State regulators are asking officials at Northeast Utilities to justify “a number” of layoffs made by the company since it merged with Boston-based NStar in April, given earlier assurances by the utilities that they would handle most job eliminations through attrition.
“The Department is extremely concerned that there appears to be a major discrepancy between what the Joint Petitioners represented to the Department as their plan for personnel reductions and what [Northeast Utilities] is actually doing,” Ann G. Berwick, chair of the state Department of Public Utilities, wrote in a Nov. 6 letter to Northeast Utilities chief executive Thomas J. May.
The agency ordered Northeast Utilities to provide regulators with a list of jobs that were eliminated and explain why those jobs were cut by Nov. 27. State regulators offered few details outside of the letter, which did not say how many layoffs had occurred.
“The DPU is continuing to take seriously its responsibility to ensure that the merger continues to operate in the public interest,” Berwick said in a statement to the Globe. “In sending the letter to Northeast Utilities, the DPU is doing its due diligence. The company has promised a timely response and we are awaiting that information.”
John Howat, a senior policy analyst with the National Consumer Law Center, applauded regulators for following up on the merger and trying to ensure “the well-being” of utility workers.
“Utility workforce reductions often result in deterioration of service quality and can undermine public safety,” Howat said. “Utility regulatory policy should be geared toward promoting economic development, not unemployment.”
Caroline Pretyman, a spokeswoman for Northeast Utilities, said the company has already begun compiling answers for regulators.
While seeking approval for the merger from the Massachusetts Department of Public Utilities, NStar and Northeast Utilities estimated that the companies’ partnership would result in an estimated $780 million in operational savings in the first decade, partly by eliminating nearly 350 administrative jobs, mostly through attrition.
In a letter acknowledging Berwick’s concerns, senior vice president and general counsel Gregory B. Butler indicated Northeast Utilities does not believe it has strayed from those projections. The letter defended the recent layoffs — which again, were not quantified — as eliminations of redundant corporate positions that were made “using attrition to the maximum extent possible.”
“We are in a customer-service business with the interests of customers as our top priority,” Butler wrote. “There is no customer interest served by the preservation of redundant and unnecessary corporate positions.”Erin Ailworth can be reached at firstname.lastname@example.org. Follow her on Twitter @ailworth.