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Expenses to Consider for Utility Project Planning

As a utility project manager, you have a huge responsibility. You have to budget for your utility projects.


In this budget, you must estimate costs for the entire project, merging quality and affordability, to make a project budget that your boss will approve.


As if this is not hard enough, you have to recall each expense that your project will incur. This is not an easy task because there are so many expenses involved in a utility project! But if you forget an expense, your budget will be short, and you will have to ask for more money part way through the project.


We understand your struggle, so we want to help. We have compiled a list of some key expenses you should consider as you are planning for your next utility project.


Indirect Costs

Indirect labor costs can impact your utility project budget. As one of the tricker expenses to estimate, indirect costs are not directly associated with the utility project, though they are still related. Understanding indirect cost rates are critical.


One indirect cost to consider includes insurance. Your company probably pays a premium for several different types of insurance, including health insurance, general liability insurance, and workers’ compensation insurance. As utility projects can be dangerous, you need your project to be covered by insurance. So that is an indirect cost you may need to account for in your project budget.


Another indirect cost is equipment repairs and maintenance. Your equipment may be in peak condition, but something could happen, and eventually, everything needs maintenance. To make sure you can get the necessary equipment fixed, include some money in your budget for equipment repair.


Labor Costs

Labor costs are a critical part of your project budget as you have to pay your team members for working on the project. The complicated part is that there can be variable labor costs.


Most likely, your company will have an hourly base pay rate that you will give to each team member working. So, estimate the number of workers you need for the project, which you can do by researching past projects and defining your project scope. Then, determine how long the project will take you. Multiply those three numbers together, and you will have a cost estimate for the project labor.


Also, know your company’s policy on payroll taxes and union costs so you know how those indirect costs factor into the overall labor cost you must budget for.


Real Estate Costs

If your company needs to buy or rent land for the power substation or other utility project, real estate costs should be a part of your project budget.


This cost will fluctuate highly based on the real estate market and whether you are buying land from the government or from private owners. Research the current state of the market to estimate how much you will spend on land.


Material Costs

These are direct costs that you will incur from purchasing the materials for your utility product. The material costs include the price of utility poles, transformers, pilings, pipes, and other materials.


You can potentially save money here based on what type of pole you choose. Wooden poles will be cheaper than steel or concrete poles, so they can help your budget. But you must also consider that wood poles have a shorter service lifespan, so they may not save as much money in the long run. You have to decide what is a cost-effective yet high-quality material choice for your specific utility project.


Equipment Costs

When doing a utility project, there are many equipment costs—direct and indirect—that you must account for.


First, there is the fee to rent equipment for your specific project. Estimate how long you will be using the rented equipment so you can more accurately budget a renting price. Then, there is the price of fuel for each piece of equipment. Plan to purchase more than enough fuel to last the duration of your project. Finally, include the fee for professional operators if none of your crew is trained to operate a certain piece of equipment.


Also, remember to budget for the indirect equipment maintenance costs here. You want your equipment running smoothly, so you need to be prepared if something were to break down.


Once you have factored in all these costs, you should have a good estimate of your total equipment cost.


Professional Services Costs

In a utility project, you will probably contract with several outside services. The best way to determine this is to look back at similar projects or other teams working on the same projects.


For example, you may use project management software to help you build a budget, define your project scope, track your progress, and communicate with key stakeholders. It is a beneficial service to have, but you do have to pay for it. Remember to include that service fee in your project budget.


You also might need to hire civil engineers to scope out the project site and give recommendations. Or they might design the entire utility power substation or whatever utility service structure you are building. So, determine what services you will need from the civil engineer, and factor their salaries into your project budget.


Transportation Costs

For any utility project, you will need to consider your transportation options. You could rent the equipment, get the permits, and plot the routes to transport the materials yourself—if one of your team members has a proper license to do so. Or you could outsource transportation.


Surprisingly, the best thing for your budget is to hire a transportation company. This will save you valuable project time, and it will also be more cost-effective.


Find a reliable company to use for your utility project so you can determine their rates ahead of time and budget accordingly.


Unloading Costs

After you budget for transporting your materials, you have to budget for unloading the materials. Most transportation companies you find will not unload the materials for you. They let you scramble to get the recruitment and crew together for unloading.


Unfortunately, this adds more expense to your project budget. Plan to rent cranes or forklifts specially designed for the utility materials you are using. Also, include the operator's fee as you will either have to hire someone or pay one of your own team members to take time away from the project and unload your materials.


Blackwood Resources Professional Utility Transporation

What if you could combine your transportation cost and unloading costs into the same service? You would control costs, and your entire transportation process would be much easier.


Blackwood Resources does just that. We have specialized trucks equipped with cranes to unload poles and other materials. We will transport your utility project materials and unload them without delay, so your project can keep running smoothly.


Not only do you save money with our self-unloading service, but you also keep your crew safe. They won’t need to unload heavy materials without the proper equipment or training.


As a trusted partner with the utility industry for over 5 years, Blackwood resources is an asset-based hauling company that has experience hauling wood, steel, and concrete poles as well as other overlength or bulky materials. We have service stations all across the eastern United States, so we are ready to assist you with our best transportation services.


Ready to add Blackwood Resources to your project expense list? We promise, our service will be worth it. Call us at 812-676-8770 or email jamie@blackwoodresources.com to learn how we can help you today.


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