General

OPPD creates new alliance to help utility build more quickly, efficiently

Demand for electricity is growing worldwide, and pretty much every utility is scrambling for the equipment and qualified professionals needed to build transmission lines and substations. 

That competition has raised material and labor costs industrywide and slowed the pace at which utilities can deliver major projects. OPPD is no exception, of course, but the utility recently adopted a new way to accelerate some of that work. 

This year, the utility launched a Transmission and Substation Contract Alliance. The alliance changes how OPPD partners with contractors to build new infrastructure that will meet eastern Nebraska’s electricity needs. The alliance emerged as OPPD’s engineering, program management and supply chain teams looked for ways to reduce risk and create better results in managing the utility’s large construction portfolio.  

Using an engineering certificate approved by OPPD’s board, the group created an alliance of contractors who have agreed to consistently bid on OPPD transmission and substation work. This engineering certificate streamlines the way OPPD secures contractors. That allows for collaboration earlier in the process, often during the design phase of work. 

Establishing a longer-term relationship helps OPPD secure a contractor’s workforce and supplies ahead of time. Earlier collaboration minimizes costly and time-consuming last-minute design changes. 

“By moving to a relationship-based alliance, we’re locking in critical contractors earlier and aligning design decisions with real-world supply constraints,” said Shane Hanson, OPPD’s director of Engineering. “That early collaboration turns supply chain risk into schedule certainty – fewer change orders, stabilized costs, and crews and materials ready when we break ground.” 

The new OPPD alliance focuses on critical transmission and substation work that ensures a smooth flow of electricity to all customers and is modeled after alliances that other utilities across the nation have built.  

Huge growth

The alliance approach to managing work comes amid huge demand growth for OPPD and new regulatory requirements, spurring historic investments in infrastructure upgrades and expansion. 

Over the next seven years, OPPD expects a sixfold increase in new substation projects. The utility also anticipates a more than 200% bump in substation expansion projects. Over the next decade, OPPD forecasts a fourfold increase in transmission line projects. That adds up to more than 400 miles of new transmission across all voltage classes. 

Supply chain challenges and competition for resources have made it more challenging to acquire new transformers, poles, wires and other infrastructure needed for plants, substations, and transmission and distribution lines. 

Over the next decade, OPPD expects to invest more than $1 billion in new infrastructure to support the reliability and load growth requirements. 

“With the amount of work we have ahead of us, we knew we couldn’t operate business as usual,” said Kelsey Haas, OPPD’s Major Projects program manager for transmission and substation builds and who led the team through the process. “We have to forge new paths that allow us to execute with consistency, efficiency and flexibility so we can deliver for our customers and community.”  

Fierce competition

Long-term alliances give OPPD greater stability and predictability with its workload and reduce unnecessary delays, saving the utility money. OPPD already has experience with multiyear agreements for distribution construction and has seen good results in quality, flexibility and relationships. 

Hanson said contractors are receptive to forging long-term alliances because the process allows them to secure more work for a longer period of time, giving them greater certainty with their budget and resource planning, and allowing them to be a bigger part of the community they are working in. One of OPPD’s recent requests for proposals for a long-term alliance partnership attracted 12 respondents. 

“We’re moving in the direction that the industry wants to go,” he said. “We’re also delivering on our obligation to our customer-owners to meet the growing demand within our communities. Having this ability to acquire and schedule resources to build these transmission lines and substations is part of that commitment.”