Make no mistake, for outside line contractors, traditional distribution and overhead line work is their bread and butter. However, there are new opportunities emerging that should be further explored.

Traditional Line Project:

Victor, N.Y.-based O’Connell Electric Co. is an outside line company established almost 100 years ago (98 to be exact). The company still does traditional yet challenging line work, but it also is being nudged by customers into newer renewable-energy projects. First, let’s examine a traditional distribution job O’Connell Electric did for a local utility.

The project included a sag mitigation in a rural area, in which transmission lines cut through agricultural fields, a state park and mountainous terrain with long, winding roads. In most cases, there was no shoulder, and poles had to be set right on the road.

According to Rick Caramante, O’Connell Electric project manager, Central Hudson—the local utility—was unhappy with one of its contractors and approached O’Connell about bidding on the job. The company landed the project and began a challenging distribution job that averaged about 15 workers and peaked at 20 during the difficult construction portions.

The sag mitigation project, which ran from February to the end of May, called for replacing 180 wooden poles with steel poles and covered more than 20 miles. According to Randy Fletcher, general foreman, the first circuit was 8 miles long; the second circuit, 7 miles; and the remaining two circuits were each 3 miles long.

O’Connell Electric’s biggest challenges were the terrain and having to close roads off to get equipment and materials to sites, Fletcher said. Workers used 100-foot buckets in a mountainous region, which was problematic. The landscape also included swampland, creeks and rivers, and poles had to be constructed on islands. It was not an easy project, so proper planning was critical.

“Access was very limited,” Fletcher said. “We actually utilized some of peoples’ yards and driveways to get at certain structures. Customer relations on our own and with Central Hudson was important.”

There were no customer outages, just transmission outages, during the lengthy project. However, O’Connell Electric had the transmissions up and running at the end of each week with a four-hour notification. All this was coordinated with three liaisons from Central Hudson.

“They were very cooperative; they’d get us anything we needed,” Fletcher said.

Because of communication and careful planning, the project went smoothly and efficiently to the point where Central Hudson loved the work and professionalism and signed O’Connell Electric for more jobs, Caramante said. According to Caramante, O’Connell Electric established a good relationship with a new customer without disappointments.

“Everything went better than expected,” he said.

“We can’t wait to do the next one. It was a good challenge, no one was hurt, and the efficiency was there,” Fletcher said.

 Stimulating Growth With The Grid:

While O’Connell Electric continues to take traditional power line jobs, it is increasingly looking to other areas for growth and to take advantage of government stimulus funding. A substantial amount of that stimulus money is being earmarked for renewable-energy projects, smart grid technologies and fixing the aging power infrastructure.

President Barack Obama’s stimulus package includes more than $10 billion in funding for new transmission projects in the United States and another $4 million in smart grid investments. The smart grid concept is a series of computer technologies that enable the grid to be more productive and cost effective. It incorporates sensors that allow utilities to shift power automatically during load and demand fluctuations.

According to “The Smart Grid: An Introduction,” a report prepared by the U.S. Department of Energy, “Even as demand has skyrocketed, there has been chronic underinvestment in getting energy where it needs to go through transmission and distribution, further limiting grid efficiency and reliability. While hundreds of thousands of high-voltage transmission lines course throughout the United States, only 688 additional miles of interstate transmission have been built since 2000.”

In short, the grid is struggling to keep up with demand and needs to be modernized. It also needs to get smarter.

According to the same report, “Given the significant concerns regarding climate change, the need for distributed solar and wind power is critical. According to the European Wind Energy Association, integrating wind or solar power into the grid at scale—at levels higher than 20 percent—will require advanced energy management techniques and approaches at the grid operator level. The smart grid’s ability to dynamically manage all sources of power on the grid means that more distributed generation can be integrated within it.”

In addition, this smart grid technology would allow rooftop solar and wind turbine owners to sell surplus power back to the grid. It is an open system that would build in more flexibility and can create a mechanism for the expansion of renewable-energy production throughout the United States. But the grid will need to be upgraded to accommodate this concept. The grid dates back to the 1950s in most cases and isn’t designed to cover the longer distances that are now required to move power.

“Modernizing the transmission grid is the major challenge we face to greening our economy,” said Edwin D. Hill, international president of the International Brotherhood of Electrical Workers.

 The (Re)New Frontier:

Consumers and the government are not the only ones concerned with an aging grid and expanding renewable-energy alternatives, such as wind and solar energy. This wave of momentum for renewable energy is opening doors for electrical contractors who have both electrical and systems capabilities. Tim Ehmann, senior project manager in the Renewable Energy Division, is leading that charge at O’Connell Electric. Demand is driving the business.

The main thrust is getting independent power producers (IPPs) connected to the grid, Ehmann said.

“Renewable energy is driving those issues,” he said. “It’s opened another market for someone who’s doing utility-based line work. Now you are going to a new private investor.”

Engineer/procure/construct (EPC) work also is driving that market’s growth.

“What design/build did for construction, we are now getting in outside line work through EPC,” Ehmann said.

According to Ehmann, O’Connell Electric didn’t reinvent the wheel but has moved into these emerging markets because of customer demand.

“Our customers are going in that direction,” he said. “We have the relationships with the IPPs who are driving the work. It’s a role reversal. We’ve adapted to the marketplace by providing what the customer needs. It’s exactly what design/build did for construction.”

According to Ehmann, 25 percent of O’Connell Electric’s 2008 business was in renewable-energy projects. That coincides nicely with the uptick in 2008 from 8,500 megawatts of new wind generating capacity to 25,300 MW, according to the American Wind Energy Association. O’Connell Electric’s renewable business likely will shrink in 2009 because of the squeezed economy, but the company is still committed to a greener way of doing business.

“We anticipate that once stimulus money filters through the federal and state levels, it will definitely enhance renewable development,” Ehmann said.

Energy-efficiency money and utility company money is driving projects right now; federal stimulus money will have an effect later for companies such as O’Connell Electric.

With production tax credits in the past being “too crazy” and tight, Ehmann said, changes needed to be made to make deadlines more reasonable. The economic stimulus package, also known as the American Recovery and Reinvestment Act of 2009, expanded deadlines to three-year terms on the renewable-energy production tax credit program, which loosens things up to better accommodate job schedules. Those tax credits drive some of the wind generation projects. Those wind power jobs were what accounted for a large chunk of O’Connell Electric’s 2008 renewable revenue.

But, Ehmann said, solar is creeping in and keeping the company very busy, mainly in small commercial and residential jobs.

“Utility-grade is popping up, and the stimulus package will probably increase and incentivize solar work,” he said.

 Maintenance Down The Road:

According to Ehmann, installation is just the beginning of long-term relationships in the renewable-energy arena. He foresees that O’Connell will be called on to support and maintain the equipment and connectivity to the grid.

“The utilities are starting to adjust, but the IPPs might be another avenue no one has experienced yet,” he said.

The independent power producers will decide who gets the maintenance work, but Ehmann is confident O’Connell Electric will be asked to bid. At the end of the day, the electrical contractors doing the installations and connections to the grid are in the best position to help the IPPs maintain and operate the equipment.

There are a lot of opportunities in renewable-energy projects, from wind to solar to hydroelectric generation. President Barack Obama has vowed to double renewable-energy production within three years of taking office. It is a market ripe for electrical contractors. ECs will be one of the key beneficiaries, especially if they get in at the onset with their professionalism and ability to successfully tackle these jobs. In difficult economic times, diversifying into specialized renewable-energy work is just the kind of outside-the-power-lines thinking that makes the difference between a good year and layoffs.

O’Connell Electric presented its turnkey electrical solutions for wind farm construction, testing, commissioning, and maintenance at WindPower 2009 in Chicago this past May.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Wind Power 2009 is the largest collection of wind professionals in one place anywhere in the world.  Growing along with the expanding wind energy industry, which installed 8300 MW in the United States during 2008, WindPower 2009 offers more than 50 educational sessions and three preconference seminars including our new Wind Power Supply Chain Workshop.  It provides the latest information on wind energy technology, industry trends and policies plus unparalleled networking opportunities for wind professionals.

Wind Power 2009  blew in like a storm with over 23,000 Attendees and 1,280 Exhibitors.  Crowds of attendees were seen on every aisle from front to back and the far sides of the exhibition hall.  The hall was buzzing with contract deals, business ventures and potential business partnerships and vendor relationships.

Companies market themselves to attendees representing all facets of the wind energy industry including:

—Project developers and operators

—Utilities

—Government agencies

—Academic institutes and non-profit organizations

—Construction and transportation companies

—Turbine manufacturers

—Component and accessory equipment suppliers

—Consulting companies

—Financial and investment institutions

—Construction and transportation companies

—Insurance companies

—Landowners

—Law firms

Employees arriving at the Empire State Plaza on Monday March 2 could not fail to notice something unusual going on between the Agency Buildings and Swan Street. A 34,500 volt transformer had been installed in the main substation on the north side of the Empire State Plaza over the weekend. The project was facilitated through the use of an eye-catching 600-ton heavy-duty construction crane, which enabled removal of the old unit, and transported the new replacement unit to its destination in a below-grade vault inside the Plaza. The retired unit had been installed about 40 years ago; its successor will help ensure reliability and efficiency at the downtown Albany complex.

OGS funded the $1.3 million project as part of its $73.5 million Capital program. Contracting services were provided by O'Connell Electric of Victor (Ontario County). The transformer was manufactured by Niagara Transformer of Buffalo (Erie County).

Thanks to careful planning and deft adaptation to challenges encountered on the scene, the project was completed successfully.

It was an unusual marriage between a field contractor and an accountant that propelled O’Connell Electric Co. Inc. into becoming one of the largest private employers in Rochester.

Since Walter Parkes hired Victor Salerno as controller in 1971, annual revenues at the firm have gone from less than $2 million to more than $110 million last year. The key to that success, people close to the firm say, is the candor and focus both men share.

“There was a no-holds-barred relationship,” says attorney Joseph Turri of Harris Beach PLLC, who began working with O’Connell Electric some 30 years ago. “It was almost like a marriage between a man and a woman who left nothing unsaid.”

Parkes is chairman of the 500-person company, and since 2006 Salerno, 64, has been CEO.

“I was moved to vice president and then executive vice president and then CEO. Who knows what Walt saw in me,” Salerno recalls. “He was a gunslinger back then.”
Parkes is a great manager and mentor, Salerno says.

“We’ve had a good relationship. We could have some spirited debates, but at the end of the day it worked out well,” Salerno says. “We didn’t always agree, but between my views and his, we ended up doing the right thing.”

In the business sense, doing the right thing meant strategic, diversified expansion and a willingness to do whatever it takes to do the job right.
In 2003, the firm began adding onto its renewable-energies division with the acquisition of a wind farm business in Syracuse; last year the firm added Rochester Solar Technologies LLC.

Rochester Solar for the first time added residential customers to O’Connell’s client roster.

Already, O’Connell has completed more than 100 installations and recently received its largest contract to date, a $300,000 solar installation for a local tax-exempt organization that Salerno declined to name.

“We are doing a lot of solar residential right now. Tons of it,” Salerno says. “There are tremendous rebates through NYSERDA. Many people believe it’s the right thing to do, and they’re willing to pay a little extra. There is a payback on it for utility rebates.”

The division is an example of O’Connell’s larger strategy of sticking to niche markets where the competition is slim and the potential is wide.

“If we’re not the largest (solar) installer in the state, we will be. And we’re going to be one of the largest in the country,” Salerno says. “It’s a service that a lot of people are looking at, and since oil prices went through the roof and gasoline prices followed, I hope a lot of people have learned a good lesson.”

The rising fuel prices put pressure on consumers and business owners alike, he added. With a fleet of 400 vehicles, O’Connell had to rework routes and invest in alternative-energy automobiles to cope.

“It was a disruption to us,” Salerno says, but the company does not anticipate cutbacks. Its financial footing is excellent, he says, and profits are stronger than ever.

“We try to take advantage of the opportunities,” he says. “Our year end in February, we’re going to have our best year in sales and profits ever - and the company has been around since 1911.

“With the new (U.S.) president and most elected officials talking about infrastructure and renewable energy - that’s what we do here. We’re in the sweet spot,” Salerno says.

The Expansion

Housing its expansion is the next issue for O’Connell.

The company is based on 7.5 acres in Victor, where the firm has built three additions since moving there from Mt. Hope Avenue in the 1970s.

“Eight years ago was the last one. We put a two-story addition on the back, and we’re full again now. I don’t know what we’re going to do. I don’t want to put on another addition if I can help it. Let’s say, we’re getting by for now, but we’re awfully close to being maxed out.” Salerno says.

At any given time, the firm has 50 to 70 staffers in Victor, working at the company’s repair garage or in the firm’s administrative offices. Including its offices in Buffalo and Syracuse and employees in the field, the firm’s staffing levels peaked this summer at 575 and since have settled at 500, in response to project cycles in the industry.

To maintain focus, Salerno meets weekly with project managers from all three locations to keep business divisions in line and working in concert. The range of O’Connell’s work across its divisions is vast but specialized.

Business stretches across multiple categories and subdivisions but most basically includes electrical construction, service, communications, renewable energies and the company’s line division.

The line division, for example, maintains and builds electrical transmission and distribution lines—underground and aboveground. The firm frequently is called to provide emergency storm restoration work.

Involved Locally

Juggling the demands at O’Connell is not Salerno’s only concern. Locally, he is well-known for his community activism, in which people say he exercises a knack for coordinating groups to achieve common goals.

He is a member of the board of trustees at St. John Fisher College and the Rochester Museum & Science Center, the latter of which he is helping to steer toward relationships with nearby non-profits to one another’s benefit.

It is one of his talents, says Turri of Harris Beach. “It also has worked for him at O’Connell Electric, achieving synergies and consensus and moving forward.” The balancing act he does and the commitment he displays impresses RMSC president Kate Bennett.

“I find that he has a knack for keeping his eye on what’s important,” she says. “His focus is extraordinary. For example, he and I touch base frequently, but we always have a conversation at the end of the week that wraps up our work and tees us up for what we’re going to accomplish the next week.

“He cares deeply and wants us and the other organizations that he’s involved with to be successful,” Bennett adds. “I think it’s a combination of caring and willing to roll up his sleeves and get the job done.”

For his contribution to St. John Fisher, Salerno’s alma mater, the Bittner School of Business recently awarded him the Dean’s Medal for Outstanding Service.

Salerno was especially thrilled that his parents, now in their 90s, were able to attend.

Just out of college, and newly married, Salerno and his wife, Eileen, moved into his parents’ house in East Irondequoit, not far from where his parents still live.

Just after his return from their honeymoon, Salerno discovered he had been drafted for the Vietnam War. Ultimately, an existing ulcer from childhood saved him from the draft.

While he waited for a decision to be rendered he started a short stint at Xerox Corp.

A few months later, Salerno and his wife moved out on their own and he began his accounting career at CPA firm Haskins & Sells (now Deloitte & Touche LLC). He worked there until he joined O’Connell almost six years later.

Salerno has spent close to 40 years at O’Connell, a family firm where, instead of simply following orders, Salerno was willing to speak out about his ideas.

And the Parkes family liked that, Turri says. In addition to Walter, his children Susan McNally and Thomas Parkes also lead the firm.

“Tom Parkes is our chief operating office. He’s been with us for a long time, and he’ll be CEO when I retire—which won’t be just yet,” Salerno says.

Through the years, Turri says he has he has grown close to the Salerno and the Parkes families.

“(The Parkeses) appreciate frankness, and it’s one of the reasons why this family corporation has succeeded where so many others fail,” Turri says.

The goal is to maintain the company’s reputation, which Salerno says everyone at the company strives to do.

“A company’s reputation is one of the things you must cherish and guard,” he says. “When you’re on top, and we’re one of the top 50 contractors in the country, you’ve got everybody taking shots at you. People love to tear down successful people.”

“Honest” and “ethical” are two of the adjectives William Goodrich uses to describe Salerno, whom he says is loyal and committed at work and play.

“We have been working together (in this industry) for many years and we have also sat on a few boards together, including the Builder’s Exchange and the United Way annual campaign committee,” says Goodrich, president and CEO of LeChase Construction Services LLC.

“He is conscientious and giving by nature--always looking out for the people around him,” Goodrich says of Salerno.

One regret Salerno has is that he did not start volunteering sooner in his career.

“I know I have a lot on the table,” he says. “But that’s one thing I really recommend to young people. Of course, you have to get your career on track, but we always have time to (get involved in) at least one thing. It exposes you to new ideas, new people. You find out as you get older, a lot of things are driven by relationships. It’s critical to people’s success.”

In addition to his community role, Salerno has an active personal life. He loves fishing and boating at the family’s cottage on Canandaigua Lake. And he says he begun to dabble in golf.

Working out an hour a day, three days a week in his home gym is one way Salerno says he maintains the energy to do all he does.

For the last 20 years, he has been working out religiously, he says, though it is but one of his favorite activities.

The Pittsford resident loves spending time with his daughter’s three children and occasionally even manages to make it to their after-school activities.

Salerno also has a son, an attorney at an international law firm in New York City. Whenever he can, Salerno and his wife go down to visit.

“We also enjoy working around the house. We just bought a new house last year. It wasn’t my idea, it was my wife’s, but we’ll be able to entertain there,” Salerno says. “We had 30 people over for Thanksgiving.”

He hopes too he can play host to more professional events at home. As it is, he spends most nights of the week out at various business-related functions.

“This week I was out Sunday, Monday, Tuesday and Thursday. Everything is business since I’ve always got my ear to the ground on something. But it’s important. You’re meeting people and nurturing relationships, and that’s part of the job as CEO,” Salerno says.

“You don’t work and then go home. But I enjoy it immensely.”

Lourdes Hospital is embarking on a $70 million, three year construction project to update and expand the hospital.  After three years of planning and designing, Lourdes master facility project—now called Mission 2012: Building Tomorrow’s Healthcare Today will bring new technology to Lourdes and provide patients with a more streamlined system of obtaining outpatient services.  The project consists of multiple construction phases, beginning in March 2009 with the estimated completion in October 2012.

The project will include:
• Expansion and modernization of the Emergency Department
• Addition of a new open MRI
• Addition of two new surgical suites
• FEMA approved and funded flood wall
• Construction of a new Ambulatory Care Building that will house Lourdes’ Gastroenterology (GI) Suite, a registration area, an outpatient blood draw lab area, a pre-admission testing area and Lourdes Rehabilitation Department
• A new two-story main entrance connecting the new Ambulatory Care Building and the existing hospital
• Expansion, redesign and modernization of the Radiology Department
• A multi-story parking garage will be the final phase beginning in 2012
 
Work on the project formally began on April 1st.