Union workers thaw TVA pay freeze

Union workers thaw TVA pay freeze

March 15th, 2012 by Dave Flessner in News

The Tennessee Valley Authority offices are located on Market Street in Chattanooga.

Photo by Jenna Walker /Times Free Press.


TVA's payroll in the Chattanooga region totals more than $400 million.

Chattanooga power headquarters - 3,000 employees

Sequoyah Nuclear Plant - 1,050 employees

Watts Bar Nuclear Plant - 1,040 employees

Widows Creek Fossil Plant - 300 employees

Total TVA staff - 12,800 employees


$74,465 - Median pay for TVA workers in fiscal 2011

$38,240 - Median pay for Chattanooga workers in 2010

$1.01 billion - Base pay for all of TVA's 12,500 workers in 2011

$107 million - "Winning Performance" payments to TVA employees in 2011, or $8,300 average per employee

37 - Number of TVA employees with a base salary above the $400,000 annual pay for President Barack Obama

149 - Number of TVA employees with a base salary above the $174,000 annual salary for members of Congress

2,136 - Number of TVA employees with base salaries above $100,000

179 - Number of TVA employees with base salaries below $30,000

Source: Tennessee Valley Authority, U.S. Bureau of Labor Statistics


The total cost of calendar 2012 pay adjustments for 4,700 annual trades and labor employees at TVA is $7.1 million, or an average of $1,510 per employee

The total cost of fiscal year 2012 pay adjustments for 3,800 represented Salary Policy employees at TVA is $7.7 million, or an average of $2,026 per employee.

Despite the 2-year-old pay freeze for most federal employees, the biggest federal agency in Tennessee is still boosting the wages paid most of its workers.

Unionized workers for the Tennessee Valley Authority have been granted wage increases in the current fiscal year averaging $1,729 per hourly employee, according to TVA union contract agreements implemented in October for white-collar workers and in January for trades and labor workers.

Such pay increases, ranging from 2 to 3 percent for most of TVA's 8,500 employees represented by labor unions, averaged less than the 3.1 percent increase in inflation over the past year. But TVA's hourly employees fared better than most of TVA's salaried workers and other federal employees covered by the federal pay freeze that began in November 2010.

As a federally owned corporation, TVA voluntarily agreed to participate in the federal employee wage freeze for most of its salaried workers. But TVA's unionized workers are not covered by the wage freeze and continue to get pay increases based upon market surveys of comparable jobs.

"The TVA act requires that workers be paid competitive wages and, if anything, I think most TVA workers are probably paid less than those with comparable jobs in the private sector," said Gay Henson, local president of the International Federation of Professional and Technical Engineers, which represents more than 2,600 engineers at TVA. "We have a highly skilled workforce at TVA and the workforce at TVA is much older than at most companies."

According to TVA salary information provided to the Chattanooga Times Free Press in response to a Freedom on Information Act request, the median base pay for TVA workers rose last year to $74,465, excluding overtime and bonus payments.

TVA's compensation levels were nearly twice the average for all Chattanooga workers, according to the U.S. Bureau of Labor Statistics. But TVA officials insist the utility's pay levels are designed to be comparable to similar private sector jobs in the Tennessee Valley.

"In setting salaries, our goal is to provide the competitive level of compensation necessary to attract and retain skilled and dedicated employees, who work hard every day to make TVA better," Janet Herrin, chief administrative officer at TVA, said in a statement to employees when the salary data was released to the Times Free Press.

Federal Pay Caps

Through most of its 79-year history, TVA could not pay its employees more than the salary paid to members of Congress, who are currently paid $174,000 a year. But under TVA reforms adopted by Congress in 2004 at the urging of then Senate Majority Leader Bill Frist, R-Tenn., the pay cap for TVA was lifted.

Last year, 74 TVA employees were paid a base salary more than the $174,000 annual congressional salary. Among those, 37 top TVA managers were paid more than the $400,000 annual salary for the president of the United States.

Last week, Congress moved to cap the pay for the top executives of the federally sponsored mortgage giants Fannie Mae and Freddie Mac to no more than $500,000 a year. In fiscal 2011, TVA had 25 executives with base salaries of more than $500,000.

U.S. Rep. John Duncan, R-Knoxville, has opposed TVA's top executive pay, claiming that no federal employee should be paid more than the president.

"You don't have to pay huge salaries to get good people to come and work in the Tennessee Valley," said Patrick Newton, communications director for Rep. Duncan.

But TVA spokesman Scott Brooks said the growing complexity of TVA's power generation requires that the agency pay competitive salaries to get the best talent. TVA conducts surveys of nearly 100 other companies to set employee pay.

"TVA has to be able to attract, train and retain a workforce that is reflective of managing and operating a more diverse generation fleet," Brooks said.

TVA pay consultant Robert J. Gormley compared TVA salaries with comparable investor-owned utilities and found that the $3.95 million paid to TVA CEO Tom Kilgore last year was 37 percent below the industry average.

"While TVA compensation is based on market comparisons, we realize that the CEO's current compensation is near the bottom of industry rankings," TVA Chairman Denny Bottorff said at the time.

Pay Freeze thaw

For the nation's 2.3 million civilian federal employees, President Obama is proposing a 0.5 percent increase in pay in the fiscal year which begins in October. TVA spokeswoman Barbara Martocci said TVA is waiting on a decision by Congress on that proposal to decide about any pay increases for its salaried workers.

Republican lawmakers in the Tennessee Valley, including Chattanooga's U.S. Rep. Chuck Fleischmann and U.S. Sen. Bob Corker, are supporting an extension of the federal employee pay freeze for another year to help cut the federal budget deficit. Although TVA no longer receives taxpayer funds and is not included in the executive branch pay freeze, Martocci said TVA voluntarily agreed to go along with the federal pay freeze in late 2010 for its managers and top salaried workers.

A new Congressional Budget Office study has bolstered the effort to extend the federal pay freeze. CBO released a report last month finding that federal employees, on average, are paid roughly 2 percent more than comparable private-sector workers - a figure that jumps to 16 percent when health care and other benefits are considered.

"Federal employees, in general, are more highly educated and skilled than the workforce as a whole and I'm sure that is true of TVA as well," said James Sherk, a senior policy analyst and labor economist at the conservative Heritage Foundation. "But even when you control for education and job skills, federal employees are generally paid more than those in the private sector. There just aren't the market forces to keep a check on their wages."

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