APPA APPA Salary SurveySalary Survey

Public Power Public Power Compared to Compared to IOUs and IOUs and CooperativesCooperatives

March 2004March 2004

Prepared by:Milliman USA1301 Fifth Avenue, Suite 3800Seattle, Washington 98101-2605206-504-5545

2

Survey Participants

Name State TypeRevenues

(000)#

CustomersBenefit

Cost/Payroll ServicesBangor Hydro-Electric Co ME IOU $128,025 107,000 45.5% Elec TransCity of Anoka, Electric Utility MN Coop $16,958 11,200 20.0% Sewer, Water, Elec DistDakota Electric Assn MN Coop $107,876 90,267 52.7% Elec DistEast Central Energy MN Coop $59,743 51,286 50.7% Elec DistEnergy United, EMC NC Coop $131,582 137,644 49.0% Elec DistFlathead Electric Coop, Inc. MT Coop $95,760 42,496 55.5% Elec DistGreen Mountain Power VT IOU $201,052 87,120 51.6% Elec Trans, Gen, DistHeartland Rural Electric Coop KS Coop $13,026 10,413 40.0% Elec Trans/DistLake Country Power MN Coop $40,486 44,516 26.0% Elec DistLee County Electric Coop Inc. FL Coop $215,273 157,900 40.2% Elec Trans/Dist, IPMedina Electric Coop Inc. TX Coop $32,102 25,202 51.0% Elec Trans, Gen, Dist, IPMid-Carolina Electric Coop, Inc. SC Coop $62,972 44,515 61.1% Elec DistMountain Electric Coop, Inc. TN Coop $37,653 30,560 57.0% Elec DistNorthern Lights, Inc. ID Coop $18,283 15,653 48.7% Elec Gen/DistPioneer Electric Coop, Inc. KS Coop $39,182 14,546 Elec DistRandolph Elec Membership Corp NC Coop $44,113 30,000 46.1% Elec DistRappahannock Electric Coop VA Coop $168,349 73,044 45.6% Elec DistSatilla REMC GA Coop $65,675 48,000 35.0% Elec DistUnitil Service Corp NH IOU $167,317 96,985 40.0% Elec Trans, Gas, Elec DistUpshur-Rural Electric Coop Corp TX Coop $45,000 40,000 45.0% Elec Dist

Median: $61,358 44,516 46.1%

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Findings$5 to $50 million revenue

APPA members tend to pay at or below average for all positions in the analysis.

$51 to $300 million revenue

APPA members tend to pay above average for lower level positions and progressively below average as positions become more senior.

Other

Bonus eligibility increases with the size of the organization

Long-term incentive programs are virtually non-existent among the smaller organizations and only in place at one-third or less of larger organizations, depending on the position.

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FindingsAPPA $5-$50 M vs. Coop/ IOU Market Average

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 $85,000 $90,000 $95,000Job Size

Base

Pay

APPA Coop/IOU Avg

5

Findings

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Chief Engineer Base Chief Engineer TCC Supv Engineer Base Supv Engineer TCC

Organizations <$50M

APPA Cooop/IOU Published

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FindingsAPPA Public

Electrics

# Orgs

# Incumb

Avg Base Pay Median

Avg Bonus

*

Avg Total Cash

% Bonus Eligible

% LTI

Eligible Avg Base

Assistant General Manager 5 5 $81,769 $75,700 $0 $81,769 0% 0% $75,623 92.5%

Chief Engineer 6 6 $76,559 $71,586 $3,824 $77,169 17% 0% $72,920 95.2%

Construction Supt 8 14 $64,661 $65,140 $2,744 $65,004 13% 0% $64,714 100.1%

Journeyman Elec Lineworker 9 117 $48,934 $49,800 $2,015 $49,158 11% 0% $48,706 99.5%

Line Division Superintendent 7 11 $70,509 $71,489 $3,755 $71,046 14% 0% $64,186 91.0%

Supervisory Engineer 3 3 $67,775 $74,083 $2,874 $68,733 33% 0% $69,843 103.1%

Custom Survey Findings ($5-$50 million)

Custom Survey

APPA Public

Electrics Avg Base/

Coops-IOUs Avg

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FindingsAPPA $51-$300 M vs. Coop/ IOU Market Average

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$45,000 $65,000 $85,000 $105,000 $125,000 $145,000 $165,000 $185,000Job Size

Base

Pay

APPA Coop/IOU Avg

8

Findings

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Chief Engineer Base Chief Engineer TCC Supv Engineer Base Supv Engineer TCC

Organizations >$50M

APPA Cooop/IOU Published

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FindingsAPPA Public

Electrics

# Orgs

# Incumb

Avg Base Pay Median

Avg Bonus

Avg Total Cash

% Bonus Eligible

% LTI

Eligible Avg Base

Assistant General Manager 6 6 $149,653 $146,095 $13,530 $158,673 67% 17% $135,910 90.8%

Chief Engineer 11 11 $104,672 $106,000 $6,328 $109,275 73% 18% $99,361 94.9%

Construction Supt 8 15 $67,541 $70,389 $3,659 $69,371 50% 0% $78,573 116.3%

Journeyman Elec Lineworker 11 295 $50,490 $50,000 $1,426 $51,009 45% 11% $54,498 107.9%

Line Division Superintendent 10 23 $75,273 $78,243 $7,306 $79,657 60% 10% $90,035 119.6%

Supervisory Engineer 6 6 $78,188 $84,789 $2,729 $80,588 67% 17% $87,193 111.5%

Custom Survey Findings ($51-$300 million)

Custom Survey

APPA Public

Electrics Avg Base/

Coops-IOUs Avg

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FindingsAPPA <$50M vs. Published Mkt Avg

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 $85,000 $90,000 $95,000Job Size

Base

Pay

Mkt Avg APPA

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Findings

APPA Public

ElectricsBase 25th

Base 50th

Base Avg Base 75th TCC Avg TCC 75th Avg Base

Chief Engineer $87,401 $95,424 $96,225 $107,375 $103,466 $115,317 $72,920 75.8%

Construction Superintendent $72,248 $77,472 $78,122 $88,114 $83,987 $96,119 $64,714 82.8%

Journeyman Electric Lineworker $53,286 $57,561 $58,357 $64,421 $60,047 $66,210 $48,706 83.5%

Line Division Superintendent $64,421 $69,591 $70,585 $77,842 $73,269 $80,924 $64,186 90.9%

Supervisory Engineer $70,151 $77,394 $77,441 $87,664 $83,168 $92,387 $69,843 90.2%

Published <$50 million

Published Market DataAPPA Public

Electrics Avg Base/ Mkt Avg

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FindingsAPPA >$50M vs. Published Mkt Avg

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$50,000 $70,000 $90,000 $110,000 $130,000 $150,000 $170,000

Mkt Avg APPA

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FindingsAPPA Public

ElectricsBase 25th Base 50th Base Avg Base 75th TCC Avg TCC 75th Avg Base

Chief Engineer $105,281 $124,368 $125,959 $149,321 $142,064 $168,509 $99,361 78.9%

Construction Superintendent $72,248 $77,472 $78,122 $88,114 $83,987 $96,119 $78,573 100.6%

Journeyman Electric Lineworker $53,286 $57,561 $58,357 $64,421 $60,047 $66,210 $54,498 93.4%

Line Division Superintendent $64,421 $69,591 $70,585 $77,842 $73,269 $80,924 $90,035 127.6%

Supervisory Engineer $68,000 $74,760 $75,754 $85,596 $79,631 $89,971 $87,193 115.1%

Published Market Data APPA Public

Electrics Avg Base/ Mkt Avg

Published $51-$300 million

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Conclusions Cooperatives and investor-owned utilities already appear to

have established somewhat more aggressive compensation practices than their public counterparts.

Smaller public power utilities appear to be at greater risk in the competition for labor talent than do the larger organizations.

The use of short-term incentives is one approach to providing competitive total cash compensation levels, one which should be given serious consideration in establishing a competitive total pay program.

APPA members with over $50 million in revenue should seriously evaluate their incentive programs given the findings of this survey that bonuses are used by over half of the coops and IOUs.

The relative infrequency of use of long-term incentives may provide APPA members with an opportunity to lead the market by using this type of compensation vehicle.