The Official Publication of the Power & Communication Contractors Association 1st Quarter 2023 Congress Considers Legislation to Exempt Broadband Grants from Taxation The New Congress: Divided Government Can Be Good for PCCA Preconstruction: The Foundation in Operational Excellence Next Practices Case Study Details Underground Mapping Pilot Program VUCA in Electric and Broadband Markets Creates Opportunities
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PCCA Journal|1st Quarter 2023 5 1st Quarter 2023 Official Publication of the Power & Communication Contractors Association Publication Staff PO Box 638 Churchton, Maryland 20733 (800) 542-PCCA • www.pccaweb.org ©2022 Power & Communication Contractors Association Publisher Timothy Wagner Editor Michael Ancell Advertising Sales Stacy Bowdring Photography Jorge de Casanova Information Technology Greg Smela Accounting James Wagner Layout & Design Joseph Wagner VUCA in Electric and Broadband Markets Creates Opportunities 11 By Loren Brace and Cam Winstead The war in Ukraine, political turmoil, 40-year inflation peak, interest rates at 30-year highs, and unprecedented supply chain disruptions have ushered in an environment of volatility, uncertainty, complexity, and ambiguity (VUCA). From this disruption are unprecedented opportunities for adept industry leaders. Are you one of them? Preconstruction: The Foundation in Operational Excellence 16 By Gregg Schoppman This article focuses on the development and implementation of preconstruction processes that will create a defined game plan before people show up to a jobsite. Ultimately, having a more prepared workforce prior to mobilization will lead to greater jobsite productivity and enhance the bottom line. Being organized can also help retain your talented managers since they have the tools, processes, and procedures to be successful, no matter the job. Inside Washington | By Jaime Steve & Zack Perconti 7 Power News 21 Broadband News 25 News Briefs 31 Industry Calendar 41 New PCCA Members 42 Advertiser Index 42 Officer Directors Board of Directors Garrett Akin Brooks Construction Co., LLC Nick Anderson Anderson Underground, Inc. John Audi Mears Group, Inc. Robert Breeden ElectriCom, Inc. Jeff Brown Global Machinery Bonnie Burnham Service Electric Company John Capodice Sterling Site Access Solutions Josh DeBruine Michels Corporation Justin Druffel Caterpillar, Inc. John Fluharty Mears Group, Inc. Robin Gilbertson J&R Underground, LLC Chase Lapcinski Push, Inc. Tommy Muse, Jr. Aubrey Silvey Enterprises, Inc. Steve Sellenriek (Advisory) UtiliSource Sam Stephens Tjader & Highstrom Jason Tyler Brooks Construction Co., LLC Billy Vincent ElectriCom, Inc. Michael Whitebread J.J. Kane Auctioneers Chris Wozniak Intercon Construction, Inc. Chairman Jerrod Henschel Equix, Inc. Chairman-Elect Ed Campbell HMI Communications 1st Vice Chairman Matthew Gabrielse Gabe’s Construction Co., Inc. 2nd Vice Chairman Rob Pribyl MP Nexlevel, LLC Treasurer Craig Amerine Amerine Utilities Construction, Inc Secretary Heath Sellenriek Sellenriek Construction
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PCCA Journal|1st Quarter 2023 7 PCCA actually sees good things in the “divided government” brought in by last Fall’s mid-term elections, that is a newly installed Republicanrun House of Representatives and the continuing Democratic-run U.S. Senate. Why? Because it puts the brakes on overbearing, overreaching labor union legislation while also creating the chance for a breakthrough on workforce needs through the hope of a broad compromise on immigration policy. Some say that divided government—or shared power—creates legislative gridlock. However, it can also lead to real compromise as the framers of the Constitution intended. This is especially true when both parties hold very slim majorities. Of the 100 members of the U.S. Senate, Democrats hold a voting majority of only 52 (three of whom are Independents who generally vote with the Democrats) to 49 Republicans. Meanwhile, of the 435 members of the House, numbers are equally tight, with 222 Republicans, 212 Democrats, and one vacancy to be filled by a special election on February 21. Labor Unions’ PRO Act Off the Table A Republican-run House of Representatives means the death of the Protecting the Right to Organize (PRO) Act for at least the next two years. The PRO Act, passed by the previous Democratic House, would be the most radical change to existing labor law in decades by overturning all right-to-work laws. Right now in 27 states, unions cannot force employees to join a union and pay dues. Under the PRO Act, employees could be required to join their workplace’s union, even if they personally do not support it. The act would also classify many freelancers and gig-workers as employees rather than independent contractors. While the law’s authors claim this reclassification applies only if a freelancer chooses to join a union, under the repeal of rightto-work laws, many of them would be forced to join unions. This makes them more expensive to hire and forces them to pay union dues they may not want to pay. The PRO Act also calls for allowing unions to bypass secret-ballot elections in favor of a “card-check” system in many situations. Under card-check, workers are “asked” to sign a card authorizing the union to represent them. However, this system often allows for unions to coerce and intimidate workers into signing their cards. Finally and most disturbing, the PRO Act would require employers to share workers’ contact information with union organizers without the approval of the employees themselves. This includes information such as their phone numbers and even addresses. Union members would be able to contact these employees at any time, opening doors to harassment Continued on page 8 Inside Washington The New Congress: Divided Government Is Good for PCCA Zack Perconti Jaime Steve APCA Government Afairs Representative email@example.com (703) 677-6049 APCA Government Afairs Representative firstname.lastname@example.org (202) 841-5493
PCCA Journal|1st Quarter 2023 8 Inside Washington Continued from page 7 Trailers for the REEL World!!! DELUXE WINDER WITH 9HP HONDA ENGINE INCLUDES NEW TAPERED RACE ROTARY REEL COLLARS (OTHER MODELS & STYLES AVAILABLE) ANNANDALE, MN 55302 | PH: 320-274-7223 | WWW.FS3INC.BIZ and intimidation. While the PRO Act would undoubtedly bolster union membership and therefore how much money unions collect, it would significantly reduce the freedom of workers to decide how and if they want to join a union. For all these reasons, PCCA is pleased that the Republican-run House will block the PRO Act from being considered. A Workforce Problem with an Immigration Solution America and PCCA companies have a serious workforce problem. We cannot find enough workers to do the huge job ahead of us to close the digital divide and harden the electricity grid. And America clearly has a long-festering immigration problem. Rep. Maria Elvira Salazar (R-Fla.) has offered a compromise solution, the Dignity Act. Salazar’s bill, which PCCA endorses, seeks to solve both the workforce and immigration problems with a relatively simple solution: 1. Stop illegal immigration 2. Provide a dignified solution for immigrants living in America, and 3. Strengthen the American workforce and economy Salazar’s bill would set up numerous changes to the immigration system, including measures to increase border security, an expedited process for asylum seekers, and a new program to provide a path to legal residency for undocumented immigrants already in the country. The bill’s proposed Dignity Program would allow undocumented immigrants who have been in the U.S. for at least five years to remain in the country and work legally if they pass a criminal background check, pay back taxes, start paying income taxes on new wages, and pay $10,000 in restitution over ten years to the federal government for entering the country illegally. The restitution fund would go to a new American Worker Fund, which would pay for workforce training for U.S. citizens. Salazar’s bill is currently co-sponsored by Reps. Dan Newhouse (R-Wash.), John Curtis (R-Utah), Pete Sessions (R-Tex.), and Jennifer Gonzales-Colon (R-P.R.). Meanwhile in the U.S. Senate, Sens. Tom Tillis (R-N.C.) and Krysten Sinema (I-Ariz.) have also been pushing an immigration reform bill. This bill would boost border security, ensure availability of immigrant work visas, provide protection for so-called “Dreamers” (children of illegal immigrants who were born in the U.S.), and improve the processing of migrants at the southern border. While a bipartisan effort, this bill does not currently address the pressing workforce issue.
PCCA Journal|1st Quarter 2023 9 Solving PCCA’s specific need and the nation’s broader need for workers through an immigration reform solution will not be easy. Everyone knows that this is a complex issue that has been kicked around for years with strongly held views on all sides. The last time Congress addressed the immigration issue was more than 30 years ago. This just might be the time for a comprehensive revamp that addresses America’s need for vastly more workers. These are just two key examples of how divided government—or shared power—in Congress can good for the interests of PCCA member companies. Biden Administration Rolls Back WOTUS Reforms With full control of Congress lost, the Biden administration has wasted no time shifting large parts of its agenda to the regulatory side of government. A new Environmental Protection Agency rule on Waters of the U.S. (WOTUS) and the repeal of the Navigable Waters Protection Rule (NWPR) announced in the closing days of 2022 undoes almost all of the reforms made during the Trump administration and threatens to plunge the industry into uncertainty due to ongoing court battles. This action stands in stark contrast to the administration’s stated goals of permitting reform, will slow utility construction work, and will delay the nation’s goals of universal broadband access and a stronger, more reliable power grid. The new WOTUS rule is a return to and expansion on the pre-2015 standards and most notably applies protected water standards to ephemeral streams flowing only because of precipitation. Pending the outcome of court proceedings (particularly Sackett v. EPA, in which oral arguments were given at the Supreme Court in late 2022), the new rule is slated to go into effect on March 20. PCCA members across the country are working tirelessly to expand access to high-speed broadband, modernize and strengthen our nation’s electric grid, and provide the essential workforce for these and many other critical infrastructure projects. However, burdensome federal regulations and policies have slowed work and jeopardize the goals set by the Biden administration to achieve universal access to broadband and a modern electric grid within the next decade. PCCA has already issued a statement against this overreach and other counterproductive regulations announced by the administration and will be working closely with the new Republican-led House to suggest and implement better policies and ensure that the administration is held accountable. Introducing the ReelLift™ Reel Management System, the contractor-tested way to save on set-up, handling and takedown for cable and wire projects. Get 50% in REEL savings Hydraulically lifts, repositions and transports reels in tight spaces Integrated bed design eliminates the need for a trailer Variable-speed controls for cable payout, retrieval and figure-8 deployment 800-534-5624 hydrabeds.com/utility
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PCCA Journal|1st Quarter 2023 11 VUCA in Electric and Broadband Markets Creates Opportunities By Loren Brace and Cam Winstead The war in Ukraine, political turmoil, 40-year inflation peak, interest rates at 30-year highs, and unprecedented supply chain disruptions have ushered in an environment of volatility, uncertainty, complexity, and ambiguity (VUCA). From this disruption are unprecedented opportunities for adept industry leaders. Are you one of them? Whether you viewed 2022 as utterly tumultuous or mildly obtrusive, it is certain that the events of this past year have added new levels of complexity to the emerging post-pandemic world we live in and will shape the landscape for years to come. In 2023, a short and shallow recession looms. The world’s largest economies face the same risks with central banks raising interest rates to stifle inflation and a pandemic aftereffect inflamed by high energy prices. The U.S. recession will be relatively mild; Europe’s will be severe. Bottom line: the discomfort will be global and felt by all. Continued on page 12 Exhibit 1 - Communications Construction Put in Place Historical Figures and Forecasts Millions of current dollars
PCCA Journal|1st Quarter 2023 12 2023 Broadband Outlook The rural broadband market is heading into 2023 with many of the same crosscurrents faced by most other industry sectors. But while the increasing importance of “internet for all,” supported by passage of the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Recovery Act (IRA), helps shield the industry against economic ambiguity, it won’t be entirely insulated from the volatility. The greatest opportunity in this market is the unprecedented federal and state spending over the next 5-7 years. Communications Spending Forecast Exhibit 1 demonstrates the steady industry growth that began in 2011 and peaked in 2018, followed by a flatter market and modest COVID-19 related pullback in 2020 and 2021. Growth will accelerate significantly as the efforts to execute on Biden administration priorities are put in motion. 2023 Electric Transmission & Distribution Outlook Last year was one of ambiguity for the electric power sector, nevertheless, it realized its share of risks and recognition. U.S. electricity sales rose, but costs also surged, largely due to natural gas prices more than doubling because of global shortages driven by Russia’s invasion of Ukraine. Complexity derived from extreme climate events—from droughts to hurricanes, heat waves, and wildfires—continued to test regional grid resilience. In response, the industry and policymakers worked to reinforce reserves, implement energy storage and microgrids, harden infrastructure, and fortify flexible load options. The greatest opportunity is the Biden administration’s social and environmental push to electrify everything and underground existing infrastructure to enhance reliability. Electric T&D Spending Forecast Exhibit 2 depicts an electric T&D market with a decade of growth beginning in 2011 with transmission-driven peaks and valleys. In 2022, this market was impacted by limited equipment availability with federal incentive and public utility commission funding via rates driving steady and faster growth in 2023 and beyond. Broadband in Perspective In 2023, more than 43 billion devices are connected to the internet.1 They will generate, share, collect, and make use of data in countless ways. There are 6.3 million households in service areas without broadband access, and when connected they would receive nearly $2,000 in economic benefits annually, yielding more than $68 billion over 20 years.2 This year will be the defining moment that will determine the roadmap of the broadband market through 2028 and likely beyond. The Broadband Equity, Access, and Deployment program (BEAD) defines the mechanism that will establish what that roadmap will look like. The BEAD program will administer the $42.45 billion in broadband spending earmarked by the IIJA. VUCA Opportunities States are at the center of the available BEAD funding, and rolling out billions of dollars will challenge those without a history of evaluating applications. States with existing broadband offices and grant programs will be well positioned to hit the ground running. States that didn’t have formal broadband offices in 2022 will need to put considerable time and effort into establishing ground rules and recruiting and educating employees to handle the grant evaluation process. Each state will be awarded an initial amount of $100 million, with the remainder of the $42.45 billion allocated based on the percentage of unserved locations across the states. The ability of states to judicially dole out the funds will greatly depend on the effectiveness of the grant evaluation process that, among a host of criteria, will consider “low-cost service options” that would provide a much better return on investment, thereby making the most of the funding rather than spending it imprudently. VUCA Opportunities Continued from page 11 Exhibit 2 - Electric T&D Construction Put in Place Historical Figures and Forecasts Millions of current dollars
PCCA Journal|1st Quarter 2023 13 Electric T&D in Perspective Electric transmission capital expenditures (Exhibit 2) will continue to grow significantly. Growth in 2022 is expected to be almost $2 billion stronger than in 2021 and will carry this momentum into 2023 before flattening. Electric distribution capital expenditures also have shown strong growth as utilities seek to add to their rate base and bring new programs on board. Capital spending will continue to be focused on replacing aging infrastructure, grid hardening, increasing efficiencies, and finding new ways to integrate renewable power generation into the grid. Grid Adaptation, Hardening, and Resilience The Edison Electric Institute reports that its member companies are deploying a significant and growing amount of capital resources on adaptation, hardening, and resilience (AHR) initiatives (Exhibit 3). AHR is increasingly becoming an important way that electric companies fulfill their mission of supplying clean, reliable, and affordable energy to customers.3 In 2022, U.S. electricity sales rose as the pandemic recovery progressed, increasing 3.6 percent compared to 2021. As a result, U.S. retail electricity prices reached record highs in 2022, averaging 12.4 cents per kilowatt hour, up 12.3 percent year over year,4 and are expected to carry into 2023 along with other promising developments that emerged, including: • U.S. renewable generation accounted for over 23 percent of electricity generated,5 largely stemming from solar and wind power, which accounted for 69 percent of new utility-scale capacity additions.6 Continued on page 14 Exhibit 3 - Adaptation, Hardening, and Resilience (AHR) 2022 Anticipated CapEx Application Exhibit 4 - Historic and Forecast Electric Vehicle Sales Per Year Interpretive Note: Totals may not sum to 100% and AHR sum may appear different due to rounding. Source: Edison Electric Institute, EEI Industry Capital Expenditures with Functional Detail (September 2022), pg. 7. (Original source: Source: EEI Business Analytics 2022 surveys - Downloaded from www.eei.org/qfu). Continuum prepared graphic. Source: Wood Mackenzie, Electric Vehicle Research – 2040 Forecast, December 2022, (Downloaded from www.woodmac.com/our-expertise/capabilities/ electric-vehicles). Continuum prepared graphic. • The Inflation Reduction Act extended and expanded tax credits for renewables, electric vehicles, and more. • IIJA funding began to flow. • Regional transmission organizations submitted initial plans for distributed energy resources to participate in wholesale markets under Federal Energy Regulatory Commission Order 2222.7 • U.S. electric vehicle sales rose from 645,000 vehicles in 2021 to 708,000 vehicles in 2022, representing a 9.8 percent increase. Sales are expected to grow exponentially through 2038 (Exhibit 4).8 VUCA Opportunities In 2023, continued supply chain complications, rising costs, and extreme weather are likely to persist. Nonetheless, inflow of federal funds to support generation technologies and grid hardening and resiliency initiatives, promising trends in innovation and investment, supported by recent legislation, can help the industry fulfill its task of providing increasingly secure, reliable, clean, and affordable electricity. Fortune Favors the Bold For decades, the U.S. enjoyed a relatively stable economic environment. Today, much of this economic stability has been disrupted. This industry requires daring new approaches to the volatility, uncertainty, complexity, and ambiguity it faces, and many such approaches are being embraced as an array of other disruptive influences become increasingly apparent. The best-performing companies disrupt and reinvent themselves on an ever-forward-moving basis. Today’s leaders must have the courage to break away from tried-and-true but rapidly dissipating business models, even when it feels hard. Prioritization is key. This means planning carefully and setting priorities with limited resources and then maintaining
PCCA Journal|1st Quarter 2023 14 focus, measuring progress, and ensuring accountability. Pace over perfection. It’s impossible to overestimate the importance of execution. Companies must take an action mindset—less planning and more action. The time leaders must drive value in business is often less than anticipated while market instability is currently at a high. Ninety-four percent of executives believe that their business models must change within the next three years. To make that transition, change must begin today. The worst possible decision is to do nothing. Clear and compelling vision. The best performing companies demand values-led leadership, which means doing what is right rather than what is pragmatic. Business leaders must be their own chief communications officers, communicating clearly, regularly, and consistently. Leadership, by definition, requires followership. If others are not brought along as a part of the journey, any transformation is destined to fail. In this current environment of VUCA, clarity, control, and speed are critical. From Continuum’s experience, leaders must lean into the forces of change, taking required and swift action before losing the ability to set their own destiny. Loren Brace and Cam Winstead are consultants with Continuum, which provides management consulting, training, and investment banking services to the worldwide energy, utility, and infrastructure construction industry. They can be reached at email@example.com or (913) 313-5099 and connected with on LinkedIn at www.linkedin.com/in/ loren-brace. For more information on Continuum, visit www. linkedin.com/company/continuum-capital or www.continuumcapital.net. Notes 1. Forecast: Internet of Things--Endpoints and Associated Services, Worldwide, 2017, Gartner, December 2017, gartner.com. 2. Tucker, Russell Ph.D.; Goodenbery, Joseph; Loving, Katherine, Unlocking the Value of Broadband for Electric Cooperative Consumer-Members, National Rural Electric Cooperative Association, Business & Technology Report, September 2018, pg. 1. 3. Edison Electric Institute, EEI Industry Capital Expenditures with Functional Detail (September 2022), pg. 5. (Downloaded from www.eei.org/qfu.) 4. US Energy Information Administration, Electric Power Monthly, Table 5.3, “Average Price of electricity to ultimate customers,” All sectors, December 20, 2022, pg. 133. 5. US Energy Information Administration, Electric Power Monthly, Table 1.1, “Net Generation By Energy Source,” Hydroelectric Conventional & Solar & Renewable Sources Excluding Solar & Other & Total Solar, Year To Date, October 25, 2022. 6. Federal Energy Regulatory Commission, “Energy infrastructure update for August 2022,” October 5, 2022, pg. 4. Data derived from Velocity Suite, Hitachi Energy and The C Three Group LLC. The data may be subject to update. 7. North American Electric Reliability Corporation13, SPIDERWG White Paper - FERC Order 2222, BPS Reliability Perspectives for Distributed Energy Resource Aggregators, NERC System Planning Impacts from DERs Working Group White Paper, July 2022. 8. Wood Mackenzie, Electric Vehicle Research, 2040 Forecast, Electric Vehicle Sales; (Downloaded from www.woodmac.com.) VUCA Opportunities Continued from page 13 RIGHT MATERIAL We listen to our customers, and by forecasting, procuring, and stocking the right material, Power & Tel is better at serving all your product and service needs. 25,000+ STOCKED P R O D U C T S WBE Certified 1.800.238.7514
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PCCA Journal|1st Quarter 2023 16 In a great economy, profitability can provide firms with a false sense of security. The challenge is that it can be unclear whether managers and supervisors are making decisions that truly drive profits due to the use of effective internal processes, tools, and metrics or because current market conditions are favorable. In a strong market, companies that believe they are already operationally superior have scant incentives to review existing processes, training, and other areas for improvement. Yet these companies might be relying on the work of a handful of talented executives, project managers, and other staff members to produce results. A firm that is truly operationally superior can utilize less experienced managers and continue to deliver exceptional results. Additionally, these firms have the training, processes, and systems in place to help employees grow and succeed. This paper is the first in a series about creating operationally superior organizations across the entire project life cycle. In this article, we focus on the development and implementation of preconstruction processes that will create a defined game plan before people show up to a jobsite. Ultimately, having a more prepared workforce prior to mobilization will lead to greater jobsite productivity and enhance the bottom line. Being organized can also help retain your talented managers since they have the tools, processes, and procedures to be successful―no matter the job. Building a Strong Foundation Through Rigor and Standardization Companies must ensure that their operations are ready for any market conditions and can withstand employee turnover in key positions. With labor shortages at an all-time high, we see that the companies with well-defined internal processes that are replicable, sustainable, and scalable are the most likely to retain quality employees. This is because workers at these companies have the necessary structure or parameters in place to be successful at their jobs. A good starting point is to implement a system of continuous review and improvement. Be rigorous about standardization throughout the company. It is important to be consistent and to include the right people in these conversations. You will need an operations director or someone with equivalent responsibility to lead this change management initiative, but frontline staff should also have input into developing standard systems and procedures. Operations directors need to be able to examine the organization and ask the right questions. A few questions to kick off an improvement initiative include: • What is going well in the organization? What is lagging? • Where can we make improvements to the company? • What processes are working? • Who should be involved in these conversations? • What tools do we currently have available? How effective are they? What could be added to improve efficiency or ease of use? • What processes should we standardize, and where should we allow for creativity? • How do we hold people accountable for following standard processes? • How are we training people on these processes throughout the firm? A Strong Start Sets the Tone Preconstruction typically runs from when the project is awarded until the project breaks ground. For contractors that engage in design/build or design/assist delivery types, a preconstruction strategy should begin earlier during the concept or design phases. FMI has identified several processes that operationally superior organizations use during preconstruction, which result Preconstruction: The Foundation in Operational Excellence By Gregg Schoppman Many engineering and construction (E&C) firms measure success strictly by looking at the bottom line. If net profits are good, companies often think they’re effectively managing their money, processes, and talent.
PCCA Journal|1st Quarter 2023 17 Continued on page 18 in better outcomes during construction. Preconstruction planning is more than a handoff, and any exchange of project information is simply a starting point for discussions. For many clients, the preconstruction meeting is a brainstorming session where owners dictate orders and the responsibility is passed to the contractor. Too many companies think of this as a checklist to speed through. It ought to be considered as the beginning of job planning and is paramount to the overall success of a project. Operationally superior construction firms guide their clients through the process and approach preconstruction as a collaboration. With a strong internal plan, construction organizations can work more effectively with clients and drive conversations centered around risk management and mitigation from all aspects. The checklist is there to guide the conversation, but it should encourage collaboration and real conversations about how to solve challenges and deliver the project on schedule and on budget. Preconstruction planning utilizes a tool to create follow-up and uncover potential issues. Many believe that purchasing planning software or other tools are all that is needed to improve efficiency. They fail to consider how best to use tools and at what specific point in the process to do so. Tools can provide incremental improvements and must be regularly evaluated and improved. Examples include meeting agendas or presentations, which may help mitigate risk and identify challenges from the onset, allowing project teams to derive effective solutions prior to mobilization. The best approach for implementation is to create a road map for how your company should use productivity tools and methods for holding people accountable. Too often clients spend millions on software, but they don’t put enough focus on how to utilize it. Ultimately, they don’t reap any tangible results. The tool utilization road map is meant to drive accountability in the same way that exercise apps on a smartphone help drive personal accountability in fitness. All processes developed should be standardized so that they are repeatable across the organization. One element of preconstruction planning is the stand and deliver phase, where the project team explains its plan, approach, or strategy to senior management, and leaders provide objective counterpoints to challenge the team’s approach. This step should occur after client handoff and all the Ground Restoration Made Easy Reduce overall project costs by performing your own ground restoration. FINN hydroseeders are easy to use so it takes minimal instruction to achieve maximum profit. Since 1935 Finn has been the worldwide leader in tough, durable, and reliable ground restoration equipment. Learn more at www.finncorp.com.
PCCA Journal|1st Quarter 2023 18 necessary team preparations. Estimators, project managers, and the superintendents will put together this plan and present it to a panel of senior leaders. Stand and deliver meetings provide the ultimate backstop prior to mobilization and help mitigate risks long before they occur. Additionally, this is the time to identify any potential challenges and to evaluate means and methods to generate greater efficiencies. Any areas of risk should be closely examined, discussed, and solved during this process. Senior management should be objective about the team’s approach and point out any flaws in the team’s initial plan or in any risk assumptions. Kickoff Meeting Is Key Before a trade partner (or subcontractor) begins, a general contractor conducts a preinstall or trade kickoff meeting to review project-specific items such as quality assurance or quality control, labor, safety procedures, or other areas. Most importantly, this meeting occurs at the jobsite with each trade partner’s field leader. Trades don’t always have the full picture for how their specific scope of work fits into the overall project. For example, a general contractor might call a drywall specialist and schedule this crew for a particular day. If the contractor doesn’t review the required application processes or discuss the trade partner’s strategy for the installation, the partner may end up covering up walls where other trades have not finished or not provided the owner’s desired finish level. Both can result in costly budget or schedule overruns. Great contractors don’t just go through the motions with these meetings. They use the time to collaboratively plan and coordinate the specific scope of work. Even if trade partners aren’t doing their own planning (which they should be), preinstallation conferences ensure contractors have their trade partners’ full attention and that the entire job is well organized from the beginning. It is important to be consistent when handing off scopes of work to trade partners. More specifically, all processes must be clear and standardized, so that trade partners know what is expected of them. Having efficient and clear processes on your project usually attracts quality trade partners that will prioritize your jobs over your less organized competitors and often results in better pricing. As the general contractor, you must also help set the strategy for efficiency; basically, you are the best source for planning and coordinating to make sure everyone is on the same page. Collaborative planning ensures each job is started in the same manner, no matter the project location or project manager. Everyone must understand the general contract and the terms and conditions therein. No one needs to be an attorney, but a fundamental knowledge of the operations-specific terms and conditions is paramount. The best companies ensure that project managers and other leaders have solid foundations in construction legal knowledge. You can achieve this through training, lunch-andlearns, or on-site seminars. One tip is to create a one-pager so that everyone on the project team understands the general terms and structure of the contracts. Standardization in this area is also key because subcontractors need consistent language and terms to work with. Only the scope of work should vary. This ensures project managers understand timelines, notification deadlines, and other contractual obligations spelled out in the contract. Each project needs an exit strategy or preconstruction planning for the last 10 percent of the project. FMI sees this as one of the weakest areas in the construction industry. The premise of the exit strategy is to plan and strategize for the successful and efficient completion of the last 10 percent of the project. This is even more critical if there are (or will be) changes to the project team. At this point in the project, the project team collaborates to develop a realistic, consistent management philosophy to drive the project over the goal line. Items that must be considered and planned forduring the exit strategy process include anything that could prevent the team from finishing the project profitably, such as creating the punch list, gathering operations and maintenance documents, commissioning critical equipment, training the owner on systems, documenting as-built construction, obtaining owner buy-in, and handing off the project. Many companies in our industry are terrible at executing these last parts of a project because they lose focus, and the resources that were on the project from the beginning have been reassigned to newly mobilized jobs instead of completing the one at hand. A few tips for this process include: • Make sure there’s a structured agenda and time frame that keeps everyone focused and effective. • Be sure to clearly assign responsibilities and make sure the client is happy before calling a job finished. Preconstruction Continued from page 17
PCCA Journal|1st Quarter 2023 19 Why It All Matters Every job starts with preconstruction, which is the foundation for project success. Operationally superior organizations understand that having consistent processes, documents, tools, and approaches to each project before mobilization can have a tremendous impact on their efficiency and margins. Improving this area helps save time, avoid project rework, and foster clear communication across the project team and with trade partners. Contractors that continually focus on improving their operational procedures and processes will reap the rewards of these efforts. Even small tweaks to existing processes can make an enormous difference in your company and help to retain your top talent and clients. Gregg Schoppman specializes in productivity and project management for general and trade contractors across the country. He also facilitates strategic planning and evaluation services focused on organizational transformation. He was named one of the Top 25 Consultants in the World in 2014 according to Consulting Magazine and is also the recipient of the Association of Management Consulting Firms’ “High Five Award” for consulting excellence in 2013. Schoppman leads FMI’s Operations consulting practice as the discipline Leader. He has been a featured instructor in FMI’s Project Manager Academy and regularly trains at all levels of construction from foreman to CEO. Before joining FMI, Schoppman was a senior project manager for a general contracting firm in central Florida, completing complex and sophisticated construction projects in several niches and geographic markets. He can be reached at firstname.lastname@example.org. About FMI. For more than 60 years, FMI has been a leading management consulting and investment banking firm dedicated exclusively to engineering and construction, infrastructure, and the built environment. FMI serves all sectors of the industry as a trusted advisor. More than six decades of context, connections, and insights lead to transformational outcomes for clients and the industry. FMI helps you build your foundation for tomorrow and optimize your business for today. Industry Focus. Powerful Results. For more information, visit www.fminet.com. © 2021 Vermeer All Rights Reserved BRON is a registered trademark of RWF Industries, a division of Roberts Welding & Fabricating Ltd. The BRON 175 utility tractor features 225 HP (167.8 kW) stage V engine, dual telescopic reel carrier, variable speed hydrostatic transmission, decelerator pedal, oscillating undercarriage and V75-3 offsetting plow. AVAILABLE EXCLUSIVELY AT VERMEER DEALERS WORLDWIDE! 873 Devonshire Ave., Woodstock ON N4S 3B6 1.800.263.1060 | ON:519.421.0036 610 Main St. West Leroy MN 48039 507.547.2864 Visit BRON online at WWW.RWFBRON.COM
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PCCA Journal|1st Quarter 2023 21 POWER NEWS Biden Names Phillips Acting FERC Chairman On January 3, President Biden announced that he had named Willie Phillips as Acting FERC Chairman. Former Chairman Richard Glick’s term ended on December 31 and Sen. Joe Manchin (D-W.Va.) chairman of the Senate Energy and Natural Resources Committee, declined to hold a renomination hearing. With Glick’s seat vacant, the five-member commission has two Democrat members and two Republican members. “It is an honor to be chosen by President Biden to lead FERC at such a pivotal moment,” Phillips said. “The work we do here at FERC is crucial to ensuring consumers have access to reliable, safe, secure, and efficient energy services at reasonable cost. I look forward to continuing to work with my fellow commissioners and the FERC staff, as well as to prioritize public engagement, in pursuit of our important mission.” Phillips joined FERC in December 2021. Prior to that he served as the Chairman of the Public Service Commission of the District of Columbia (DCPSC), named to that role in 2018 and serving on the DCPSC since 2014. He is an experienced regulatory attorney combining nearly 20 years of legal expertise in public and private practice. Phillips has an extensive background in the areas of public utility regulation, bulk power system reliability, and corporate governance. Prior to the DCPSC, Phillips served as Assistant General Counsel for the North American Electric Reliability Corporation, in Washington, D.C. Before joining NERC, he worked for two law firms where he advised clients on energy regulatory compliance and policy matters. Phillips has a Juris Doctor from Howard University School of Law and a Bachelor of Science from the University of Montevallo. He lives in Washington, D.C., with his wife and two children. Amy Andryszak, President and CEO of the Interstate Natural Gas Association of America, issued the following statement regarding Phillips’ appointment: “We congratulate Commissioner Phillips on his appointment as Acting Chairman of FERC by President Biden. As an independent regulatory agency, FERC plays a critical role in ensuring all Americans have access to safe and reliable energy supplies at a reasonable cost, and we at INGAA look forward to working with Chairman Phillips and the rest of the commission as it undertakes this important role.” USDA Announces $2.7 Billion to Improve and Expand Rural Electric Infrastructure U.S. Department of Agriculture (USDA) Secretary Tom Vilsack on January 30 announced that the department is investing $2.7 billion to help 64 electric cooperatives and utilities expand and modernize the nation’s rural electric grid and increase grid security. “These critical investments will benefit rural people and businesses in many ways for decades to come,” Vilsack said. “This funding will help rural cooperatives and utilities invest in changes that make our energy more efficient, more reliable, and more affordable. Investing in infrastructure—roads, bridges, broadband and energy—supports good-paying jobs and keeps the United States poised to lead the global economy.” USDA is investing in 64 projects through the Electric Loan Program. This funding will benefit nearly 2 million rural people and businesses in Alabama, Arkansas, Colorado, Florida, Georgia, Iowa, Indiana, Kentucky, Michigan, Minnesota, Mississippi, Montana, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, and Wisconsin. The loans include $613 million to help rural utilities and cooperatives install and upgrade smart grid technologies. Smart grid can be a catalyst for broadband and other telecommunications services in unserved and underserved rural areas in addition to improving grid security and reliability. Nearly half of the awards will help finance infrastructure improvements in underserved communities. Below are some examples of how the funding will be used: • The Northern Virginia Electric Cooperative is receiving a $111 million loan to connect 1,264 consumers and build and improve 404 miles of line. The loan includes $13.4 million for smart grid Power News continued on page 22
PCCA Journal|1st Quarter 2023 22 technologies. Northern Virginia Electric serves 176,604 consumers more than 7,614 miles of line in six counties. • The Carteret-Craven Electric Membership Cooperative is receiving a $28 million loan to connect 3,115 consumers and build and improve 132 miles of line. The loan includes $169,437 for smart grid technologies. Carteret-Craven Electric serves 41,655 consumers through 2,493 miles of line in four counties in southeastern North Carolina. • Minnesota’s Beltrami Electric Cooperative is receiving a $22.7 million loan to connect 1,480 consumers and build and improve 225 miles of line. The loan includes $1.3 million for smart grid technologies. Beltrami Electric serves 21,772 consumers in portions of Beltrami, Cass, Clearwater, Hubbard, Itasca, and Koochiching counties with 3,500 miles of distribution line covering approximately 3,000 square miles. A full list of recipients is at https:// www.rd.usda.gov/media/file/download/ usda-rd-nr-electricloan-programprojectlist.pdf. Appalachian Power Plans Power Grid Improvements in West Virginia In January, Appalachian Power announced plans for an upcoming electric transmission project in Logan County, W.Va., including some 17 miles of new transmission line and two new substations. The Becco Area Transmission Improvements Project involves: • Building about 7 miles of 138-kilovolt (kV) transmission line • Building about 10 miles of 69-kV transmission line to be operated at 46-kV standards • Retiring 24 miles of 46-kV transmission line • Building the proposed Argyle and Tin Branch substations • Retiring the Pine Gap and Dehue substations Crews plan to replace a transmission line from the 1930s that consists of deteriorating wooden poles with modern steel poles and new wires to meet current operational needs. The project will strengthen the electric grid by installing modern equipment and additional power sources. These enhancements reduce community-sustained outages and improve electric reliability for area customers. “By retiring this 90-year-old power line and building new substations with modern equipment, we are able to increase area service reliability for our customers and reduce the number of temporary outages in the Whitman and Argyle areas,” Appalachian Power spokesperson George Porter said. The project team plans to use input from landowners and additional field work to determine a power line route that minimizes impact on the community and environment. Company representatives expect construction to begin fall 2025 and conclude spring 2027. Additional details are available at AppalachianPower.com/ BeccoArea. Energy Department Announces $47 Million to Develop Affordable Clean Hydrogen Technologies On January 27, the U.S. Department of Energy (DOE) announced up to $47 million in funding to accelerate the research, development, and demonstration (RD&D) of affordable clean hydrogen technologies. Projects funded under this opportunity will reduce costs, enhance hydrogen infrastructure, and improve the performance of hydrogen fuel cells--advancing the Department’s Hydrogen Shot goal of reducing the cost of clean hydrogen to $1 per kilogram within a decade. DOE said that achieving these cost reductions will accelerate the use of clean hydrogen across multiple sectors, strengthening energy security while supporting President Biden’s ambitious goals of a 100 percent clean electric grid by 2035 and a net-zero emissions economy by 2050. “Clean hydrogen is a versatile fuel essential to achieving President Biden’s vision of an equitable clean energy economy rooted in reliability and affordability,” U.S. Secretary of Energy Jennifer M. Granholm said. “This funding will advance cutting-edge research and drive down technology costs to help unlock the full potential of clean hydroPower News Continued from page 21
PCCA Journal|1st Quarter 2023 23 gen energy—providing another valuable resource to combat the climate crisis while creating economic opportunities in communities across the country.” Clean hydrogen—which is produced with zero or near-zero emissions—is set to play a vital future role in reducing emissions from some of the hardest-todecarbonize sectors of the economy, including industrial and chemical processes and heavy-duty transportation. While hydrogen technologies have come a long way over the last several years, costs and other challenges to at-scale adoption need to be addressed for clean hydrogen to realize its full potential. This funding opportunity, which is administered by DOE’s Hydrogen and Fuel Cell Technologies Office, focuses on RD&D of key hydrogen delivery and storage technologies as well as affordable and durable fuel cell technologies. Fuel cell RD&D projects will focus particularly on applications for heavy-duty trucks, to reduce carbon dioxide emissions and eliminate tailpipe emissions that are harmful to local air quality. These efforts will work in concert with hydrogenrelated activities funded by the Bipartisan Infrastructure Law, including the Regional Clean Hydrogen Hubs and an upcoming funding opportunity for RD&D to advance electrolysis technologies and improve the manufacturing and recycling of critical components and materials. © 2023 The Charles Machine Works, Inc. Learn more from your Ditch Witch® dealer. The Marksman Plus HDD Guidance System features a dual-power-mode beacon for consistent performance across housing sizes. ALLETE, Grid United Join Forces to Develop Key Transmission Link North Plains Connector, a new, approximately 385-mile high-voltage direct-current (HVDC) transmission line from central North Dakota to Colstrip, Montana, will be the nation’s first transmission connection between three regional U.S. electric energy markets: the Midcontinent Independent System Operator, the Western Interconnection, and the Southwest Power Pool. Power News continued on page 24www.pccaweb.org