New OSHA Interpretations Will Prompt Changes in Wind Power Design, Operations and Ownership Considerations

Until this year the wind power industry was flying beneath the radar screen of the Occupational Safety and Health Administration (“OSHA”). OSHA has now given notice that it will be targeting the industry. This will require changes in specific design, operation and maintenance features of the industry. This blog will discuss those changes and make recommendations for contract provisions between the various parties in the industry. 

Announcements at Windpower 2011
During the American Wind Energy Association (AWEA) - WindPower 2011 Conference and Exhibition in Anaheim, CA, this week, representatives from the federal OSHA gave a presentation on their vision for enforcing employee safety regulations in the industry. Starting next year OSHA will embark upon a National Emphasis Program (“NEP”) to target the industry. In the interim, OSHA will be inspecting wind farms as issues arise, such as complaints or accidents. Later this year or next year, OSHA is likely to start systematically visiting wind farms in its Region 5 (Illinois, Wisconsin, Minnesota and Michigan).  Since Minnesota and Michigan are state plans, it is unclear whether the initiative will include systematic inspections in those states. After that, the systematic inspections will spread nationwide. There is not much time to become compliant, and existing and new contracts such as Turbine Supply Agreements and Operation and Maintenance Agreements need to be reviewed and revised to address the new realities.

Turbine Supply Agreements
Agreements for the purchase of wind turbines and related equipment should address several aspects of OSHA's new enforcement interpretations and initiatives. Included in these challenges are the following:

• Equipment Capable of Being Locked Out - All equipment where the unexpected start up or release of stored energy could result in injury to repair, maintenance or other personnel, must be capable of being locked out. This applies to electrical panels, gear boxes, and other moving or electrical equipment that could release stored energy and cause amputation, struck by hazards, entrapment, or electric shock. For manufacturers, it is important to know that OSHA does not address product design directly, but its interpretations can have significant impact on not only sales, but also on product liability claims. So manufacturers should be concerned about this aspect of OSHA enforcement and interpretation. Turbine Supply Agreements that require OSHA compliant equipment probably require equipment to be capable of lockout. 
• Fall Protection Tie Offs - There is no uniformity among manufacturers in this area. This makes compliance with fall protection difficult for maintenance personnel, and can raise the stakes of litigation in accident cases. Turbine Supply Agreements that require OSHA compliant equipment probably require equipment to have tie off anchorages that are engineered to withstand at least 5000 lbs of force. 
• Confined Spaces - Depending on the configuration and potential hazards inside specific models of wind turbines, these may be considered confined spaces or permit required confined spaces. There are very detailed requirements for permit required confined spaces. The following spaces are discreet portions of a wind tower that must be considered:  the blades tower, rotor hub, tower, nacelle, tower basement, and pad mount transformer. The industry currently considers the blade to be a permit required confined space, because of the entrapment hazard between the 90 and 270 degree positions. However, if machine guarding, fall or electrical hazards are present in the nacelle, that is likely to be considered a permit required confined space by OSHA. Manufacturers should consider this in their designs and owner/operations manuals, and give proper warnings to purchasers and operators. 
• Warranty periods - Many Turbine Purchase Agreements may contain requirements for manufacturers or suppliers to train the ultimate user in operation and maintenance. OSHA will be looking at the manufacturers of wind turbines to determine whether they have properly trained the operators who will be taking over the operation. Manufacturers might be cited for failure to train. 

Operations and Maintenance Agreements
OSHA's enforcement programs will impact the cost of wind power operations and maintenance.  Those operators entering into long term operations contracts should be aware of what is coming down the track, and address contract provisions and financial considerations with this in mind.

OSHA has created a task force to focus its attention to the industry following several accidents.  OSHA held a three day session at its training center near Chicago, IL, recently and identified questions that would be addressed in a compliance directive later this year or next. Accidents and complaints will immediately result in inspection. In one recent case, the wind operator was fined nearly $400,000, and received very negative publicity. 

OSHA has announced that wind turbine operation and maintenance will be governed by regulations that were written for traditional power plant operators. Specifically, OSHA will apply 29 CFR 1910.269. These regulations address the following potential subject areas that may lead to citations. 

• Requirements that all machines be capable of being locked out - See discussion above for Turbine Supply Agreements. OSHA's hope is that manufacturers will equip wind power electrical and mechanical parts of the towers with the capability to be locked out during maintenance. However, if they do not, the operators who work on this equipment may be issued citations anyway. Turbine Supply Agreements should be reviewed.
• Electrical Training - OSHA expects wind technicians to have a high level of training on electrical safety, comparable to electrical contractors and traditional power plant personnel.
• Grounding - OSHA will require proper grounding of equipment. 
• Tie off points for fall protection - There is no standardization among manufacturers on tie off points. This will complicate fall protection compliance among operators. Tie offs that are not OSHA compliant could be a source of product liability claims for manufacturers. 
• Lockout/Tagout - OSHA will require that each employee have his own lock and key for maintenance on turbines. If multiple employees will work on the same equipment, each must apply his lock. 
• Electrical Safety Equipment - At Wind Power 2011 there was also the suggestion that OSHA's rules may require the use of electrical safety protective equipment and clothing consistent with NFPA 70E rules. This may require that those individuals working on wind turbines wear special clothing, and in certain cases wear flash hoods or blast helmets. 
• Job Briefings - Under the traditional power plant regulations the crew is required to hold a job briefing each day (29 CFR 1910.269). OSHA will require this for wind power maintenance crews as well. 
• First Aid and Rescue - Since most wind turbines are in remote areas, medical facilities and rescue personnel are often far away. Wind power operators who do not provide first aid equipment, first aid training or rescue equipment/training are likely to be cited for this. 

Owners/Host Employers

• Host Employer Responsibility – Some wind farms are set up on a business model in which the landowner invests some money and other partners assist in providing additional funding and the expertise and financial support to bring the project to market. How will OSHA view the liability for compliance on such projects?

OSHA has experienced recent success in issuing enforcement actions against employers whose own employees were not exposed. So contracting to have work performed by others may not sufficiently insulate a company from liability. In certain cases OSHA intends to issue citations to owners of wind turbines in the event that operators are not sufficiently trained and capable of working safely. 

Recommendation for contracts
Many well written contracts contain provisions that allow an adjustment to the contract, including pricing, based upon a change of law. However, OSHA has no intent to adopt regulations specific to the wind power industry. Instead, OSHA intends to interpret existing law to regulate the industry. Never the less, the world of safety in the industry is going to change, and with those changes will come added costs for equipment, clothing, training and man hours dedicated to compliance. Contract clauses should be reviewed and changed to address these concerns.

When buying a wind turbine, careful consideration should be given to lockout capability. Contracts should also address whether the design requires the  tower to be treated as a permit required confined space, and whether tie offs for fall protection are OSHA compliant.

Finally, if the tower contains a power lift, make certain that the lift is on separate power from other equipment up tower. If the maintenance personnel have to climb up and down the tower to do maintenance, there is a good chance they are not going to lockout the electrical equipment, since that will deactivate the lift. 

Conclusion
This new emphasis by OSHA will change some design features of turbine equipment, as well as, maintenance procedures. However, that will not happen fast enough for OSHA and large penalties may be issued to wind turbine owners, operators or manufacturers. Parties to a wind turbine project must understand the law and the new focus of OSHA and obtain proper legal counsel to limit their liabilities and assign responsibility for OSHA compliance. Failure to do so will increase project costs, litigation and other costs, and reduce the long term ability of a  company to succeed. 

Legal counsel should be consulted concerning project development. There are many traps to these projects and the financial and legal documents must be developed and prepared by counsel to address the safe design and operation of wind turbines. Otherwise projects may not provide the ROI that is expected, and may damage not only the reputation involved in the specific project, but also that of the industry.