Massachusetts regulators look at NiSource outsource
BY KEITH BENMANMassachusetts regulators are looking into NiSource Inc.'s plans to outsource through IBM up to 100 jobs at its Bay State subsidiary, citing preliminary evidence that the move could affect reliability and customer service.
The state Department of Telecommunications and Energy on Nov. 30 said the case "raises questions not so much about Bay State's local management ... but about NiSource's management decisions from Merrillville, Indiana."
NiSource's NIPSCO subsidiary has been talking to its union here about outsourcing 40 to 60 accounting and billing jobs, and local union officials are taking notice of Massachusetts regulators' investigation.
"They are saying there is a direct link between lopping off people and public safety and customer service," said David Chlebek, United Steelworkers Local 12775 vice president.
Bay State serves 300,000 natural gas customers in Massachusetts. NIPSCO has 712,000 natural gas and 445,000 electric customers in northern Indiana.
Bay State will cooperate with the Department of Telecommunications and Energy in its examination of staffing at the utility, according to Carol Churchill, a NiSource spokeswoman based in Massachusetts.
She noted customer service is not strictly a matter of how many people are working at the utility. NiSource and its subsidiaries also consider work processes and the application of new technology when determining staffing levels.
"Outsourcing continues to be a NiSource-wide initiative and has benefits for the customers as well as the company," Churchill said.
Six months ago, NiSource announced it would outsource 572 jobs to IBM and cut another 445. As of Sept. 30, 499 employees already had transferred to IBM, according to NiSource's quarterly filing with the U.S. Securities and Exchange Commission.
NIPSCO has been trying to entice the union into bargaining over outsourcing the 40 to 60 jobs, but so far union officials are holding the company to a no-layoff clause, according to Debra Birkholz, USW Local 13796 president.
"Everything that is happening there is happening with us," Birkholz said.
The union is fresh off a victory in the NIPSCO hub closings case. The utility wanted to close five service hubs in northern Indiana, but the union teamed up with local communities and beat back the move.
Massachusetts regulators pointed out the number of Bay State employees has dropped from 811 in 1998, when NiSource bought the company, to 586 today.
Massachusetts Attorney General Thomas Reilly has alleged Bay State has neglected maintenance since NiSource took over and that the Merrillville company has "pocketed" the savings.
Massachusetts regulators ordered the investigation of the current staff cuts at Bay State on the same day they granted the utility a 2.3 percent rate increase. It was the utility's first rate increase since 1992.