[IBEW Business -Manager Gary Brooks] asked, ‘what's in it for us? If some guy from Mississippi is going to come in and get the work; why should we care?'

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Alaska Star - June 20, 1996
Chugach rejects intertie project
By LEE JORDAN, Alaska Star Editor

CORRECTION: Chugach did not reject the northern intertie project, only the agreement mandating IBEW only bidding. The final decision on contracting method will be taken by the group of seven railbelt utilities of which Chugach has the largest cost share (30%).

Chugach Electric Association board of directors recently took action to move ahead with construction of the Northern Intertie, but repudiated an agreement which would guarantee the work would be done only by workers represented by the International Brotherhood of Electrical Workers (IBEW), the state's largest labor union.

The agreement, said Chugach Board President Ray Kreig, would have cost consumers millions of extra dollars.

IBEW Business -Manager Gary Brooks looked at it differently.

"They, asked for our help (in getting money for the project). They signed an agreement and now we're being informed they are reneging on the deal," Brooks said.

"In order to maximize benefits, we feel it should be built in the most economical manner; possible," explained Kreig. He pointed to a recent study commissioned by Chugach, one which concluded that open bidding could save several millions of dollars.

At issue is a pair of electrical intertie systems which would upgrade lines linking Southcentral Alaska with Fairbanks, improving reliability of service. A new section also would be built between Healy and Fairbanks, making possible potential coal-fired power generation.

The Legislature in 1993 authorized $90 million to construct two projects.

Fairbanks' Golden Valley Electric Association would build the northern intertie on behalf of the Intertie Participants Group (IPG), an association initially consisting of eight utilities but which now has only five who support the 1990 Memorandum of Understanding.

Forming the IPG were Fairbanks Municipal Utilities System, Chugach, the City of Seward electric utility, Matanuska Electric Association (MEA), Golden Valley, Homer Electric Association, Anchorage Municipal Light & Power (ML&P) and the Alaska Electric Generation and Transmission Inc. the latter having joined later in the process.

ML&P did not-sign the original agreement. MEA earlier declared it no longer supports the agreement.

Both of those utilities as well as Chugach declined to sign a revised agreement dated Feb. 9,1996. That revision several concessions, Brooks said, including reduced "subsistence" pay in per diem rates for workers. It also listed only five holidays eligible for double time and revised the ratio of electric linemen compared to workers involved in tower construction.

That revision came on the heels of the study done in January 1996 for Chugach by Herbert R. Northrup and A. J. Thiebolt. The study became an issue in the April annual meetings of both MEA and Chugach where backing of board candidates by IBEW was bitterly contested.

Brooks said Tuesday he had not yet been advised by the Chugach general manager that Chugach intends to back out of the memorandum of understanding. He did know that the board had passed a motion directing the general manager to so advise IBEW.

"If that is to be their position, we would view it negatively," Brooks said. "It's a breach of the agreement."

The union leader said he anticipates IBEW will either appeal to the courts or file a grievance with the National Labor Relations Board "or most likely both:"

Chugach's action does not mean the intertie won't be built, Kreig said.

"Chugach's decision is that we won't be bound by the 1990 agreement, but will exercise our options to operate outside the agreement," the board president said.

"We feel the decisions should be based on building the project at the lowest cost to consumers," Kreig said. "Restricting construction (to IBEW members) serves no purpose to the consumers."

"Their complete repudiation (of the agreement) disturbs me. It shows a lack of faith," Brooks said:

"They enjoyed the fruits of our labor," Brooks said of the efforts to gain the $90 million appropriation of money from the Railbelt Energy Fund.

"The entire railbelt group came to us after they'd been working five years without getting anywhere. We asked, ‘what's in it for us? If some guy from Mississippi is going to come in and get the work; why should we care?'"

In exchange for an agreement that IBEW members would be guaranteed the work, IBEW bought pressure to bear on the Legislature and secured the appropriation.

"It was not something (the utilities) took lightly at the time," Brooks said.

Kreig said Chugach is concerned because it is the largest utility in Southcentral and "will be paying most of the costs while the majority of the benefits goes to Fairbanks."

CORRECTION: ALL southcentral utilities, not just Chugach, will be paying most of the costs.

As project manager, "Fairbanks would be paying 15 cents on each dollar of cost over- runs," Kreig said. With several millions of dollars in potential savings at stake, he said his utility is anxious to "maximize our options:"

It is hoped that the northern intertie would go to bid this year, Brooks said. Work could start after the first of the year and would continue over the next 18 months. The southern intertie, which would be built by Chugach, may be three years away.

Chugach's board on June 5 approved a construction management agreement for the northern intertie, which would be built between Healy and Fairbanks. It also approved a system agreement covering access, configuration and defining some participation details.

The board also authorized environmental work to-proceed on the southern intertie route alternatives. A draft report from engineers looking at possible routing is expected later this month. A lead agency will then be chosen to proceed with an environmental review of the alternative routes.