Thoughts to Ponder….
A Steel Pole Perspective
by
George Tamez, PE
Why Steel?
Evaluation
• Strength
• Environmental
• Customer Acceptance
• Inventory & Handling
• Lineman Concerns
Streng
th
Enviro
nmen
tal
Custom
er
Accep
tance
Linemen
Conce
rns
Inve
ntory
& Han
dling
D
Steel
Wood
Intangible Decision is Steel
So What is the Problem?
NPV: Time & Money
• New Installation
• Replacement Accessible
Steel – New Installation
1500
10 12 1520 24
29
3000
10 20 30 35 45 55 65 70
NPV s = $ 1537
112WACC= 7% Inflation= 2%
Wood – New Installation
950
25 30
530
48 5870
36
1060
10 20 30 35 45 55 65 70
NPV w =
2100
$ 1235
WACC= 7% Inflation= 2%
Steel – Replacement Accessible
2100
10 1220 24
29
3000
15
10 20 30 35 45 55 65 70
NPV s-r =
112
$ 2137
WACC= 7% Inflation= 2%
Wood – Replacement Accessible
1050
25 30
530
48 5870
36
1060
10 20 30 35 45 55 65 70
NPV w-r =
2100
$ 1335
WACC= 7% Inflation= 2%
Tangible Decision is Wood
•New Installation
(NPV s) > (NPV w) by ~ $ 300
•Replacement Accessible
(NPV s-r) > (NPV w-r) by ~ $ 800
• 1,566 sq miles
• 7,450 OH ckt miles
• 360,000 poles
Net Yearly InstallationsWood vs. Steel
0
1000
2000
3000
4000
5000
6000
7000
Amount
1997 1998 1999 2000 2001 2002 2003 2004
Year
WOOD STEEL
Wood decreases by avg. of 27%
Steel increases by avg. of 46%
What goes up must come down!
Breakdown of Wood Installations
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2001 2002 2003 2004 2005
CIVIE SBDVE SIMPE
System Improvements Contributing to Increase Use of Steel
0
500
1000
1500
2000
2500
3000
2001 2002 2003 2004 2005
CIVIE SBDVE SIMPE
Could We Go Cold Turkey?
Customer Commitments
Agreements to Use Steel
• San Antonio Capital Civic Improvements • Suburban Cities
* Universal City* City of Live Oak* City of Schertz
• Military Bases* Camp Bullis/Fort Sam Houston* Brooks
• Conversion/Beautification Projects
Where do we go from here?
Recommendation are…
• Discontinue use of steel on system improvements,
• Continue use steel for City of SA Civics/Political,
• Continue use steel for reimbursable customer requests,
… but depends on budget, price of steel.
“ Tis easy to See,
hard to Forsee.”
~~Benjamin Franklin.