Over 300 towers were installed in rugged terrain.
New transmission line is an innovative, privatized balancing act between three different entities.
Posted on 10/08/2004 4:28:24 AM PDT by snopercod
Design-build delivery rightfully has earned credit for unclogging many congested highways. But in a remote, rugged stretch of central California, design-build now is about to clear a different sort of traffic jam.
In an innovative partnership teaming the U.S. Dept. of Energy, a private developer and an investor-owned utility, a contractor is completing an 84-mile, 500-kilovolt transmission line in the San Joaquin Valley that will relieve a longtime bottleneck on a grid segment called Path 15.
The line’s 1,500 megawatts of additional transmission capacity will provide flexibility "to move generation up and down the state to meet the load demands," says Jim McIntosh, director of grid operations for the California Independent System Operator (Cal-ISO), which runs the state’s power grid. The upgrade represents "the first greenfield, privately financed transmission line in the history of the country," says Bob Mitchell, president and chief operating officer of Trans-Elect Inc.’s New Transmission Development Co., the project’s private developer. Reston, Va.-based Trans-Elect, the first independent transmission company in North America, is arranging financing and will own the majority of the transmission rights on the line.
At the heart of the fast-track project is an $87.8-million engineer-procure-construct (EPC) contract awarded last year to Mesa, Ariz.-based Maslonka & Associates Inc. by DOE’s Western Area Power Administration. The project will come in about 10% under budget and months ahead of its originally projected completion date, predicts Martin J. Maslonka, company president. Maslonka attributes "90% of the credit for the success" of the project to the EPC approach. "The shifting of significant risk and responsibility, parallel with the shifting of authority over execution from the asset owner to the EPC firm, drove those results," he contends.
Trans-Elect’s Mitchell agrees. "In large part, it was the EPC bidding process that resulted in a significantly lower bid than what had been projected to be the likely price," he says. The project’s overall cost estimate has dropped from $322 million to between $265 million and $270 million.
Power officials call the project essential to avoiding shortages of the kind that plagued northern California in 2000 and 2001. When high demand squeezed capacity several years ago, Cal-ISO could not direct surplus power from south to north "because there wasn’t enough capacity on Path 15," says David Christy, a spokesman for the Western Area Power Administration, the DOE agency managing design and construction of the Path 15 upgrade. Western also manages 17,000 miles of transmission lines and markets power generated by federal water projects in 15 western states.
New transmission line is an innovative, privatized balancing act between three different entities.
The bottleneck is located where Path 15 narrows from three lines to two between a substation near Los Banos in Merced County to a substation in Fresno County near Coalinga. Adding a third line there had been seriously considered in the late 1980s, but cost and other issues scuttled the upgrade. After the rolling blackouts highlighted Path 15’s inadequacy, U.S. Secretary of Energy Spencer Abraham charged Western with gauging private-sector interest in financing a third line. Thirteen parties responded, but Trans-Elect’s share increased "because all of the other parties dropped out except PG&E and us," Mitchell says.
Power Play
Under the plan, Trans-Elect is financing construction of the transmission line, and will receive 72% of the transmission rights. PG&E is upgrading two substations and will own 18% of the transmission capacity. Western is responsible for planning and right-of-way acquisition and will own the remaining 10%.
Over 300 towers were installed in rugged terrain.
From the beginning, signs pointed to design-build as the preferred project delivery method. Trans-Elect arranged to finance the project through equity financing and long-term debt. "The private parties financing the project needed to have the assurance that this was going to be done for a fixed price," says Mitchell. Because of the shaky state of the power industry, "the financial community in 2003 was not feeling particularly venturesome," he says. "Having assurance that the project was going to be completed on time and on budget and having a party that was liable if it wasn’t was very important."
An EPC approach came about primarily "through our insistence and our belief that EPC is a more productive way to go," Mitchell says. Much of the utilities’ in-house transmission line staff also had moved on during the long lull in new projects, making EPC delivery more attractive than rebuilding staff for a single project.
In a departure from standard procedure, the agency therefore issued a request for proposals, rather than asking contractors to bid on a complete set of documents, says David Radosevich, Western’s engineering and construction manager. That freed the agency from awarding the contract on price alone. "On some projects that are extremely critical, you don’t want the low bidder, you want someone who has the experience to get the project completed" on time and on budget, says Radosevich. Qualifications-based selection allowed Western to choose "the best contractor possible, not the cheapest contractor," he adds.
Proposals were judged on the contractor’s experience in transmission projects, strategy for meeting an aggressive schedule, supply information, bonding capacity and safety program. Price was a consideration but not the determining one. The panel evaluating the proposals "didn’t even get to see the price at first," Radosevich says.
Western’s review panel recommended Maslonka after evaluating about a half-dozen candidates. The company’s price was not the lowest submitted, but its proposal excelled in key considerations. "The plan they put together was extremely thorough and well thought out," Radosevich says. Maslonka also scored high marks for its track record and experience of the individuals assigned to the project. And, "Maslonka did extremely well in trying to set up alliances with different manufacturers and suppliers," Radosevich says. Material quality, schedule and delivery problems can plague transmission projects, so Maslonka’s suppliers are liable for liquidated damages, he adds.
In keeping with the financial backers’ insistence on single-point responsibility, Maslonka’s contract has stringent financial requirements. "I’ve never heard of a project where you need a 100% surety bond and a letter of credit from a leading financial institution," Maslonka says. The contractor also is liable for $50,000 per day in liquidated damages for late delivery and a 10% retention will be released only after the project is completed and energized. These provisions "make sure that what they’re working on will be completed on schedule and completed to our specifications," says Radosevich.
The design-build approach "shifted much more risk and responsibility to our firm, enabling us to have the authority" to make key decisions, says Maslonka, Specification problems can cause finger pointing between contractor and engineer, "but we eliminated that by being more proactive with the specs themselves," Maslonka says. Building on information provided by Western, Maslonka scans and upgrades drawings as needed and we "write our own specs, which created a much higher degree of utilization for our on-site work force," he adds.
Standing Tall
For Path 15, Western provided about 60% design, including such elements as conductors, insulators, preliminary tower types and transmission line clearance. Maslonka’s design scope includes completing site surveys for the towers, confirming sag calculations, executing geological investigation and foundation design and completing tower designs.
On the construction side, Path 15 involves formidable scope over its 84-mile alignment. Some 1,500 to 2,000 ft west of the existing lines, Maslonka is erecting 246 100-ft to 160-ft-tall steel lattice towers and 98 steel poles ranging in height from 127 ft to 207 ft and then stringing the lines. The company has built or improved more than 100 miles of access roads. About 60% of the towers were flown in by helicopter. The remaining towers and all poles were erected by all-terrain cranes with up to 200-ton capacity, aided by 25 smaller cranes and winch-equipped bulldozers.
Maslonka fast-tracked construction to meet an aggressive schedule that Radosevich estimates allows only about 75% of the time Western would ordinarily allocate to a project of this scale. "We were doing geotechnical engineering, procurement and installation simultaneously," he says. Early in the project, the contractor took risks "that helped jump-start the project in their staging of equipment and personnel," says Mitchell.
Fast-track risks included ordering towers before base designs were completed and pouring concrete for conservatively designed foundations before completing geological investigation. Maslonka then refined the designs in response to the investigation. Access road construction took place during foundation pours. A more intangible need is for "the owner to get out of the way and to have someone there who isn’t a problem creator but a problem solver"–a description that fits several of Western’s team members like a glove, Maslonka says.
Backers say the Path 15 upgrade offers a potential model for other transmission projects. "We’re in discussions with all of our clients about using all or part of the advances" on Path 15, Maslonka says. This summer, the Bonneville Power Adminstration held an open session to gauge private developer interest in financing a $167-million, 79-mile-long transmission line spanning Washington and Oregon on the Lower Columbia River.
Public-private partnerships for transmission upgrades also could get a boost from legislation proposed by U.S. Sen. Kay Bailey Hutchison (R-Tex.). "Inevitably there will be more use [of Path 15’s breakthroughs] because of market forces and regulatory pressures," Maslonka predicts.
If only Duke could find a better way to design/build its grids.
Thanks for posting the article....I think the LATimes had an article about one of the power companies (maybe AES getting serious about building some power generating plants in California also )...
Over 300 towers were installed in rugged terrain.
New transmission line is an innovative, privatized balancing act between three different entities.
Unlike the "Born again Pagans," I marvel at what the God-given mind of man can do to tame the forces of nature to benefit so many timid souls!!!
God bless the PRODUCTIVE PEOPLE in America and ignore all the Anti-Everything Activist pukes that populate CA!!!
I'm sure that somewhere some equipment ran over a Mojave Turtle....
What the heck does one of those look like?
Can't be small!!!
Thanks you.
They must have bribed or mugged the " let's sue everyone" crowd...
And saving the Bay area from themselves and their Socialist attitudes....
Of course the next question...who is getting rich from this....someone has to be....very bad....
That crowd will show up shortly.....headlines in tomorrow's paper...news at 11 pm....
I read in Windpower Monthly that Germany has some 184,000 such giant towers. It's interesting how people don't worry about skylines when it's just towers, only if there is a windmill attached.
Germany isn't big enough to hold 184,000 of those giants...is it?
That's a common mistake to make. You just don't realize how big counties and states are unless you get on a motorcycle and start cruising. Iowa has the most windpower per capita of any state. Iowa is 56,000 square miles. If someone put you in some random place in Iowa and told you to start driving until you found a windmill, you'd be at it for months before you found one.
How soon we forget. Haven't you ever seen ski lift towers going up the side of steep slopes where cranes can't go?
And Germany is a lot bigger than Iowa.
Iowa is a lot smaller than Kansas....lots of windmills in Kansas,.
Kansas has 113 mw worth of windpower, Iowa has 472 mw with a 310 mw windfarm on the way.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.