Dear Mr. Slavin:
Thank you for your email message. I am sorry there was difficulty in sending the message via my campaign email address. I appreciate the opportunity to respond to your questions and would be pleased to speak with you directly if it would prove helpful.
As I respond to your questions, I will include some background information for clarity purposes. First, Exelon Corporation is the merged entity created in October 2000 between Commonwealth Edison in Chicago and PECO Energy in Philadelphia. I joined Commonwealth Edison in September 1997 as Vice President of Human Resources after serving in a similar capacity for USG Corporation and its Operating Subsidiaries including United States Gypsum Company. I had been with USG nearly 25 years.
At Commonwealth Edison, and later with Exelon, I lead the Human Resources function. In 2005, I was promoted to Executive Vice President and Chief Human Resources Officer and reported to the Chairman and CEO with responsibility for staffing, compensation, benefits, management development, succession planning, diversity, labor relations and related human resource functions. I advised the Board of Directors on management performance, variable compensation structures including long term incentives, succession planning and leadership/organizational models. I did not have accountability for nuclear safety or security. That was the accountability of the President of the Exelon Generation Company who also served as the Chief Nuclear Officer. He reported to the Chairman with dotted line accountability to the Generation Committee of the Board of Directors. He made regular reports to the Board and the Nuclear Regulatory Commission on all nuclear operations matters including safety and security.
I retired from Exelon in September 2007, though because of unused vacation time, my last day worked was July 31, 2007. During my tenure, I was never aware of any security lapses at Exelon. Had such been the case, I can assure you Exelon leaders, including myself, would have immediately addressed them. As I recall, the Associated Press reported the very unfortunate Peach Bottom Wackenhut security guard problem around September 19, 2007 (nearly two months after my last work day). When advised of the security breach, Exelon promptly discharged Wackenhut. Exelon took (and continues to take) its safety and security commitments seriously. Its safety record is amongst the best in global nuclear operations. The Wackenhut incident, which became known to Company officials after my last day worked, was obviously not related to my scheduled retirement.
Before responding to your questions about health care and labor negotiations, I will provide some additional background information. Prior to the formation of Exelon, both Commonwealth Edison and PECO Energy, both traditional electric utility companies, were highly regulated. Their operating costs including salaries, wages and all benefit expenses such as health care and pensions, were built in to the rate case which state legislators tended to automatically approve. All their costs/expenses were simply passed on directly to customers in the form of monthly electric bills. These electric utility companies had a virtual monopoly with no competition. In 1997, a law was enacted in Illinois that deregulated the electric utility industry allowing electric power competitors to enter the state. At about the same time, a similar law was enacted in Pennsylvania. In other words, both Commonwealth Edison and PECO Energy, for the first time in the history of those 100 year old companies, had competition. Moving from a highly regulated environment where rates were guaranteed to a deregulated, competitive environment was exceedingly challenging. Under the new scenario, rates and customers were no longer guaranteed. Amongst other considerations, all cost structures had to be reviewed and any costs that were out of line when compared to other industrial/power companies had to be modified to ensure sustainability of the company. The very survival of Commonwealth Edison and PECO Energy (and later Exelon) was at stake.
In reviewing the benefits program for companies, including holidays, vacations, sick time, health care, pensions, and related plans, it was apparent that they were out of line with competitive practice. The benefits program was at approximately the 98th percentile of competitive practice. Benefits costs were approximately 50% of salaries/wages. The median percentage is about 33%. For the company to survive in a deregulated, competitive market place, changes to benefits, salary and incentive levels had to be made. The Board of Directors directed Management to develop and implement a more competitive benefits program. Significant efforts were made to communicate to all employees the competitive state of the business and the need to modify benefit plans and programs. Over time, and phased in on a graduated basis with significant advance notice to employees, changes were made to both health care (co-pays, deductibles, contribution levels, etc.) and pension plans (moving from a traditional defined pension plan to a defined contribution like program) to bring such plans more in line with competitive practice. When I retired, Exelon’s benefits program was still amongst the richest in the industry well-above the competitive median practice.
In terms of labor negotiations, Exelon and its operating facilities had several contracts with the International Brotherhood of Electrical Workers. Special efforts were made to engage and communicate with union leaders and employees about the changing nature of the business (from regulated to deregulated) and the implications for all constituents (shareholders, customers and employees). To my knowledge, there was never any misleading information knowingly conveyed to employees about the state of the business or the Company’s benefits plans. An emphasis was placed on educating the IBEW and its members about the financial costs of Exelon’s various benefits and work practices and the need for the Company to be more competitive. It was an open book. Negotiations during a period of rapid market and economic change are challenging. Both parties are committed to achieving their goals. At the end, it is about trust and mutual respect. Management trusting and respecting union leaders and their doing the same in return. The objective is to reach agreements that are in the best long term interests of the Company, the union and employees. Though challenging, all labor negotiations during my tenure were successfully achieved with no work stoppages, no interruption of electric service to our customers and no violations of the National Labor Relations Act.
As to your question related to developers and speculators, I have absolutely no agreement, understanding or relationship with such people. As you may know, I am funding my campaign in its entirety to avoid any appearance of impropriety.
As to why I am seeking office, these are challenging times requiring tough minded leaders who will make hard decisions. The world has changed. Status quo management of our city will not work. The odds are we will be required to do more with fewer resources.
I won't back down when it comes to facing today’s challenges. I possess the leadership, business and financial skills to address the major challenges we face. An example is the Maratea issue where I, and dozens of others, convinced the Commissioners to pay down the debt and reduce our taxes. I seek office to ensure we manage these changing times with courage and determination and that plans and programs are thoughtfully developed and managed in a fiscally sound manner.
Once again, thank you for your communications. I apologize for the lengthy response but trust it answers your questions.
Sincerely,
S. Gary Snodgrass
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Dear Mr. Snodgrass:
I have a few questions for you:
1. Why did you and Exelon (and predecessor companies) hire Wackenhut to guard nuclear powerplants?
2. Were you aware of Wackenhut’s history of violating whistleblower rights in Alaska, including the case of Chuck Hamel, whom Wackenhut and Alyeska paid $10 million over illegal surveillance and creating a phony environmental group to spy on whistleblowers?
3. Were you aware that Exelon’s plants had Wackenhut’s guards sleeping in the ready room?
4. Do you think that nuclear powerplant security guards should work twelve hour shifts, as they did at the Peach Bottom plants?
5. Why were guards working twelve-hour shifts at Exelon plants?
6. Did you take personal accountability for the sleeping guards?
7. If not, who did?
8. Did you leave Exelon because of the sleeping guard problem?
9. What are your thoughts about Exelon’s treatment of whistleblowers?
10. How did you “cut healthcare”?
11. How did you negotiate with unions?
12. Why did you cause allegedly misleading information to be distributed to employees, both union and management, that allegedly misled them about their pensions?
13. What agreements, understandings and relationships do you have with developers and speculators?
14. Why are you running for Commissioner based on your business record?
Sincerely,
Ed Slavin
Clean Up City of St. Augustine, Florida
www.cleanupcityofstaugustine.blogspot.com
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