As regulatory uncertainty gripped the utility industry in the late 1990s, many utilities decided to put their construction plans on hold. However, the Tennessee Valley Authority (TVA) took a different path, continuing to invest in the build-out of its transmission system. While other utilities were outsourcing entire departments, TVA kept its engineering and construction functions intact. In fact, TVA has been strengthening both of these vital functions over the last several years.
Growing our Talent
When I first met with my transmission planning department in 1999, it was frightening to look around the room and see all the gray hair (like mine). The days of downsizing, rightsizing and budget cutting had kept us from adding staff. Things have changed over the past six years, as we're hitting the university campuses once again. With the soft market for engineering talent, we find we are able to recruit the best and the brightest. However, we didn't just replace higher paid, retiring engineers with raw college recruits, we've developed a new progression program for engineering recruits that takes them from raw recruits to seasoned senior engineers in four to six years.
It's still scary to meet with the planning department but now for a different reason. We now have a bunch of well-trained, enthusiastic kids doing some of our most sophisticated analyses. And, they are doing a great job.
As with our engineering workforce, we also have increased our entry-level recruiting of craft personnel. We bring in two classes of electrician and linemen apprentices and at least one class of groundmen trainees each year. TVA's investment in craft training is paying dividends as these new workers fill the boots of those who are retiring.
Putting the Right Structure in Place
Our transmission line, substation and telecommunications project groups are self-contained, each encompassing both engineering and construction functions. Projects are directed by senior project managers who have no ties to product lines, which allows them to focus on the projects at hand.
We also have standardized and automated a great amount of our design work, drastically reducing the time to prepare designs, shaving engineering hours and cutting down on drawing errors.
Keeping Construction In-House
To assure that TVA could rapidly respond and recover from major emergencies, including storms and tornadoes, we kept our in-house construction crews. The wisdom of this decision has been proven over and over with record performance in numerous storm breaks. We routinely compare our crew costs with contract construction costs and work hard to ensure we are competitive. We also benchmark our safety records and annually rank at or near the top against large transmission providers.
To be cost-effective, we staff just below the low points in our engineering and construction workload projections and contract with our engineering and construction partners when our in-house resource capability has been exceeded.
We competitively select our contract partners, with contracts awarded for several years with options to renew. This reduces the high cost of orienting new firms to our standards and expectations.
Alliances with equipment suppliers are key to our ability to buy equipment, satisfying TVA's technical requirements at competitive prices and meeting our fast-paced project schedules. For critical components, at least two strategic suppliers are competitively selected based on total ownership cost. We work closely with our suppliers in advance, enabling us to pre-source more than 95% of the items purchased on our capital projects.
Why We're Investing in Infrastructure
TVA's bulk transmission system has been one of the most robust in the nation. We were the first to build at 161 kV. TVA was first again in the United States when it began to build at 500 kV. When our 500-kV bulk transmission system was completed in the mid-1980s, TVA had transmission capacity to spare. But, with the sustained heavy regional load growth since then, the addition of our own generation, and the interconnection of 10,600 MW of merchant generation, TVA's bulk system is again being stretched. TVA is responding by building 500-kV substations — about one per year — and we are again planning, siting and designing 500-kV transmission lines.
Let's Get Building
As more utilities and transmission providers turn to expanding their systems again, they will find engineering and construction resources stretched, critical equipment being manufactured in distant countries, material escalation driving up costs and increasingly difficult siting issues. But, these are challenges that can and will be met if we are to keep the lights on — and we must.
David Hall is a vice president in TVA's Transmission/Power Supply Group, where he manages transmission planning, engineering and construction. Hall also has held engineering and management positions in nuclear, fossil and hydro over his nearly 33 years with TVA.