Florida Power & Light and its sister company, NextEra Energy Resources, will eliminate 1,000 positions or 6.7 percent of their combined, nationwide workforce during the next two years, as part of an effort to improve efficiency and enhance the use of technology, the utility said Wednesday.
A total of about 160 workers are expected to lose their jobs, with the remaining 840 cuts coming from the elimination of open positions, early retirement and normal attrition, said FPL President Eric Silagy.
It is not yet known how many of the total job losses will be in Florida, but 60 of 80 workers who will be the first to be informed next week are within the state, he said. The eliminated positions will cut across all job functions, from entry level to management.
“Our goal is to be the best utility in the nation, and this is a way to do that, by tapping into our employee knowledge of the business, and how they do their jobs every day,” Silagy said in a telephone interview.
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Earlier this year, FPL asked employees to identify areas where savings could be made from improved efficiency and productivity, as well as how technology could be better used to cut costs.
As a result, the company has converted to an automated billing process that does not require manual work; given line workers in bucket trucks iPads to improve their productivity; increased the use of power tools rather than manual tools, and standardized its processes across the organization. It is also reviewing work that it does in-house to see if should be outsourced, as well as whether work that is outsourced should be handled internally, Silagy said.
In all, the company, which he said has one of the largest payrolls in the state and ranks as Florida’s largest taxpayer, has identified $75 million a year in savings.
“It allows us to be more efficient and reinvest in the company without having to go to the [Public Service] Commission and say we can’t do this or end up looking at a rate change,” Silagy said. “My goal is to make sure we are doing everything we can to maintain those low bills and the high reliability without sacrificing anything related to safety or security.”
FPL, based in Juno Beach, has 10,000 employees in Florida, and operates in 35 counties, or about half of the state. NextEra Energy Resources, also based in Juno Beach, has 1,000 employees in Florida, and 5,000 in total. It operates in 26 states, Canada and Spain. Both are subsidiaries of parent NextEra Energy.
The affected positions are expected to be cut over 26 months, and will depend on voluntary early retirements and attrition. Anticipating that job cuts would result from its initiative, FPL instituted a hiring freeze in March. That continues to be in effect except for critical jobs needed to run the business, Silagy said.
The latest announcement, part of the company’s “Project Momentum” initiative, is separate from the hundreds of positions lost as part of FPL’s move to advanced meter technology.
FPL is in the process of cutting 446 positions due to the installation of “smart meters” throughout Florida. The new meters link directly to FPL’s computer system, eliminating the need for technicians visiting customers and manually recording the electric consumption.
So far, 212 meter readers have been let go statewide since the fall of 2011 as a result of the new technology, said FPL spokeswoman Elaine Hinsdale.
Such moves are the most recent steps in FPL’s ongoing efforts to improve efficiency and productivity during the last two decades, Silagy said.
In the mid-1980s, FPL had 14,000 employees who served 2.6 million customers, or a total of about 5 million people, he said.
Today, FPL serves 4.6 million customers, or more than 9 million people, with 10,000 employees.
The company’s reliability is also higher, Silagy said, and bills are, in fact, lower. The average customer is paying 13 percent less today than they did five years ago, he said.
Faced with higher costs associated with more stringent regulations, utility companies across the industry are trying to be more efficient, said Jack Plunkett, chief executive of Plunkett Research, based in Houston.
“Utility companies are under a tremendous amount of pressure because of changes in EPA regulations,” Plunkett said. “So the cost of what the industry has to go through has to be paid somehow, and the only way to do so is to charge consumers to pay more for their power — or cut jobs.”