddone on July 03 at 5:54 a.m.
Avista is very much like NIC in Idaho. There is very minimal and loose control over how much they “take” from the “customer.” When a company, or taxing entity, can charge essentially whatever they want there will be abuse.
Ninch on July 03 at 7:30 a.m.
So why are Avista employee wages being compared to the “public sector?” The public sector over time has increased number of employees rather doing more with fewer employees as has Avista. How many public sector employees work through the night to restore power or switch out equipment for upgrades? How many public sector employees must absolutely know how to work with electricity and natural gas so that customers (or themselves) are not endangered? Big, big difference between public sector union employees and Avista union employees.
Performance bonuses are much better use of funds than paying wages to someone who feels they can get paid for just occupying a space. Avista is a good employer but their employees must earn their way.
eagleproducer on July 03 at 8:24 a.m.
Half of Avista is unionized?
Where is Scott Walker when we need him?
westerly: Job security should be a goal we work towards, not denigrate. The idea that one’s financial future is subject to the whim of a boss, a board of trustees or other entity is immoral.
eagleproducer on July 03 at 8:25 a.m.
“Avista is a super efficient company.”
Yeah, those corporate officers must be kept awake nights trying to figure out a way to wring a profit from a legally protected monopoly that produces a necessary service.
Zenman on July 03 at 8:50 a.m.
Avista is a good company that works hard to keep rates low while providing living wages to its employees.
monkeyman on July 03 at 9:17 a.m.
Where is Dan the-Avista-man? Isn’t it time for him to be here for damage control. I am sure some other Avista employees are on call for other (real) emergencies.
Perhaps someone needs to call him about this…
lewis8457 on July 03 at 9:22 a.m.
If Avista was not a monopoly all the raises would be OK with me, but since i have no choice but to keep paying higher rates, then I feel I am being robbed.
Dan_at_Avista on July 03 at 9:40 a.m.
Monkeyman, I’m here, just didn’t feel the need to weigh in. Looks like there are a few reasonable people out here commenting, so I wasn’t the first to jump in. Glad to know not everyone commenting on here is nuts.
As always I’d be happy to take questions directly at Conversation@avistautilities.com
monkeyman on July 03 at 9:45 a.m.
I rest my case.
Happy fourth to all, and to Dan.
jddavis on July 03 at 10:13 a.m.
Great! The employees are getting raises that are .6-1.1% BELOW the inflation rate. Seems Avista could at least keep wages on track with inflation….
slimvg on July 03 at 11:26 a.m.
Bob Lutz the GM CEO talks about companies that got driven by trying to please Wall Street instead of trying to make a great product. Make a great product and the stock price will follow should be the motto.
For private utilities to produce a great product they need to make sure their equipment is in the best working order and they are doing everything efficiently. They need to continually look at the structure of the company and make sure they are not over managing. Older companies have a tendency to create to many managers as time goes on.
Private Electric Utilities are regulated by the Utilities Commission and are highly scrutinized by them but they are at the mercy of the info they receive from the Utilities. I really doubt that Avista has them in there pocket.
Eliminate the bonus program it is a scam. How do they meet the goal every year. Seems fishy to me. Let see half the employees are union and they got $819. So 819 times 750 employees equals ~614k. That leaves 7.8 million divided between 750 employees. So that means the average non union employee got ~$10,000. You know thats not true the executives got the biggest share of that. Lets see they decide to keep it why? Because it is a big chunk of change to them. Scott Morris got $627,669 that as much as his yearly wage how many of us would like to get our yearly salary as a bonus every year. Don’t pick on the Meter Reader their jobs are being eliminated and the executives bonuses could pay all their wages for a year. Enron was destroyed by their bonus program. The money could be put back into the up keep of the system to make sure you are providing a great product.
deacon46 on July 03 at 12:22 p.m.
Dan,
Nuts or not they are your customers., The people that pay your wage.
Dan_at_Avista on July 03 at 12:38 p.m.
deacon46, indeed. And to those who are willing to engage in meaningful dialog, using the many channels we’ve set up to talk about energy and Avista, I very much appreciate it. Though, over the last two years that I have been commenting on these boards on Avista issues, I more likely than not have found folks unwilling to think beyond their preconceived notions about my company. The all-caps rants, mud slinging and physical threats has me rather frustrated with level of discourse here. Thus, I appreciate those who have e-mailed me and even met with me in person to discuss their concerns - from rates to billing to customer service. If individuals only receive their exposure to issues through this comment forum, they are doing themselves a disservice. I think that’s nutty.
Find more info here: www.avistautilities.com/blog , www.avistainfo.com , www.twitter.com/avistautilities , www.youtube.com/avistautilities and conversation@avistautilities.com
misjustice on July 03 at 12:43 p.m.
Dan, the Avista Answer Man, nothing like insulting the folks that pay your wages. If you can’t stand the heat, stay out of the forum…it’s really that simple.
Just sayin’…
; )
Squid on July 03 at 2:13 p.m.
Dan, why are you so eager to take comments out of a public forum and talk in private? Just wondering.
You say it’s nutty and a disservice to discuss in a public forum?
I don’t understand how your customers would benefit from talking to you privately.
Thanks in advance for helping me understand. I’m not the brightest guy, so it’s hard for me to figure it out.
eagleproducer on July 03 at 4:39 p.m.
I’m sure Dan meant nutty in a good way, like how one refers to a nutty relative who brings up uncomfortable dinner conversation during the holidays which smacks to closely to the truth.
Dan_at_Avista on July 03 at 6:58 p.m.
Squid,
I’ve been doing this for a while now - offering information to a group of folks who tend to skew-negative on nearly every story posted at S-R and certainly on Avista stories. I urge people with actual concerns they want addressed to contact me directly, because trying to have a “discussion” here is a fruitless effort. But I’ve found that those who are actually willing to have a discussion are also willing to talk one-on-one either in person or through e-mail, where their actual concerns can be addressed. Often times those concerns are based on their personal experiences and private account information. I certainly can’t discuss private account information here. That said, any correspondence we have is your’s to do what you want with. Want to tell people your monthly bill? Address? Sure, go ahead. Want to tell people what I wrote back to you? Go for it. I welcome it.
Let me address the “nuts” comment. I spoke out of turn and didn’t mean to offend anyone. I apologize for that and I deserve to be called on the carpet for it if you wish. None of you deserve to be painted with such a broad brush and again I appreciate those who are willing to discuss their concerns with me through the many channels we offer. I’m certainly not perfect and I made a mistake.
misjustice on July 03 at 7:11 p.m.
Thanks for the apology.
Signed,
A NUT that pays your salary…
Just sayin’…
; )
Oh, I have my remedy for the yearly robbery, errr, rate hikes by Avista; more firewood. This year I am buying two extra cords, to ensure that I don’t have to use electricity to heat my modest abode. So, as a reward for my conservation of electricity, I expect ANOTHER rate increase next year…and so it goes! Damned if you do, double damned if you don’t….
DickAdams on July 03 at 8:03 p.m.
Avista really is compassionate during the economic down turn. Hike in rates is all I ever hear. Washington Utilities Commissioners love the monopoly and have never seen a request from the parasites they at least did not grant some amount of loot.
D Statler on July 05 at 12:03 a.m.
Just more lip service from the UTC and the AG’s offices. These elected officials and appointed panel of the UTC have nothing to gain by helping we the people. Their campaign contributions are pouring in from AVISTA and other PAC groups. Wages for AVISTA’s hourly employees are a drop in the bucket compared to executive pay and bonuses. Once again, unions in America are being targeted instead of the real problems facing us. Corporate greed is the root cause of our trouble here. The wealth in America is being robbed from the middle class daily. Avista’s continual increases are just another prime example.
><(((*> on July 05 at 4:04 p.m.
it is no surprise that Dan_at_Avista only wants “actual concerns”
after all, once he thinks the question is worth his time, he can politely pat them on the head and send them on there way.
rates are going up to increase profit.
i am sure it is a hard thing to convince hostage consumers increased rates will be somehow good for them.