Directly from a response to intervenors. One if the first things to happen and 25% reduction in leadership positions.
Management Functions
There are opportunities to rationalize the Management structure and other functions within the integrated utility. Identifying a single Management structure and Executive Management Team is one of the first integration efforts that will be conducted. Broader workforce reductions are expected to occur at a much more gradual pace as various integration initiatives are undertaken over the 10 year deferred rebasing period. Considerations by the new Management team with respect to any workforce reductions will require a review and alignment of operational processes and the related systems, and the staff necessary to execute these processes so that safe, reliable business operations continue and service levels are maintained. The savings from the rationalizing of Management structure is estimated to be $180 million over ten years. While this equates to a 7% reduction in combined utility annual salaries and wages of $285 million (net of capitalization), this estimate for potential savings is considered aggressive as a percentage of the Management level salaries. The estimate for Management structure changes is input as $20 million per year with a first year severance cost of $20 million. The estimated $20 million cost reduction will come from a mix of people leadership levels at both utilities. Management used a 25% reduction to an estimated base of 450 combined leadership positions for the purpose of this analysis.