Labor resource planning for substation maintenance

Author: Jeffrey Phelan

10/01/2006 - Volume III - Issue II

Electric transmission and distribution utilities face the challenge of maintaining and upgrading an aged and stressed infrastructure with fewer and fewer in-house labor resources. The previous decade's wave of deregulation and consolidation had a dramatic effect on the availability of trained labor even against a backdrop of healthy increases in demand for electricity.


The need for T&D utilities to outsource at least selective substation O&M and construction activities is undoubtedly on the rise for the next several years. Utilities should view outsourcing as an opportunity to review and improve upon their current practices. Done correctly, selective outsourcing utilizing committed partners can help utilities survive in today's "do more with less" paradigm.

Figure 1: US Bureau of Labor Statistics and NERC 2003-2012 Reliability Report


Furthermore, a substantial portion of the T&D equipment in service has exceeded its original design life. The peak of capacity additions to the transmission grid occurred over 30 years ago. As investments in added generation capacity were made in recent years, they were not matched by the historical ration of spending in transmission (see Figure 2).

Figure 2: Source: NERC 2003-2012 Reliability Report


This under-funding in T&D is partly attributed to networks being over-designed in the 1970s. Much can be blamed on underinvestment in replacing and upgrading an aging infrastructure in more recent years. Simply stated, the industry has been retiring workers at a faster rate than its equipment. That same older equipment left in service is being worked harder and stands at an ever increasing risk of failure.


Squeezing Assets


Utilities have implemented a number of methods to squeeze more out of their installed assets. Some of these methods include applying advanced tools like state estimators to increase efficiency of operations 2, switching to condition-based and reliability-based maintenance strategies, overloading equipment 3, and simply deferring scheduled replacements. This has allowed most utilities to extend the service life of their critical power transformers and circuit breakers beyond their original 30-40 year expected service life.


With due respect given to these methods, many in the industry wonder if we have reached the point of trying to get blood from a turnip. Inherent in deploying these "asset squeezing" methods, the risk of equipment failures has increased. Both actual and predicted future failures support this conclusion (see Figure 3).

Figure 3: William H. Bartley P.E., Hartford Steam Boiler Inspection & Insurance Co., "Life Cycle Management of Utility Transformer Assets"


Equipment maintenance and replacement


To mitigate the risk of equipment failure, many utilities are actively implementing multi-year programs to either replace aged infrastructure or conduct maintenance on these assets. Replacing oil-filled circuit breakers with new SF6 breakers are of particular interest. Key drivers behind these equipment replacement projects are:

  • Mitigation of financial risk of lower energy sales due to forced equipment outages

  • Addition of new generation capacity may require replacing older circuit breakers with new circuit breakers rated for higher fault-current duty

  • Third party entities, such as ISOs, mandate that overdue maintenance backlogs with new circuit breakers rated for higher fault-current duty

  • Third party entities, such as ISOs, mandate that overdue maintenance backlogs be executed or aged assets be replaced

  • T&D equipment, particularly in high duty applications such as circuit breakers on capacitor banks, have simply reached the end of their useful life.

More Work - Less People


With funding for equipment maintenance and/or replacement projects getting approved, the challenge of staffing qualified field resources to execute this work becomes greater. One might expect a corrective swing of the pendulum to impact Figure 1. In other words, utilities in-house staffing could ramp back up in reaction to this need. So far this decade, that has not been the case. Employment in the T&D sector has continued to decline...

Figure 4: Source: US Bureau of Labor Statistics (USBLS)


...and likely will not increase in the future.


Because large mergers continue to take place, analysts do not predict significant staffing increases to T&D field labor over the next eight years. The US Bureau of Labor Statistics has this to say regarding their 2006-2014 employment projections for T&D labor:

  •  Very little employment growth is expected among electrical powerline installers and repairers. Despite consistently rising demand for electricity, industry deregulation is pushing companies to cut costs and maintenance, which tends to reduce employment.
  • Employment of electrical and electronics installers and repairers, powerhouse, substation, and relay [sic] is expected to decline slightly. Consolidation and privatization in utilities industries should improve productivity, reducing employment.

One might argue that some of the larger US utilities are addressing the labor need by re-invigorating recruitment and training programs for skilled laborers like linemen. However, these programs may provide only enough staffing to backfill more experienced personnel taking early retirement. While this situation is endemic of the baby boom demographics of the entire US workforce, it hits the electric utility business harder than other industries. The average age of utility craft workers is 50 years old, the highest average age for any industry. According to research conducted by Carnegie Mellon University Electric Industry Center, an astounding 40%-50% of current electric utility workers will be eligible to retire by 2010.


External partners


Ruling out a net hiring upswing, utilities have only two choices in executing their burgeoning O&M and construction work backlog: increase productivity and/or develop external partners to execute work. One drastic approach that has been applied primarily outside the US is to separate a utility's entire network O&M organization into an independent Network Services company that is sold to a third party. This model basically leaves the utility responsible for ownership and management of the network assets, but it leaves the actual provision of network services to the newly formed third party. A major benefit to the utility of this approach is that it generates short-term revenue from the divestiture and dramatically reduces the utilities workforce as employees are shifted into the third party's organization. While this approach has been tested in the US market, most T&D utilities consider network services, such as substation maintenance and equipment replacement, among their primary or secondary competencies. Therefore, this article discusses delivering peak labor solutions to execute overflow work in these areas.


Long-term strategy


A long-term labor strategy for a typical T&D utility may look like the below example.

Figure 5: Typical T&D utility long-term labor strategy


A core, in-house staff of skilled labor is retained to execute the base load of work expected to be done year after year. Peak years (or seasons) of labor demand for specific initiatives, like replacing major substation assets, will require relaying on outside service providers. The challenge of implementing the above strategy is deciding what activities should  be outsourced and how to peel that activity out of the organization's existing way of doing business.


One approach is to outsource activities to a provider that has a particular expertise in a limited activity, an original equipment manufacturer for example, such as installing or maintaining the equipment it supplies. Injecting such subject matter expertise can provide the desired productivity improvements through reducing overall installation time and start-up failures or introducing low-cost diagnostic technologies.


Before developing a work specification to outsource an activity, it's important to develop a process description with a clear understanding of the various internal departments that are involved (directly or indirectly) in that process. Without mapping their existing process, a utility runs the risk of their outsourcing partner not satisfying all the various departments' requirements. A typical replacement task/department matrix might look like :

Figure 6


Typically, outsourcing activities that can be carved out from one department's scope have the best chance of being executed flawlessly. With that in mind, a common outsourcing scope would be items five through ten. However, items five through ten as well as two (engineering) and three (procurement) can also be successfuly outsourced provided sufficient pre-planning is done involving personnel from the engineering, procurement, maintenance, and I&C departments. Also, by involving the outsourcing partner in the above task/department mapping, new processes may be implemented that reduce manpower requirements. For example, many utilities include power factor testing in the final test scope when installing new SF6 breakers. While power factor testing was useful in the days of oil breakers with condenser bushings, its relevance with SF6 breakers is questionable. Removing this task from the commissioning scope can save eight man-hours per circuit breaker with no loss in reliability.


Finally, safety should always be a top priority. Utilities have worked hard at building thorough safety programs. Despite the inherent risks, the industry has maintained a good safety record relative to other industries. Part of the evaluation process to select a service provider should include a review of their safety program and OSHA recordable rates. In the above example, it is recommended that the utility always retain switching, grounding, lock-out, and tag-out as part of their responsibility (items 4 and 12).


In conclusion, the need for T&D utilities to outsource at least selective substation O&M and construction activities is undoubtedly on the rise for the next several years. Utilities should view outsourcing as an opportunity to review and improve upon their current practices. Done correctly, selective outsourcing utilizing committed partners can help utilities survive in today's "do more with less" paradigm.



  1. Life Cycle Management of Utility Transformer Assets, Bartley, Hartfor Steam Boiler, 2002. Peak year of GVA additions in the U.S. was 1974.
  2. NERC Reliability Assessment 2003 - 2012, p.43.
  3. A recent survey of 63 member utilities of the Edison Electric Institute (EEI) Washington, DC, regarding transformer loading practices revealed that over 75% allowed short-term overloading of their transformers. They survey revealed that many utilities use dynamic loading methods that accelerate a transformer's aging process in order to obtain additional output during contingency conditions.
  4. Frost and Sullivan 2005 Report on North American MV and HV Breaker Markets.
  5. Transmission & Distribution World, August 2006, p. 31. Quote from Paul McCoy, COO of Trans-Elect, "...there will be a growing need to update infrastructure we already have. This will include updating protective relaying, controls, communication, and data mangement, in addition to the replacement of major power components such as transofmers and circuit breakers... Overall, transmission capital investment could easily be sustained at $7 to $9 billion per year for quite a while."
  6. NERC Reliability Assessment 2003 - 2012, p.47.
  7. U.S. Transmission Capacity: Present Status and Future Prospects, p. 22, August 2004 report prepared for EEI and US DOE by Eric Hirst. PJM's 2003 plan includes more than 200 transmission upgrades to address reliability requirements through 2007. The projects include "replacing transformers to remedy thermal overload problems,... and replacing circuit breakers where their fault interrupting capability is inadequate."
  8. Electric Perspectives, September/October 2005, An Aging Workforce, Bridgers, Johnson.
  9. U.S. Department of Labor, Bureau of Labor Statistics Fatal occupational injuries report 2005. 

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