From Rob Sanchez' Job Destruction Newsletter:


<<<<< JOB DESTRUCTION NEWSLETTER No. 2049 -- 8/17/2009 >>>>>

The Arizona utility Salt River Project (SRP) decided to outsource their IT
department to the two Indian owned bodyshops Accenture and Infosys. SRP
officials claim that outsourcing the jobs will save them money but they
won't say how much.

Barbara Hoffnagle, assistant general manager and chief information
executive, made a statement that on the surface seems to make sense, but
upon reflection is bizarre:

Some of the work that could be outsourced is done now by contract
workers, she said, but outsourcing could help SRP because the
utility would no longer have to manage the workers.

You can be sure that most of the decisions to outsource are being made by
bean counters with MBA degrees. Their degree is in MANAGEMENT, yet they're
complaining about the burden of having to MANAGE employees. Hopefully once
their computer people are fired SRP will decide to no longer burden the
MBAs by having to come to work because there are no more people for them to
manage.

SRP paints an optimistic forecast of the fate of those who will lose their
jobs, but the reality will be quite different for most of them. Some of
them will lose their houses, but that will go unnoticed in the Phoenix
metro area where foreclosures are epidemic. Most of them will be hard
pressed to find a job in the depressed Arizona economy.

This is the type of standard boilerplate all companies tell the news media
when they are going to throw their employees on the street:

SRP officials said that between 40-50 jobs are at stake, but that
some employees who work in IT have been leaving for other jobs
because of the likelihood of outsourcing. Others are being
encouraged to seek positions in other IT areas that won't be
outsourced, Hoffnagle said.

Doesn't it make you feel good to know that SRP employees have been
quitting, ostensibly for high paying jobs, and undisclosed numbers of them
will be "encouraged" to find other types of jobs at SRP?

So, in order to save a fistful of dollars, SRP is disposing a few dozen of
their American employees. Nobody including SRP seems to be concerned with
the fact that Indian nationals will control the computer systems for large
parts of Arizona's water and electricity infrastructure. To make matters
even worse Arizona residents who are captive customers of SRP will have no
say in how their personal data is used by the Indians. National security
and personal privacy always seems to play a back seat role when corporate
profits are to be realized.

In other SRP news: they are raising rates for electricity that will
increase their revenue by $200 million and they are applying for federal
stimulus funds (they haven't disclosed how many hundreds of millions of
dollars) that are supposed to be used to create jobs.


REFERENCES:


http://www.azcentral.com/business/artic ... srp0812.ht
ml
SRP considers outsourcing to save money


http://www.kswt.com/Global/story.asp?S= ... enu613_2_6
Some question need for huge SRP rate increase


http://www.bizjournals.com/phoenix/stor ... ml?ana=fro
m_rss
Salt River Project applying for stimulus money; Arizona Public Service
considering it


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http://www.azcentral.com/business/artic ... srp0812.ht
ml

SRP considers outsourcing to save money

40 comments by Ryan Randazzo - Aug. 10, 2009 05:27 PM
The Arizona Republic

Salt River Project this week will send bid requests to two global
consulting companies to see if the utility can save money outsourcing about
50 information-technology employees.

Officials are considering the cost-cutting move because of sluggish
customer growth and said they have to pursue any reasonable option to keep
utility rates low.

A consultant's analysis showed that SRP spends more than the industry
average on its computer services, prompting the outsourcing plan, officials
said.

They would not disclose what SRP spends on the IT work, saying that
information could influence how the companies bid on the job.

SRP officials have been interviewing outsourcing companies to see how they
would handle "selected" computer services, including maintaining the 5,500
or so desktop computers used by employees and the customer-account system,
said Barbara Hoffnagle, assistant general manager and chief information
executive.

If SRP decides to outsource, the contracted company will not deal directly
with customers, she said.

Based on the interviews, Accenture Ltd. and Infosys Technologies Ltd.
likely could do the work for less than SRP is spending, Hoffnagle said.

Both Accenture and Infosys operate globally and have a presence in Phoenix.

Accenture shareholders recently voted to move the company from a Bermuda
base and incorporate in Ireland. Infosys is based in Bangalore, India.

SRP officials said that between 40-50 jobs are at stake, but that some
employees who work in IT have been leaving for other jobs because of the
likelihood of outsourcing.

Others are being encouraged to seek positions in other IT areas that won't
be outsourced, Hoffnagle said.

She said SRP officials hope to move their existing workers into more
advanced computing jobs, and outsource the simpler programming.

"Our interest is not to lose SRP employees," she said. "Our interest is
keeping our knowledge inside. We like to keep our intellectual property
inside our organization."

Some of the work that could be outsourced is done now by contract workers,
she said, but outsourcing could help SRP because the utility would no
longer have to manage the workers.

"If we choose to outsource, it will be phased in," she said.

Accenture has done contract work for the utility in the past, including
developing parts of the customer system, Hoffnagle said. Infosys has not
worked for SRP before, she said.

A 14-member board of directors governs SRP, and those officials were
briefed on the outsourcing plan Monday. None raised objections.

When asked about the plan in May, SRP directors wouldn't speculate on how
much the company would have to save to justify outsourcing 40 to 50 jobs.

++++++++++++++++++++++++++++++++++++++++++++++++++ +

http://www.kswt.com/Global/story.asp?S= ... enu613_2_6

Some question need for huge SRP rate increase

Associated Press - August 5, 2009 2:14 PM ET

MESA, Ariz. (AP) - A public interest lawyer and others are questioning why
Salt River Project needs an 8.8% rate increase during a down economy.

Arizona Center for Law in the Public Interest director Tim Hogan said SRP
doesn't pay taxes or shareholders and is paying less for fuel.

SRP officials say they need the rate hike to replace older power plants and
purchased power contracts that are expiring.

Hogan said if the utility had embraced renewable energy, it wouldn't need
to build new coal-fired plants.

If the utility's board approves the rate hike, SRP would take in an
estimated $218 million in additional income in 2011. An SRP spokesman said
the typical residential customer would see a monthly increase of $12.22.

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http://www.bizjournals.com/phoenix/stor ... ml?ana=fro
m_rss

Friday, July 17, 2009
Salt River Project applying for stimulus money; Arizona Public Service
considering it
Phoenix Business Journal - by Mike Sunnucks

Salt River Project is applying for federal stimulus money to upgrade its
electrical grid and substations. Arizona Public Service Co. is considering
applying for upgrade money from the U.S. Department of Energy, but has not
made a decision, said APS spokesman Alan Bunnell.

The federal government is doling out money to utilities and energy
companies through the American Recovery and Reinvestment Act to help
upgrade their grids and distribution systems.

SRP spokesman Scott Harelson said the utility is not yet disclosing how
much money it is seeking from the ARRA Smart Grid Investment Grant Program.

"SRP has filed a letter of interest indicating our intent to submit an
application for funds for smart meters and substation and distribution
system smart-grid automation," he said.

The Energy Department has $4.5 billion in such grants available for
utilities and energy companies aimed at improving electricity delivery,
upgrading systems and technology, and installing smart meters at
customers? homes to give them better knowledge of their energy use.

East Coast utility Pepco Holdings is applying for $254 million in federal
stimulus grants to upgrade its various utility systems in Washington, the
mid-Atlantic and New Jersey. Baltimore Gas & Electric is asking for $200
million.

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