GPU Energy Signs Labor Agreement That Increases Productivity and Lowers Costs.

READING, Pa.--(BUSINESS WIRE)--Dec. 8, 1999--

GPU Energy and System Council U-3 of the International Brotherhood of Electrical Workers have signed a new labor agreement that increases productivity and lowers costs. The three-year contract covers GPU Energy's 1,600 unionized workers in New Jersey.

More efficient planning and scheduling combined with greater work practice efficiencies under the contract will create significant savings for GPU Energy over the life of the agreement. In addition, the contract expands the use of performance-based compensation.

"In several areas the company and the union agreed to create performance-based pay - tied to job-specific targets - that will help to move us to first quartile performance," said Robert S. Zechman, vice president, Engineering and Operations for GPU Energy. "We agreed to more flexible work practices that increase efficiency."

Other contributors to productivity improvements are:

- changes in the provisions for when and how employees work in

inclement weather without affecting safety;

- many more cases where personnel will report directly to

field job sites or meter-reading routes each day rather than

to the local office first;

- more flexibility to use qualified personnel across a broader

range of assignments as needed;

- smaller crews for some jobs; and,

- alternative work schedules.

"By introducing more flexibility and a two-tiered wage system we will lower our costs to read a meter by more than 40 percent in New Jersey," said Douglas J. Howe, vice president, Customer Services for GPU Energy. We agreed to market-level compensation for new meter readers. We will introduce incentive compensation for meter readers and customer service representatives with job-specific targets to increase productivity, accuracy and customer satisfaction.

"These changes were necessary to become more competitive in the provision of metering services in New Jersey."

Zechman added, "A key provision of this contract is the ability to deploy the workforce more readily and more cost effectively to where it is most needed in New Jersey in response to customer needs or changing organizational needs.

"We are willing to work together with union leadership to mutually resolve problems and to ensure our success in the new competitive environment in New Jersey."

The contract was ratified by the union membership on November 30 and is retroactive to November 1. Call center staff and meter readers will receive the opportunity for higher performance-based payments, but no base-wage increase. Other bargaining unit members will receive a three percent base-wage increase the first year, followed by two percent in the second and third years. In addition, they will be eligible for performance-based payments each year.

GPU Energy manages the largest electric distribution system across New Jersey and Pennsylvania, serving approximately two million customers and covering half the land mass of the two states.