RE: Docket No. PL24-1-000; Project-Area Wage Standards in the Labor Cost Component of Cost-of-Service Rates

Dear Mr. Commissioners:

I am writing in response to the Commission's Notice of a Proposed Policy Statement clarifying how it will treat project-area wage standards in computing the labor cost component of jurisdictional cost-of-service rates. After review of the proposed sources of measurement, I believe the Commission should view collectively bargained rates as the only metric for project-area wages when an operator certifies the employment of union labor.

I applaud the Commission’s initiative to update the sources it will consider in determining project-area wage standards. I also share LIUNA’s primary concerns with using a “blended wage rate”, which is not a metric used in any other Government body or anywhere else within the construction industry, to determine cost reimbursements to operators. Of the four sources the Commission has proposed to accept, wage and fringe benefit rates in applicable collective bargaining agreements or project labor agreements are the most reliable source to determine local labor standards because these rates represent the compensation and benefit levels for the personnel actually performing the work.

Key reasons why I support collectively bargained rates as the only metric for project-area wages include:

• Collectively bargained reflect the wages and benefits skilled tradespeople actually receive on pipeline projects. Local 798 members, specifically, hone our craft over several years, which enables us to provide the highest quality service to pipeline operators. If an operator decides to use union labor, such as from our Local, the Commission can easily validate the exact wages and benefits.
• In the case of pipeline projects that span multiple states or years, collective bargaining agreements already have state-specific rates, and annual wage increases established, preventing the need for further clarification.
• The United Association is one of four signatories to the National Pipeline Agreement, which covers construction, installation, double jointing, rebeveling, treating, insulation, reconditioning, testing, relaying or relocation of cross-country pipelines or any segments thereof.
• Finally, it is important to remember that pipeline construction is highly specialized and involves much greater skill and training levels mandated by PHMSA. A “blended wage rate”, in particular, inherently ignores this fact and dis-incentivizes operators from using union contractors & the associated labor, denying our nation’s most dedicated and highly trained union craftsmen good jobs.

Due to the reasons discussed above, I strongly believe that collectively bargained rates should be the only metric for project-area wages when an operator certifies the employment of union labor. Further, the Commission should also only consider Davis-Bacon and state prevailing wages if they have been recently updated, and reflect actual wages workers received, such as collectively bargained rates. Along those same lines, construction cost models or databases should only be relied upon if the labor cost inputs are based on actual area wages and benefits, not national averages or averages for the general construction industry.

I appreciate the opportunity to make my voice heard on this issue, and I hope the Commission considers this comment as it discusses the sources of data it uses to determine project-area wage standards for the dedicated craftsmen that build and maintain our nation’s pipeline infrastructure.

Signed,

[Signers below]