METROPOLITAN EDISON COMPANY - Pennsylvania Public Utility ...

of straight time hours; however, as shown in Exhibits X-6 through X-8, the FE-PACompanies have consistently experienced overtime at levels significantly above thisamount. Straight time hours and overtime hours for all three FE-PA Companiescombined during 2006 through 2009 are summarized in Exhibit X-9.Exhibit X-9FE-PA CompaniesLine Worker Straight Time and Overtime Hours2006 – 20092006 2007 2008 2009Straight time hours 1,015,104 1,080,381 1,130,326 1,067,440Overtime hours 270,393 317,320 361,755 259,746Percentage 26.6% 29.4% 32% 24.3%Source: Data Request HR-34The FE-PA Companies overtime budget levels of 15%-18% of straight time hoursare in the range budgeted by other utilities in the industry; however, as shown inExhibits X-6 though X-9, they have been consistently exceeding these budgeted levelsby significant amounts. The FE-PA Companies overtime is comprised of planned andunplanned work. Unplanned overtime includes Company-specific outage restorationsas well as affiliated and unaffiliated mutual assistance support. Nevertheless, highamounts of overtime by particular line workers can lead to safety issues as excessivelytired workers tends to increase the possibility of mistakes and injuries. Therefore,mutual assistance efforts should be included in overtime planning and ongoingmanagement practices.Reducing overtime levels should result in reduced operating costs, improvementsin operational effectiveness and reductions in injuries. FirstEnergy pays time and a halffor overtime hours and based on an average straight time rate of $30 per hour for lineworkers, 259,746 hours of overtime in 2009 cost the FE-PA Companies approximately$11.7 million (259,746 x $30 x 1.5 = $11,688,570). If the FE-PA Companies reducedthe overtime for line workers to 15%, it would save the FE-PA Companiesapproximately $4.5 million (1,067,440 x 15% x $30 x 1.5 = $7,205,220 and $11,688,570- $7,205,220 = $4,483,350). Placing linemen on different shifts and/or hiring additionalline workers to offset the overtime could reduce the savings by approximately 50%hence the FE-PA Companies would be able to net a savings of approximately $2.2million a year with Met-Ed realizing a majority of the annual savings of approximately$1.2 million (or approximately 55% of overall savings), Penelec realizing a savings ofapproximately $850,000 and Penn Power realizing a savings of approximately$150,000.Staff’s Follow-up Recommendation – Conduct an analysis of overtime hours foreach FE-PA Company and strive to maintain overtime levels at less than 15% ofstraight time hours.- 68 -