pasadena water and power approve a project contingency amount of $2,500,000 for existing contracts...

Pasadena Water and Power

APPROVE A PROJECT CONTINGENCY AMOUNT OF $2,500,000 FOR EXISTING CONTRACTS RELATED TO THE LOCAL GENERATION REPOWERING PROJECT - PHASE II; INCREASE THE BUDGET BY $5,000,000;

AND APPROVE AN ADDITIONAL APPROPRIATION OF $10,000,000

City CouncilSeptember 29, 2014


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Site Pictures - GT-5 Repowering Project

August 4 – 8, 2014


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Last Friday, Sept. 26th, 2014



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Last Friday, Sept. 26th, 2014


Recommendations For GT5 Repowering Project

1. Approve a project contingency of $2.5 million for six existing contracts. City Manager to authorize expenditures

2. Increase budget by $5 million from ~$132 to ~$137 million

> Increase FY2015 appropriation by $10 million … Increase $88 million (approval up to FY2015) to $98 million

§ $ 5 million by new appropriation; and§ $ 5 million by transferring amounts from the currently budgeted and appropriated capital

projects related to the local power plant

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Financing•Interim - planned LOC•Long term – Electric Revenue Bonds


Budget , Appropriation, Workplan, Funding and Financing

Project Budget: The estimated cost of the project …. Can not be spent without Appropriation approved by the City Council.

Appropriation: The funds that can be expended on the project.

Workplan: Projected annual cash flow (payments) against expenses

Fund: Pasadena Light and Power Fund maintained exclusively for the electric utility

operations and capital projects in accordance with the City of Pasadena Charter

Financing: Source of funds i.e. equity and/or Electric Revenue Bonds issued by the Light

and Power Fund

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Project Contingency of $2.5 million

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Contractors Work Description Base Contract ContingencyTotal Contract (not to exceed)

Power Engineers Owner's engineer $3,000,000 $0 $3,000,000

Worley Parsons Air permitting $310,500 $20,000 $330,500

PCR Services Corp. CEQA study and EIR $211,997 $21,110 $233,107

GE Package Power Power Island Equipment $60,494,529 $1,376,000 $61,870,529

Process Unlimited International Project and construction I management

$3,004,000 $300,000 $3,304,000

ARB, Inc. Balance of Plant design I t and construction

$55,661,973 $0 $55,661,973

Total $122,682,999 $1,717,110 $124,400,109

1. Individual contract contingency amount will be used prior to using Project Contingency for that contract.

2. City Manager authorized to expend the Project Contingency.

3. Monthly report to MSC about the expenditure status of Project Contingency.


Increase Budget by $ 5 million

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$131,904,183

$127,697,205

$4,206,978

Natural gas pipeline/meter upgrades $2,200,000 Other misc. contracts, PO’s & Admin costs $1,506,978 Project Contingency for Existing Contracts $2,500,000 Budget contingency for unforeseen expenses $3,000,000

Proposed New Budget (Approved Budget + Additional Budget needed) $136,904,183

$9,206,978 Sub Total

Additional Budget Needed (Currently Committed Expenditures + Future Estimated Costs and Contingency – Currently Approved Budget) $5,000,000

Currently Approved Budget

Currently Committed Expenditures (contracts, staff costs and Art Funding)

Uncommitted remaining balance ($131,904,183 - $127,697,205)

Future Estimated Costs and Contingency


Proposed Funding For GT-5 Project

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Proposed Funding for the Repowering Project Current Projection Proposed Projection

Equity Fund $20,000,000 $20,000,000

Debt (Electric Revenue Bond Issuance)

a. 2013A Bonds $55,000,000 $55,000,000

b. Planned Letter of Credit and subsequent Electric Revenue Bond issuance $56,904,183 $61,904,183

Total $131,904,183 $136,904,183


Increase FY2015 Appropriation by $ 10 million

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AppropriationWorkplan (actual

up to FY2014)Appropriation

Workplan (actual up to FY2014)

Up to FY2013 $37,952,430 $4,160,697 $37,952,430 $4,160,697

FY2014 $35,900,000 $23,748,455 $35,900,000 $23,748,455

FY2015 $14,200,000 $55,008,226 $24,200,000 $70,038,024

FY2016 $36,208,667 $30,214,020

FY2017 $12,778,138 $8,742,987

Total $88,052,430 $131,904,183 $98,052,430 $136,904,183

Current Approvals/Estimates Proposed Approvals/Estimates

BUDGET


Financing for $10 million Appropriation

1. $ 5 million by new appropriation; and2. $ 5 million by transferring amounts from the following local

power plant capital projects

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AdditionsReduction

s

3194 Local Generation Repowering Project - Phase II $5,000,000

3180 Power Production Facility Improvements ($48,042) No material impact

3149 B-3 SCR Catalyst Replacement ($550,000)Recent testing showed satisfactory performance of the SCR catalyst which may not require replacement prior to B-3 retirement in FY2017

3186 GT-3 and GT-4 Renewals, Replacements, and Improvements ($625,807) No material impact

3182 GT-1 & GT-2 Renewals, Replacement, & Improvements ($3,776,151)Major upgrade will be deferred to FY 2016/17 depending on the decision to repair GT2.

Sub Total $5,000,000 ($5,000,000)

CIP# Description

FY 2015 Proposed Amendment Impact on the Project


Back Up Slides

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Future Administrative and Misc.. Costs

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Misc. Contracts, Purchase Order and Admin Cost

Estimated Cost Remarks

Geotech $25,000 Legal Fees $100,000 CalARP Program Revision $25,000 PWP Labor and Material Cost $566,242 PSLF Model $10,000 Post Completion Noise Survey $50,000 Distribution /Transmission System Upgrades $500,000

Potentially required by Southern California Edison

Polisher Rental $50,000 Local Hire/Buy Local Misc. Exp. $5,375 Air Permitting Consultant $25,000 Acceptance Testing Consultant $25,000 Public Outreach $25,000 PCR Outstanding Claim $100,000 Sub Total $1,506,977

Breakdown for Miscellaneous Contracts, Purchase Order and Administrative Costs


Currently Approved Contracts

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Currently Approved Budget $131,904,183

Approved Major Contracts and Committed Expenditures

Contractors/expenses Base Contract Contingency Total Contract

Power Engineers $3,000,000 - $3,000,000

Worley Parsons $310,500 $20,000 $330,500

PCR Services Corp. $211,997 $21,110 $233,107

GE Package Power $60,494,529 $1,376,000 $61,870,529

Process Unlimited International $3,004,000 $300,000 $3,304,000

ARB, Inc. $55,661,973 - $55,661,973

Other Contracts, P.O’s and Art Funding (1% construction) $1,321,217 $1,321,217

PWP Labor and Material Cost $1,892,400 $1,892,400

Local Hire Consultant $83,479 $83,479

Sub Total $125,980,095 $1,717,110 $127,697,205

Uncommitted remaining balance ($131,904,183 - $127,697,205) = $4,206,978


$5 million Transfer

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Table 1: DETAIL OF PROPOSED FY 2015 CIP BUDGET AMENDMENTS

CIP# Description Appropriations Available for FY 2015

Planned expenditure through

FY 2015

Remaining appropriations

through FY 2015

FY 2015 Proposed Amendment Adjusted Appropriations

Through FY 2015 Impact on the Project

Additions Reductions

3194 Local Generation Repowering Project - Phase II $88,052,430 $88,052,430 $5,000,000 $93,052,430

3180 Power Production Facility Improvements $870,243 $120,000 $750,243 ($48,042) $822,201 No material impact

3149 B-3 SCR Catalyst Replacement $550,000 $550,000 ($550,000) $0Recent testing showed satisfactory performance of the SCR catalyst which may not require replacement prior to B-3 retirement in FY2017

3186 GT-3 and GT-4 Renewals, Replacements, and Improvements $715,807 $90,000 $625,807 ($625,807) $90,000 No material impact

3182 GT-1 & GT-2 Renewals, Replacement, & Improvements $3,926,151 $150,000 $3,776,151 ($3,776,151) $150,000 Major upgrade will be deferred to FY 2016/17

depending on the decision to repair GT2.

Sub Total $94,114,631 $5,000,000 ($5,000,000) $94,114,631

Zero net change

Zero Net Change in appropriations through FY 2015


Increase FY2015 Appropriation by $ 10 million

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AppropriationWorkplan (actual

upto FY2014)Appropriation

Workplan (actual upto FY2014)

Up to FY2013 $37,952,430 $4,160,697 $37,952,430 $4,160,697

FY2014 $35,900,000 $23,748,455 $35,900,000 $23,748,455

FY2015 $14,200,000 $55,008,226 $24,094,746 $70,038,024

FY2016 $36,208,667 $30,214,020

FY2017 $12,778,138 $8,742,987

Total $88,052,430 $131,904,183 $97,947,176 $136,904,183

Current Projection

Proposed Projection

$20,000,000 $20,000,000

$55,000,000 $55,000,000

$56,904,183 $61,904,183

$131,904,183 $136,904,183 Total

Proposed Funding for the Repowering Project

Current Estimates Proposed Estimates

Equity Fund

Debt (Electric Revenue Bond Issuance)

a. 2013A Bonds

b. Planned Letter of Credit and subsequent Electric Revenue Bond issuance

BUDGET


Possible Scenario For schedule Interruption

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Examples of needs for services that could jeopardize project schedule if there is no unused contingency in the approved budget

Dates City Council Approval Amount

Remaining Uncommitted Funds in

the approved $132 million budget

Need City Council approval for Budget

increase

Does project stop for lack of Budget approval

9/23/2014 Already approved, $132 million budget $4,206,978 No No

9/29/2014Project Contingency (pool of contingency for 6 existing

approved contracts)$2,500,000 $1,706,978 No No

10/29/2014, expected Gas meter/pipe upgrade contract $2,000,000 -$293,022 Yes, by 293,022 No

11/1/2015, hypothetical but possible

Geotech consultation (sudden need due to soil condition

encountered during excavation)$5,000 -$5,000 Yes, by $5,000

Yes, could be avoided by issuing a Purchase Order by staff provided there were

sufficient funds in the unused contingency

11/11/2015, hypothetical but possible

Outside attorney fee to prepare response to Court in CEQA

lawsuit$25,000 -$25,000 Yes, by $25,000

Yes, could be avoided by issuing a Purchase Order by staff provided there were

sufficient funds in the unused contingency

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pasadena water and power approve a project contingency amount of $2,500,000 for existing contracts...

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