Sec.  1910.269 contains no similar requirement because the
corresponding general industry provision, Sec.  1910.333(c)(3), does
not apply to qualified employees performing work covered by Sec.
1910.269. In a similar fashion, proposed Sec.  1926.953(a) does not
contain Sec.  1910.269(e)'s exemption from paragraphs (d) through (k)
of Sec.  1910.146 dealing with permit-space entries, as that general
industry standard does not apply to construction work. OSHA intends to
retain such differences in the final rule.
---------------------------------------------------------------------------

    \65\ These provisions generally require that a 3.05-meter (10-
foot) minimum clearance be provided between mechanical equipment and
overhead power lines.
---------------------------------------------------------------------------

    On the other hand, OSHA has identified several nonsubstantive
differences between the existing language in Sec. Sec.  1910.137 and
1910.269 and the language proposed in Sec.  1926.97 and Subpart V.
Table IV-8 identifies these differences. The Agency intends to carry
those changes into final Sec. Sec.  1910.137 and 1910.269. OSHA invites
comments and questions on any differences between the proposed
standards and existing Sec. Sec.  1910.137 and 1910.269 and on how the
respective final rules should be made consistent.

           Table IV-8.--Provisions With Nonsubstantive Changes
------------------------------------------------------------------------
    Section 1926.97 provisions with        Correspondong provisions in
   nonsubstantive changes in language        existing Sec.   1910.137
------------------------------------------------------------------------
1926.97(c)(2)(xii), Note...............
1910.137(b)(2)(xii), Note..............
----------------------------------------
       Subpart V Provisions with           Corresponding provisions in
   Nonsubstantive Changes in Language        Existing Sec.   1910.269
----------------------------------------
1926.950(a)(2).........................  1910.269(a)(1)(iii).
1926.950(b)(2), introductory text......  1910.269(a)(2)(ii),
                                          introductory text.
1926.950(b)(2), Note...................  1910.269(a)(2)(ii), Note.
1926.950(b)(4)(i)......................  1910.269(a)(2)(iv)(A).
1926.955(b)(4).........................  1910.269(h)(2)(iii).
1926.956(d)(3).........................  1910.269(i)(4)(ii).
1926.957(a)............................  1910.269(j)(1).
1926.961(c)(9)(i)......................  1910.269(m)(3)(x)(A).
1926.961(c)(10)........................  1910.269(m)(3)(xi).
1926.962(b), introductory text.........  1910.269(n)(2), introductory
                                          text.
1926.966(e)(1)(iii), introductory text.  1910.269(u)(4)(i)(C),
                                          introductory text.
1926.968, definition of ``designated     1910.269(x), definition of
 employee''..                             ``designated employee''.

1926.968, Note to the definition of      1910.269(x), Note to the
 ``guarded''.                             definition of ``guarded''.
------------------------------------------------------------------------
Notes:
(1) This table does not list provisions in which the only change was to
  break up paragraphs with multiple requirements into separately
  numbered paragraphs. See, for example, proposed Sec.
  1926.960(b)(1)(i), (b)(1)(ii), and (b)(2), which were taken from the
  introductory text to existing Sec.   1910.269(1)(1).
(2) This table also does not list provisions in which the only change
  was a conversion to international standard (SI) units. See, for
  example, proposed Sec.   1926.966 (e)(1)(iii)(B), which was taken from
  existing Sec.   1910.269(u)(4)(i)(C)(2).

    OSHA expects that final Subpart V will differ from proposed Subpart
V because of changes adopted based on the rulemaking record. When the
final rule is published, the Agency intends to make corresponding
changes to Sec.  1910.269 to keep the two rules the same, except to the
extent that substantial differences between construction work and
general industry work warrant different standards. Similarly, the
Agency intends to adopt changes to Sec.  1910.137 so that it is the
same as Sec.  1926.97. Therefore, OSHA is seeking comment on entire
Sec. Sec.  1910.137 and 1910.269. Comments received on the general
industry standards will be considered in adopting the final
construction standards and vice versa. In particular, the Agency has
requested comments on several issues in the proposed revision of
Subpart V and in proposed new Sec.  1926.97. Some of these issues are
directed towards requirements in those construction standard that are
taken from general industry provisions that OSHA is not proposing to
revise. For example, earlier in this section of the preamble, the
Agency requests comments on whether AEDs should be required as part of
the medical and first aid requirements in proposed Sec.  1926.951. (See
the summary and explanation of proposed Sec.  1926.951(b)(1).) Although
OSHA has not proposed to revise the corresponding general industry
provision, existing Sec.  1910.269(b)(1), the Agency intends to revise
that general industry provision if the rulemaking record supports a
requirement for AEDs. Therefore, OSHA encourages all rulemaking
participants to respond to these issues regardless of whether the
participants are covered by the construction standards. Table IV-9 is a
cross-reference table to help interested parties to find the section in
Subpart V that corresponds to a particular paragraph in Sec.  1910.269.

               Table IV-9.--Provisions in Subpart V Corresponding to Paragraphs in Sec.   1910.269
----------------------------------------------------------------------------------------------------------------
                                          Corresponding section in
     Paragraph  in Sec.   1910.269                subpart V                             Topic
----------------------------------------------------------------------------------------------------------------
(a)....................................  Sec.   1926.950...........  General, scope, and training.
(b)....................................  Sec.   1926.951...........  Medical services and first aid.
(c)....................................  Sec.   1926.952...........  Job briefing.
(e)....................................  Sec.   1926.953...........  Enclosed spaces.
(f)....................................  Sec.   1926.967(f)........  Excavations.
(g)....................................  Sec.   1926.954...........  Personal protective equipment.
(h)....................................  Sec.   1926.955...........  Ladders and platforms.
(i)....................................  Sec.   1926.956...........  Hand and portable power tools.
(j)....................................  Sec.   1926.957...........  Live-line tools.
(k)....................................  Sec.   1926.958...........  Materials handling and storage.
(l)....................................  Sec.   1926.960...........  Working on or near exposed energized parts.
(m)....................................  Sec.   1926.961...........  Deenergizing lines and equipment for
                                                                      employee protection.
(n)....................................  Sec.   1926.962...........  Grounding for the protection of employees.
(o)....................................  Sec.   1926.963...........  Testing and test facilities.
(p)....................................  Sec.   1926.959...........  Mechanical equipment.
(q)....................................  Sec.   1926.964...........  Overhead lines.
(s)....................................  Sec.   1926.967(k)........  Communication facilities.
(t)....................................  Sec.   1926.965...........  Underground electrical installations.
(u)....................................  Sec.   1926.966...........  Substations.
(w)....................................  Sec.   1926.967...........  Special conditions.
(x)....................................  Sec.   1926.968...........  Definitions.
----------------------------------------------------------------------------------------------------------------
Note: Paragraphs (d), (r), and (v) have no counterparts in Subpart V.

    Foot protection for electrical hazards. OSHA is also proposing to
revise Sec.  1910.136(a). Existing Sec.  1910.136(a) reads as follows:
    (a) General requirements. The employer shall ensure that each
affected

employee uses protective footwear when working in areas where there is
a danger of foot injuries due to falling or rolling objects, or objects
piercing the sole, and where such employee's feet are exposed to
electrical hazards.
    The Agency is concerned that this language is being interpreted to
recognize the use of electrical hazard footwear as a primary form of
electrical protection. Electrical hazard footwear is constructed to
provide insulation of the wearer's feet from ground. This can provide a
small degree of protection from electric shock for the wearer. This
protection is limited to voltages of 600 volts or less under dry
conditions and is intended to be a secondary form of electrical
insulation.\66\ Conductive footwear, which is not electrical hazard
footwear, is designed to prevent static electricity buildup. This is
one method of protecting against static electrical discharges that can
damage equipment or, in hazardous locations, could possibly lead to
fires or explosions.
---------------------------------------------------------------------------

    \66\ Primary insulation normally insulates an employee directly
from an energized part. Rubber insulating gloves and rubber
insulating blankets are examples of primary electrical protection.
Secondary insulation normally insulates an employee's feet from a
grounded surface. Electrical hazard footwear and rubber insulating
matting are examples of secondary electrical protection.
---------------------------------------------------------------------------

    Interpreting existing Sec.  1910.136(a) so as to recognize
electrical hazard footwear as a primary form of electrical protection
could expose employees to electric shock hazards if they believe that
the real primary form of electrical protection (for example, rubber
insulating gloves or blankets) is no longer necessary. This is true for
several reasons. First, electrical hazard footwear only insulates an
employee's feet from ground. The employee can still be grounded through
other parts of his or her body. Second, the insulation provided by
electrical hazard footwear is good only under dry conditions. This
footwear provides little if any protection once it becomes wet or damp.
Lastly, the voltage rating on electrical hazard footwear is only 600
volts.
    OSHA believes that, because of these limitations, electrical hazard
footwear should not be addressed by Sec.  1910.136, which is designed
to provide protection to employees' feet. The Agency also believes that
the need for conductive footwear, whether or not it provides protection
for the foot, is adequately addressed by the general requirement in
Sec.  1910.132(a) to provide personal protection equipment. Therefore,
OSHA is proposing to delete language relating to electrical hazards
from Sec.  1910.136(a).
    Paragraph (d) of Sec.  1910.132 addresses hazard assessment and
selection of personal protective equipment. Paragraph (f) of Sec.
1910.132 addresses training in the use of personal protective
equipment. As noted in Sec.  1910.132(g), paragraphs (d) and (f) of
existing Sec.  1910.132 do not apply to electrical protective equipment
covered by Sec.  1910.137. While training is covered in other
electrical standards (for example, in Sec.  1910.268,
telecommunications, in Sec.  1910.269, electric power generation,
transmission, and distribution, and in Sec.  1910.332, training in
electrical safety-related work practices), many of the hazard
assessment requirements in Sec.  1910.132(d) are not addressed in any
other OSHA electrical standard. OSHA requests comments on whether
electrical protective equipment should be added to the scope of Sec.
1910.132(d) or Sec.  1910.132(f) or both.

D. Effective Date

    When a final rule is promulgated, OSHA typically provides a delay
in effective date to allow employers to become familiar with the rule
and to come into compliance. Some of the provisions in the proposal
would require some employers to purchase new equipment. For example,
the requirements proposed in Sec. Sec.  1910.269(l)(11) and 1926.960(g)
would require some employers to purchase flame-resistant clothing. OSHA
requests comments generally on what an appropriate delay in effective
date should be and specifically on how long employers will need to make
purchases necessary for compliance with the proposed rule.
    Some of the proposed provisions would require employers to replace
existing noncomplying equipment with equipment that meets the proposal.
For example, proposed Sec.  1926.954(b)(2)(xi) would require snaphooks
used with work positioning equipment to be of the locking type. Some
employers may still use nonlocking snaphooks with work positioning
equipment. OSHA requests information on the extent to which nonlocking
snaphooks are used. The Agency also requests information on the useful
life of such equipment and on whether OSHA should allow sufficient time
for noncomplying equipment to be replaced as it wears out. Such a delay
would minimize the costs incurred by employers but would expose
employees to hazards for a longer period.

V. Preliminary Regulatory Impact Analysis and Initial Regulatory
Flexibility Analysis

A. Executive Summary

Introduction
    OSHA is required by the OSH Act to ensure and demonstrate that
standards promulgated under the Act are technologically and
economically feasible. Executive Order 12866, the Regulatory
Flexibility Act, and the Unfunded Mandates Reform Act also require OSHA
to estimate the costs, assess the benefits, and analyze the impacts of
the rules that the Agency promulgates.
    Accordingly, OSHA has prepared this Preliminary Regulatory Impact
Analysis (PRIA) for OSHA's proposal to update its standards addressing
electric power generation, transmission, and distribution work, and the
use of electrical protective equipment. For purposes of this analysis,
the terms ``proposal'' and ``proposed standard'' include all elements
of this proposed rulemaking, including proposed changes to 29 CFR
1910.269, proposed changes to 29 CFR 1926, proposed changes involving
electrical protective equipment requirements, and other associated
revisions and additions. The consolidated set of proposed actions was
analyzed in its entirety; only those parts that were identified as
involving nonnegligible costs are explicitly reflected in the analysis
of compliance costs and impacts.
    In some past notices of proposed rulemakings, OSHA has included
only an Executive Summary of the PRIA in the preamble to the proposal.
For this rulemaking, OSHA is including the entire PRIA in this Federal
Register notice for the convenience of the public.
Need for Regulation
    Employees in work environments addressed by the proposed standards
are exposed to a variety of significant hazards that can and do cause
serious injury and death. The risks to employees are excessively large
due to the existence of market failures, and existing and alternative
methods of alleviating these negative consequences have been shown to
be insufficient. After carefully weighing the various potential
advantages and disadvantages of using a regulatory approach to improve
upon the current situation, OSHA preliminarily concludes that in this
case the proposed mandatory standards represent the best choice for
reducing the risks to employees. In addition, rulemaking is necessary
in this case in order to replace older existing

standards with updated, clear, and consistent safety standards.
Affected Establishments
    The proposal affects establishments in a variety of different
industries involving electric power generation, transmission, and
distribution. The proposed standards primarily affect firms that
construct, operate, maintain, or repair electric power generation,
transmission, or distribution systems. These firms include electric
utilities as well as contractors who are hired by utilities and who are
primarily classified in the construction industry. In addition,
potentially affected firms are found in a variety of manufacturing and
other industries which own or operate their own electric power
generation, transmission, or distribution systems as a secondary part
of their business operations. The proposal also potentially affects
establishments performing line-clearance tree-trimming operations.
Benefits, Net Benefits, and Cost Effectiveness
    The proposed revisions to the OSHA standards addressing electric
power generation, transmission, and distribution work, as comprised by
the proposed rulemaking, are expected to result in an increased degree
of safety for the affected employees. These changes are expected to
reduce the numbers of accidents, fatalities, and injuries associated
with the relevant tasks, as well as reducing the severity of certain
injuries, such as burns or injuries that could be sustained as a result
of an arrested fall, that may still occur while performing some of the
affected procedures.
    An estimated 74 fatalities and 444 injuries occur annually among
employees involved in electric power generation, transmission, and
distribution work addressed by the provisions of this rulemaking. Based
on a review and analysis of the incident reports associated with the
reported injuries and fatalities, full compliance with the proposed
standards would prevent 79.0 percent of the relevant injuries and
fatalities, compared with 52.9 percent prevented with full compliance
with the existing standards. Thus, the increase in safety that would be
provided by the proposed standards is represented by the prevention of
an additional 19 fatalities and 116 injuries annually. Applying an
average monetary value of $50,000 per prevented injury, and a value of
$6.8 million per prevented fatality, results in an estimated monetized
benefit of about $135 million annually.
    The net monetized benefits of the proposed standard are estimated
to be about $101.1 million annually ($135 million in benefits and $33.9
million in costs). Note that these net benefits exclude any
unquantified benefits associated with revising the standards to provide
updated, clear, and consistent regulatory requirements to the public.
    Additional benefits associated with this rulemaking involve
providing updated, clear, and consistent safety standards regarding
electric power generation, transmission, and distribution work to the
relevant employers, employees, and interested members of the public.
OSHA believes that the updated standards enhance worker safety and are
easier to understand and to apply. They will benefit employers and
employees by facilitating compliance while improving safety. The
benefits associated with providing updated, clear, and consistent
safety standards have not been monetized or quantified.
    Table V-1 summarizes the costs, benefits, net benefits, and cost
effectiveness of the proposed standard.

                                 Table V-1.--Net Benefits and Cost Effectiveness
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Annualized Costs:
    Determination of Appropriate Protective Clothing.......  $11.0 million.
    Provision of Appropriate Protective Clothing...........  $8.4 million.
    Host/Contractor Communications.........................  $7.8 million.
    Expanded Job Briefings.................................  $5.1 million.
    Additional Training....................................  $1.2 million.
    Other Costs............................................  $0.4 million.
        Total Annual Costs.................................  $33.9 million.
Annual Benefits:
    Number of Injuries Prevented...........................  116.
    Number of Fatalities Prevented.........................  19.
    Monetized Benefits (Assuming $50,000 per Injury and      135 million.
     $6.8 million per Fatality Prevented).
    OSHA standards that are updated and consistent.........  Unquantified.
        Total Annual Benefits..............................  116 injuries and 19 fatalities prevented.
----------------------------------------------------------------------------------------------------------------

    Net Benefits (Benefits Minus Costs): $101 million annually.

Cost Effectiveness

    Compliance with the proposed standards would result in the
prevention of 1 fatality and 6 injuries per $1.8 million in costs, or,
alternatively, $4.00 of benefits per dollar of cost.
Compliance Costs
    The estimated costs of compliance for this rulemaking represent the
additional costs necessary for employers to achieve full compliance.
They do not include costs associated with current compliance with the
new requirements imposed by the rulemaking; nor do they include costs
associated with achieving full compliance with existing applicable
requirements. The total annualized cost of compliance with the proposed
rulemaking is estimated to be about $33.9 million.
    The largest component of the compliance costs, at $11.0 million
annually, is comprised of the costs necessary to comply with the
requirement for the employer to make a determination regarding the type
and extent of flame-resistant apparel necessary to protect employees in
the event that employees may be exposed to an electric arc.
    Other provisions of the proposed standards involving compliance
costs include requirements for more protective clothing ($8.4 million),
requirements for various communications between host employers and
contractors ($7.8 million), expanded requirements for conducting job
briefings ($5.1 million), and revised training requirements ($1.2
million).
Economic Impacts
    To assess the nature and magnitude of the economic impacts
associated with

compliance with the proposed rulemaking, OSHA developed quantitative
estimates of the potential economic impact of the requirements on
entities in each of the affected industry sectors. The estimated costs
of compliance were compared with industry revenues and profits to
provide an assessment of potential economic impacts.
    The costs of compliance with the proposed rulemaking are not large
in relation to the corresponding annual financial flows associated with
the regulated activities. The estimated costs of compliance represent
about 0.01 percent of revenues and 0.14 percent of profits on average
across all entities; compliance costs do not represent more than 0.24
percent of revenues or more than 4.03 percent of profits in any
affected industry.
    The economic impact of the proposed rulemaking is most likely to
consist of a small increase in prices for electricity, of about 0.01
percent on average. It is unlikely that a price increase on the
magnitude of 0.01 percent will significantly alter the services
demanded by the public or any other affected customers or
intermediaries. If the compliance costs of the proposed rulemaking can
be substantially recouped with such a minimal increase in prices, there
may be little effect on profits.
    In general, for most establishments, it would be very unlikely that
none of the compliance costs could be passed along in the form of
increased prices. In the event that unusual circumstances may inhibit
even a price increase of 0.01 percent to be realized, profits in any of
the affected industries would be reduced by a maximum of about 4
percent.
    OSHA concludes that compliance with the requirements of the
proposed rulemaking is economically feasible in every affected industry
sector.
    In addition, based on an analysis of the costs and economic impacts
associated with this rulemaking, OSHA preliminarily concludes that the
effects of the proposed standards on international trade, employment,
wages, and economic growth for the United States would be negligible.
Initial Regulatory Flexibility Analysis
    The Regulatory Flexibility Act, as amended in 1996 by the Small
Business Regulatory Enforcement Fairness Act, requires the preparation
of an Initial Regulatory Flexibility Analysis for certain proposed
rules promulgated by agencies (5 U.S.C. 601-612). Under the provisions
of the law, each such analysis shall contain: (1) A description of the
impact of the proposed rule on small entities; (2) a description of the
reasons why action by the agency is being considered; (3) a succinct
statement of the objectives of, and legal basis for, the proposed rule;
(4) a description of and, where feasible, an estimate of the number of
small entities to which the proposed rule will apply; (5) a description
of the projected reporting, recordkeeping and other compliance
requirements of the proposed rule; (6) an identification, to the extent
practicable, of all relevant Federal rules which may duplicate, overlap
or conflict with the proposed rule; and (7) a description and
discussion of any significant alternatives to the proposed rule which
accomplish the stated objectives of applicable statutes and which
minimize any significant economic impact of the proposed rule on small
entities.
    OSHA has analyzed the potential impact of the proposed rule on
small entities. As a result of this analysis, OSHA preliminarily
concludes that the compliance costs are equivalent to over 5 percent of
profits for some groups of affected small entities (as identified later
in this analysis). Therefore, OSHA has prepared an Initial Regulatory
Flexibility Analysis in conjunction with this rulemaking to describe
the potential effects on small entities and to enable the Agency and
the public to fully consider alternatives to the proposal.

B. Need for Rule

    Employees performing work involving electric power generation,
transmission, and distribution are exposed to a variety of significant
hazards, such as fall, electric shock, and burn hazards, that can and
do cause serious injury and death. As detailed below, OSHA estimates
that, on average, 444 serious injuries and 74 fatalities occur annually
among these workers.
    Although some of these incidents may have been prevented with
better compliance with existing safety standards, research and analyses
conducted by OSHA have found that many preventable injuries and
fatalities would continue to occur even if full compliance with the
existing standards were achieved. Relative to full compliance with the
existing standards, an estimated additional 116 injuries and 19
fatalities would be prevented through full compliance with the proposed
standards.
    Additional benefits associated with this rulemaking involve
providing updated, clear, and consistent safety standards regarding
electric power generation, transmission, and distribution work. The
existing OSHA standards for the construction of electric power
transmission and distribution systems are over 30 years old and
inconsistent with the more recently promulgated OSHA standards
addressing repair and maintenance work.
    OSHA has different standards covering construction work on electric
power transmission and distribution systems and general industry work
on the same systems. In most instances, the work practices used by
employees to perform construction or general industry work on these
systems are the same. The application of OSHA's construction or general
industry standards to a particular job depends upon whether the
employer is altering the system (construction work) or maintaining the
system (general industry work). For example, employers changing a
cutout (disconnect switch) on a transmission and distribution system
would be performing construction work if they were upgrading the
cutout, but general industry work if they were simply replacing the
cutout with the same model.
    Since the work practices used by the employees would most likely be
identical, the applicable OSHA standards should be identical. OSHA's
existing requirements are not, however. Conceivably, for work involving
two or more cutouts, different and conflicting OSHA standards might
apply. The inconsistencies between the two standards create
difficulties for employers attempting to develop appropriate work
practices for their employees. For this reason, employers and employees
have told OSHA that it should make the two standards identical. This
proposal does so.
    OSHA has preliminarily determined that the proposal is needed to
reduce the number of fatalities and injuries occurring among workers
involved in electric power generation, transmission, and distribution
and to make the relevant standards clear and consistent. Before
reaching this preliminary conclusion, many alternatives were
considered, including regulatory alternatives and alternative
approaches that would not involve the promulgation of revised
standards.

C. Examination of Alternative Approaches

Alternative Regulatory Approaches
    To determine the appropriate regulatory requirements to address
occupational risks for employees working on electric power generation,
transmission, and distribution systems,

OSHA considered many different factors and potential alternatives. The
Agency examined the incidence of injuries and fatalities and their
direct and underlying causes to ascertain where existing standards
needed to be strengthened. These standards were reviewed, current
practices in the industry were assessed, information and comments from
experts were collected, and the available data and research were
scrutinized.
    OSHA faces several constraints in determining which regulatory
requirements should apply. As required under Section 3(8) of the OSH
Act, the requirements of an OSHA standard must be ``reasonably
necessary or appropriate to provide safe or healthful employment and
places of employment.'' Also, as required under Section 6(b)(8) of the
OSH Act, the requirements of an OSHA standard may only differ
substantially from existing national consensus standards to the extent
that the OSHA standard will better effectuate the purposes of the OSH
Act than the corresponding national consensus standards. OSHA standards
must also be technologically and economically feasible, as noted
earlier, and be cost-effective.
    A full discussion of the basis for the particular regulatory
requirements chosen is provided in Section IV, Summary and Explanation
of Proposed Rule, earlier in this preamble. The regulatory alternatives
considered by OSHA are discussed in the Initial Regulatory Flexibility
Analysis later in this section of the preamble.
Alternative Nonregulatory Approaches
    Introduction. The stated purpose of the OSH Act is to ``assure so
far as possible every working man and woman in the Nation safe and
healthful working conditions and to preserve our human resources.''
This congressional mandate provides the basis for OSHA's proposed
rulemaking on electric power generation, transmission, and
distribution, which is designed to mitigate the occupational hazards
associated with work on electric power systems.
    Before issuing a standard, OSHA must assess whether there are
other, nonregulatory approaches available that may provide an equal or
higher level of benefits. Executive Order 12866 directs regulatory
agencies to assess whether an unregulated private market can achieve
the same level of social benefits as that expected to result from
Federal regulation:

Section 1. Statement of Regulatory Philosophy and Principles.

    (a) The Regulatory Philosophy. Federal Agencies should
promulgate only such regulations as are required by law, are
necessary to interpret the law, or made necessary by compelling
public need, such as material failures of private markets to protect
or improve the health and safety of the public, the environment, or
the well-being of the American people. In deciding whether and how
to regulate, agencies should assess all costs and benefits of
available regulatory alternatives, including the alternative of not
regulating.

    The discussion below considers several nonregulatory alternatives
to OSHA's proposed rulemaking: Private market incentives, information
dissemination programs, tort liability options, and workers'
compensation programs.
    Private Market Incentives. Economic theory suggests that the need
for government regulations would be greatly reduced if private markets
worked efficiently and effectively to provide health and safety
protections for employees. At issue is whether the private market will
be able to produce a level of safety and health for employees that will
be equal to or greater than that potentially afforded by the proposed
OSHA standards. In particular, OSHA examined whether the level of risk
of experiencing an injury caused by workplace hazards that would be
provided by an unregulated market would be at least as protective of
employee safety as the proposed electric power rulemaking.
    Theoretically, unregulated markets are capable of achieving an
efficient allocation of resources if certain assumptions are satisfied.
Necessary assumptions include elements such as perfect and free
information, perfect and costless mobility of labor and other factors
of production, and an absence of any externalities.
    A major conclusion of the ``perfect competition model'' of economic
theory is that, in the presence of full information about market
choices and outcomes and with complete mobility of the factors of
production, the private market would produce an efficient allocation of
resources.
    In the presence of perfect and complete information regarding
occupational risks, labor markets would reflect the presence of
different degrees of risk across different industries, firms, and
occupations. In such a market, wage premiums would be paid to
compensate workers engaged in hazardous occupations for the added risk
they confront on the job.
    In this theoretical framework, wages would vary directly with the
riskiness of a job (other things being equal), and employers would have
an incentive to make investments to reduce occupational health and
safety risks to the extent workers would demand compensation for being
exposed to such risks. In other words, because employers would have to
pay their workers a premium to induce them to work in a risky
environment, employers would be willing to pay to make that environment
less risky by introducing technologies and practices that lower risks
to workers.
    In addition, a perfectly competitive market will theoretically lead
to the efficient allocation of resources only if all of the costs and
benefits (pecuniary and nonpecuniary) associated with the behavior of
market participants and with market transactions are fully borne by
those directly involved. In economic terms, this implies that there
will not be any negative externalities associated with economic
activities.
    If all of the costs associated with occupational safety and health
risks would in fact be internalized, then market decisions about
occupational safety and health conditions made by employers and workers
would be based on a consideration of the full social costs of their
economic actions. However, if some of the effects of these actions are
externalized (that is, some costs are not borne by employers and
employees but by other parties who are external to the transaction),
then those costs will not be adequately incorporated into the decisions
of managers and workers. The resultant market allocation of resources
can then be expected to be less efficient.
    Costs and other impacts that are imposed on society and are not
borne directly by the economic participants involved in an activity or
transaction are referred to as externalities. The existence of such
externalities is one reason why an unregulated private market often
fails to produce an efficient allocation of resources. The presence of
these externalities also implies that economic efficiency can
potentially be improved with regulatory interventions.
    In a theoretically perfect market without externalities, firms
would decide how much to spend on reducing safety and health risks
based on the full costs associated with the presence of such risks. The
costs include pain and suffering, impacts on the quality of the lives
of families, and effects on society as a whole. Workers would decide
whether they were willing to work in a particular job based on the
relative riskiness of the job and the extent to which they believe the
wages offered to

them provide adequate compensation for these risks.
    Research conducted by OSHA and information from several other
sources show that many firms have responded to the risks posed to
workers by electric power systems. Employers have increasingly
recognized the costs associated with these risks and have implemented
measures to reduce the occupational risks faced by their employees.
    In fact, many risk control programs already implemented by
employers go beyond the provisions required by the existing OSHA
standards or by the proposed OSHA standards. The fact that employers
are implementing these programs demonstrates that economic incentives
do exist at least to some degree to motivate employers in the direction
of reducing the risks associated with occupational exposures to the
hazards of electric power work.
    However, OSHA notes that many other employers continue to fall
short of their obligations to provide even minimum safety protections
for their employees. Such circumstances persist despite ongoing
attempts by OSHA and other groups to provide information and assistance
to employers to increase awareness and reduce the risks involved with
work involving electric power systems.
    The benefits section of this preliminary analysis shows that
preventable injuries and fatalities continue to occur every year. The
evidence indicates that market forces cannot alone curb occupational
risks adequately.
    Among employees engaged in work involving electric power
generation, transmission, and distribution systems, there does not
appear to be any risk premium reflected in wage rates that would
differentiate between employers based on the extent of risks faced by
employees. In fact, as presented in Section IV, Summary and Explanation
of Proposed Rule, earlier in this preamble, there is some evidence that
in these industries, wages for workers in similar jobs performing
similar types of work are negatively correlated with the degree of risk
involved: Employees of utilities tend to earn more than their
counterparts working for contractors, and yet the fatality and injury
rate is higher among employees of the contractors.
    There are a variety of reasons why workers may not be paid the risk
premiums that would theoretically be necessary to ensure that markets
provide efficient levels of expenditures on safety and health. Workers
have imperfect knowledge about the nature and magnitude of occupational
risk factors. Many workers are not likely to be fully aware of the
extent and nature of occupational risks associated with various
different jobs and different employers at different points in time.
    Even if workers have adequate information regarding the risks of
occupational injuries, they may be unable to adequately incorporate
this information into their decisions about choosing a job or staying
on the job. Other factors and circumstances may affect employment
choices, and decisions cannot be changed easily. There are also
significant costs associated with job searches and changing jobs.
    Assessing occupational risks for the purpose of determining the
acceptability of wages offered is made even more difficult when
differences in risk between two firms are significant but cannot be
readily observed or predicted over the pertinent time periods. If
differences in occupational risk between various establishments are not
fully incorporated into the employment decisions of workers, the wage
premiums paid for risky jobs will not accurately reflect the relative
occupational risks associated with specific jobs in different firms.
Thus, firms will have little incentive to individually reduce risk
beyond levels present in other firms.
    In addition, many employers may simply be unaware of the direct and
indirect costs associated with occupational risks. Some employers may
regard these costs as beyond their control or as part of general
overhead costs. Employers may also not be fully aware of the
availability of cost-effective ways of ameliorating or eliminating
these risks and reducing the corresponding costs.
    A significant problem that prevents risk premiums in an unregulated
market from achieving the theoretical results that may potentially
reduce occupational risks involves imperfections in the operation of
labor markets. Changing jobs can be costly, and in some circumstances
the costs may preclude a decision to change jobs solely on the basis of
the occupational health risks involved. Factors that may make job
changes particularly costly include nontransferability of occupational
skills or seniority within a company, the difficulty of acquiring
sufficient human capital to seek alternative employment opportunities,
the costs and uncertainty associated with relocating to take advantage
of better employment opportunities, the existence of institutional
factors such as the nontransferability of pension plans and seniority
rights, and the risk of prolonged periods of unemployment.
    Often, differences in occupational risk between two firms must be
very marked before a worker will change jobs on that basis. Therefore,
wage rates determined by a market in which the protection of
occupational safety and health is unregulated are unlikely to fully
compensate workers for occupational health and safety risks, including
those related to the risks of concern here.
    Information Dissemination Programs. OSHA and other organizations
currently produce and disseminate a considerable amount of information
regarding the risks associated with work involving electric power
generation, transmission, and distribution and the methods that can be
used to reduce these risks. The dissemination of such information would
continue in conjunction with the promulgation of the proposed
standards; alternatively, in lieu of issuing mandatory standards, OSHA
could rely on current or expanded information dissemination programs to
generate the incentives necessary to produce further reductions in
injuries and fatalities. Better informed workers can more accurately
assess the occupational risks associated with different jobs, thereby
facilitating those market interactions that result in wage premiums for
relatively risky occupations.
    There are several reasons, however, why reliance on information
dissemination programs will not yield the level of social benefits
achievable through compliance with the proposed electric power rules.
First, there are no reliable incentives or mechanisms that would ensure
that appropriate and sufficiently detailed information could be
produced, or that such information would actually be distributed among
and relied upon by workers. Furthermore, hazards associated with work
on electric power systems are highly specific to individual tasks and
work environments. The development of accurate knowledge about these
occupational risks would require each employer to make available
specific information about the risks present in his or her projects
expected to be undertaken in the future. The lack of adequate
incentives or mechanisms and the potentially large costs associated
with the collection and reporting of the necessary information makes
effective information dissemination difficult to implement in practice.
    In addition, even if workers are better informed about workplace
risks and hazards, other factors, such as barriers to labor mobility,
that contribute to market failure would still remain. Finally, as
argued above, workers may

not be able to evaluate information about long-term risks accurately
when making employment decisions. Better information, therefore, will
not ensure that the market will produce wage risk premiums in a manner
that is consistent with an efficient allocation of resources.
    Currently, in addition to the applicable OSHA standards, there are
consensus standards, voluntary guidelines, and other information
sources for preventing injuries and fatalities while working on
electric power generation, transmission, and distribution systems.
Although many employers have adopted many of the practices and
procedures recommended by these sources, many other employers have been
less successful in the widespread implementation of all of the
recommendations of these voluntary guidelines. The Costs of Compliance
section of this preliminary analysis provides further information
regarding current compliance with specific elements in sectors covered
by the proposal.
    Thus, the experience and observations regarding electric power
generation, transmission, and distribution work show that, while
improved access to information about occupational risks can provide for
more rational decision-making in the private market, voluntary
information programs will not produce an adequately low level of
occupational risk.
    Tort Liability Options. Employees currently are generally
restricted from using tort law to force employers to pay for costs and
damages associated with fatalities and injuries that occur on the job.
Greater worker use of tort law in seeking redress from injuries
associated with occupational risks involving work on electric power
generation, transmission, and distribution is another example of a
possible nonregulatory alternative to the proposed rule. If employees
were able to effectively sue their employers for damages caused by
work-related hazards, and if other conditions regarding the cost and
availability of information, knowledge and mobility of workers, and
externalities are satisfied, then the need for an OSHA standard would
potentially be reduced or eliminated.
    A tort may be described, in part, as a civil wrong (other than
breach of contract) for which the courts provide a remedy in the form
of an action for damages. The application of the tort system to
occupationally related injuries and illnesses would mean that a worker
whose disability resulted from exposure to a work place risk would sue
the employer to recover damages. The tort system could thus shift the
liability for the direct costs of occupational injury from the worker
to the employer, at least under certain specific circumstances.
    With limited exceptions, however, the tort system has not been a
viable alternative to regulation in dealings between employees and
employers, for a number of reasons. All States have legislation making
workers' compensation either the exclusive or principal legal remedy
available to employees. Generally, tort law can be applied only to
third-party producers or suppliers of hazardous products or equipment,
for example, asbestos products. It is often difficult, however, to
demonstrate that workplace injuries have been caused by defective or
negligently designed products or equipment.
    Moreover, legal proceedings generally fail to fully internalize
costs because of the substantial legal fees and uncertainties
associated with bringing court actions. In deciding whether or not to
sue, the victim must be sure that the potential award will exceed both
the expense and hardship of bringing the lawsuit. Legal expenses
commonly include a contingency fee for the plaintiff's lawyer, plus
court fees and the costs of accumulating evidence and witnesses. The
accused firm must also pay for its defense.
    In sum, the use of legal action as an alternative to regulation is
limited because of the expense, delays, and uncertainties involved, and
because under current State laws, workers' compensation will normally
be an exclusive remedy that will prevent a worker from filing a suit at
all. The tort system, therefore, does not serve adequately to protect
workers from exposure to risks in the workplace.
    Workers' Compensation Programs. The existing workers' compensation
programs serve to partially address the market failures that result in
insufficient reductions in occupational risks. An alternative to a
mandatory standard would be a continued reliance on these and other
existing programs (including possible modifications or enhancements to
these programs) to address occupational risk. The workers' compensation
system was implemented in part as a result of the perceived failure of
the unregulated market to compel employers to sufficiently reduce
occupational health and safety risks and to compensate employees for
bearing those risks. The system seeks to shift some of the burden of
the costs associated with occupational injuries and illnesses from
workers to employers. By so doing, workers' compensation requirements
can ensure that more of the costs of occupational injuries and
illnesses are incorporated into decisions of employers even if
employees do not have full information regarding their risks or are
unable to receive full wage compensation for such risks. Originally
designed to force more of the social costs of occupational injuries and
illnesses to be internalized, the workers' compensation program has in
practice fallen short of fully achieving this goal and does not fully
compensate workers for occupationally related injuries and illnesses.
    Compensation tends to be especially inadequate in permanent
disability cases, in part because of time limits on benefit
entitlements and in part because of the failure of the system to adjust
benefits for changes in a worker's expected earnings over time. Several
States restrict permanent, partial, and total disability benefits
either by specifying a maximum number of weeks for which benefits can
be paid, or by imposing a ceiling on dollar benefits. Both temporary
and permanent disability payments are commonly limited by imposing a
ceiling on the income per week that can be paid. In addition, under
workers' compensation, no award is made for pain and suffering.
    The extent to which income is replaced by each type of indemnity
payment (that is, temporary or permanent partial) differs. First,
although rules vary by State, temporary disability income is designed
in most states to replace two-thirds of the worker's before-tax income.
However, most States place a maximum and a minimum on the amount of
money paid out to the worker, regardless of his or her actual former
income.
    The Worker Compensation Research Institute (WCRI) has studied the
extent to which workers' compensation replaces after-tax income in 19
states. These studies show that temporary total disability payments
replace between 80 and 100 percent of the after-tax income of the
majority of workers in all of the States examined [5].\67\ From 3 to 44
percent of workers receive less than 80 percent of their after-tax
income, and from 0 to 16 percent receive more than 100 percent of their
previous after-tax income (as a result of the ``floor'' on payments).
In 15 of the 19 States examined, more workers receive less than 80
percent of their former after-tax income than receive more than 100
percent of their former income. WCRI does not provide estimates of the
average replacement rates for all workers in a State. However, based on

these data, it seems reasonable to assume that, on average, workers
receive no more than 90 percent of their after-tax income while on
temporary disability.
---------------------------------------------------------------------------

    \67\ References appear at the end of this section of the
preamble.
---------------------------------------------------------------------------

    In addition to not fully replacing after tax income, workers'
compensation payments, which are not taxable, provide no replacement
for tax losses to the Federal, State or local government as a result of
an illness. This loss is properly considered part of the social losses
associated with an illness or injury. Typically taxes, including State
and Federal income taxes and employee and employer contribution to
social security taxes will be approximately 30 percent of income. The
taxes not paid when an individual is unable to work thus add an
additional 30 percent of worker income as losses associated with
injuries and illnesses not covered by workers' compensation.
    In summary, workers' compensation often covers less than 65 percent
of the financial losses associated with the costs of injuries, and does
not cover any portion of losses due to pain and suffering. Thus, even
if the financial costs were fully internalized by employers, workers'
compensation would be insufficient to assure adequate economic
incentives to address work-related injuries and illnesses.
    For workers' compensation to be able to internalize costs of work-
related injuries and illnesses, it would be necessary for the costs an
employer pays for workers' compensation to be directly related to the
employer's risk of causing work-related injuries or illnesses.
    Most workers' compensation programs nominally include the
employer's injury experience as a factor in determining the level of
the employer's insurance premiums. However, the majority of firms are
not rated individually for their safety and health record; that is,
they are not ``experience rated.'' For example, small firms often are
ineligible for experience rating because of the high year-to-year
variance in their claim rates. Such firms are class rated, and rate
reductions are granted only if the experience of the entire class
improves. Segregation of loss experience into classes is somewhat
arbitrary, and an individual firm may be classified with other firms
that have substantially different accident rates. Even when firms have
an experience rating, the premiums paid may not accurately reflect
their true degree of risk. In addition, a firm's experience rating is
generally based on the benefits paid to ill or injured workers, not on
the firm's safety and health record or on the actual risks faced by
employees. Thus, in some cases employers may have more of an incentive
to reduce premiums by contesting claims than by initiating safety and
health measures.
    For employers who rely on workers' compensation insurance, the
payment of premiums represents the employer's major cost for the
occurrence of occupational injuries and illnesses. However, the
mechanism for determining an employer's workers' compensation premium
frequently fails to reflect the real costs associated with a particular
employer's record. As a result, efforts made by an employer to reduce
the incidence of occupational injuries and illnesses are not
necessarily reflected in reduced workers' compensation premiums.
Similarly, firms that devote fewer resources to promoting worker safety
and health often may not incur commensurately higher workers'
compensation costs. Consequently, the program does not provide direct
incentives for most employers to reduce the occupational health and
safety risks in their workplaces.
    Finally, workers' compensation is an insurance mechanism through
which participants spread and share the risk of injury and illness
claims, and the costs associated with occupational injuries and
illnesses are often spread throughout the economy through risk sharing
stemming from participation in health insurance programs. For example,
some direct costs may not be incurred or attributed to employers
because many workers go to their private physician rather than the
company's physician for work-related injuries and illnesses, even
though there are systemic mechanisms in place to ensure that work-
related injuries are treated through the workers' compensation system.
The social burden of adverse health effects is also shared by taxpayer-
supported programs such as welfare, social security disability and
death benefits, and Medicare. Employers have, therefore, less incentive
to avoid such losses than they would if they were directly liable for
all such claims. This transfer of risk is another reason why the market
does not fully internalize the social costs of occupationally related
injuries and illnesses.
    The workers' compensation system does provide economic incentives
for larger firms, especially those that self-insure for workers'
compensation, because these firms internalize a greater portion of the
true costs of the work-related injuries and illnesses incurred by their
workers. Thus, larger firms can generally be expected to have done more
to reduce the costs associated with occupational risks than smaller
firms.
    In summary, the workers' compensation system suffers from several
defects that seriously reduce its effectiveness in providing incentives
for firms to create safe and healthful workplaces. First, because the
scheduled benefits are often significantly less than the actual losses
experienced by injured or ill workers and the social losses experienced
by tax payers, the existence of workers' compensation programs limits
an employer's liability to levels significantly below the actual costs
of the injury or illness. Second, premiums for individual firms are
often unrelated or only loosely related to that firm's risk
environment. The firm, therefore, does not receive the proper economic
incentives and consequently fails to invest sufficient resources in
reducing workplace injuries and illnesses. The economic costs not borne
by the employer are imposed on the employee directly or on society
through social welfare programs.
    Summary. OSHA has determined that certain workers are exposed to
occupational risks associated with work on electric power generation,
transmission, and distribution systems. The private market has not been
effective in sufficiently reducing this level of risk due to a lack of
complete information about safety risks in specific work environments,
limits on worker mobility, and other factors that contribute to the
failure of markets to provide an efficient allocation of resources.
Options for improving the operations of markets include information
dissemination programs, tort liability options, and workers'
compensation programs. After considering each of these options, OSHA
has concluded that none of them will provide the level of benefits
achievable by the proposed electric power systems rules.

D. Profile of Affected Industries

    The proposal affects establishments in a variety of different
industries involving electric power generation, transmission, and
distribution. The proposal primarily affects firms that construct,
operate, maintain, or repair electric power generation, transmission,
or distribution systems. These firms include electric utilities as well
as contractors who are hired by utilities and who are primarily
classified in the construction industry. In addition, potentially
affected firms are found in a variety of manufacturing and other
industries that own or operate their own electric power generation,
transmission, or distribution systems as a secondary part of their
business operations. The

proposal also potentially affects establishments performing line-
clearance tree-trimming operations.
    Table V-2 presents data on the numbers of establishments and
numbers of employees for each affected industry. Across all industries,
an estimated 20,765 establishments and 227,683 employees may be
affected by the proposed standards.

                    Table V-2.--Profile of Potentially Affected Establishments and Employees
----------------------------------------------------------------------------------------------------------------
                                                                                Potentially
                                                                               Potentially       affected full-
             Industry code                         Industry name                 affected       time equivalent
                                                                              establishments    (FTE) employees
----------------------------------------------------------------------------------------------------------------
NAICS 234910...........................  Water, sewer, and pipeline                       847                951
                                          construction.
NAICS 234920...........................  Power and communication                         2829              26179
                                          transmission line construction.
NAICS 234930...........................  Industrial nonbuilding structure                 266               1391
                                          construction.
NAICS 234990...........................  All other heavy construction.....                656               5573
NAICS 235310...........................  Electrical contractors...........               1613              16342
NAICS 235910...........................  Structural steel erection                        652                300
                                          contractors.
NAICS 235950...........................  Building equipment and other                     952                281
                                          machine installation contractors.
NAICS 235990...........................  All other special trade                         2612                734
                                          contractors.
NAICS 221110...........................  Electric power generation........               1745              43103
NAICS 221120...........................  Electric power transmission,                    6190              71441
                                          control, and distribution.
NAICS 2211.............................  Publicly owned utilities.........                923               9864
Various................................  Industrial power generators......                933              16504
SIC 0783...............................  Ornamental shrub and tree                        547              35020
                                          services.
                                                                           --------------------
    Total..............................  .................................              20765            227683
----------------------------------------------------------------------------------------------------------------
Source: CONSAD [2], Appendix C, pages 1-2.

    As shown in Table V-2, the construction industries with the largest
numbers of affected employees are Power and Communication Transmission
Line Construction and Electrical Contractors, which together account
for over 42,000 employees of the affected work force. Other potentially
affected construction industries include Water, Sewer, and Pipeline
Construction, Industrial Nonbuilding Structure Construction, All Other
Heavy Construction, Structural Steel Erection Contractors, Building
Equipment and Other Machine Installation Contractors, and All Other
Special Trade Contractors.
    Table V-2 also shows that firms classified as utilities account for
over 8,000 of the potentially affected establishments, and for over
120,000 of the potentially affected employees. Utilities include
establishments classified in the Electric Power Generation industry and
in the Electric Power Transmission, Control, and Distribution industry.
    The U.S. Department of Commerce Census data on the numbers of
utilities and the numbers of workers employed by utilities do not
include utilities that are owned by public sector entities. Thus, data
for utilities owned by the public sector are shown separately in Table
V-2.
    Potentially affected utilities include publicly-owned utilities
that operate in OSHA State-plan States. (State-plan States,
representing about half of total U.S. employment, are States that
operate their own occupational safety and health programs; these States
are obligated, under formal agreements with OSHA, to impose OSHA-
equivalent State regulatory requirements on public employees within
their jurisdiction.) The number of potentially affected public entities
and the corresponding number of employees are shown separately in Table
V-2. Over 900 establishments and over 9,000 employees are part of
publicly-owned utilities potentially affected by the proposed
standards.
    Table V-2 further shows the numbers of potentially affected
establishments and employees that are part of firms in a variety of
manufacturing and other industries who own or operate their own
electric power generation, transmission, or distribution systems as a
secondary part of their business operations. Over 900 establishments
and 16,000 employees potentially affected by the proposed standards are
accounted for by these firms. Based on their primary business activity,
these establishments are classified as part of the following industry
sectors: Oil and Gas Extraction; Mining; Water, Sewer, and Other
Systems; Food Manufacturing; Wood Product Manufacturing; Paper
Manufacturing; Petroleum and Coal Products Manufacturing; Chemical
Manufacturing; Primary Metal Manufacturing; Wholesale Trade, Durable
Goods; Educational Services; and Hospitals.
    Finally, Table V-2 presents figures for the numbers of potentially
affected establishments and employees in the Ornamental Shrub and Tree
Services industry. OSHA estimates that over 500 establishments and over
35,000 employees in this industry are potentially affected by the
provisions in the proposal involving requirements associated with
providing fall protection while working in aerial lifts.

E. Benefits, Net Benefits, and Cost Effectiveness

    The proposed revisions to the OSHA standards addressing electric
power generation, transmission, and distribution work are expected to
result in an increased degree of safety for the affected employees.
These changes are expected to reduce the numbers of accidents,
fatalities, and injuries associated with the relevant tasks, as well as
reducing the severity of certain injuries, such as burns or injuries
that could be sustained as a result of an arrested fall, that may still
occur while performing some of the affected procedures.
    To develop estimates of the potential benefits associated with this
proposal, CONSAD Corp., under contract to OSHA, researched and reviewed
potential sources of useful data. CONSAD, in consultation with the
Agency, determined that the most reliable data sources for this purpose
included OSHA's Integrated Management Information System (IMIS), and
the Census of Fatal Occupational Injuries developed by the Bureau of
Labor Statistics (BLS).
    From these sources, CONSAD identified and analyzed injuries and

fatalities that would be addressed by this proposal. This analysis was
based on over 9 years of data contained in these databases. CONSAD
identified relevant cases in the databases by determining the criteria
provided in the databases that would apply to such cases, such as the
nature of the injury, the occupation of the employee, the source of the
injury, and the industry classification of the employer. CONSAD then
reviewed individual accident abstracts to make a final determination
whether to include the accident as one addressed by the proposed
standards. A description of the methodological approach used for
analyzing these data is included in the final report submitted to OSHA
by CONSAD Corporation [1].
    CONSAD's analysis found that an average of 74 fatalities and 25
injuries involving circumstances directly addressed by the existing or
proposed standards are recorded annually in the relevant databases.
These figures represent minimums since they are associated with
documented cases.
    The actual number of fatalities addressed by this rulemaking may be
somewhat higher, but OSHA does not currently have a basis for
estimating how many pertinent fatalities may have occurred that would
not be represented by the relevant data sources. OSHA requests
information and comments from the public regarding this issue.
    The actual number of injuries addressed by this rulemaking is
almost certainly much greater than the number included in the data
sources. OSHA requires data to be included in its IMIS database only if
an incident involves at least one fatality or three or more
hospitalized injuries. However, some individual States have more
stringent reporting requirements and thus include some additional
injuries among the cases submitted to the IMIS database.
    CONSAD performed an analysis of the IMIS fatality and injury data
by State that were relevant to this rulemaking. This analysis found
that the ratio of injuries to fatalities in California, which requires
all hospitalized injuries to be reported, was over six.
    Applying this ratio to the number of known fatalities addressed by
this rulemaking results in an estimated 444 injuries occurring
annually. It should be noted that even this figure excludes injuries
that for various reasons may not be reported to or included in the IMIS
database, such as single injuries that result in no hospitalizations.
OSHA requests any information and comments from the public that may
help improve the accuracy of this estimate.
    Thus, OSHA estimates that 74 fatalities and 444 injuries occur
annually among employees involved in electric power generation,
transmission, and distribution work addressed by the provisions of this
rulemaking.
    Based on a review and analysis of the incident reports associated
with the reported injuries and fatalities, OSHA estimates that full
compliance with the existing standards would have prevented about 53
percent of the injuries and fatalities. In comparison, full compliance
with the proposed standards would have prevented 79.0 percent of the
relevant injuries and fatalities. Thus, the increase in safety that
would be provided by the proposed standards is represented by the
prevention of an additional 19 fatalities and 116 injuries annually.
    Applying an average monetary value of $50,000 per prevented injury
and a value of $6.8 million per prevented fatality results in an
estimated monetized benefit of $135 million. In estimating the value of
preventing a fatality, OSHA has followed the approach established by
the U.S. Environmental Protection Agency (EPA). EPA's approach is
detailed in Chapter 7 of EPA's Guidelines for Preparing Economic
Analyses, which provides a detailed review of the methods for
estimating mortality risk values and summarizes the values obtained in
the literature [6]. Synthesizing the results from 26 relevant studies,
EPA arrived at a mean value of a statistical life (VSL) of $4.8 million
(in 1990 dollars). EPA recommends this central estimate, updated for
inflation (the value is $6.8 million in 2003 dollars) for application
in regulatory analyses. This VSL estimate is also within the range of
the substantial majority of such estimates in the literature of $1
million to $10 million per statistical life, as discussed in OMB
Circular A-4.
    In estimating the value of preventing an injury, OSHA reviewed the
available research literature. A critical review of 39 different
studies estimating the value of a statistical injury is provided by Kip
Viscusi and Joseph Aldy in their 2003 study [7]. Viscusi and Aldy found
that most studies have estimates in the range of $20,000 to $70,000 per
injury, and several studies have even higher values. The range of
values is partly explained by the measure of nonfatal job risks used:
some studies use an overall injury rate, and other studies use only
injuries resulting in lost workdays. The injuries that would be
prevented by this proposed electric power standard are hospitalized
injuries, which are likely to be more severe, on average, than lost
workday injuries. In addition, the proposed standard is expected to
reduce the incidence of burn injuries, which tend to be more severe
injuries, involving more pain and suffering, more expensive treatments,
and generally longer recovery periods than lost workday injuries. Thus,
for this rulemaking, an estimated value of a statistical injury in the
upper part of the reported range of estimates would be supported. In
their paper, Viscusi and Aldy reviewed the available willingness to pay
(WTP) literature to identify their range of estimates; using WTP to
value non-fatal injury and illness is the recommended approach, as
discussed in OMB Circular A-4.
    The net monetized benefits of the proposed standard are estimated
to be about $101.1 million annually ($135 million in benefits and $33.9
million in costs). Note that these net benefits exclude any
unquantified benefits associated with revising the standards to provide
updated, clear, and consistent regulatory requirements to the public.
    Table V-4 provides an overview of the estimated benefits associated
with this proposed rulemaking. OSHA requests comments from the public
regarding these figures and any other aspects of the estimation of the
benefits associated with this rulemaking. Table V-3 summarizes the
costs, benefits, net benefits, and cost effectiveness of the proposed
standard.

             Table V-3.--Net Benefits and Cost Effectiveness
------------------------------------------------------------------------

------------------------------------------------------------------------
Annualized Costs
    Determination of Appropriate Protective       $11.0 million.
     Clothing.
    Provision of Appropriate Protective Clothing  $8.4 million.
    Host/Contractor Communications..............  $7.8 million.
    Expanded Job Briefings......................  $5.1 million.
    Additional Training.........................  $1.2 million.
    Other Costs.................................  $0.4 million.
        Total Annual Costs......................  $33.9 million.

Annual Benefits
    Number of Injuries Prevented................  116
    Number of Fatalities Prevented..............  19
    Monetized Benefits (Assuming $50,000 per      $135 million.
     Injury and $6.8 million per Fatality
     Prevented).
    OSHA standards that are updated and           unquantified.
     consistent.
        Total Annual Benefits...................  116 injuries and 19
                                                   fatalities prevented.

Net Benefits (Benefits Minus Costs): $101 million annually Cost
 Effectiveness
    Compliance with the proposed standards would result in the
     prevention of 1 fatality and 6 injuries per $1.8 million in costs,
     or, alternatively, $4.00 of benefits per dollar of costs..
------------------------------------------------------------------------

    Additional benefits associated with this proposal involve providing
updated, clear, and consistent safety standards regarding electric
power generation, transmission, and distribution work to the relevant
employers, employees, and interested members of the public. The
existing OSHA standards for the construction of electric power
transmission and distribution systems are over 30 years old and
inconsistent with the more recently promulgated standards addressing
repair and maintenance work. OSHA believes that the updated standards
are easier to understand and to apply and will benefit employers by
facilitating compliance while improving safety.
    As explained earlier, the inconsistencies between OSHA's existing
standards related to electric power generation, transmission, and
distribution for construction and general industry work create numerous
difficulties for employers and employees. The benefits associated with
providing updated, clear, and consistent safety standards are great,
but they have not been monetized or quantified. OSHA requests comments
regarding how these benefits can or should be estimated.
    With particular regard to the benefits associated with requirements
for protective clothing, OSHA estimates that an average of at least 8
electric utility burn accidents occur each year, leading to 12 nonfatal
injuries and 2 fatalities per year. Of the reports indicating the
extent of the burn injury, 75 percent reported third degree burns.
Proper protective clothing is expected to reduce the number of
fatalities and the severity of these injuries.
    Requiring the use of body harnesses instead of body belts is also
expected to reduce fatalities and injuries among affected workers.
There are several problems with body belts. First, they are more likely
to result in serious injury during a fall because they place greater
stress on the workers' body. Second, body belts virtually eliminate the
possibility of self rescue after the fall, and increase the probability
of serious internal injuries as the worker hangs suspended. Studies
performed in Europe and by the U.S. Air Force indicate high risks
associated with the body belt both in fall arrest and suspension modes.
Third, it is harder for supervisors to determine visually if the worker
is using appropriate fall protection when belts are used. By contrast,
it can easily be seen from a distance whether a harness is being worn.
Finally, there is a greater risk that a worker could slip out of a body
belt than out of a harness. As a result of these considerations, many
employers have already switched to requiring harnesses rather than
belts. French and German worker safety standards prohibit the use of
body belts, and British standards impose major restrictions on their
use. Studies documenting the inappropriateness of and the safety risks
associated with the use of body belts as part of a fall arrest system
include Exhibits 2-36, 3-7, 3-9, 3-10, and 3-13 in OSHA docket S-206
(Fall Protection), and Exhibits 9-33, 11-3, 11-4, 11-5, and 11-6 in
OSHA docket S-700 (Powered Platforms).
    An average of about fifteen fatalities annually involve falls from
aerial lifts; in these cases, the employees were generally not wearing
a belt or a harness. Since most employees do, in fact, wear a belt or a
harness (according to the CONSAD report, current compliance is over 80
percent), there are likely to be at least 60 falls annually in which a
belt or harness was relied upon to arrest a fall.
    Employees who rely only on a belt for fall protection have been
determined to be at significant risk of serious injury, and the use of
body belts as part of a fall arrest system has been determined to be
generally inappropriate, as OSHA has already established with an
extensive record on the subject as part of the final rule for fall
protection in construction. For a complete discussion of this issue,
see the Summary and Explanation section of the preamble to the final
OSHA rule on fall protection in construction (59 FR 40672, August 9,
1994).

                                     Table V-4.--Overview of Annual Benefits
----------------------------------------------------------------------------------------------------------------
                                                                Injuries                     Fatalities
----------------------------------------------------------------------------------------------------------------
Total Addressed by the Proposed Rulemaking.........  444..........................  74
Preventable Through Full Compliance with Existing    235..........................  39
 Standards (52.9 percent).
Additional Preventable with Full Compliance with     116..........................  19
 Proposed Standards (26.1 percent).
Monetized Benefits, Assuming Value of $50,000 per    $5.8 million.................  $129.2 million
 injury, $6.8 million per fatality.
                                                    --------------------------------
    Total Monetized Benefits.......................                         $135 million
----------------------------------------------------------------------------------------------------------------
Note: Additional benefits associated with this rulemaking involve providing OSHA standards that are updated,
  clear, and consistent.
Sources: CONSAD [1]; OSHA, Office of Regulatory Analysis.

F. Technological Feasibility

    In accordance with the OSH Act, OSHA is required to demonstrate
that occupational safety and health standards promulgated by the Agency
are technologically feasible. In fulfillment of this requirement, OSHA
has reviewed the requirements that would be imposed by the proposal,
and has assessed their technological feasibility. As a result of this
review,

OSHA has determined that compliance with the requirements of the
proposal is technologically feasible for all affected industries.
    The proposal would require employers to provide protective
equipment and clothing, to provide training, and to implement work
practices to reduce the hazards associated with work involving electric
power generation, transmission, and distribution. Compliance with all
of the proposed requirements can be achieved with readily and widely
available technologies. OSHA believes that there are no technological
constraints associated with compliance with any of the proposed
requirements, and requests comments regarding this conclusion.

G. Costs of Compliance

Introduction
    This section of the preliminary analysis presents the estimated
costs of compliance for the proposed electric power generation,
transmission, and distribution rulemaking. The estimated costs of
compliance represent the additional costs necessary for employers to
achieve full compliance. They do not include costs associated with
current compliance with the new requirements; nor do they include costs
associated with achieving full compliance with existing applicable
requirements.
    For purposes of this analysis, the terms ``proposal'' and
``proposed standard'' include all elements of this proposed rulemaking,
including proposed changes to 29 CFR 1910.269, proposed changes to 29
CFR 1926, proposed changes involving electrical protective equipment
requirements, and other associated revisions and additions. The
consolidated set of proposed actions was analyzed in its entirety; only
those parts that were identified as involving nonnegligible costs are
explicitly reflected in the analysis of compliance costs and impacts.
    Table V-5 presents the total annualized estimated costs by
provision and by industry sector. As shown in Table V-5, the total
annualized cost of compliance with the proposed rulemaking is estimated
to be about $33.9 million.
    The largest component of the compliance costs, at $11.0 million
annually, is comprised of the costs necessary to comply with the
requirement for the employer to make a determination regarding the type
and extent of flame-resistant apparel necessary to protect employees in
the event that employees may be exposed to an electric arc. For
purposes of estimating costs of compliance with this provision, OSHA
expects generally that utilities will conduct system-wide analyses of
the extent of potential hazards in various parts of the system and will
communicate the relevant information to contractors. The contractors,
in turn, will use the information provided by the utilities to
determine the appropriate type and extent of flame-resistant apparel
that employees on a particular project must wear.

                                           Table V-5.--Summary of Compliance Cost by Industry and by Provision
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Existing                                 Determination
                                           Revised    1910.269 for      Host-      Expanded job        of       Provision of     Use of     Total annual
    Industry code       Industry name     training    construction    contractor     briefing     appropriate    appropriate  harnesses in   compliance
                                        requirements     (except    communication  requirements    protective     clothing    aerial lifts      costs
                                                        training)    requirements                   clothing
--------------------------------------------------------------------------------------------------------------------------------------------------------
NAICS 234910.........  Water, Sewer,         $25,850        $3,043        $84,325       $37,642        $23,055       $79,174            $0      $253,089
                        and Pipeline
                        Construction.
NAICS 234920.........  Power and             614,829        83,773      1,062,275       945,140        581,517     2,071,169             0     5,358,702
                        Communication
                        Transmission
                        Line
                        Construction.
NAICS 234930.........  Industrial              2,358             0        114,887        42,827         47,048        94,957             0       302,077
                        Nonbuilding
                        Structure
                        Construction.
NAICS 234990.........  All Other Heavy       138,029        17,834        508,846       270,538        228,773       499,701             0     1,663,721
                        Construction.
NAICS 235310.........  Electrical            334,494        52,294      1,629,823       829,851        611,134     1,517,936             0     4,975,533
                        Contractors.
NAICS 235910.........  Structural              3,856             0         29,071        16,637         16,448        25,664             0        91,676
                        Steel Erection
                        Contractors.
NAICS 235950.........  Building                5,481             0         27,230        15,584         15,407        24,039             0        87,741
                        Equipment and
                        Other Machine
                        Installation
                        Contractors.
NAICS 235990.........  All Other              16,094             0         77,081        55,111         54,532        76,318             0       279,136
                        Special Trade
                        Contractors.
NAICS 221110.........  Electric Power         11,645             0      1,021,719       662,584      2,106,375     1,224,001             0     5,026,324
                        Generation.
NAICS 221120.........  Electric Power         25,205             0      2,725,314     1,102,340      5,900,695     2,033,643             0    11,787,197
                        Transmission,
                        Control, and
                        Distribution.
NAICS 2211...........  Publicly Owned          3,559             0        280,791       145,737        676,998       273,101             0     1,380,186
                        Utilities.
Various..............  Industrial              3,986             0        232,289       235,334        778,076       444,284        67,422     1,761,391
                        Power
                        Generators.
SIC 0783.............  Ornamental             59,968             0              0       700,013              0             0       216,578       976,559
                        Shrub and Tree
                        Services.
                                       ---------------
    Total............  ...............    $1,245,355      $156,944     $7,793,651    $5,059,338    $11,040,058    $8,363,987      $284,000  $33,943,333
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CONSAD [2], Appendix C; OSHA estimates.

    As shown in Table V-5, other provisions of the proposed standards
involving compliance costs include requirements for protective clothing
($8.4 million), requirements for various communications between host
employers and contractors ($7.8 million), expanded requirements for
conducting job briefings ($5.1 million), and revised training
requirements ($1.2 million).
    The remainder of this section provides and explains the details
underlying the calculations of the compliance costs associated with the
proposal. OSHA estimated compliance costs for each provision of the
proposal that involves nonnegligible costs and for each affected
industry sector. Total annualized costs were calculated by annualizing
nonrecurring first-year costs (at 7 percent over 10 years) and then
adding these to recurring annual costs.
    The calculations of the estimated costs associated with compliance
are intended to be representative of the average resources necessary to
achieve compliance with the proposed standards. Affected establishments
may achieve compliance through other means with an equivalent amount of
resources.
    Labor costs are based on industry-specific wage rates published by
BLS, adjusted upwards by 37 percent to account for benefits and other
employee-related costs and are presented in Table V-6. Supervisory wage
rates, including benefits, are estimated to be $22.45 per hour in the
Ornamental Shrub and Tree Services industry, and are estimated to range
from $31.56 to $41.00 in all other affected industries. Employee wage
rates (except those for engineers), including benefits, are estimated
to be $16.66 per hour in the Ornamental Shrub and Tree Services
industry, and are estimated to range from $24.00 to $34.84 in all other
affected industries. Wage rates for engineers, including benefits, are
estimated to be $41.00 per hour. Clerical wage rates, including
benefits, are estimated to be $16.78 per hour in the Ornamental Shrub
and Tree Services industry, and are estimated to range from $17.91 to
$23.70 in all other affected industries. [1, Table 5.3]

                 Table V-6.--Summary of Wag Rates for Calculating Compliance Costs, by Industry
----------------------------------------------------------------------------------------------------------------
                                                   Wage rates
-----------------------------------------------------------------------------------------------------------------
                                                        Salaries (including Fringe Benefits \1\) Based on Jobs
                                                                              Description
                                                     -----------------------------------------------------------
                                                                                Power
                                                                             generation-    Utility/    Utility/
       Industry code           Industry description                           power line      other      other
                                                      Supervisor  Clerical  construction/     power      power
                                                                             maintenance/     plant      plant
                                                                            repair worker  supervisor   engineer
                                                                                \2\
----------------------------------------------------------------------------------------------------------------
SIC 0783...................  Ornamental Shrub and         $22.45    $16.78         $16.66  ..........  .........
                              Tree Services.
NAICS 2211-10..............  Electric Power                41.00     23.70          32.66      $41.00     $44.37
                              Generation.
NAICS 2211-20..............  Electric Power                41.00     23.70          32.66       41.00      44.37
                              Transmission, Control,
                              and Distribution.
NAICS 2349-10..............  Water, Sewer, and             31.56     19.11          24.00  ..........  .........
                              Pipeline Construction.
NAICS 2349-20..............  Power and Communication       31.56     19.11          24.00  ..........  .........
                              Transmission Line
                              Const.
NAICS 2349-30..............  Industrial Nonbuilding        31.56     19.11          28.28  ..........  .........
                              Structure Construction.
NAICS 2349-90..............  All Other Heavy               31.56     19.11          26.85  ..........  .........
                              Construction.
NAICS 2353-10..............  Electrical Contractors.       33.99     17.91          25.46  ..........          ;
NAICS 2359-10..............  Structural Steel              34.13     18.08          34.84  ..........  .........
                              Erection Contractors.
NAICS 2359-50..............  Building Equipment and        34.13     18.08          34.84  ..........  .........
                              Other Machine
                              Installation Contr.
NAICS 2359-90..............  All Other Special Trade       34.13     18.08          34.84  ..........  .........
                              Contractors.
                             Major Publicly Owned          41.00     23.70          32.66       41.00      44.37
                              Utilities.
                             Industrial Generators..       41.00     23.70          33.02       41.00     44.37
----------------------------------------------------------------------------------------------------------------
\1\ Assumes an additional 37 percent of base salary for fringe benefit costs.
\2\ Depending upon the industry and the type of work performed (that is, power generation, power line, or both),
  these workers include line workers, tree-trimming crew members, power plant workers, and substation workers.
Source: CONSAD Research Corporation, ``Analytical Support and Data Gathering for a Preliminary Economic Analysis
  for Proposed Standards for Work on Electric Power Generation, Transmission, and Distribution Lines and
  Equipment (29 CFR 1910.269 and 29 CFR 1926--Subpart V),'' 2005, prepared for the U.S. Department of Labor,
  Occupational Safety and Health Administration, Office of Regulatory Analysis under Contract No. J9-F9-0013,
  Task Order Number 31, Pittsburgh, PA.

First-Year Costs for Revising Training Programs
    The proposed revisions to the OSHA standards addressing electric
power generation, transmission, and distribution work would require
establishments covered by 29 CFR 1910.269 to revise existing training
programs.
    The costs associated with such a revision were estimated as
involving 8 hours of supervisory time plus an hour of clerical time for
all industries except Ornamental Shrub and Tree Services. Due to the
more limited and less complex nature of the training for employees in
the Ornamental Shrub and Tree industry, the costs associated with
revising a training program in this industry were estimated to involve
4 hours of supervisory time plus half an hour of clerical time. [2,
Appendix C, pages 3-4]
    Thus, OSHA estimates that the average cost of compliance per
affected establishment covered by 29 CFR 1910.269 for revising existing
training programs would be $196 for establishments in the Ornamental
Shrub and Tree Services industry, and would range from $272 to $351 in
all other affected industries.
    Most establishments in all affected industries either already have
training programs that meet the requirements of the proposed standards,
or regularly revise their training programs to account for new
information or work practices. For these establishments, no additional
costs would be necessary to achieve compliance with the proposed
standards.
    Rates of current compliance were estimated for each affected
industry. Within each industry, rates of current

compliance were estimated separately for establishments based on their
size and based on whether their work force was unionized or not. In the
Ornamental Shrub and Tree Services industry, estimated rates of current
compliance ranged from 50 to 75 percent. In all other affected
industries, rates of current compliance were estimated to range from 75
to 98 percent. [2, Appendix C, pages 3-4]
    The total estimated first-year cost of compliance for revising
training programs was thus estimated to be $516,000, as shown in Table
V-7. Table V-7 also shows the costs of compliance for each affected
industry. In calculating the total annual cost associated with all of
the revised training requirements, this nonrecurring first-year cost
was annualized at a rate of 7 percent over 10 years and was then added
to the other annual costs.

                           Table V-7.--First-Year Costs for Revising Training Programs
----------------------------------------------------------------------------------------------------------------
                                                                   Average cost                       First-year
      Industry code            Industry name      Establishments   per affected    Compliance rate    compliance
                                                   affected (%)    establishment     (%) low/high       costs
----------------------------------------------------------------------------------------------------------------
NAICS 234910.............  Water, Sewer, and                  95            $272              75/95      $28,036
                            Pipeline
                            Construction.
NAICS 234920.............  Power and                          95             272              75/95       95,269
                            Communication
                            Transmission Line
                            Construction.
NAICS 234930.............  Industrial                        100             272              75/95        7,859
                            Nonbuilding
                            Structure
                            Construction.
NAICS 234990.............  All Other Heavy                    95             272              75/95       23,120
                            Construction.
NAICS 235310.............  Electrical                         95             290              75/95       61,211
                            Contractors.
NAICS 235910.............  Structural Steel                  100             291              75/95       24,714
                            Erection Contractors.
NAICS 235950.............  Building Equipment                100             291              75/95       36,315
                            and Other Machine
                            Installation
                            Contractors.
NAICS 235990.............  All Other Special                 100             291              75/95      106,576
                            Trade Contractors.
NAICS 221110.............  Electric Power                    100             351              95/98       21,793
                            Generation.
NAICS 221120.............  Electric Power                    100             351              95/98       77,343
                            Transmission,
                            Control, and
                            Distribution.
NAICS 2211...............  Publicly Owned                    100             351              95/98       11,790
                            Utilities.
Various..................  Industrial Power                  100             351              98/98        6,563
                            Generators.
SIC 0783.................  Ornamental Shrub and              100             196              50/75       15,885
                            Tree Services.
                                                 -----------------
    Total................  .....................  ..............  ..............  .................     516,474
----------------------------------------------------------------------------------------------------------------
Source: CONSAD [1], Table 5.3 and CONSAD [2], Appendix C, pages 3-4.

First-Year Costs for Provision of Additional Training for Employees
Already Covered by 29 CFR 1910.269
    The proposed revisions to the OSHA standards addressing electric
power generation, transmission, and distribution work may involve costs
for providing additional training.
    The costs associated with the provision of additional training were
estimated as involving resources (including labor costs or other
expenditures) equivalent to 1.5 hours of employee time, plus 12 minutes
of supervisory time, plus 3 minutes of clerical time per employee for
all affected industries except Ornamental Shrub and Tree Services. For
establishments in the Ornamental Shrub and Tree Services industry, the
provision of additional training was estimated as involving resources
(including labor costs or other expenditures) equivalent to 0.75 hours
of employee time, plus 6 minutes of supervisory time, plus 3 minutes of
clerical time per employee. [2, Appendix C, pages 5-6]
    Half of the incremental cost of this additional training is
attributable to the need to train current employees on the changes in
requirements that would be associated with the adoption of the proposed
standards and that would substitute for previous training. This part of
the cost would only need to be incurred in the first year; in
subsequent years, the corresponding part of the training would be
substituted for the previous training. The other half of the additional
training in the first year represents additional training that may be
necessary to fully comply with the revised training requirements of the
proposal.
    OSHA estimates that the average cost of compliance for providing
the additional training would be $40 per employee for establishments in
the Ornamental Shrub and Tree Services industry, and would range from
$50 to $67 per employee in all other affected industries.
    Based on research conducted by CONSAD, most establishments in all
affected industries are estimated to already provide training that
fully complies with the requirements of the proposed standards [2,
Appendix C, pages 5-6]. For these establishments, no additional costs
would be necessary to achieve compliance.
    Rates of current compliance with the proposed requirements were
estimated for each affected industry. Within each industry, rates of
current compliance were estimated separately for establishments based
on their size and based on whether their work force was unionized or
not. In the Ornamental Shrub and Tree Services industry, estimated
rates of current compliance ranged from 50 to 75 percent. In all other
affected industries, rates of current compliance were estimated to
range from 75 to 98 percent [2, Appendix C, pages 5-6].
    The total estimated first-year cost of compliance for providing
training meeting the requirements of the proposed standards was thus
estimated to be $572,000, as shown in Table V-8. Table V-8 also shows
the costs of compliance for each affected industry. In calculating the
total annual cost associated with all of the revised training
requirements, this nonrecurring first-year cost (less the corresponding
annual cost shown in Table V-10) was annualized at a rate of 7 percent
over 10 years and was then added to the recurring annual costs.

 Table V-8.--First-Year Costs for Providing Additional Training to Employees Already Covered by Sec.   1910.269
----------------------------------------------------------------------------------------------------------------
                                                                   Average cost     Compliance      First-year
      Industry code            Industry name         Employees     per affected    rate (%) low/    compliance
                                                   affected (%)      employee          high            costs
----------------------------------------------------------------------------------------------------------------
NAICS 234910.............  Water, Sewer, and                  95             $50           75/95          $4,028
                            Pipeline
                            Construction.
NAICS 234920.............  Power and                          95              50           75/95         106,246
                            Communication
                            Transmission Line
                            Construction.
NAICS 234930.............  Industrial                        100              58           75/95           6,041
                            Nonbuilding
                            Structure
                            Construction.
NAICS 234990.............  All Other Heavy                    95              55           75/95          27,622
                            Construction.
NAICS 235310.............  Electrical                         95              51           75/95          78,696
                            Contractors.
NAICS 235910.............  Structural Steel                  100              67           75/95           1,854
                            Erection Contractors.
NAICS 235950.............  Building Equipment                100              67           75/95           1,736
                            and Other Machine
                            Installation
                            Contractors.
NAICS 235990.............  All Other Special                 100              67           75/95           5,071
                            Trade Contractors.
NAICS 221110.............  Electric Power                    100              60           95/98          55,278
                            Generation.
NAICS 221120.............  Electric Power                    100              60           95/98          91,945
                            Transmission,
                            Control, and
                            Distribution.
NAICS 2211...............  Publicly Owned                    100              60           95/98          12,187
                            Utilities.
Various..................  Industrial Power                  100              61           98/98          19,744
                            Generators.
SIC 0783.................  Ornamental Shrub and              100              40           50/75         162,035
                            Tree Services.
                                                 -----------------
    Total................  .....................  ..............  ..............  ..............        572,483
----------------------------------------------------------------------------------------------------------------
Source: CONSAD [1], Table 5.3 and CONSAD [2], Appendix C, pages 5-6.

First-Year Costs for Additional Training for Employees Not Already
Covered by 29 CFR 1910.269
    The proposed revisions to the OSHA standards addressing electric
power generation, transmission, and distribution work include revisions
to the existing training requirements in 29 CFR 1910.269 and more
substantial revisions to the training requirements applicable to
construction work.
    Companies that perform construction work associated with electric
power generation, transmission, and distribution systems would also be
able and willing to perform (and, in fact, do perform) similar work
involving the repair and maintenance of such systems. The distinction
between construction work and repair or maintenance work can be
difficult to make in some situations. For example, the distinction may
hinge on whether a particular piece of equipment is regarded as an
upgrade or a ``replacement-in-kind.''
    Since the nature of the work is often almost identical, companies
are not likely to restrict themselves to only repair or maintenance
work or to only construction work with regard to potential jobs
involving electric power generation, transmission, and distribution.
Thus, it would be reasonable to assume that any company involved in
such work would have their employees trained in accordance with
accepted industry safety practices, as required by the existing OSHA
standard addressing this type of work in general industry in 29 CFR
1910.269.
    Small business representatives from the affected industries
providing comments to OSHA on a draft of the proposal generally
indicated that construction contractors follow and comply with the
standards applicable to general industry work (29 CFR 1910.269) for all
of their work, including construction work. But some small business
representatives indicated that there are some companies who follow the
standards for construction work in 29 CFR 1926, rather than the
standards for general industry work in 29 CFR 1910.269. [3, p. 14]
    For certain aspects of a particular construction job, it may be
possible to avoid some expenses associated with compliance with some of
the requirements of 29 CFR 1910.269 not dealing with training. However,
if the employees of the company ever do any work considered repair or
maintenance, or any other work covered by 29 CFR 1910.269, then they
must have been trained in accordance with that standard. Thus,
compliance with the training requirements of 29 CFR 1910.269 in
particular is likely, even if a specific job involves only construction
work and the employer follows the relevant provisions of the
Construction Standard, Subpart V.
    The number of firms, if any, who actually limit themselves to
construction work as defined by OSHA, and therefore avoid providing a
basic training regimen for employees under 29 CFR 1910.269, is
difficult to estimate. One small entity representative estimated that
about 10 to 30 percent of contractors involved in electric power
transmission and distribution work may exclusively do construction;
another representative stated that they do not know of any contractor
firms that do exclusively construction work [3, p. 15].
    It is not clear to what extent it is understood by potentially
affected firms that much work that is commonly regarded as construction
or that is commonly performed by construction companies does in fact
fall under OSHA's definition of general industry work, which includes
repair and maintenance. Thus, it would be easy for firms or people to
mistakenly believe that they (or others) are only involved in
construction work when in fact some of their work falls under the scope
of OSHA's general industry standards.
    It is very unlikely that contractors performing electric power
generation, transmission, or distribution work meet both of the
following criteria: (1) They know and expect that for all projects
performed, only construction work will be done such that the training
required by 29 CFR 1910.269 would not be required to be provided, and
(2) they have employees perform such work without providing them with
what many consider to be a minimum amount of basic safety training
applicable to this type of work, as reflected in the training
requirements of 29 CFR 1910.269. Only contractors meeting both of these
criteria would experience additional training costs due to the formal
extension of the training requirements in 29 CFR 1910.269 to the
construction industry.
    Nevertheless, for purposes of estimating the potential costs of
compliance that may be associated with this proposal, OSHA estimates
that 5

percent of the work force in several construction industries would need
to be provided with the training currently required by 29 CFR 1910.269
in order to achieve full compliance with the proposed standards.
    In the development of the proposal, OSHA was not able to identify
any employers that performed work covered by Subpart V of Part 1926,
but no work covered by 29 CFR 1910.269. However, OSHA has calculated
costs based on an estimate that 5 percent of the affected construction
work force performs no work covered by 29 CFR 1910.269, primarily in
response to the recommendations of the SBREFA Panel, as discussed in
the Initial Regulatory Flexibility Analysis.
    Specifically, OSHA estimates that 5 percent of the relevant work
force would be affected in the following industries: Water, Sewer, and
Pipeline Construction; Power and Communication Transmission Line
Construction; All Other Heavy Construction; and Electrical Contractors.
OSHA requests comments and information from the public regarding this
issue and the associated estimates.
    The costs associated with the additional training that may be
necessary to achieve full compliance with the new training provisions
for employees not already covered by 29 CFR 1910.269 were estimated as
involving resources (including labor costs or other expenditures)
equivalent to 24.75 hours of employee time, plus 3 minutes of clerical
time per employee in the affected industries.
    Thus, OSHA estimates that the average cost of compliance per
affected employee for the required training would range from $690 to
$772 in the affected industries.
    For the establishments and employees considered to be affected by
the expansion of the scope of applicability of this training
requirement, current compliance was estimated to be zero. [2, Appendix
C, pages 5-6]
    The total estimated first-year cost of compliance for providing
additional training for employees not already covered by 29 CFR
1910.269 (and not already provided with such training) was thus
estimated to be $4.1 million, as shown in Table V-9. Table V-9 also
shows the costs of compliance for each affected industry. In
calculating the total annual cost associated with all the revised
training requirements, this nonrecurring first-year cost (less the
corresponding annual cost shown in Table V-11) was annualized at a rate
of 7 percent over 10 years and was then added to the recurring annual
costs.

    Table V-9.--First-Year Costs for Additional Training for Employees Not Already Covered by Sec.   1910.269
----------------------------------------------------------------------------------------------------------------
                                                                   Average cost     Compliance      First-year
      Industry code            Industry name         Employees     per affected    rate (%) low     compliance
                                                   affected (%)      employee          high            costs
----------------------------------------------------------------------------------------------------------------
NAICS 234910.............  Water, Sewer, and                   5            $690               0         $78,184
                            Pipeline
                            Construction.
NAICS 234920.............  Power and                           5             690               0       2,153,238
                            Communication
                            Transmission Line
                            Construction.
NAICS 234930.............  Industrial                          0  ..............  ..............               0
                            Nonbuilding
                            Structure
                            Construction.
NAICS 234990.............  All Other Heavy                     5             772               0         479,611
                            Construction.
NAICS 235310.............  Electrical                          5             700               0       1,344,110
                            Contractors.
NAICS 235910.............  Structural Steel                    0  ..............  ..............               0
                            Erection Contractors.
NAICS 235950.............  Building Equipment                  0  ..............  ..............               0
                            and Other Machine
                            Installation
                            Contractors.
NAICS 235990.............  All Other Special                   0  ..............  ..............               0
                            Trade Contractors.
NAICS 221110.............  Electric Power                      0  ..............  ..............               0
                            Generation.
NAICS 221120.............  Electric Power                      0  ..............  ..............               0
                            Transmission,
                            Control, and
                            Distribution.
NAICS 2211...............  Publicly Owned                      0  ..............  ..............               0
                            Utilities.
Various..................  Industrial Power                    0  ..............  ..............               0
                            Generators.
SIC 0783.................  Ornamental Shrub and                0  ..............  ..............               0
                            Tree Services.
                                                 -----------------
    Total................  .....................  ..............  ..............  ..............      4,055,143
----------------------------------------------------------------------------------------------------------------
Source: CONSAD [1], Table 5.3; CONSAD [2], Appendix C, pages 5-6; OSHA estimates.

Annual Costs for Provision of Additional Training for Employees Already
Covered by 29 CFR 1910.269
    The proposed revisions to the OSHA standards addressing electric
power generation, transmission, and distribution work may involve
annual costs for providing additional training due to workforce
turnover.
    The costs associated with the provision of additional training were
estimated as involving resources (including labor costs or other
expenditures) equivalent to 0.75 hours of employee time, plus 6 minutes
of supervisory time, plus 3 minutes of clerical time per employee for
all affected industries except Ornamental Shrub and Tree Services. For
establishments in the Ornamental Shrub and Tree Services industry, the
provision of additional training was estimated as involving resources
(including labor costs or other expenditures) equivalent to 0.375 hours
of employee time, plus 3 minutes of supervisory time, plus 3 minutes of
clerical time per employee.
    OSHA estimates that the average cost of compliance for providing
the additional training would be $20 per affected employee for
establishments in the Ornamental Shrub and Tree Services industry and
would range from $25 to $34 per affected employee in all other affected
industries.
    The number of affected employees in each establishment was
estimated by determining the corresponding work force turnover rate.
The work force turnover rate associated with the relevant occupational
category was estimated for each potentially affected industry. The
turnover rates among employees performing electric power generation,
transmission, and distribution work were estimated to range from 11 to
16 percent in the construction industries, were estimated to be 3
percent in generation and utility industries, and were estimated to be
31 percent for establishments in the Ornamental Shrub and Tree Services
industry [2, Appendix C, p. 7-8].
    Based on research conducted by CONSAD, OSHA estimates that most
establishments in all affected industries already provide training that
fully complies with the requirements of the

proposed standards [2, Appendix C, pages 7-8]. For these
establishments, no additional costs would be necessary to achieve
compliance.
    Rates of current compliance with the proposed requirements were
estimated for each affected industry. Within each industry, rates of
current compliance were estimated separately for establishments based
on their size and based on whether their work force was unionized or
not. In the Ornamental Shrub and Tree Services industry, estimated
rates of current compliance ranged from 50 to 75 percent. In all other
affected industries, rates of current compliance were estimated to
range from 75 to 98 percent [2, Appendix C, pages 7-8].
    The total estimated annual cost of compliance for providing
training meeting the requirements of the proposed standards was thus
estimated to be about $58,000, as shown in Table V-10. Table V-10 also
shows the costs of compliance for each affected industry.

  Table V-10.--Annual Costs for Providing Additional Training for Employees Already Covered by Sec.   1910.269
----------------------------------------------------------------------------------------------------------------
                                                                   Average cost     Compliance        Annual
      Industry code            Industry name         Employees     per affected    rate (%) low/    compliance
                                                   affected (%)      employee          high            costs
----------------------------------------------------------------------------------------------------------------
NAICS 234910.............  Water, Sewer, and                  15             $25           75/95            $299
                            Pipeline
                            Construction.
NAICS 234920.............  Power and                          15              25           75/95           7,870
                            Communication
                            Transmission Line
                            Construction.
NAICS 234930.............  Industrial                         16              29           75/95             448
                            Nonbuilding
                            Structure
                            Construction.
NAICS 234990.............  All Other Heavy                    15              28           75/95           2,046
                            Construction.
NAICS 235310.............  Electrical                         10              26           75/95           4,103
                            Contractors.
NAICS 235910.............  Structural Steel                   11              34           75/95              97
                            Erection Contractors.
NAICS 235950.............  Building Equipment                 11              34           75/95              91
                            and Other Machine
                            Installation
                            Contractors.
NAICS 235990.............  All Other Special                  11              34           75/95             280
                            Trade Contractors.
NAICS 221110.............  Electric Power                      3              30           95/98             817
                            Generation.
NAICS 221120.............  Electric Power                      3              30           95/98           1,359
                            Transmission,
                            Control, and
                            Distribution.
NAICS 2211...............  Publicly Owned                      3              30           95/98             180
                            Utilities.
Various..................  Industrial Power                    3              31           98/98             292
                            Generators.
SIC 0783.................  Ornamental Shrub and               31              20           50/75          40,447
                            Tree Services.
                                                 -----------------
    Total................  .....................  ..............  ..............  ..............         58,329
----------------------------------------------------------------------------------------------------------------
Source: CONSAD [1], Table 5.3; CONSAD [2], Appendix C, pages 7-8; OSHA estimates.

Annual Costs for Additional Training for Employees Not Already Covered
by 29 CFR 1910.269
    As noted earlier, OSHA has included training costs based on an
estimate that 5 percent of the affected construction work force
performs no work covered by 29 CFR 1910.269. Specifically, OSHA
estimates that 5 percent of the relevant work force would be affected
in the following industries: Water, Sewer, and Pipeline Construction;
Power and Communication Transmission Line Construction; All Other Heavy
Construction; and Electrical Contractors.
    The annual costs associated with this additional training were
estimated for new affected employees as involving resources (including
labor costs or other expenditures) equivalent to 24.75 hours of
employee time, plus 3 minutes of clerical time per employee. OSHA
estimates that the average cost of compliance per affected employee for
the required training would range from $690 to $772 in the affected
industries.
    The number of affected employees in each establishment was
estimated by determining the corresponding work force turnover rate.
The work force turnover rate associated with the relevant occupational
category was estimated for each potentially affected industry. The
turnover rates among employees performing electric power generation,
transmission, and distribution work were estimated to range from 11 to
16 percent in the affected construction industries [2, Appendix C, p.
9-10].
    For the establishments and employees considered to be affected by
the expansion of the scope of applicability of this training
requirement, current compliance was estimated to be zero [2, Appendix
C, pages 9-10].
    The total estimated annual cost of compliance for providing
additional training for employees not already covered by 29 CFR
1910.269 (and not already provided with such training) was thus
estimated to be about $542,000, as shown in Table V-11. Table V-11 also
shows the costs of compliance for each affected industry.

    Table V-11.--Annual Costs for Provision of Additional Training for Employees Not Already Covered by Sec.
                                                    1910.269