Resource Planning Studies

Repowering Aging Gas Fired Units

ERG completed a power supply study performed for a joint action agency consisting of 18 municipal utilities located in the Southeastern U.S. The study assessed the viability of repowering aging gas-fired conventional boilers at 6 municipal power plants, and compared potential combined-cycle repowering opportunities, with new greenfield power plant development, and merchant power offers. Seventeen units at six sites were identified as candidates for repowering. The units ranged in size from a low of 5 MW to a high of 41 MW, and in age from 27 years to 40 years. As part of the analysis, ERG staff visited and reviewed the selected facilities, assessed the candidate equipment, and developed estimated cost and performance parameters for each of the repowering options. In addition to assessing the technical feasibility of the repowering options, and in order to compare the repowering opportunities with competing alternatives, ERG performed a system wide economic analysis. The analysis involved forecasting member utilities loads and fuel prices, and forecasting the availability of, and prices for wholesale market power. As part of the study, the utilities existing generating system was modeled for comparison to potential supply-side options. Total production costs for the system were developed and compared under various operating and capacity expansion scenarios. Study results were used by the agency in support of its future supply decision making.

Cogeneration Feasibility Analyses

Members of the Firm provided consulting assistance to the Greenville Utilities Commission, North Carolina (GUC) concerning feasibility investigations of two potential cogeneration projects. The overall goal of the studies was to determine if the development of a cogeneration project by GUC could be utilized to reduce its purchased power supply costs. An initial “Fatal Flaw” investigation was undertaken concerning the potential installation of a combustion turbine based co-generation facility to provide the steam heating requirements of East Carolina University’s (ECU) main campus. For this investigation, the installation of a combustion turbine rated 8.55 MW in combination with an unfired heat recovery steam generator (HRSG) rated for delivery of 44,000 lbs/per hour steam. Study results indicated that the benefit of such an installation to GUC would be marginal due to ECU’s thermal load profile. As a separate investigation, the preliminary feasibility of installing eleven different combinations of closed-cycle and combined-cycle combustion turbine units to meet the steam heating and cooling requirements of the ECU Medical School and Pitt County Memorial Hospital (PCMH) was analyzed. As one aspect of this study, ERG developed potential joint venture project business and operations structures for the project. Study results indicated that the installation of two combustion turbines each rated 6.2 MW with unfired HRSG’s and steam absorption chillers would potentially provide savings of approximately $2 million annually in power purchase cost to GUC and would reduce the heating and cooling costs of the ECU Medical School and PCMH by approximately $1 million annually while maintaining the proposed project in full compliance with federal Qualified Facility criteria. A follow-on comprehensive study was accomplished to: develop a detailed conceptual project design; resolve siting issues and investigate state and federal regulatory requirements; develop a project implementation schedule and to perform detailed economic/financial analyses relative to several alternatives for splitting the savings between project participants.

Water Heater Modeling Load Research Study

For the Electric Power Research Institute (EPRI), a member of the Firm participated in a detailed study to model the energy use of residential water heaters as part of an EPRI research project. Working with a consultant team that included Associated Edison Illuminating Companies (AEIC) Load Research Committee members from several large utilities, the project encompassed the development of a physical model as well as a model of the customer use characteristics. Multiple sites were selected, and variations on the equipment, installation specifics, and configuration of the dwellings were tested and incorporated in the physical model. Hourly data collected from interval metering was processed with demographic data to model the customer use characteristics in conjunction with the physical model.

Resource Planning Services

The Louisiana Energy & Power Authority (LEPA) is a Joint Action Agency with seventeen Louisiana municipal electric system members. ERG is presently involved in providing assistance to LEPA in acquiring long term power supply resources either through power purchase agreements with third party suppliers or the development of new LEPA generating resources designed to meet the future load requirements of its member electric systems. In this regard, ERG has been involved in a number of multi-track tasks, including the optimization of the mix of resources required to provide for economic long term power supply resources to LEPA members, the development and management of an RFP process for power purchases, and negotiation power purchase agreements with the recommended wholesale provider. In support of determining the deliverability of proposed power purchases across the Southwest Power Pool and Entergy transmission grids, ERG participated in LEPA’s submission of transmission service requests (TSR) to Entergy’s Independent Coordinator of Transmission (ICT) and performed independent review of system impact and facilities studies which recommended construction on significant transmission upgrades as a condition of approval of LEPA's TSRs.

Supply Side Planning

For the Guam Power Authority (GPA), a member of the Firm was responsible for the development of long range resource plans leading to GPA’s commitment to construct a new base load low speed diesel generating station and several combustion turbine based peaking and cogenerating plant additions. A member of the Firm was involved in recommending changes to the Island Wide Power System Agreement (IWPS) between GPA and the U.S. Navy relative to cost allocation and joint dispatch of IWPS units.

Lake Livingston Hydroelectric Project Development

For the Lone Star Municipal Power Agency (LSMPA) and the City of College Station, Texas, a member of the Firm provided assistance regarding the initial development of the Lake Livingston Hydroelectric Project and was responsible for negotiating the Project and Power Sales Agreements on behalf of LSMPA and the project sponsor, the Trinity River Authority. A member of the Firm also acted as Project Manager concerning the development and filing of an Application for a Major License concerning the project before the FERC, as well as representation of LSMPA before the FERC and other federal and state agencies regarding the acquisition of required project approvals.

Cogeneration Project Financing Support

A member of the Firm served as the primary consultant for Indosuez Australia, Ltd., Sydney, concerning its provision of financing regarding the development of the Victoria Hospitals Cogeneration Project. The Project consisted of the development of combustion turbine based cogeneration systems for five hospitals located in Melbourne, Australia. Reviews were performed concerning hospital steam loads and power requirements; proposed steam sale and power sale agreements; proposed retrofit plans for existing hospital steam supply and power distribution systems; proposed combustion turbine/ waste heat boiler systems; project capital costs, project annual costs and revenue projections; project environmental and regulatory permitting requirements; and, project scheduling. A confidential Consulting Report for submission to project lenders and equity participants was prepared in conjunction with the engagement.

Nuclear Research Reactor Conversion Study

ERG participated in a study for the City of Richland, Washington’s Energy Services Department which investigated the feasibility of acquiring ownership of and conversion of the U.S. Department of Energy’s (“USDOE”) Fast Flux Test Facility Nuclear Research Reactor (“FFTF”) located on USDOE’s Hanford Reservation to commercial use. The study focused on technical issues related to adapting the facility for power generation, licensing requirements, and development of necessary transmission additions to support the project. In conjunction with the engagement, an economic/financial analysis of the project was also performed.

Combined Cycle Gas Turbine Generating Facility Development

For the Louisiana Energy & Power Authority (LEPA), ERG performed load flow studies to investigate the potential locations for development of a new generating resource for LEPA, considering existing transmission system topology and constraints. In conjunction with this effort ERG determined the optimal project sizing and configuration, and developed capital cost estimates. Based upon ERG’s economic/financial analyses leading to development of a cost allocation structure for LEPA’s members, ERG recommended the development of a 1X1 64 MW (nominal) rated combined cycle gas turbine (CCGT) generating facility to be located in Morgan City, Louisiana. ERG played a lead role in selection of an Owner’s Engineer for preliminary design, and permitting of the project. ERG participated in the development of bid packages for procurement of the project’s major equipment including the combustion turbine generator, steam turbine generator, heat recovery steam generator and transformers. ERG was also involved in the development of the bid package for an Engineering, Procurement and Construction contractor. The project is presently in construction.

Independent Review of Demand and Supply Plans

While not a holding company under SEC regulations, PacifiCorp operated in a six state multi-jurisdictional area and, subsequent to its merger with Utah Power, operated a Utah Power division and a Pacific Power division as well as an unregulated subsidiary Inner PacifiCorp, Inc. On behalf of a Fortune 50 corporate client, ERG reviewed and analyzed PacifiCorp’s multi-jurisdictional six state rate proposal and reviewed and provided an analysis of its short and long term demand and supply side plans. In addition, ERG assisted the client in the development of a competitive selection process for the selection of electric utility providers and in the operation and maintenance of production and transmission facilities.

Re-Powering Study

ERG served as the primary consultant to the Guam Power Authority (GPA) and U.S. Navy Public Works Center concerning the performance of a study investigating the feasibility of re-powering the Navy’s PITI Station Units 4 and 5 as combined cycle units. The following services were provided: determination of the remaining life of existing boilers and steam turbine generators; investigation of the feasibility of converting the units to combined cycle operation; development of capital cost estimates; development of operating and maintenance costs; development of a construction schedule; coordination with GPA in performance of long range supply-side planning studies; and, comparison of the project to other supply-side alternatives. A report was prepared concerning the results of the reviews undertaken for presentation to both to the GPA and U.S. Navy concerning the project.

Power Facility Operations Review

Since 1983 ERG has been retained by the Louisiana Energy and Power Authority (LEPA) to perform annual operations reviews and semi-annual inspections of Rodemacher Unit No. 2, a 523 MW pulverized coal conventional steam turbine generating unit operated by CLECO in central Louisiana. In the performance of the annual Consulting Engineers Report, ERG staff performs on-site inspections of the facility, conducts interviews with key plant staff, reviews operations and maintenance records, assesses capital improvement plans, and reviews compliance with environmental permits. Additionally, the review includes a financial survey of the use of funds related to the project. The report is filed with LEPA's bond trustee to provide an independent opinion that the facility is being operated and maintained in a prudent manner and that all of the bond covenants, agreements, and conditions related to the bonds issued by LEPA to acquire and maintain an ownership share of the unit have been satisfied.

Generation Project Feasibility Study

The Coushatta Tribe, in coordination with Meyer & Associates, Inc. (Meyer), investigated the potential development of a petroleum coke-fired generating facility, proposed to be located in central Louisiana. In this regard, ERG was retained to conduct several aspects of the feasibility study. In particular, members of ERG developed the load definition for the proposed project by identifying and modeling the aggregate load profile of potential wholesale municipal electric system purchasers of the project’s output. Based upon this information an analysis of alternative plan configurations was performed. ERG was also responsible for developing a conceptual project capital cost estimate, and an investigation of the availability of adequate transmission capacity required to deliver the project’s output to ultimate purchasers and alternatives for the provision of associated ancillary services.

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