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GLENARM POWER PLANT REPOWERING PROJECT WORKSHOP

GLENARM POWER PLANT REPOWERING PROJECT WORKSHOP. Pasadena City Council February 4, 2013 Item 13. Glenarm Repowering Project. Build a new combined cycle electric generation unit (68 MW net, 71 MW gross) Decommission existing B3 electric generation unit (65 MW net, 71 MW gross)

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GLENARM POWER PLANT REPOWERING PROJECT WORKSHOP

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  1. GLENARM POWER PLANT REPOWERING PROJECT WORKSHOP Pasadena City Council February 4, 2013 Item13

  2. Glenarm Repowering Project Build a new combined cycle electric generation unit (68 MW net, 71 MW gross) Decommission existing B3 electric generation unit (65 MW net, 71 MW gross) Close State Street cul-de-sac off of Fair Oaks Avenue Construct control room, instrument shop and offices Modify existing Pump Building as Maintenance shop

  3. Aerial View of Power Plant B3 Gold Line New Plant Glenarm Bldg. Pump Bldg. State St.

  4. Why Repower ? City’s Electrical System Must Stay Reliable • Need dependable local generation to back up single energy import location • B3 can’t be depended on for too long …47 years old, spare parts problems • Other alternatives (i.e. another import connection) not feasible • Reduced operations cost • New efficient unit is necessary to reduce dependence on coal • Flexible generation with quick start enables wind and solar power integration • Approximately same cost over 20 years to maintain B3 vs. new unit The City Council approved 2009 Energy IRP on 3/16/2009 • Replace existing B3 unit with equivalent size combined cycle unit by 2015

  5. Project Phases and Timeline Description Consultants • Selection of technology, configuration, Power Engineers preliminary engineering, specifications, etc. • CEQA/EIR PCR Hearing by Planning Commission … 3/13/13 City Council consideration … 4/8/13 • Air permits for General Electric and Rolls Royce Worley ParsonsApplication submitted …6/12; permit expected 5/13 • Environmental & geotechnical site assessment Hydrolouge, Inc. • Others for chemical risk management, noise study, asbestos/lead assessment, etc.

  6. Project Phases and Timeline • Bid Specifications for major equipment i.e. gas Issued 6/2012 turbine, once through steam generator, steam Contract by 7/2013 turbine and generator (Power Island) $ 45million approx. • Bid specification for final design, rest of the Contract by 2/2014 equipment and construction (Balance of Plant) $ 51million approx. • Design and construction of control room, etc. Contract by 2/2014 • Request for proposal for Project Manager and Contract by 9/2013 Construction Manager These contracts would need the City Council approval 6

  7. Visual Simulations Looking West From Broadway Plant (Existing)

  8. Visual Simulations (Cont.) Looking West From Broadway Plant…General Electric LM6000 Option

  9. Visual Simulations (Cont.) Looking West From Broadway Plant (Rolls Royce Trent Option)

  10. CEQA / EIR- Major Focus Areas Substantial comments received on draft EIR • Significantly high greenhouse gas emissions • CEQA compares emissions from new unit operating entire year at full capacity with B3’s actual recent operation i.e. 4% of full capacity • On MWh basis new unit emits ≈30% less • Exemption for height of structures…125 ft. stack • Cultural Resources – Historical resources (Glenarm Building) • Land Use and Planning – Consistency with South Fair Oaks Specific Plan • Noise – Noise Element of General Plan & Noise Ordinance • Project Labor Agreement…. Discussion with CURE underway, emphasis on local hiring and apprenticeship

  11. Project Management and Oversight PWP – GM PWP – AGM OFFICE POWER SUPPLY POWER PLANT SUPERINTENDENT REPOWERING PM TBD POWER PLANT ENGINEERING OWNER’S ENGR. POWER OTHER PWP DEPT. OTHER AGENCIES CONST. MGR. TBD BOP/construction CONTRACTOR TBD Power Island CONTRACTOR TBD Note : Project Manager and Construction Manager may be from the same firm and/or hired under the same contract. Staff to determine best value arrangement for the project following review of proposals for PM/CM services. 11

  12. Potential Financing Alternatives • Sources of Equity Financing: • $15 million to $20 million from Power Fund (working capital) • *All impacts estimated, actual debt service and kWh impact may vary

  13. Next Steps and Issues • Next Steps • EIR approval • Air Permit (contingent upon EIR approval) • Financing (Reimbursement resolution for City Council approval on 2/25/2013) • Contracts for major equipment, construction and Project/Construction Managers • Construction and Commissioning • Training for Power Plant staff • Major Issues • Air permit conditions and fee increase • EIR • Project Labor Agreement • Future plan for Broadway site and Glenarm building • Future plan for Gas Turbines 1 and 2 • Some elements of project and milestones continue to change due to regulatory and market information

  14. Back Up Slides BACK UP SLIDES TO FOLLOW

  15. Another View of Power Plant 15

  16. Primary Project Responsibilities • Repowering Construction Manager • On-site management of construction contract • Reports to Project Manager and Owner’s Engineer • Responsible for: site meetings, document control, inspections, const. schedule, billings, change management • Coordinates between equipment supplier and BOP contractor • Repowering Project Manager • Overall project responsibility • Reports to PWP AGM • Responsible for high-level decision making and integration and execution of project controls • Full time role, Attends PWP and City management meetings, provides status updates as needed

  17. Contracting Strategy • Contract directly for Power Island (15 Major Equipment) ≈ $45M • BOP Contract for detail design & installation of Power Island ≈ $51M • Contract design & construction of control room/offices ≈ $12M 17

  18. Project Cash Flow Project Total : $115.4M FY 2013: $1.2M FY 2014: $44.7M FY 2015: $46.2M FY 2016: $23.3M

  19. ProjectKey Dates/Milestones Environmental Impact Report… 4/8/13 • Issued NOP-------- 10/6/11 • Issued Draft EIR-------- 11/5/12 • Public Meeting Held on Draft EIR---- 12/12/12 • PC Hearing for Draft Final EIR--- 3/13/13 • Council Certification of EIR--- 4/8/13 Air Permit (SCAQMD/EPA)… 5/13/13 • Submitted applications for GE and RR---6/6/12 Power Island Contract (gas turbine, steam and electric generators)…7/23/13 Balance of Plant Construction Contract… 2/28/14 Glenarm Building Contract… 2/28/14 Demo/Construction Start 3/3/14 Commercial Operation… 8/10/15

  20. Estimated Impact of 100% Bond Financing • Impact of additional debt service may be reduced by offsetting revenues from ancillary services, wholesale energy transactions and reduced operating expenses due to increased efficiencies • $100 million of tax exempt revenue bonds • Estimated pricing date June 1, 2013 • 30 year, level debt service, estimated 4.0% true interest cost • Annual debt service approximately $7 million

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