Turn-key Versus Site Erected. Transmission, Distribution

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1 Turn-key Versus Site Erected Substation Control Buildings Edison Electric Institute Transmission, Distribution and Metering Conference Darren LePage Director, Sales and Marketing Keystone Electrical Manufacturing

2 Building Construction Types Site Erected Pre-fabricated (aka Pre-assembled) Turn-key

3 Site Erected Building Pre-engineered metal Architectural masonry Constructed at jobsite / stick built Basic electrical mounted and wired at jobsite Protection and control installed wired and tested at jobsite

4 Pre-fabricated Building Metal or masonry Manufactured in a factory Basic electrical mounted and wired at the factory Cable tray installed at factory Protection and control installed wired and tested at jobsite

5 Turn-key Building Metal or masonry Manufactured in factory (pre-fabricated) Basic electrical installed at factory (by building manufacturer) Protection and control installed wired and tested at factory

6 Productivity Comparison Site Versus Factory Factory is a more structured environment than construction jobsites Material and tools more readily available in a factory Lean manufacturing can be implemented in a factory Factory is more able to take advantage of task repetitiveness Productivity advantage applies to manufacturing of building and electrical equipment mounting and wiring (basic and protection and control)

7 Key Indicators Wiring Area Minutes per Connection 12 week moving average

8 Resource Utilization Grid modernization is requiring more new and retrofit substation projects Aging engineering workforce Safety programs for construction are more onerous, requiring more resources Doing more with less

9 Resource Utilization Turn-key building requires one RFQ and one purchase order to place and expedite Turn-key outsources some project management, detailed design, purchasing and assembly coordination functions Documentation problems can be handled more efficiently in a factory

10 Quality Comparison Manufacturing has a more intense focus on quality than construction Factory labor stable with consistent work assignments (task repetitiveness) Construction labor mobile with inconsistent work assignments potentially resulting in varying levels of quality

11 Cost Comparison Comparisons between construction methods difficult due to infinite variables related to building size, number of panels and complexity of project Construction labor varies depending on location and union/nonunion (factory labor doesn t vary) Intra-building protection and control and communication requirements vary Termination/Marshalling a a cabinet(s) or pull box

12 Cost Comparison Assumptions Site preparation requires concrete slab for site erected, turn-key can use piers Site erected building cost includes; Metal buildings by well known manufacturers Material and installation of basic electrical Site erected construction costs Off loading cost of turn-key building compared to receiving and material handling costs of site erected building and the loose equipment, including P&C panels, considered a wash

13 Cost Comparison Assumptions Manufacturing labor considered 40% more efficient than construction labor Labor rates, fully burdened: Manufacturing at $50, Construction at $95 Additional administrative and engineering costs for site erected covers additional RFQs, purchase orders and expediting Additional jobsite supervision for site erection of basic electrical installation a and protection o and control o panel installation, a inter- panel wiring and cabling to termination cabinet

14 Cost Comparison Cost Item Turnkey Site Erected Site Preparation $3,000 $13,000 Building Cost including basic electrical $83,000 $61,000 Rigging g and material handling no difference no difference P&C panel install, Intra building wiring and cabling (includes termination cabinet) $6,200 $16,625 Shipping costs no difference no difference Administrative and engineering costs differential $15,000 Protection and control panels no difference no difference Jobsite supervision differential $14,000 Total Cost Comparison $92,200 $119,625

15 Other Considerations Logistics of getting turn-key building into substation Construction schedules

16 Logistics Size limitations for pre-assembled and turn-key buildings Transportation and off-loading of pre-assembled and turn-key buildings can be challenging Shipped across North America, but east coast is more limiting

17 Construction Schedules Timing of engineering documentation, especially wiring diagrams Site erected building deliveries typically faster than pre- fabricated and turn-key

18 Annual Production 2010 vs Relay ypanels Control buildings 12 27

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