Struggle Over Power Plants

Council members in two cities that are rushing to build power plants to avoid the next energy meltdown are accusing a labor organization of exploiting environmental laws to keep nonunion contractors from bidding on the jobs.

The union group says it’s trying to protect California from pollution as well as electricity shortages.

Call it a power crisis power struggle.

The California Energy Commission is studying allegations that California Unions for Reliable Energy, or CURE, repeatedly has threatened to raise environmental concerns that could cause costly delays in licensing procedures unless power plant developers agree to use only union construction workers.

“People don’t want to use the word blackmail, but that’s what it is,” said Richard Roccucci, a councilman in the fast-growing Sacramento suburb of Roseville. “This may be legal, but in my opinion, it’s unethical.”

Roccucci cast the lone dissenting vote against a July 21 motion that Roseville sign such a labor agreement with CURE to speed up the construction of a 150-megawatt gas-fired plant.

Councilman Steve Adams in Riverside is even more adamant, calling CURE’s effort to slow down his city’s licensing of a proposed plant “borderline extortion, if not racketeering.”

The Riverside City Council unanimously voted July 27 to sign a contract with a nonunion contractor that bid $5 million less than its closest competitor.

At about the same time, CURE filed legal papers with the energy commission, raising concerns about air pollution at the Riverside project. The unions at a hearing last week asked the commission to subject Riverside to a yearlong full environmental review, instead of the six-month “expedited” process for small power plants, like Riverside’s 96-megawatt facility.

CURE rejected the criticism, asserting that unions had been in the forefront of efforts to reduce air and water pollution from recently built electricity generating stations.

“We have done cutting-edge stuff in the environmental field,” said CURE Chairman Robert Balgenorth, president of the State Building & Construction Trades Council of California. “These people are trying to slander our reputation and say we did wrong.”

He said negotiations between CURE and developers had resulted in a 50% drop in power plant emissions of nitrogen oxide since 1997.

Unions, Balgenorth added, have a strong record of providing skilled workers who have helped developers finish numerous projects in California on time and under budget.

CURE’s negotiations with power plant developers seek to create a balance between protecting the environment and fostering jobs, Balgenorth said. Reaching a union-hiring agreement means that “we will have satisfied that balancing act,” he said.

CURE’s motivations appear to be more about protecting union jobs than preserving the environment, said Herbert R. Northrup, a retired management professor at the University of Pennsylvania’s Wharton School who has written extensively on union activities in the construction industry.

“They’re using a lot of desperate tactics to try to get back the jobs they once had,” Northrup said, noting that unions now represent 17% of construction workers, compared with 87% in 1945.

Northrup’s statement is echoed by a July 12 memo to the City Council from Roseville’s municipal utility director. Tom Habashi said that in recent years CURE’s involvement in energy commission licensing proceedings had been “light and supportive” when it got a union-only labor agreement. But “on those projects that do not sign

The memo concluded that not signing a union agreement could cost Roseville ratepayers “anywhere from $3 million to $15 million or more

The rationale persuaded the council but left members of the four-person majority feeling tainted.

“Quite honestly, I’m disgusted to have to be put in a position like this,” Councilman John Allard said just before the vote. The unions are saying that “if you don’t do what we want you to do, we are going to take you to court and jam you.”

Shortly after the council vote, the city and CURE drew up an agreement in which Roseville promised to use only union workers and CURE pledged to not engage in any actions before government regulatory agencies that could slow construction.

Faced with a similar situation, Riverside officials took a different tack. The council insisted that it had no choice but to spurn CURE’s demands because the city charter required contracts to go to the lowest bidder.

When Riverside built a small power plant about a year ago, “it happened to be that a union company got the bid, and we didn’t get any objections from anybody,” Councilman Art Gage said. “But this time around the nonunion company got it, and all these people came out of the woodwork.”

In both cases, he said, the city is required to pay union-scale prevailing wages to all workers, whether they are employed by union or nonunion contractors.

The successful nonunion bidder said CURE’s legal strategy was costly to electricity ratepayers because it prevented many qualified firms from bidding on California projects.

“All that we ask for is that projects be bid on a competitive basis,” said Gary Bennett, corporate relations director of Industrial Co., an international construction company based in Steamboat Springs, Colo. Bennett said his firm often hired union subcontractors or independent union craftsmen and planned to do so in Riverside.

CURE’s use of the energy commission licensing process worries some environmentalists.

“The environmental pretext of CURE’s work has gotten thinner and thinner,” said V. John White, legislative director of the Clean Power Campaign in Sacramento, which advocates for renewable energy like solar, wind and geothermal power. “Lately, they have become more cynical and hypocritical. It suggests they don’t have an environmental agenda at all.”

Even nonpolluting alternative energy projects have become the targets of the union’s environmental concerns, said Jonathan Weisgall, vice president of MidAmerican Energy Holdings Co., whose CalEnergy unit recently completed construction of 10 geothermal energy plants in Imperial County.

“CURE aggressively opposed this project, which was surprising because as renewable energy, it faced few environmental hurdles,” he said. “But once we executed the project labor agreement and were confirmed as working with the unions, CURE’s intervention at the energy commission no longer was an issue.”

CURE’s attorney, Marc Joseph, denied that the unions opposed the project for other than environmental reasons. The unions, he said, “got the developer to agree to make the project environmentally better.”