When people in electrical construction think about outside line work, they think of overhead lines, repair work, linemen, hooks, bucket trucks and traditional distribution. They think of crews battling bad weather to restore power to places affected by ice and storms.
Make no mistake, for outside line contractors, traditional distribution and overhead line work is their bread and butter. However, there are new opportunities emerging that should be further explored.
Traditional line project
Victor, N.Y.-based O’Connell Electric Co. is an outside line company established almost 100 years ago (98 to be exact). The company still does traditional yet challenging line work, but it also is being nudged by customers into newer renewable--energy projects. First, let’s examine a traditional distribution job O’Connell Electric did for a local utility.
The project included a sag mitigation in a rural area, in which transmission lines cut through agricultural fields, a state park and mountainous terrain with long, winding roads. In most cases, there was no shoulder, and poles had to be set right on the road.
According to Rick Caramante, O’Connell Electric project manager, -Central Hudson—the local utility—was unhappy with one of its contractors and approached O’Connell about bidding on the job. The company landed the project and began a challenging distribution job that averaged about 15 workers and peaked at 20 during the difficult construction portions.
The sag mitigation project, which ran from February to the end of May, called for replacing 180 wooden poles with steel poles and covered more than 20 miles. According to Randy Fletcher, general foreman, the first circuit was 8 miles long; the second circuit, -7 miles; and the remaining two circuits were each 3 miles long.
O’Connell Electric’s biggest challenges were the terrain and having to close roads off to get equipment and materials to sites, Fletcher said. Workers used 100-foot buckets in a mountainous region, which was problematic. The landscape also included swampland, creeks and rivers, and poles had to be constructed on islands. It was not an easy project, so proper planning was critical.
“Access was very limited,” Fletcher said. “We actually utilized some of peoples’ yards and driveways to get at certain structures. Cus-tomer relations on our own and with Central Hudson was important.”
There were no customer outages, just transmission outages, during the lengthy project. However, O’Connell Electric had the trans-missions up and running at the end of each week with a four-hour notification. All this was coordinated with three liaisons from Cen-tral Hudson.
“They were very cooperative; they’d get us anything we needed,” Fletcher said.
Because of communication and careful planning, the project went smoothly and efficiently to the point where Central Hudson loved the work and professionalism and signed O’Connell Electric for more jobs, Caramante said. According to Caramante, O’Connell Elec-tric established a good relationship with a new customer without disappointments.
“Everything went better than expected,” he said.
“We can’t wait to do the next one. It was a good challenge, no one was hurt, and the efficiency was there,” Fletcher said.
Stimulating growth with the grid
While O’Connell Electric continues to take traditional power line jobs, it is increasingly looking to other areas for growth and to take advantage of government stimulus funding. A substantial amount of that stimulus money is being earmarked for renewable-energy pro-jects, smart grid technologies and fixing the aging power infrastructure.
President Barack Obama’s stimulus package includes more than $10 billion in funding for new transmission projects in the United States and another $4 million in smart grid investments. The smart grid concept is a series of computer technologies that enable the grid to be more productive and cost effective. It incorporates sensors that allow utilities to shift power automatically during load and demand fluctuations.
According to “The Smart Grid: An Introduction,” a report prepared by the U.S. Department of Energy, “Even as demand has sky-rocketed, there has been chronic underinvestment in getting energy where it needs to go through transmission and distribution, further limiting grid efficiency and reliability. While hundreds of thousands of high-voltage transmission lines course throughout the United States, only 688 additional miles of interstate transmission have been built since 2000.”
In short, the grid is struggling to keep up with demand and needs to be modernized. It also needs to get smarter.
According to the same report, “Given the significant concerns regarding climate change, the need for distributed solar and wind power is critical. According to the European Wind Energy Association, integrating wind or solar power into the grid at scale—at levels higher than 20 percent—will require advanced energy management techniques and approaches at the grid operator level. The smart grid’s ability to dynamically manage all sources of power on the grid means that more distributed generation can be integrated within it.”
In addition, this smart grid technology would allow rooftop solar and wind turbine owners to sell surplus power back to the grid. It is an open system that would build in more flexibility and can create a mechanism for the expansion of renewable-energy production throughout the United States. But the grid will need to be upgraded to accommodate this concept. The grid dates back to the 1950s in most cases and isn’t designed to cover the longer distances that are now required to move power.
“Modernizing the transmission grid is the major challenge we face to greening our economy,” said Edwin D. Hill, international president of the International Brotherhood of Electrical Workers.
The (re)new frontier
Consumers and the government are not the only ones concerned with an aging grid and expanding renewable-energy alternatives, such as wind and solar energy. This wave of momentum for renewable energy is opening doors for electrical contractors who have both electri-cal and systems capabilities. Tim Ehmann, senior project manager in the Renewable Energy Division, is leading that charge at O’Connell Electric. Demand is driving the business.
The main thrust is getting independent power producers (IPPs) connected to the grid, Ehmann said.
“Renewable energy is driving those issues,” he said. “It’s opened another market for someone who’s doing utility-based line work. Now you are going to a new private investor.”
Engineer/procure/construct (EPC) work also is driving that market’s growth.
“What design/build did for construction, we are now getting in outside line work through EPC,” Ehmann said.
According to Ehmann, O’Connell Electric didn’t reinvent the wheel but has moved into these emerging markets because of customer demand.
“Our customers are going in that direction,” he said. “We have the relationships with the IPPs who are driving the work. It’s a role reversal. We’ve adapted to the marketplace by providing what the customer needs. It’s exactly what design/build did for construction.”
According to Ehmann, 25 percent of O’Connell Electric’s 2008 business was in renewable-energy projects. That coincides nicely with the uptick in 2008 from 8,500 megawatts of new wind generating capacity to 25,300 MW, according to the American Wind Energy Association. O’Connell Electric’s renewable business likely will shrink in 2009 because of the squeezed economy, but the company is still committed to a greener way of doing business.
“We anticipate that once stimulus money filters through the federal and state levels, it will definitely enhance renewable develop-ment,” Ehmann said.
Energy-efficiency money and utility company money is driving projects right now; federal stimulus money will have an effect later for companies such as O’Connell Electric.
With production tax credits in the past being “too crazy” and tight, Ehmann said, changes needed to be made to make deadlines more reasonable. The economic stimulus package, also known as the American Recovery and Reinvestment Act of 2009, expanded deadlines to three-year terms on the renewable-energy production tax credit program, which loosens things up to better accommodate job sched-ules. Those tax credits drive some of the wind generation projects. Those wind power jobs were what accounted for a large chunk of O’Connell Electric’s 2008 renewable revenue.
But, Ehmann said, solar is creeping in and keeping the company very busy, mainly in small commercial and residential jobs.
“Utility-grade is popping up, and the stimulus package will probably increase and incentivize solar work,” he said.
Maintenance down the road
According to Ehmann, installation is just the beginning of long-term relationships in the renewable-energy arena. He foresees that O’Connell will be called on to support and maintain the equipment and connectivity to the grid.
“The utilities are starting to adjust, but the IPPs might be another avenue no one has experienced yet,” he said.
The independent power producers will decide who gets the maintenance work, but Ehmann is confident O’Connell Electric will be asked to bid. At the end of the day, the electrical contractors doing the installations and connections to the grid are in the best position to help the IPPs maintain and operate the equipment.
There are a lot of opportunities in renewable-energy projects, from wind to solar to hydroelectric generation. President Barack Obama has vowed to double renewable-energy production within three years of taking office. It is a market ripe for electrical contrac-tors. ECs will be one of the key beneficiaries, especially if they get in at the onset with their professionalism and ability to successfully tackle these jobs. In difficult economic times, diversifying into specialized renewable-energy work is just the kind of outside-the-power-lines thinking that makes the difference between a good year and layoffs.
KELLY, former editor of ELECTRICAL CONTRACTOR, is a Baltimore-based freelance writer. Reach him at email@example.com.