Playing with Electricity

Electrical work is never simple.

Sorting out the myriad variations on electrical licensing, training and qualifications can be next to impossible. Some states require licensing for electricians, including a two-year apprentice and journeyman program, while other states do not require any licensing.

Some states require "high-voltage" electricians to be licensed, while allowing "low-voltage" integrators to work without a license or training. And other states require both electricians and low-voltage integrators to be trained and licensed.

Companies also vary in how they work with electricians and low-voltage integrators -- while some have both on staff, others contract the work out, and still others don't see the distinction.

There's a reason for all this madness: demand.

With the increased business in structured cabling and voice data video (V/D/V), the distinctions -- high and low -- have gradually grown into two industries.

The low-voltage industry is growing by leaps and bounds due to the commercial demand for high-speed cabling for V/D/V applications.

NEC (National Electric Code) Digest reports on findings from the Telecommunications Industry Association (TIA), which discovered that over the 2004-2007 period, the U.S. telecommunications industry will increase at a projected 9.2 percent compound annual rate rising to $1 trillion, while industry estimates place the value of the global structured cabling market at more than $4 billion.

NEC Digest also reports that two-thirds of electrical contractors are involved in various aspects of the low-voltage V/D/V market, including network cabling, CCTV, security/fire/life safety, access control, fiber optics or residential networking.

According to the National Electrical Contractors Association's (NECA) 2002 survey, 72 percent of all electrical contractors do data communications installation work, and 58 percent of the firms install fire/life safety systems.

According to other reports, low-voltage electronics V/D/V is the fastest growing segment of an electrician's business. The average electrician does $175,000 in low-voltage work per year.

Tale of Two Industries

Originally, there was only one electrical industry, not two distinct categories.

S&S Electric's history dates back to 1947, a time when electrical work was plain and simple. Shawn Smith, vice president of the Oldsmar, Fla.-based company, points out that the industry did not initially distinguish.

His grandfather, an electronics repairman, had a passion for wiring homes. The low-voltage work he did in the early years was done in commercial projects and not in the residential sector.

"We were doing low-voltage work before it was known as low-voltage work," says Smith. "We have always just considered it electrical work."

Starting in the 1980s, the demand increased for residential wiring for A/V, and the low-voltage industry began to take shape. Smith saw the work in front of him but didn't jump in right away.

"As electrical contractors, we were unsuccessful at defining our industry, so we let the alarm industry define it for us," he says.

"We quickly began losing more and more work to the alarm contractors. As they started to spread propaganda that electricians were unqualified to install low-voltage (at the time it wasn't much more then telephone, television and intercoms), many in our industry began to believe it. Other electricians considered low-voltage work to be beneath them and gladly gave it up to the alarm guys."

It was in 1998 when S&S Electric began to take the low-voltage industry seriously. "Enough was enough," says Smith.

"There was no reason for our customers [the production homebuilder] to have two or three different sub-contractors (electrician, alarm contractor and A/V installer) in their homes installing cable."

The company began a campaign to get some of the work back. "We were leaving money on the table by allowing other installers on our jobs to install products that we were fully capable of installing."

Today, S&S Electric's rule is that they won't provide any low-voltage services unless they are the high-voltage electrical contractor on the project.

When it comes to low-voltage work, S&S Electric provides basic structured cabling as a standard. An example would be a minimum of three Cat 5e and three RG-6 Quad Shield homerun back to a central enclosure and terminated to the appropriate jacks or modules.

"We provide basic structured cabling as minimum even in homes where the builder hasn't requested structured cabling and in homes where the builder has specifically requested that there not be any structured cabling," says Smith.

"Builders who are intimidated by or just don't understand structured cabling don't want to install it. But we don't give them a choice. We install it anyway. We believe that it is a minimum for a quality installation."

Its base price to wire a 2,000-square-foot production home is around $5,000 for the basic electrical and structured cabling. After meeting with the homebuyer, the company typically sells an average of $5,000 additionally in option upgrades.

"While $5,000 in upgrades may not appear like much, we doubled our revenue for that house, and we didn't have to send any additional crews out to provide the products," says Smith.

Low and Fair

Low-voltage work is taking off nationwide.

One company, Collins Electrical of St. Paul, Minn., saw so much increased low-voltage business they decided to form a new company. While Collins Electrical has been working in high-voltage since 1948, it began work in low-voltage in 1987 and formed Convergent Media, a new division, in 1999.

"Our low-voltage division grew out of our need to be a full-service provider for all electrical/communication related services," says Ralph Burrell, director for marketing and business development.

"Since forming Convergent Media, we have become a DirecTV dealer, a dealer for fire alarm systems and a full service audio/video company."

Its market consists of production homes, high-rise condominiums, mid- to high-priced single-family homes and senior housing complexes.

Integration companies formed after the 1980s would naturally focus on low-voltage work. Smaller companies tend to contract out electricians when needed.

Soundvision of Novato, Calif., has been in business since 1998 serving the northern part of the San Francisco Bay area. Its business focus is in design, engineering, project management and installation/service.

It does not have any established partnerships with electricians. Generally, when it needs an electrician, it calls on those it's worked with in the past.

"We do simple electrical work, installing a switch or adding/moving an outlet," says Scott Sullivan, president. "When we need more electrical work than that, we will create the documentation and bring in an electrician. The goal would be to stick to our core competencies as much as possible."

When Soundvision is integrating a lighting control system in a new construction, it typically creates the required documentation and a project manager walks the electrician through the project.

The company has considered adding high-voltage services but in the end decided against it.

"It doesn't make sense for us. It's an established trade and the work is relatively simple. Since it does not fit into our core competencies, we won't add a lot of value," says Sullivan.

Playing High/Low

In the production home market, it seems that having one electrician do both high- and low-voltage work is most efficient.

S&S Electric's niche is in the high-volume production home market, where the builders have tight production schedules and rapid turnaround times.

"In a business with eroding margins, we have found that the best way to make money was to work in a high-volume environment for customers that paid their bills and paid them quickly," says Smith.

"It isn't romantic, but our philosophy is get in, get out and get paid."

For the high-end custom environment, Smith recommends multiple contractors. "For this work, the initial installations often go well beyond the cabling infrastructure and include multiple components and subsystems that all have to be integrated together," he says.

"In this scenario, multiple contractors may be advantageous. I would still recommend (and I often see) the electrical contractor installing the cabling infrastructure and terminating the cabling, but often a separate division or company will come in to provide the component installation and integration."

Smith finds that having one electrician also guarantees efficiency and convenience.

"A single contractor, single point of contact, single point of billing and single point of warranty service makes it much more convenient for the builder to get their homes built on time," he says.

The company used to have one group on high-voltage and one on low-voltage. He says it backfired on them. "We started to perpetuate the propaganda that electricians weren't qualified to install low-voltage by having a different group of people do the work," he says.

Once he found that it was a mistake to hire two crews, the company started to get serious about low-voltage work and invested in training.

The company later experienced many positive changes after this experience.

"One of the good things that came out of hiring separate crews for low-voltage is it made us take a good hard look at jobsite efficiency, and it made us get training so that we were not reliant on others for our livelihood," says Smith.

Homeward Bound

In the custom home market, the approach to electrical work varies. In some cases, there may be a solo electrician on the job.

In other scenarios, low-voltage integrators may be brought in by the client. RL Johnson Construction Services of Waynesfield, Ohio, works in the custom home market, building for empty nesters, seniors and luxury homebuyers.

The company works on approximately one a year, typically sized around 8,000 square feet and up. It also does light commercial work for professional offices and take-out restaurants.

The owner, Ric Johnson, has been a master electrician and electrical engineer since 1973. The company partners with two custom builders and one developer.

Johnson's company designs and installs every electrical and low-voltage system and subsystem in the project.

"On a typical installation we will meet with the client and builder, using the same CAD system to design the line voltage electrical system, the telephone and cable sub system, home automation, multiroom audio, intercom, security, networking, including wireless, lighting control, adding all of this to the drawing as the project is being laid out," he says.

"We only run Cat 5e and RG-6 coax at this time. However, we run them individually and in pre-made bundles depending on the need or outlet opening."

Safety First

Out of all of the issues that have arisen about the division in low- and high-voltage work, safety and licensing stand out as key concerns.

With so many variations in state licensing requirements, how do business owners know the best route to take? Is it worth investing in training even if it's not required?

Electricians must also follow the National Electric Code.

"The state of Ohio has adopted the 2005 edition," says Johnson.

"Each individual political subdivision that has a registered building department must adopt the Code, as some in our trade area are using the 1999 code and some have adopted the 2002 code. While the code has a three-year cycle, changes are minimal with each edition, always providing for the minimum safety standard to high-voltage electrical installations."

Johnson points out that, currently, home automation has no such minimum standards that are agreed upon by installers and industry organizations.

"CEDIA, TIA, ETA, CEA, CABA, etc. all have their own certification programs, but no one has stepped up to provide a comprehensive minimum standard of low-voltage installations," he says.

"It is quite possible that your definition and mine could be different."

In S&S Electric's playing field, Florida has licensing requirements for installing any electrical system, high- or low-voltage.

However, there's a loophole that allows individuals to perform low-voltage work without a license, a legislative issue that Smith is trying to counteract.

According to Smith, the electrical inspector typically overlooks the low-voltage work and doesn't inspect it.

"However, more and more municipalities starting in the Miami and Orlando areas are starting to pay attention to the low-voltage installation in homes," says Smith.

Preparation Is Key

Bob Baird is a firm believer that safety is the bottom line.

As vice president of apprenticeship and training for Independent Electrical Contractors, Inc. (IEIC), an association for merit shop electrical and systems contractors, he's responsible for the organization's national training programs for electricians and low-voltage technicians.

"We train low-voltage technicians to recognize electrical hazards since they're not trained to work on power electrical systems," says Baird. "There is a need for adequate training."

Baird has found that it's generally easier to train electricians in low-voltage work than to train low-voltage technicians in high-voltage work.

This is mostly because electricians are already trained in electrical theory and safety and know how to work around the other electrical and mechanical systems in the building.

"Low-voltage technicians are generally more specialized and have not had the broad training that is necessary to work on power electrical systems," he says.

Many of the technicians who are now working independently in low-voltage work once specialized in low-voltage work for a big company that provided a very controlled environment.

After losing their jobs to downsizing, many have become contractors working in general construction -- an environment that's not as controlled as they're used to. The dramatic shift of enviroments can often lead to competency issues.

Baird provides an example of how mistakes due to an untrained low-voltage worker can run in the thousands: A military base had multi-mode fiber optics cable installed. It tried to activate the system and it didn't work.

The contracting officer decided the system wasn't good enough and ordered it to be torn out. He called an industry expert in, but by the time he arrived they had already taken all the cable out.

The expert found that the cable was actually fine, but the technicians had terminated the multimode cabling with single-mode connectors.

In this example, $500,000 was lost because of lack of knowledge on the job, according to Baird.

Baird recommends that all electricians be trained in low-voltage.

"You can be the best in the world, but unless you know how to terminate Cat 5 cable, you won't do it properly. Unless you're trained in splicing and terminating multi-mode fiber, it won't work out," says Baird.

Most contractors are familiar with the various organizations that provide training on both the electrical and low-voltage side of this work. IEIC provides training in 38 states.

Manufacturers of low-voltage systems will also provide some degree of training.

"While there are variations between location to location and from instructor to instructor, you'll find the major organizations have nationally standardized systems and provide the best possible training," says Baird.