From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Sunday, November 06, 2011 8:28 PM 

To: Kenneth Winder 

Cc: Corkran, Jerry L; Robert Berman; Christopher Bolduc; Richard Parker; rick.anderson@faypwc.com; 

tballo@earthjustice.org; ScottB@lvmetals.com; john.caskey@nema.org; john.cymbalsky@ee.doe.gov; 

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carlosgsiqueiros@eaton.com; Raba, Jim 

Subject: Re: A Note on Pole Change Out Cost: 

Ken, 

Does your Coop really issue 7% bonds? What's your rating? Can you put my email on your 

distribution list for your next issue? 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com

On Nov 6, 2011, at 7:40 PM, Kenneth Winder wrote: 

Jerry and Committee: 

 At our Cooperative, we use Western Red Cedar and try to get 60 years from a distribution 

pole. We can achieve that because of the type of wood that is available and the climate in the 

Rockies. That is not the same in other parts of the country. Other utilities can respond with their 
experience. 

 We use 7% as our current cost of money in our economic studies, if we are borrowing. 

Ken Winder 

On 11/6/2011 2:40 PM, Corkran, Jerry L wrote: 

Knowing not too much about pole life, I would expect the poles will last about 60 years provided the

transformer weight and wind profile does not increase.  

 Would some of the utility people who have knowledge about give us an estimate of the typical

pole life?

 Does the pole life vary across the country from the wet to the dry regions?  

 Also the utility person is requested to comment about what is their cost of money.  

 Is the 7% cost of money about right as we have suggested?

Regards,

                        Jerry Corkran

Jerry

From: Robert Berman [mailto:bermaneconomics@gmail.com] 

Sent: Sunday, November 06, 2011 12:23 PM 

To: Christopher Bolduc 

Cc: Richard Parker; rick.anderson@faypwc.com; tballo@earthjustice.org; ScottB@lvmetals.com; 

john.caskey@nema.org; Corkran, Jerry L; john.cymbalsky@ee.doe.gov; adelaski@standardsasap.org; 

Teckman@nwcouncil.org; gbf1@pge.com; carlos.gaytan@ge.com; rgreeson@federalpacific.com; 

bruce.r.hirsch@bge.com; jhodge@howard.com; mhyland@appanet.org; dave.millure@metglas.com; 

snadel@aceee.org; wes.patterson@us.abb.com; Eric.Petersen@aksteel.com; 

Raymond.Polinski@atimetals.com; artrosenfeld@gmail.com; srosenstock@eei.org; rroy@nrdc.org; 

robert.saint@nreca.coop; chuck.simmons@pgnmail.com; BermanEconomics@gmail.com; 

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zhimei.luo@navigant.com; emily.marchetti@ee.doe.gov; mrivest@navigant.com; gjrosenquist@lbl.gov; 

charlied@uus.org; phopkinson@hvolt.com; James.Lass@cleco.com; maheshsampat@bellsouth.net; 

DYoung@energy-solution.com; chad.kennedy@us.schneider-electric.com; eduardorobles@eaton.com; 

vijay.tendulkar@onyxpower.com; thomas.patzner@us.schneider-electric.com; 

carlosgsiqueiros@eaton.com; Raba, Jim 

Subject: A Note on Pole Change Out Cost:

 

Hi Chris, 

 

A quick note on the nature of pole change-out costs, and to what extent efficiency increases are 

cost-causitive. 

 

Poles do not last forever. They have a limited life. Indeed, many utilities are replacing / 

reinforcing older wood poles as part of a general infrastructure improvement program. 
Commonwealth Edison is currently replacing 15,000 poles for just this purpose, according to 

Terry Donnelly, the Exec. VP for Operations. 

 

While an increase in efficiency may hasten the change-out, under some conditions, it is not costcausative of a pole change -- only of moving that change forward in time. For example, if a pole 

required replacement this year anyway, and there was a more efficient transformer to be 

installed, one would not suggest the transformer was responsible for the change. More generally, 

if a pole change were required 10 years earlier than otherwise due to a heavier transformer, the 

cost would be the time value of money over the 10 year period, not the full cost of the pole. This 

time value of money should subject to sharing for the likelihood of a joint pole cost sharing 

arrangement, and included at its expected value (as you are currently doing). 

 

Hope this helps. 

Regards,

Robert A. Berman, Principal

Berman Economics

www.BermanEconomics.com

1915 Grand Court

Vienna, VA 22182

703‐281‐0490

703‐655‐8398 (cell)

BermanEconomics@gmail.com