Electric Rate Increases to Spur Construction

Light & Medium Truck, Aug 2008 by Galligan, Jim

WILLIAMSBURG, Va. - Electric utilities are about to undertake major construction projects to rebuild and expand the nation's aging power grid. That will pose a service and supply challenge for electric utility fleets currently slammed by soaring fuel costs and burdened by aging vehicles, an electric industry executive said.

"I see about two decades of major transmission construction in the [United States]," Dave DeCampli, president of PPL Electric Utilities, told fleet managers during a session at the annual Electric Utility Fleet Managers Conference here in June.

DeCampli said electric service rates that have been frozen in place in Pennsylvania and other states will begin to expire over the next few years. That will mean higher rates for users but also more revenue for the utility companies to rebuild or expand the electricity transmission network. ,

As a result, utilities will have to "dust off their engineering standards and construction techniques," DeCampli said, and fleet managers will have to re-evaluate the vehicles and tools needed to support the construction.

Utility fleet managers are usually responsible for maintaining the vehicles used by the utility's service and line maintenance divisions. Construction of major transmission lines, however, is often outsourced to contractors.

"You need very big vehicles to support transmission construction," DeCampli said.

Because electric rates have been frozen or permitted to increase only marginally over the past decade in many states, utilities have not invested in building new transmission lines, DeCampli said.

The increased emphasis on large construction equipment may alter somewhat the responsibilities of the fleet managers, said Wes Keller, transportation manager for PPL.

"It will mean a lot of construction work. For the fleet manager, it's another phase of what we do. We'll have to balance that with taking care of the distribution network every day," he said.

PPL has been operating under a rate cap for 12 years but the restrictions end after December 2009, DeCampli said.

"Residential rates will go up 35% when the cap lifts," he said. - Jim Galligem