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.