DOCUMENT FOLDER · 2c TRAINING It is the policy of PG Energy to make training and development opportunities available to all employees, Training is both activities of a formalized

April 4, 2006

>j O'visjc-o Soi^wn (Audi Co^oa'fy

Mr. John Alford

Secretary

Pennsylvania Public Utility Commission

Room B20, North Office Building

Commonwealth and North Streets

Harrisburg, PA 17105-3265

RECEIVED

APR - 4 2006

PA PUBLIC UTILITY COMMISSION SECRETARY'S BUREAU

Dear Mr. Alford:

Set forth below in accordance with your letter dated March 25, 1999, is PG Energy's

annual report.

If. after reviewing the enclosed responses, additional clarification and/or information is

required, please do not hesitate to contact me at (570) 829-8661.

Enclosure

Sincerely,

(l —*—

John M. Beberus

Director of Human Resources

DOCUMENTFOLDER

One PEI Center Wilkes-Barre. PA 18711-0601

fO-ObW ^7

REPORT ON DIVERSITY TO THE

PENNSYLVANIA

PUBLIC UTILITY COMMISSION

APR 1 3 2006

APR - t 2006


PG ENERGY

APRIL 1,2006


PENNSYLVANIA


HUMAN RESOURCES SECT

PG ENERGY

APR ~ 4 zm


HUMAN RESOURCES SECTION

TABLE OF CONTENTS

PART 1 WORKFORCE COMPOSITION...........................................PAGES 3-6

PART 2 NARRATIVE ON AFFIRMATIVE ACTION

EFFORTS........................................................................................PAGES 7-12

2a RECRUITING.........................................................................PAGE 7

2b ADVERTISING...................................................................... PAGE 82c TRAINING............................................................................... PAGE 92d PROMOTION......................................................................... PAGES 10-112e RETENTION........................................................................... PAGE 12

PART 3 WORKFORCE/SERVICE TERRITORYCOMPARISON............................................................................. PAGES 13-17

3a DESCRIPTION OF SERVICE TERRITORY.............. PAGE 13

3b DEFINITION OF RELEVANT LABOR FORCE....... PAGES 14-153c COMPARISON OF INTERNAL WORKFORCE/

RELEVANT LABOR FORCE.......................................... PAGES 16-17

PAGE 2

PART 1

PG ENERGY’S

WORKFORCE COMPOSITON

Pages 4-6 reflect the prior three years workforce composition data for PG

Energy.

It should also be noted that the data in this report includes the affiliate company, PEI POWER CORPORATION which is located in Archbald, PA.

PEI POWER CORPORATION employs eleven persons.

PAGE 3

The below information sets forth PG Energy’s actual EEO-1 statistics for the plan ending 12/31/03.

MALE FEMALEA B C D E F G H I J K

Overall White Black Hispanic Asian Amer- White Black Hispanic Asian Amer-Totals [Not of [Not of Or Indian [Not of INot of Or Indian

Job Categories[Sum of Hispanic Hispanic Pacific Or Hispanic Hispanic Pacific OrCol. B thru Origin] Origin] Islander Alaskan Orisinl Oriein] Islander Alaskan

K] Native Native

OFFICIALS AND MANAGERS 1 84 68 16

PROFESSIONALS 2 27 15 12

TECHNICIANS 52 48 4

SALES WORKERS 4 7 5 2

OFFICE AND CLERICAL

5 96 5 89 2

CRAFT WORKERS (SKILLED)

6 105 103 1 1

OPERATIVES(SEMI-SKILLED)

7 9 9

LABORERS(UNSKILLED)

8 63 59 4

SERVICE WORKERS 9 2 2

TOTAL 10 445 314 1 127 2

PAGE 4


MALE FEMALE

A B C D E F G H I ; KOverall White Black Hispanic Asian Amer- White Black Hispanic Asian Amer-Totals [Not of [Not of Or Indian [Not of [Not of Or Indian(Sum of Hispanic Hispanic Pacific Or Hispanic Hispanic Pacific Or

Job Categories Col. B thru Origin] Origin) Islander Alaskan Orieinl Orieinl Islander Alaskan

K1 Native Native

OFFICIALS ANDMANAGERS 1 81 66 15


TECHNICIANS 3 53 47 6


OFFICE AND 5CLERICAL 93 4 88

CRAFT WORKERS 6(SKILLED) 105 103

OPERATIVES 7(SEMI-SKILLED) 10 10

LABORERS 8(UNSKILLED) 59 55 4


TOTAL 436 307 1 126 1

PAGES


MALE FEMALEA B C D E F G H I J K.

Overall White Black Hispanic Asian Amer- White Black Hispanic Asian Amer*Totals [Not of [Not of Or Indian [Not of [Not of Or Indian[Sum of Hispanic Hispanic Pacific Or Hispanic Hispanic Pacific Or

Job Categories Col. B thru Origin] Orieinl Islander Alaskan Origin] Orieinl Islander Alaskan

K1 Native Native

OFFICIALS ANDMANAGERS 1 81 65 16


TECHNICIANS 3 51 45 6


OFFICE AND 5

CLERICAL 93 4 87 2

CRAFT WORKERS 6

(SKILLED) 104 102 1 1

OPERATIVES 7

(SEMI-SKILLED) 10 10

LABORERS 8

(UNSKILLED) 56 53 3


TOTAL 429 301 1 124 2

PAGE 6

PART 2

AFFIRMATIVE ACTION EFFORTS

2a RECRUITING

It is the policy of PG Energy to fill any vacant position within

the Company with the candidate most qualified for that position. Although specialized qualifications required may

necessitate an expansion of the search for candidates to outside

sources, every practicable effort is made to fill such vacancies with qualified persons from within the regular full-time employees regardless of race, color, religion, sex, age or

national origin.

In order to attract qualified female and minority applicants the

Human Resources Department contacts verbally and/or in writing several female and minority organizations. These

include the NAACP, Department of Military Affairs, Bureau of Employment Securities (including veteran representatives), Human Development Agencies, etc. These job services are instructed that we are seeking qualified females and/or minorities for job vacancies.

Other recruitment methods have included: employee referrals and attendance at local Job Pairs sponsored by local colleges or

the Chamber of Commerce in surrounding areas. PG Energy’s recruiting program encourages the recruitment of minority and female applicants for current employment opportunities.

PAGE?


2b ADVERTISING

If necessary, expanded searches for candidates are conducted via the most appropriate method.

Employment advertisements which contain job title, job specifications and the Company’s Equal Opportunity

Employer Statement are placed in local newspapers relevant to the work location of the position vacancy. Job placement with any advertising organization reflects the Company’s EEO

Statement.

Advertisements were placed in local newspapers for the following position vacancies during 2005:

Service Technician: Williamsport

Gas Balancing Analyst: Wilkes-Barre HR Generalist: Wilkes-Barre Automated Mapping Specialist: Bloomsburg Call Center Representative: Wilkes-Barre Laborer: Honesdale

PAGES


2c TRAINING

It is the policy of PG Energy to make training and development

opportunities available to all employees,

Training is both activities of a formalized nature, e.g. courses,

seminars, etc, conducted either within or outside the Company

and structured on-the-job learning experiences to which

employees are deliberately exposed.

Tuition Reimbursement is one program through which the Company encourages its regular full-time employees to better qualify themselves for their present work with PG Energy.

During 2005, 6 females and 5 males took courses through the reimbursement program. For 2005, Tuition Reimbursement was based on grade received for completing each course with a maximum of 100% reimbursement for tuition and texts when an A grade is achieved. 85% for a B grade and 75% for a C grade. A D grade and below received no reimbursement.

Supervisory personnel have attended Supervisory Training which includes information relating to Affirmative Action, Diversity and Equal Employment Opportunities at Penn State (a local college). During 2005, the Company reinforced its programs on performance appraisal, interviewing skills, and forms completion training programs to employees in-house.

The Company also presented several Spanish speaking workshops, Luzerne County Community College Customer Service training to outside employees, and Achieve Global

Customer Service programs.

PAGE 9

iWmAFFIkMATIVE action efforts

I?]

2d PROMOTION

It is the policy of PG Energy to take all practical steps toward

securing qualified candidates for vacant positions from within

the total current employee population, and to offer current

employee training, and developmental opportunities which not

only better qualifies them to meet the requirements of their present position but which also prepares them to assume

positions of greater responsibility in the future. This is

accomplished through the job posting process for many

positions.

To insure compliance, every supervisor involved in hiring, promotion, training or termination decisions is instructed to make those decisions in accordance with equal employment

opportunity principles. Only those qualifications which are directly related to job requirements will be considered. Both employees and applicants will be judged on their skills and abilities alone.

PG Energy will ensure equal employment and promotional opportunities to all individuals without regard to race, color, religion, sex, age, veteran status, disability or national origin. An individual’s sex will not be used as a factor for consideration in matters affecting initial employment and

subsequent treatment as an employee, unless required by law or as a bona fide condition of employment. During 2005, 4 employees were promoted with PG Energy of which 2 were

females and 2 were male.

PAGE 10


2d PROMOTION (continued)

An employee is promoted when he/she responds to a job

posting within the Company, whether it is a bargaining unit,

non-exempt, or exempt job posting, and is awarded the

position, provided the award is a higher ranked position in the

overall structure of positions. The employee receives the rate of pay applicable to the position or a percentage increase if they are awarded a non-bargaining unit position. A promotion may also occur if the employee receives a title change in either the same grade or the same general classification of positions in

a bargaining unit family of positions.

PAGE 11


2e RETENTION

PG Energy retains its employees by paying competitive salaries

as they relate to local and regional market conditions;

additionally, the fringe benefits package is very competitive.

The majority of employees are recruited and promoted

through the job posting process, thus providing employees opportunities to financially better themselves. The turnover

rate for the last several years has been low, except for early retirements. These events provided opportunities to employees for upward mobility and during a reorganization of certain Company functions, employees were provided opportunities to move into key positions.

The Company provides training and education opportunities for employees as a means of retention. Training and education allows employees to reach their productivity and creativity potentials, thus becoming important resources to the Company.

PAGE 12

PART 3

WORKFORCE/SERVICE TERRITORY

COMPARISON

3a

DESCRIPTION OF SERVICE TERRITORY

PG ENERGY is a local natural gas distribution company

operating in 13 counties in northeastern Pennsylvania. Natural

gas is served to approximately 158,000 customers in over 116 municipalities, including the cities of Scranton, Honesdale, Wilkes-Barre and Williamsport.

PEI POWER CORPORATION, provides consumers with

electricity generated from natural and methane gases.

PAGE 13

Scranton-Wilkes-Barre-Hazleton

LABOR FORCE CHARACTERISTICSEMPLOYMENT AND UNEMPLOYMENT BY SEX AND MINORITY STATUS

SEX AND MINORITY STATUS

LABORFORCE

EMPLOYED UNEMPLOYED PERCENT DISTRIBUTION

Labor Force Employed UnemployedBOTH SEXES 4

Total 259,175 246,525 12,650 100.0 100.0 100.0 ■

White 256,025 243,800 12,250 98.8 98.9 96.8

Black 1,325 1,075 225 0.5 0.4 1.8

Other Races 1,825 1,675 175 0.7 0.7 1.4

Hispanic 1,675 1,525 125 0.6 0.6 1.0

Minority Group 4,800 4,275 500 1.9 1.7 4.0

MALE

Total 138,550 131,800 6,175 100.00 100.00 100.00

White 136,850 130,475 5,950 98.8 99.0 96.4

Black 650 500 150 0.5 0.4 2.4

Other Races 1,025 950 100 0.7 0.7 1.6

Hispanic 950 825 75 0.7 0.6 1.2

Minority Group 2,600 2,300 275 1.9 1.7 4.4

FEMALE <

Total 120,625 114,725 6,475 100.0 100.0 100.0

White 119,175 113,325 6,300 98.8 98.8 97.3

Black 675 575 75 0.6 0.5 1.2

Other Races 800 725 75 0.7 0.6 1.2

Hispanic 725 700 50 0.6 0.6 0.8

Minority Group 2,200 1,975 225 1.8 1.7 3.5

'Hispanic persons are o Mexican, Puerto Rican, Cuban, Central or South American, or some other Spanish Origin.

** Sum of black, other races, and Hispanic. Some duplication is possible since Hispanic may include non-white races.

***As noted in Labor Market Information Books, items may not add to totals because of rounding.

PAGE 14

Williamsport and Allentown-Bethlehem, PA

LABOR FORCE CHARACTERISTICSEMPLOYMENT AND UNEMPLOYMENT BY SEX AND MINORITY STATUS

SEX AND MINORITY STATUS

LABORFORCE

EMPLOYED UNEMPLOYED PERCENT DISTRIBUTION

Labor Force Employed UnemployedBOTH SEXES 4Total 372,300 358,050 14,250 100.0 100.0 100.0 m

White 355,975 343,450 12,550 95.6 95.9 88.1

Black 6,725 5,950 800 1.8 1.7 5.6

Other Races 9,600 8,675 925 2.6 2.4 6.5

Hispanic 16,500 15.425 1,075 4.4 4.3 7.5

Minority Group 32,800 30,025 2,775 8.8 8.4 19.5

MALE

Total 199,950 192,175 7,775 100.0 100.0 100.0

White 191,200 184,350 6,850 95.6 95.9 88.1

Black 3,300 2,875 475 1.7 1.5 6.1

Other Races 6,175 4,975 550 3.1 2.6 7.1

Hispanic 9,425 8,850 550 4.7 4.6 7.1

Minority Group 18,125 16,675 1,450 9.1 8.7 18.6

FEMALE ____________________iTotal 172,350 165,875 6,475 100.0 100.0 100.0

White 164,775 159,100 5,700 95.6 95.9 88.0

Black 3,425 3,075 325 2.0 1.9 5.0

Other Races 4.150 3,700 425 2.4 2.2 6.6

Hispanic 7,075 6,575 525 4.1 4.0 8.1

Minority Group 14,675 13,350 1,325 8.5 8.0 20.5

* Hispanic persons are of Mexican, Puerto Rican, Cuban, Central or South American, or some other Spanish Origin.

** Sum of black, other races, and Hispanic. Some duplication is possible since Hispanic may include non-white races.

***As noted in Labor Market Information Books, items may not add to totals because of rounding.

PAGE 15

PG ENERGY UTILIZATION ANALYSIS

As of January 1, 2006JOB GROUP NUMBER

OFEMPLOYEES

Employ/merit Availability UNDERUTILIZATION MINORITY FEMALE

Yes/No Yes/NoMINORITY # %

FEMALE# %

MINORITY%

FEMALE%

Executive Management 5 0 0.0 0 0.0 4.4 21.7 Yes YesOperating Managers / Directors 29 0 0.0 8 27.6 0.3 16.3 Yes NoLine Supervision 47 0 0.0 8 17.0 0.4 24.2 Yes Yes

Engineers 6 0 0.0 0 0.0 1.7 8.1 Yes YesOther Professionals 19 0 0.0 10 52.6 0.6 36.2 Yes No

Technical / Professionals 51 0 0.0 6 11.8 1.7 26.8 Yes Yes

Sales Representatives 7 0 0.0 2 28.6 1.3 87.8 Yes Yes

Secretarial & Administrative Support 10 0 0.0 10 100.0 1.2 95.9 Yes NoCustomer Contact Representative 45 1 2.2 44 97.8 2.1 86.4 No NoAll Other Clerical 38 1 2.6 33 86.8 1.5 88.2 No Yes

Crew Leader 20 1 5.0 0 0.0 0.2 0.4 No YesService Person 60 1 1.7 0 0.0 0.1 7.1 No YesAll Other Craftsmen 24 0 0.0 0 0.0 0.0 13.3 No Yes

Assistant Fitter 6 0 0.0 0 0.0 0.0 5.7 No YesMechanics & Repairers 4 0 0.0 0 0.0 0.2 0.1 Yes Yes

Meter Reader 20 0 0.0 3 15.0 0.6 47.1 Yes YesLaborers 36 0 0.0 0 0.0 1.9 5.1 Yes Yes

Patrolperson / Janitor 2 0 0.0 0 0.0 1.7 13.9 Yes Yes

PAGE 16

WORKFORCE/SERVICE TERRITORY

COMPARISON

3c

EXPLANATION OF WORKFORCE/

RELEVANT LABOR FORCE COMPARISON

The comparison on page 16 shows the internal workforce by EEO-1 group as well as the availability of minorities and

females in the relevant labor force by EEO-1 group. Where the percentage of minorities and females in the internal

workforce surpasses the percentage of minorities and females in the external labor force, there is adequate utilization of the surrounding labor force for position vacancies within an EEO-

1 group. However, where the labor force availability percentage surpasses the percentage of females and minorities in the internal workforce, there is concern of underutilization and affirmative action efforts are taken to reduce such

underutilization. **Please note: the relevant labor force percentages were determined through extensive calculations found in the availability analysis section of the Company’s Affirmative Action Plan. The method used to calculate the percentages was the Availability Computation Method.

PAGE 17


PENNSYLVANIA


PROCUREMENT SECTION

PG ENERGY

PROCUREMENT SECTION

TABLE OF CONTENTS

PART 1 NARRATIVE ON MAV/DBE PROCUREMENT

EFFORTS........................................................................................ PAGES 3-5la INTERNAL EFFORTS..........................................................PAGE 3

lb EXTERNAL EFFORTS.........................................................PAGE 41c SUBCONTRACTING EFFORTS....................................... PAGE 5

PART 2 UTILITY PROCUREMENT DIVERSITY REPORT........PAGES 6-7

PAGE 2

PART laPG ENERGY

INTERNAL EFFORTS

Purchasing works closely with all PG Energy departments to

ensure that every effort is made to identify and use

disadvantaged businesses for the purchase of materials and

services. The support and direction of upper management is

enlisted in this effort to ensure success.

PAGE 3

PART lbPG ENERGY

EXTERNAL EFFORTS

The purchasing manager works with the newly formed

Energy Association of Pennsylvania purchasing and material

managers to identify and share vendor information on

minority, physically challenged and women-owned businesses.

It is anticipated that this new substantially larger

organization of gas and electric utilities will lead to a more

effective procurement process for all participants.

We continue to access the Pennsylvania State listing of

disadvantaged businesses: minority, physically challenged

and women-owned. Qualified vendors will be solicited for

quotations for materials and services. PG Energy will also

search out minority business counsels in Pennsylvania and

adjacent states in an effort to identify additional vendors. We

will further our efforts to identify and develop disadvantaged

vendors within our local communities with the help of our

local college’s small business incubator programs and the

local Chambers of Commerce.

In addition, when we cannot identify vendors in the

Commonwealth, we will enlist our parent company, Southern

Union Company, and its divisions to develop minority,

physically challenged and women owned business.

PAGE 4

PART 1cPG ENERGY

SUBCONTRACTING EFFORTS

We have worked more closely with our vendors to

encourage and assist them in the identification and use of

disadvantaged businesses.

PAGE 5

PART 2

PG ENERGY

UTILITY PROCUREMENT DIVERSITY REPORT

AS OF DECEMBER 31, 2004

TOTALCOMPANY MINORITY S % OF TOTAL

PROCUREMENTS

(MBE)

DIRECT

TOTAL $128,349,124.96 $ 15,963.17 .01%

WOMEN S % OF TOTAL (WBE)

TOTAL $ (MAV/DBE)

% OF TOTAL

$3,150,539.62 2.45% $3,166,502.79 2.467%

* The above data represents 2004 figures. 2005 data was unavailable.

PAGE 6

PART 2

PG ENERGY

PROCUREMENT DATA FOR PROTECTED CLASSES

CATEGORIZED BY MINORITY, FEMALE AND

PHYSICALLY CHALLENGED

A “Vendor Data Form” was mailed to each of PG Energy’s

vendors. This form contains necessary business classification

information in order to categorize vendors by minority,

female and physically challenged. The process of posting the

vendor information to our computer system has been

completed.

PAGE 7

Documents

DOCUMENT FOLDER · 2c TRAINING It is the policy of PG Energy to make training and development opportunities available to all employees, Training is both activities of a formalized