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Funding Vegetation Management

March 7, 2016
Once you have appropriately qualified people guiding and undertaking VM work, the only question that remains is how much of it do you need?

Previously, we discussed recognizing that vegetation management requires a skill set that is distinct from those held for other positions and work within a utility. Once you have appropriately qualified people guiding and undertaking VM work, the only question that remains is how much of it do you need? They can’t give you what they are capable of if they are overburdened to the extent that they are just putting out fires (literally preventing fires).

Have you determined appropriate VM funding levels?

Regardless of the degree professionalism in your VM staff, they cannot move your VM program forward if they are hamstrung by underfunding. How do you determine the appropriate level of funding? There are a number of paths to the answer.

Although we have utilities who are executing solid VM programs…..

There are electric utilities in North America that have had degreed foresters or horticulturalists managing their VM programs since the early 1970s. Not only have these utility foresters implemented good arboricultural practices but also they recognized that the maintenance frequency is determined by growth rates and things like local tree species, pruning practices, use of herbicides, etc. They tracked work completed in databases and generally have a history of numerous maintenance rotations across the service territory. In other words, the VM program is sustainable or has achieved equilibrium; there is a history of what it costs, on average, to complete one rotation through the full system.

Having read that, there will be a strong tendency for many of you to jump to the conclusion that this describes your system, VM program and circumstances.

Au contraire for too many of you.

While it will be the case for some, I’ll ask you to run a verification test. Plot your annual tree-caused outages in customer minutes or hours. If from the early eighties to mid-eighties onward your tree-caused outage trend has been level, then you can comfortably conclude that not only do your vegetation managers have a clear picture of what VM costs are but also your utility has adequately funded VM.

Now this will probably be shocking but I’m going to suggest that if all North American utilities ran this test, less than 10% would be able say, yep, we got it. Over this thirty year timeframe, some of you may have perceived a problem with your VM program, especially after the deregulation inspired cost cutting of the ‘90s and rectified it. So, if the tree-related outage trend over the last 10 years is level, you have probably rectified the problem and arrived at equilibrium. If the trend is either up or down chances are you still don’t know what your annual VM funding level needs to be to hold tree-related outages steady. Then what?

Warning Mr Smith!

This shouldn’t need saying but unfortunately, it’s warranted. You’ve hired professional VM staff. Why would you reject their advice? Oh, their solution is going to cost more money. Do you reject your lawyers’ advice regarding environmental compliance because it will cost more or your accountants’ advice regarding tax matters?

What your staff needs to tell you….

Likely, that they need an inventory, a snapshot of the amount of work and to obtain growth rates. They may offer two ways of obtaining that information, using in-house staff to conduct a system-wide patrol and to obtain growth rates and the alternative, to hire a consultant or contractor to obtain growth rates, to randomly sample the system for work load and to make statistically valid projections of the workload across the system. Before providing some guidance on which approach might be best suited for your utility, let me step back and address VM funding needs from a conceptual level.

Have you considered Growth and Hazard Trees?

The VM work that needs to be addressed is to prevent trees or vegetation such as vines, growing into conductors and creating a bridge between phases (or making any contact with energized conductors if you have tree species which exude combustible volatiles) and as far as possible, preventing trees from falling into conductors. Thus the VM workload consists of the annual growth increment and the number of added hazard trees, which number is proportional to the tree mortality rate. Based on average growth and mortality rates there is a specific amount of VM work that needs to be completed annually to keep the system in equilibrium. This will deliver a fairly level tree-related outage experience. (See Vegetation Management Concepts and Principles).

In-house or Out-house er, Outsourced

OK, returning to the detail and you are faced with the question do we undertake an inventory in-house or by contracting a consultant. Unless your in-house VM staff is skilled in statistical analysis, usually using in-house staff means patroling every mile of the system. Consultants typically sample only 2-8% of the system and can achieve a 95% confidence level doing so. In terms of inventory costs, the larger the electric system the stronger the case for using a consultant. The smaller the system, the smaller the difference in cost is between a full system patrol and the statistical approach system sampling. The reason for this is that if we use 1 mile as the sampling unit size, whether it is a large system or a small system 1 mile might have no work or be an entire mile of pruning work. As the range in variability is the same it can be determined that at a 95% confidence level 384 samples are required. So you can see that the for a 1,000 mile system almost 40% needs to be sampled whereas for a 10,000 mile system only about 4% needs to be sampled and the sampling costs are the same. There are some means to reduce the cost for smaller systems but on a relative basis statistical sampling will cost more for a small system than a large system.

Make your case to the people who count

In choosing the approach, one of the considerations is to whom do you have to sell the VM funding needs. If you are a cooperative and the board and members have always had strong confidence in cooperative staff, then an in-house inventory might work fine. However, if you need to make a case to a regulator using an independent third party contractor will have more credibility, even though the conclusion of the in-house staff and the consultant may be the same. (See From the Edge of the Precipice to Solid Ground)

Yes, Virginia, you can hold your regulators accountable

The final step of course is to actually fund VM based on the findings of the inventory. If the regulator prevents you from doing so, then they, not you, are accountable for your subsequent tree-related outage experience.

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