Keeping the Treatment Option Open
As competition grows for any business, the players examine all options to grow their part of a market share. Utility services are no different and have moved in a costly trend over the past few years. Please allow me a moment of your time to explain.
Narrowing it down to a single component of utility services, Utility Pole Inspection, we find a service that essentially has a definition which is sometimes whatever the Provider and the Utility decide it to be. It is proprietary, with no oversight body and no handbook of standards that is uniform.
Couple this with the fact that we are dealing with a service that sometimes requires judgement based on depth of knowledge and offers as the end product, the delayed gratification of long-term system integrity and we have a vulnerable service.
Back to my initial statement about the “costly trend”: In short, I am referring to the practice of offering the most rudimentary of services and assuring the utility that this is where they need to be. As a consultant, the Service should get to know the Utility and the constraints. Of course, the most common constraint is the budget. Weighing the budget constraints against the desired benefits of the Utility should be the first job of the consultant.
This equation has been forgone in many of my recent visits to one side. The deciding factor has been “what is the lowest price service that you can quote”. Remember that this business may be largely proprietary. The end result has often been a very rudimentary inspection with absolutely no treatment option whatsoever.
Allow me to explain how this is the absolutely most expensive inspection option available:
A growing practice is to judge a pole as either “good” or “bad” without taking the time to assess a remedy.
I am reminded of the story of the illustrious Mike Tyson at his peak of success. He was driving one night and managed to hit a tree (minor damage) with his 183,000 dollar Bentley. Mr. Tyson emerged unharmed, handed his keys to the police officer and said “Here, you can have it”.
That is exactly what happens when a pole with any perceptible amount of decay is being rejected.
The reality is that decay is a process. It does not happen overnight and when it is discovered, it can be at a very superficial stage, or it can be well-advanced to the point where replacement is necessary.
In reality, it is usually somewhere in between. A skilled inspector who is motivated to respect the best interests of the utility will do everything that they can to guard system safety, integrity and the economic interests of the utility. This cannot be accomplished without keeping a treatment option available. I am not referring to necessarily treating every pole, although that may be the most economically viable in the long run. I refer to the poles that have superficial or a lesser amount of decay which would either 1) Be unnecessarily rejected or 2) Left to continue their downward spiral to the point where replacement is the only option. These are the only two options available with no treatment option.
What do I mean by the “Treatment Option”? It may be as simple as addressing only those poles that show decay tendencies with a proven treatment to arrest that decay and keep them at “Status Quo”. In many cases, that may be only 2 or 3 percent of the poles inspected and influence a huge overall cost savings to the Utility.
What is the Value of keeping the Treatment option open?
Using 3 percent as a number, retreatment versus replacement on 10,000 poles inspected/year with a 1000/pole replacement cost and a 20 dollar adder for treating that same pole and keeping it in service:
Cost of Replacement = 10,000 poles x .03 x $1,000 replacement cost/pole = $300,000
Cost of Treatment = 10,000 poles x .03 x $20 treatment adder = $6,000.
Net savings = $294,000. That is 1.61 Bentleys…
The cost of allowing this option in your bid is nothing and the application can be discussed at the Pre-Job meeting. A reputable, skilled consultant will advocate this on your behalf.
Regards,
Joel
As competition grows for any business, the players examine all options to grow their part of a market share. Utility services are no different and have moved in a costly trend over the past few years. Please allow me a moment of your time to explain.
Narrowing it down to a single component of utility services, Utility Pole Inspection, we find a service that essentially has a definition which is sometimes whatever the Provider and the Utility decide it to be. It is proprietary, with no oversight body and no handbook of standards that is uniform.
Couple this with the fact that we are dealing with a service that sometimes requires judgement based on depth of knowledge and offers as the end product, the delayed gratification of long-term system integrity and we have a vulnerable service.
Back to my initial statement about the “costly trend”: In short, I am referring to the practice of offering the most rudimentary of services and assuring the utility that this is where they need to be. As a consultant, the Service should get to know the Utility and the constraints. Of course, the most common constraint is the budget. Weighing the budget constraints against the desired benefits of the Utility should be the first job of the consultant.
This equation has been forgone in many of my recent visits to one side. The deciding factor has been “what is the lowest price service that you can quote”. Remember that this business may be largely proprietary. The end result has often been a very rudimentary inspection with absolutely no treatment option whatsoever.
Allow me to explain how this is the absolutely most expensive inspection option available:
A growing practice is to judge a pole as either “good” or “bad” without taking the time to assess a remedy.
I am reminded of the story of the illustrious Mike Tyson at his peak of success. He was driving one night and managed to hit a tree (minor damage) with his 183,000 dollar Bentley. Mr. Tyson emerged unharmed, handed his keys to the police officer and said “Here, you can have it”.
That is exactly what happens when a pole with any perceptible amount of decay is being rejected.
The reality is that decay is a process. It does not happen overnight and when it is discovered, it can be at a very superficial stage, or it can be well-advanced to the point where replacement is necessary.
In reality, it is usually somewhere in between. A skilled inspector who is motivated to respect the best interests of the utility will do everything that they can to guard system safety, integrity and the economic interests of the utility. This cannot be accomplished without keeping a treatment option available. I am not referring to necessarily treating every pole, although that may be the most economically viable in the long run. I refer to the poles that have superficial or a lesser amount of decay which would either 1) Be unnecessarily rejected or 2) Left to continue their downward spiral to the point where replacement is the only option. These are the only two options available with no treatment option.
What do I mean by the “Treatment Option”? It may be as simple as addressing only those poles that show decay tendencies with a proven treatment to arrest that decay and keep them at “Status Quo”. In many cases, that may be only 2 or 3 percent of the poles inspected and influence a huge overall cost savings to the Utility.
What is the Value of keeping the Treatment option open?
Using 3 percent as a number, retreatment versus replacement on 10,000 poles inspected/year with a 1000/pole replacement cost and a 20 dollar adder for treating that same pole and keeping it in service:
Cost of Replacement = 10,000 poles x .03 x $1,000 replacement cost/pole = $300,000
Cost of Treatment = 10,000 poles x .03 x $20 treatment adder = $6,000.
Net savings = $294,000. That is 1.61 Bentleys…
The cost of allowing this option in your bid is nothing and the application can be discussed at the Pre-Job meeting. A reputable, skilled consultant will advocate this on your behalf.
Regards,
Joel