Project Execution Plani.pdf

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Operations Committee MeetingJanuary 14, 2009

Revised

XII. Review/Recommend Acceptance of the SCAPP Execution Plan

Southcentral Power Project

Project Execution Plan

January 2009 Dustin Highers

Rev. 1 Formatted: Font : 9 pt

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SPP Project Execution Plan

Chugach Electric Association Page 2 of 34 December 12, 2008

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Table of Contents

1 PROJECT DESCRIPTION......................................................................................... 21.1 Design Basis........................................................................................................ 21.2 Cost Estimate ...................................................................................................... 21.3 Schedule.............................................................................................................. 2

1.4 Project Funding................................................................................................... 22 PROJECT ORGANIZATION .................................................................................... 2

2.1 Project Management Team ................................................................................. 22.1.1 Management................................................................................................ 22.1.2 Permitting Staff........................................................................................... 22.1.3 Preliminary Engineering & Construction Management Staff..................... 22.1.4 Engineering & Construction Staff .............................................................. 22.1.5 Quality Assurance Staff .............................................................................. 22.1.6 Safety Staff.................................................................................................. 22.1.7 Project Controls Staff.................................................................................. 22.1.8 Materials Contracting & Procurement Staff ............................................... 2

3 PROJECT MANAGEMENT............. ......................................................................... 23.1 Communications Management ........................................................................... 2

3.1.1 Document Control....................................................................................... 23.1.2 Owner Representation Plan......................................................................... 2

3.2 Project Controls (Scheduling & Cost Control) ................................................... 23.2.1 Scheduling................................................................................................... 23.2.2 Estimating ................................................................................................... 23.2.3 Budgeting...... .............................................................................................. 23.2.4 Forecasting.................................................................................................. 23.2.5 Progress Assessment for Vendor Pay Requests.......................................... 23.2.6 Reporting..................................................................................................... 2

3.3 Contract Management......................................................................................... 23.3.1 Compliance ................................................................................................. 23.3.2 Contractor Interface .................................................................................... 2

3.4 Risk Management ............................................................................................... 2

3.4.1 Risk Management Plans.............................................................................. 23.4.2 Quality Assurance....................................................................................... 23.4.3 Site Safety & Loss Control ......................................................................... 23.4.4 Compliance (Environmental & Other)........................................................ 2

4 PROJECT PHASES.................................................................................................... 24.1 Study & Planning................................................................................................ 24.2 Conceptual Engineering/Permitting........................... ......................................... 24.3 Preliminary Engineering ..................................................................................... 24.4 Design Engineering............................................................................................. 24.5 Construction........................................................................................................ 24.6 Startup and Commissioning................................................................................ 2

4.6.1 Performance Testing ................................................................................... 24.7 Warranty Administration and Project Close-out Plan ........................................ 2

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1 PROJECT DESCRIPTION

The Southcentral Power Project (SPP) will be a natural gas-fired combined cycle power plant utilizing GE LM6000 PF-25 DLE combustion turbines in a three-on-oneconfiguration, in which each combustion turbine exhausts to a heat recovery steam

generator (HRSG). Steam generated in the HRSG’s is piped to a condensing steamturbine, which generates electrical energy in addition to that generated by the combustionturbine generators. The steam turbine exhausts to a conventional steam surfacecondenser which is cooled by a closed-loop glycol / water system which rejects heat fromthe cycle via a large air-cooled heat exchanger consisting of banks of finned tubes andfans for directing airflow through the tube banks. The turbine will be a 3,600 rpm, singlecasing, single flow, non-reheat machine and will operate in sliding pressure mode withthe turbine’s steam admission valves wide open. The generator associated with the steamturbine will be a totally enclosed water-air cooled generator as will the generatorsassociated with the combustion turbines. The combined cycle power plant will have anapproximate net plant output and net plant heat rate of 182.5 MW and 6,382 Btu/kW-hr,respectively, while operating at the annual average ambient temperature of 36°F.

The unit will be equipped with a selective catalytic reduction (SCR) system for reductionof NOX emissions and a CO oxidation catalyst for reduction of CO emissions.

Power generated by the facility will be stepped up to 138 kV by four three-phasegenerator step-up (GSU) transformers – one transformer for each combustion turbinegenerator and one for the steam turbine generator. The GSU transformers will beconnected to a new 138 kV substation located on the International Generation Terminal(IGT) property near the generating facility. Station auxiliaries will be powered from twounit auxiliary transformers.

1.1 Design Basis

The design basis for SPP was established through multiple studies prepared by Black &Veatch for Chugach. The Conceptual Engineering and Economic Assessment for IGT-2

3x1 LM6000 documents the general plant design criteria that will be used during the project’s detailed design. The key design criteria are listed below.

A three-on-one combined cycle configuration has three combustion turbinegenerators (CTG) exhausting flue gas through three HRSGs which supply steamto a single steam turbine generator (STG). The SPP plant will be based on GELM6000PF-25 DLE combustion turbines with single fuel, natural gas firing, two-

pressure HRSGs, and a non-reheat STG with axial exhaust.

The new combined cycle plant will be located on the south side of ChugachElectric’s IGT property immediately adjacent and east of the Chugach PCBBuilding (Building E). Chugach Electric’s headquarters are located at thenorthernmost part of the site.

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The plant site elevation is at 130 fasl (feet above sea level) and its average annualtemperature is 36° F (dry bulb) and 68 percent relative humidity.

Power generation by the plant will be stepped up to transmission voltage of 138kV.

The new generation should be designed to provide the same redundancy,reliability, and availability as that being incorporated into other state-of-the-art, base loaded natural gas-fired, combined cycle power plants.

The plant will be equipped with an auxiliary boiler. This equipment will assistwith initial inlet air heating of combustion air for the gas turbines and providesealing steam to the steam turbine glands to allow for vacuum buildup duringstartup of the steam system.

Natural gas will be used as the only fuel for the CTGs and for the auxiliary boiler. Natural gas for the new plant will be supplied by ENSTAR Natural GasCompany. Chugach Electric’s communication with ENSTAR revealed that thenatural gas supply system may be able to supply at least 30 MMscf per day at

GE’s required gas pressure of 675 +/- 20 psig – a pressure in which compressorswill not be required. However, future conditions are unknown and compressionwill be installed to accommodate any unforeseen pressure drops or other futuredeliverability problems. ENSTAR will need to upgrade their IGT meteringstation to accommodate the increased flows. If the supply pressure is lower thanexpected, compression may be required as part of the project.

Cycle heat rejection will be accomplished with a steam surface condenser used inconjunction with a fin-fan cooler. Coolant for the heat rejection system will be a

propylene-glycol / water mixture instead of water. Closed cycle componentcooling will be accomplished by utilizing a side stream circuit of coolant from thecycle heat rejection system. Use of a glycol system will open options for plantand external heating requirements, especially inlet air heating of the gas turbines

to support more efficient operation, in terms of both thermal and environmentalcharacteristics.

The CT/HRSG combinations will be equipped with bypass stacks and diverterdampers to allow for simple cycle operation of the CTGs.

Black start capability is included.

Major equipment, especially rotating and other sensitive equipment, will beinstalled indoors within the plant’s main structures with an overhead crane for theSTG. Ready access will be provided to the CTGs, HRSGs, and BOP equipmentfor regular maintenance. The plant maintenance shop and warehouse will beadequately equipped with tooling and spares in consideration of the ChugachElectric’s normal approach to maintenance. This is to be done primarily for

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reliability and availability issues. Maintenance will take significantly longer toaccomplish on HRSG and steam systems with cold weather packages (heattracing) installed. The use of a building avoids the freeze up of boilers, piping,and instrumentation that will result in unexpected, forced outages. Given this

plant will be vastly more efficient than all others on the Railbelt, these productionlosses will become increasingly unacceptable with ever increasing natural gas

prices. Further, the proximity of these systems to residential areas will lead to anoise compliance issue. A building will have the added effect of noise reductionto avoid impact to the project’s neighbors. The extent of the plant building is to

be finalized during the preliminary engineering phase of the project.

Raw water for cycle makeup and general use will be available from city waterlocated on-site.

Access to the site is readily available with one of Alaska’s major highwayslocated within one-mile of the site. The Port of Anchorage is available to receiveshipments from ocean going ships, and the Alaska Railroad runs immediatelyadjacent to the IGT site.

The plant’s construction workforce and Chugach’s permanent operations andmaintenance staff will reside in housing located within the greater Anchoragearea.

The Air Quality Control (AQC) systems will be designed to comply with allapplicable emissions requirements. The following is a summary of the anticipatedBest Available Control Technology (BACT) and emission levels:

o Nitrogen oxides--BACT is expected to be the use of Selective CatalyticReduction (SCR) to achieve 3 to 5 ppmvd NOX at 15 percent O2.

o Carbon monoxide--BACT is expected to be the use of an oxidationcatalyst to achieve 3 to 10 ppm CO.

o Particulate matter (PM/PM10)--BACT is expected to be the use of natural

gas and good combustion practices.o Volatile organic compounds (VOC)--BACT is expected to be the use ofnatural gas and good combustion practices.

o Sulfur dioxide--BACT is expected to be the use of natural gas with amaximum sulfur content of 2 grains per 100 scf.

o Sulfuric acid mist--BACT is expected to be the use of natural gas with amaximum sulfur content of 2 grains per 100 scf.

o Actual final emission levels will be dictated by final permitting efforts.

Black & Veatch utilized the above described general plant design criteria in thedevelopment of the conceptual design for the SPP project. Assumptions for conceptualsystems and component design were based on these criteria and are further described inthe Conceptual Engineering and Economic Assessment for IGT-2 3x1 LM6000 report.

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1.2 Cost Estimate

In May 2008, the capital cost estimate was updated from previous figures provided in2006 and 2007 by Black & Veatch. Estimates of total project costs were calculated byescalating the July 1, 2005 dollar value of the plant less the CTGs to April 1, 2007 USdollars by a factor of 1.1082. The April 1, 2007 dollar value was then escalated to May2008 US dollars using a factor of 1.25 and GE’s April 2008 proposed cost per CTG of

$20,903,299 (including stack) was added to the estimate. The total EPC project cost wasestimated at $274,254,677. The conceptualized 3x1 combined cycle plant continued theuse of GE LM6000PD DLE combustion turbines and included duct firing of the HRSGs,

but did not include black start generation. This estimate was considered as adequate forrelative comparison purposes to other plant configuration scenarios being considered inthe Chugach economic analysis, but the estimate was noted by Black & Veatch as now

being an order of magnitude capital cost. COD was not specified.

A new capital cost estimate will be prepared by the Owner’s Engineer, once thisengineering firm is retained under contract. The estimate will be based upon preliminaryengineering of a 3x1 combined cycle plant using GE LM6000PF-25 DLE combustionturbines and will include simple cycle bypass stacks and black start generation. Ductfiring of the HRSGs will not be included in the plant design. The capital cost estimate

will be based upon a project schedule in which an EPC contractor will be given Notice toProceed by First Quarter 2009 and the COD will be set at June 30, 2013.

1.3 Schedule

Based on a construction start date of September 2009 and a 45 month constructionschedule, plant commercial operation was projected to occur on June 30, 2013. Toenable construction to begin at the end of September 2009, preliminary engineeringshould have begun in May 2008, air permitting should have begun in July 2008, and theaward of the EPC contract should happen by April 2009.

Critical path for the project was identified as the procurement of the steam turbinegenerator (STG). A 24- to 36-month STG procurement duration is expected. STG

procurement durations will be reviewed once again by the OE at the time of procurement.

A new project schedule will be prepared by the Owner’s Engineer, once this engineeringfirm is retained under contract. The project schedule will based upon preliminaryengineering of a 3x1 combined cycle plant using GE LM6000PF-25 DLE combustionturbines. The project schedule will consider having the Owner’s Engineer contracted inFebruary 2009, the EPC contractor receiving Notice to Proceed by April 2009, and thecombined cycle plant COD set at June 30, 2013.

1.4 Project Funding

The project was put forward on the basis that economies of scale and significant savingswould be achieved by working together with other utilities to increase the size andcapacity of the new power plant. This resulted in the successful negotiation of theParticipation Agreement between Chugach Electric Association, Inc. (Chugach) and

Anchorage Municipal Light and Power (ML&P). This Agreement contains the

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requirement for a Financing Plan which describes the project’s funding plans by Chugachand ML&P. The relevant sections of the Financing Plan are as follows:

“Chugach Electric Association, Inc. (“Chugach”) intends to fund its proportionate shareof the costs of the South Central Alaska Power Project (“SCAPP”), throughestablishment of a highly liquid Commercial Paper (“CP”) program in the amount up to

$300 million. The facility will be backstopped by a combined senior unsecured creditfacility from National Rural Utilities Cooperative Finance Corporation in the amount of$100 million and KeyBank in the amount of $200 million.”

And,

“Municipal Light & Power (“ML&P”) intends to fund its proportionate share of the costsof the South Central Alaska Power Project (“SCAPP”) through establishment of acommercial paper (“CP”) program in an amount up to $90 million and through the use ofretained earnings up to $10 million. The facility will be backstopped by a senior creditfacility in the amount of $90 million.”

Chugach achieved the CP program and the backstop, thereby fulfilling requirements of

the Financing Plan.

The proportionate shares of the generation are defined in the Participation Agreementwith 70% to Chugach, and 30% to ML&P.

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2 PROJECT ORGANIZATION

2.1 Project Management Team

2.1.1 Management

The Chugach Electric organization for SPP has been established by the Senior VicePresident, Power Supply. This position is the Program Manager which holdsresponsibility for planning and execution of the project as a whole across the divisions ofChugach for all project Participants including ML&P.

The Chugach Project Manager is responsible to the Pr ogram Manager for thecoordination and overall execution of the generation project, including performing thework in accordance with the general policies of the company. The Project Manager isresponsible for the progress, schedules, costs, and quality of the project assisted by theChugach Site Manager. He will be directly supported by the OE Project Manager whowill be responsible for the activities performed by the engineering firm providing OEservices, including such tasks as preliminary design development, permitting support,major equipment procurement specification preparation, proposal evaluations, EPC bid

package development, EPC bid package evaluation, construction support, start-up/commissioning support, etc. The OE Project Manager will have an OE AssistantManager located in the field to work alongside Chugach’s Project Manager to representthe OE in Chugach Electric’s offices. The OE Assistant Project Manager will not only

provide Chugach support during preliminary engineering and equipment procurement, but also during construction.

The Chugach Electric project organization includes project management and the projectstaff assigned to the project. Positions within the project organization will be staffed byemployees and/or temporary employees of Chugach Electric and the Owner’s Engineer(OE). The project organization may also have contractors assisting in various projectroles. The project team is shown in Attachment 1; the organizational structure is shownin Figure 2-1.

2.1.2 Permitting Staff

The Project Permitting Manager will be responsible for all permitting activities on the project. Conceptual and preliminary environmental and air permitting for SPP has been performed by the environmental professionals at Hoefler Consulting Group inAnchorage, Alaska under the direction of Chugach’s Environmental Manager. Final

project permitting services will be bid as part of the OE contract. The OE will provideengineering services and preliminary design technical documents to support permittingwork for the project.

2.1.3 Preliminary Engineering & Construction Management Staff

The Owner’s Engineer (OE) Project Manager will be responsible for the activities performed by the engineering firm providing OE services. The OE Project Manager will

be supported by an Assistant Project Manager located in the field to work alongside

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Chugach Electr ic Asso ciatio n Page 10 of 34 December 12, 2008

Chugach Electric’s Project Manager and to represent the OE in Chugach Electric’soffices.

The OE Project Engineering Manager will oversee the day to day activities in the designoffice of the owner’s engineering firm and he will report directly to the OE ProjectManager. Reporting to the OE Project Engineering Manager will be discipline

engineering leads, including OE Project Engineer – Civil/Structural, OE Project Engineer – Mechanical, OE Project Engineer – Electrical, OE Project Engineer – Controls, and OEProject Engineer – Chemical.

2.1.4 Engineering & Construction Staff

Design engineering will be awarded to either the Owner ’s Engineer as an extension of theOE contract, or it may be put to bid at the direction of the Project Manager with guidancefrom the Operations Committee. The ability to assign this scope of work to the OE will

be established in the OE contract but, due to the large value of this contract, theassignment may only be accomplished with approval from the Chugach Board ofDirectors in accordance with Chugach policy. Chugach will reserve the right to bid thedesign engineering scope for any reason. For this reason the OE Project Manager may

become the Engineering Manager for the project. Alternatively the Engineering Managerwill be assigned by the successful bidder of the design work.

Construction will be performed by an Construction Contractor under the direction of aConstruction Manager. . The Construction Manager will have a constructionmanagement team led by a Project Field Manager who will likely have direct reportsincluding a Construction Manager, Controls Manager, Engineering/Start-up Manager,Lead Field Engineer, Quality Control Manager, and Safety/Health Manager. Chugach’sProject Manager, the OE Assistant Project Manager, and OE Project Safety Engineer willwork closely with each member of the Construction Contractor’s constructionmanagement team.

The OE Assistant Project Manager will have field engineers for various periods during

construction. The Field Civil/Structural Engineer will be on-site during sitedevelopment, installing underground utilities, installing foundations, and steel erection.The Field Electrical Engineer will be on-site once electrical wiring and components are

being installed, and the Field Mechanical Engineer will support equipment and pipinginstallation throughout the plant.

Once the Construction Contractor begins start-up and commissioning activities, the Start-up Commissioning Engineer from the OE’s staff will be present to represent ChugachElectric in coordination with the Chugach Startup Manager.

2.1.5 Quality Assurance Staff

The Project Quality Plan (PQP) will be developed and implemented by the OE ProjectQA/QC Engineer under supervision of the OE Project Manager. The Quality

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Management System (QMS) standards will be developed by the OE staff and theChugach Project Manager.

2.1.6 Safety Staff

The site safety program will be administered by the OE Project Safety Engineer, who willadvise the Chugach Electric Project Manager and the OE Assistant Project Manager

whenever site personnel and construction workers are not following the requirements ofthe program, especially as they relate to OSHA safety regulations.

The Chugach Project Manager will work closely with the Chugach Safety Manager toensure that all company policies are followed while contractors are on site.

2.1.7 Project Controls Staff

The Chugach Project Controls Engineer will be responsible for overall project costcontrol and high level scheduling to coordinate efforts of the Owner’s Engineer and otheraspects of the project, such as engineering and construction of the substation. TheChugach Project Controls Engineer will work in close cooperation with the OE ProjectControls Manager.

The OE Project Controls Manager will be responsible for overseeing and monitoring project planning, scheduling, and cost control, and will report directly to the OE ProjectManager.

2.1.8 Materials Contracting & Procurement Staff

Project procurement control is essential. Completing a project on time and within budgetrequires careful attention to materials contracting and procurement activities. Detailedengineering design depends on the prompt selection of equipment and schedule certaintyrelies on timely material purchase orders and subcontract selection. Continued supportafter contract award includes control and monitoring of costs.

Chugach internal materials contracting and procurement will be managed the Chugach

Electric Purchasing Department. The OE Project Manager will be responsible fordevelopment of major equipment materials specifications, which will be supportingdocumentation for the Requests for Proposal (RFP’s) using the normal Chugach bidding

procedure.

Contract management for major equipment purchases and major contracts (Owner’sEngineer and EPC contracts, in particular) will be negotiated by a Chugach teamcomprised of the Chugach Project Manager, the Chugach Purchasing Manager, the

project’s attorney, and a Subject Matter Expert (SME) selected based on relevantqualifications. The Project Controls Engineer will assist with negotiation of projectcontracts and ensure all contracts conform to the RFP prior to submission to thePurchasing Department for final review and processing.

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The OE Project Procurement Specialist will be responsible for overseeing and monitoring project materials contracting and procurement activities assigned to the Owner’sEngineer, and will report directly to the OE Project Manager.

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Chugach

Program Manager

Chugach

Environmental

Manager

Chugach

Permiting Manager

Chugach

Startup Manager

Chugach

Site Manager

Chugach

Project Manager

OE Project

Procurement

Specialist

Chugach Project

Controls Engineer

EngineeringManager

OE Project

Support Assistant

OE ProjectManager

OE Project

Engineer (Civil/

Structual)

OE Project

Scheduler

OE Project Cost

Control Engineer

OE Assistant

Project Manager

(On Site Liaison)

OE Project

Engineering

Manager

OE Project Safety

Engineer

OE Project QA/QC

Engineer

OE Project

Controls Manager

OE Field Electrical

Engineer

OE Project

Engineer

(Chemical)

OE Project

Engineer

(Mechanical)

OE Project

Engineer

(Electrical)

OE Start-up

Commissioning

Engineer

OE Field Civil/

Structural

Engineer

OE Field

Mechanical

Engineer

OE Project

Engineer

(Controls)

ConstructionManager

Figure 2-1. Project Staffing

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3 PROJECT MANAGEMENT

3.1 Communications Management

3.1.1 Document Control

Chugach Electric will accept the OE’s standard document filing and numbering system tomaintain organization of OE submittals. This system will be used to identify and file OE

project documents. The standard document filing and numbering system may be adjustedfor project requirements, as mutually agreed between Chugach Electric and the OEProject Manager. The OE will manage formal communications with the EPC contractor.

Chugach Electric’s Project Manager, the OE Project Manager, the OE Assistant ProjectManager, and the OE Project Engineering Manager shall ensure that all projectdocuments are properly numbered and filed. All OE project documents shall beidentified by the OE’s standard file number. Chugach may adopt the OE’s system toorganize and track internal project documentation once it is available for review.

The OE Project Manager shall ensure that a review of the project’s official file system,

process, and procedures is performed quarterly and that Chugach Electric’s ProjectManager shall be notified of the results of the review.

The modes of communication to be used on the project are for both team memberslocated in Alaska and in the OE’s primary design office. Instructions on letterhead usage,correspondence numbering, handling of meeting notes, phone calls, e-mail, and theProject Correspondence Distribution Matrix are to be documented in a ProjectInstructions Manual. The OE Project Support Assistant shall ensure effective andconsistent record and information sharing between various project groups and ChugachElectric. The OE Project Support Assistant shall ensure that official distribution andfiling of key project information will be provided in accordance with establishedinterfaces and lines of communication protocol as outlined in a yet to be developedcommunications procedure.

Project documentation submitted to Chugach will be stored in a protected network filingsystem, which is available to the Chugach Engineering Support department. OE drawing

packages will be entered into the Meridian Document Management System when formalinternal reviews are required, and these will be cross referenced to the Chugach standarddocument naming convention. Ultimately all project documentation subject to revisioncontrol will reside in Meridian. Those packages not subject to future revision (e.g.quality documentation required at equipment purchases) will be entered in Chugach’sLaserfiche document management system.

3.1.2 Owner Representation Plan

The Chugach Electric Program Manager will make monthly project status presentationsto the Operations Committee created by the Participation Agreement between Chugach

and ML&P.

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The Project Manager will provide the basis for these reports through consistent reportingfrom the Chugach Project Controls Engineer. Support will be received by the OEAssistant Project Manager and the Project Permitting Manager along with other keymembers of the project management team as is necessary to explain progress and/orissues with design, schedule, procurement, permitting/licensing, construction, safety, and

project financials.

The meetings will be held in Chugach Electric’s offices on the second Tuesday of everymonth and will be limited to a one-half day meeting. The agenda for each meeting will

be issued to the Operations Committee members on the day prior to the meeting. Eachmeeting will be followed by a tour of the facility to provide an overview of the progressof the project.

3.2 Project Controls (Scheduling & Cost Control)

Chugach will internally develop, maintain, and implement a logic-driven schedule for the project management team to confirm the requirements of the overall project are beingmet. This project schedule will integrate project activities of the OE, the Engineering

Contractor, the Construction Contractor, and various Chugach departments at a high levelwith associated Chugach projects and activities by the Chugach Project ControlsEngineer.

The successful completion of SPP on time and within budget requires carrying out the project in accordance with a well developed plan. Chugach Electric’s objective is toimplement a cost effective management tool that provides timely and accurate reportingof actual project costs against the project budget and actual project progress against the

project schedule, thereby facilitating the management of project cost and schedule risksand helping to minimize disputes. It should provide the necessary information needed toquickly identify and effectively address and resolve problems as they arise.

Cost control is an integral part of successful project performance. The necessary

elements of a cost control system include accurate budget development, cost reporting/forecasting, cost tracking, and cash flow development. By implementing these practices,the lowest cost project can be achieved.

3.2.1 Scheduling

Three levels of schedules will be developed over the course of the project with increasingamount of detail, as follows:

• Level I Project Milestone Schedule – The Level I schedule shall include the mostsignificant events in the project and planned dates for the accomplishment ofeach. This will be developed at the beginning of the project by the OE ProjectScheduler and maintained by the Chugach Project Controls Engineer .

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• Summary Schedule – The Summary Schedule (sometimes referred to as a Level IIschedule) is a time sequence network of summary activities and their associated

planned dates. It is developed by the OE Project Scheduler by summarizing (i.e.,rolling up) the Level III schedule and provides an overview of all phases of the

project for periodic Chugach Electric’s corporate management and the SPP Partners. This Level II schedule will be incorporated into the schedule

maintained by the Chugach Project Controls Engineer, which also tracks internal projects related to the construction of the power plant.

• Level III Control Schedule (CS) – The Level III schedule will be prepared by theOE Project Scheduler utilizing the precedence critical path method covering all

phases of the project and incorporating milestones and other key events defined inthe Level I schedule. Activities included in the CS cover the permitting,conceptual and detailed design, procurement, construction, and start-up.Interfaces between all activities are included which assures integration of all

phases of the project. The construction and start-up portions of the CS will bedeveloped in sufficient detail to logically complete the project and to focusengineering and procurement with early need dates. The CS will be utilized bythe project team to monitor and analyze construction and start-up activities and

progress of the Engineering and Construction Contractor s.

3.2.2 Estimating

The most recent estimated total project cost for SPP was developed by Black & Veatch inMay 2008. The estimate is an order of magnitude capital cost. It was derived byescalating a cost estimate that was developed two years earlier based on a plant designthat was conceptual. Going forward, a new capital cost estimate will be prepared by theOE, once this engineering firm is retained under contract. The estimate will be basedupon preliminary engineering of a 3x1 combined cycle plant using GE LM6000PF-25DLE combustion turbines and will include simple cycle bypass stacks and black startgeneration. It will be based on a well defined site plot plan, general arrangementdrawings, process flow diagrams, electric one-line, detailed equipment list, award pricingfor the combustion turbine generators, OEM budgetary prices for the steam turbine

generator, HRSGs, and fin-fan cooling heat rejection system, and takeoffs for the balance-of-plant.

The project cost estimate will be updated with actual award procurements andconstruction proposal pricing that are received as the project progresses. The number ofunknowns will be reduced and the accuracy of the estimate will therefore be improved.

3.2.3 Budgeting

The project cost estimate will be approved by Chugach Electric and the SPP Participantsand become the project budget. This project cost estimate will serve as the starting pointfor the project cost report. Normal Chugach budgeting procedures will be followed inaccordance with Chugach Board Policy.

3.2.4 Forecasting

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The project will manage cost changes through Contract Change Orders. The purpose ofthese documents will be to describe the change and impacts to the schedule and cost.Chugach Electric will need to approve the Contract Change Orders prior to the work

being performed. The OE’s Project Controls group will manage the process and maintainlogs and files for the changes. Forecasts of cost to complete will be derived fromfactoring the changes into the project cost estimate and thus reported on a monthly basis.

3.2.5 Progress Assessment fo r Vendor Pay Requests

Project Schedule will be analyzed on a monthly basis and deviation and analysis reportswill be prepared by the OE’s Project Controls group with support from the project team.Other reports will be developed as required and tailored specifically for the projectsneeds to assess actual progress by the Contractor s. Progress payments will be made inaccordance with the terms and conditions set forth in the relevant contract.

3.2.6 Reporting

Monthly reports will be produced with a written summary prepared by the OE’s ProjectControls group that indicates float analysis, problem areas, trends, and risks for ChugachElectric’s Project Manager and project team to review. For critical activities that aretrending 20 days or more behind, the EPC Contractor will be required to develop

recovery plans to ensure the project completion date is not impacted.

3.3 Contract Management

3.3.1 Compliance

A compliance plan will be generated for each major contract to ensure each party hasachieved the agreed requirements. This plan will be reviewed by the Chugach ProjectControls Engineer periodically, or as required by milestones achievement on eachcontract.

3.3.2 Contractor Interface

Since the project involves a scope split of the permitting, preliminary and Owner’s

engineering, and construction, a detailed division of responsibility (DOR) document shall be prepared, communicated, maintained, finalized, and implemented. Review,expansion, and refinement of the DOR will likely be required during project execution.

The Chugach Project Manager, with the support the OE Project Manager and the OEAssistant Project Manager, will be responsible for revising the scope of services asrequired throughout the project. The OE Project Manager and/or the OE AssistantProject Manager shall ensure that a recorded history of the changes to the scope ofservices initiated by others is maintained. The OE Project Manager and/or the OEAssistant Project Manager shall also ensure that the interface information and datarequired from Chugach Electric and that influence the performance of contracted workwith the permitting company, the Owner’s Engineer, and the Construction Contractor areobtained timely and efficiently. A list of the key information and data required from

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Chugach Electric shall be developed for items that will have the most influence on thesuccessful and timely performance of services by each contractor.

The interface coordination list shall be initially developed within 60 days of the OE’snotice to proceed. Additions shall be made as new key interfaces are identified. Theinterface coordination list shall be in tabular format and indicate, as a minimum, the

following:

• Transmittal number of applicable correspondence.• Transmittal subject.• Date requested.• Status.

This list will be reviewed from time-to-time in a weekly coordination conferencetelephone call with Chugach Electric to ensure information is made available in a timelymanner.

3.4 Risk Management

3.4.1 Risk Management PlansRisk management for the project will be the responsibility of all Chugach projectmanagement staff. It is expected that lessons learned from previous projects andexcellent planning will help avoid many of the risks present on this type of project.Selection of appropriate expertise, based on knowledge and experience, will befundamental in addition to the requirement of good communications between the Ownerand each contractor.

Many types of risk exist for the project, including business, commercial, permitting,contracting, etc. The most tangible is the risk of loss which may occur at any time, butespecially during procurement and construction of the project. This risk of loss iscovered through the various forms of property insurance carried by Chugach. For allother forms of risk, full risk management plans will be developed to identify where risks

may exist, the cause of such risk, the effect, and a mitigation plan for those risks whichare considered either highly probably or costly.

3.4.2 Quality Assurance

SPP’s quality system requirements are to be documented in a Project Quality Plan (PQP),and the PQP shall be developed and implemented by the Project QA/QC Engineer.Chugach Electric’s Project Manager shall ensure that a PQP is developed, maintained,communicated, and implemented for the project.

The PQP is to be composed of two components. The first component describes the SPP quality system, the project’s quality objective, division of responsibilities, and methods to

be used for each part of the project. The other PQP component is the identification ofdetailed procedures and work instructions to be implemented.

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The PQP defines the applicable Quality Management System (QMS) standards to be usedduring the project execution stage for both the Engineering and the ConstructionContractor. The plan will cover the following:

• Applicable Engineering and Construction Contractor QMS standards.

• Applicable Chugach Electric project-specific standards and requirements (if any).

• Planned participation level of the OE’s Quality Management Services Departmentin supplier/subcontractor evaluation either by direct visits or desk record review,assisting in supplier selection using past history data, direct inspection ofsuppliers and subcontractors, supplier/subcontractor quality auditing, andinvolvement in the review cycle of the defined process, including contract, designand purchase order reviews, and incorporation of requirements.

• Assist Chugach Electric in the creation of the project supplier Inspection TestPlan (ITP), if requested.

• Project internal audits.

• Project design and drawing verification process.

• Quality records management.

The Project Quality Plan shall be included in the Project Instructions Manual.

3.4.3 Site Safety & Loss Control

The protection of life and property, prevention of accidents, and maintenance of a safeand healthy work environment for site personnel and visitors are needed for the project to

be successful. A site safety program will be established and it will be defined anddocumented in a Project Safety and Health Manual. It shall be administered by theProject Safety Engineer, who will advise the Chugach Electric Project Manager and the

OE Assistant Project Manager whenever site personnel and construction workers are notfollowing the requirements of the manual or abiding by OSHA safety regulations.

Chugach Electric, or its OE acting on behalf of Chugach Electric, shall be responsible forthe following activities:

• Administer the site safety program as documented in the Project Safety andHealth Manual.

• Initiate reports and maintain records as required by Chugach Electric’s insurersand OSHA regulations.

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• Monitor the enforcement of all safety rules and regulations on the project,including but not limited to, the following:- Monitoring contractor/subcontractor enforcement of personnel wearing

appropriate personnel protective equipment (PPE).- Assisting contractor/subcontractors in posting safety signs for hazardous

locations.

- Monitoring contractor/subcontractor performance to ensure compliance withOSHA standards.

- Monitoring contractor/subcontractor working areas and note any violations ofsafety regulations.

• Maintain surveillance of jobsite work ing practices and conditions, includinglevels of airborne contaminants, noise exposure, and sanitary facilities.

• Organize and oversee a Supervisory Safety Committee consisting of the ChugachElectric Project Manager, OE Assistant Project Manager, Project Safety Engineer,EPC Field Manager, and the EPC Construction Manager to evaluate the

performance of the safety program. This committee shall meet often on a regular basis.

• Maintain liaison with contractor/subcontractors on ordering, handling, andcontrolling hazardous materials.

• Assist in claim investigations; log claims.

• Conduct safety and site loss orientation meetings for new site personnel andconstruction workers.

All contractor/subcontractor workers shall be responsible for compliance with all federaland state laws related to their work as evidenced by a safety plan coordinated with theProject Safety and Health Manual. The Engineering and Construction Contractor s and allsubcontractors shall implement the following activities in connection with their work in

cooperation with Chugach Electric, the OE, and other subcontractors.

• Initiate and maintain procedures that are necessary to comply with OSHAregulations.

• Provide frequent and regular inspections of the jobsite, materials, and equipment by competent persons.

• Determine that their employees comply with established first aid and medicalattention procedures.

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• Be responsible for the distribution of potable drinking water, the provision ofsanitary toilet facilities for its employees, and furnish required PPE, safetywarning devices, signs, portable fire extinguishers, etc.

• Determine that equipment used on the SPP meets OSHA regulations.

• Be responsible for the attendance of all new employees to safety and site lossorientation meetings.

• Issue safety instruction with all work assignments, supervise weekly safetymeetings, and ensure all craft employees are familiar with OSHA regulations.

3.4.4 Compliance (Environmental & Other)

Compliance with federal, state, and local environmental laws and other regulations will be monitored, overseen, and managed by Chugach Electric’s project management teamunder the direction of Chugach Electric’s Project Manager. The Project PermittingManager will take the lead role for ensuring all permits and licenses are identified,applications prepared and submitted, and appropriate and timely approvals by governingauthorities are obtained. The OE Project Manager and OE Assistant Project Manager

along with their designees will provide support as necessary to execute knowncommitments and track emerging issues.

The Chugach Permitting Manager will ensure all environmental compliance requirementsare addressed in relevant contracts. This requirements will be reviewed with eachcontractor upon mobilization to site. He will also monitor compliance requirements inassociation with the Chugach Environmental Engineering Manager throughout the

project.

At the outset of the project, regulatory permitting and licensing requirements will beaddressed, including the identification of environmental regulatory requirements and theestablishment and implementation of a comprehensive licensing strategy. Services

provided by professionals assigned to ensure success of the compliance aspects of the

project will also include conducting environmental field studies (such as communitynoise surveys, ambient air quality monitoring, visibility impairment, etc.),characterization, modeling and analysis of impacts, preparation of permit applications forreview by regulatory agencies and the public, agency negotiation support, and expertwitness testimony.

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4 PROJECT PHASES

SPP will be executed under the direction of the Chugach Electric Project Manager andwith the organization established by the Senior Vice President, Power Supply. The Sr.VP Power Supply is the ultimate responsible authority and will act as the Program

Manager to coordinate activities of various Chugach departments to achieve successfuloperation of the new plant. SPP will be implemented in accordance with this ProjectExecution Plan and the Project Instruction Manual and within limits and directions

provided in the Project Quality Plan and the Project Safety and Health Manual. The project will be implemented in multiple phases as described below.

4.1 Study & Planning

Conceptual studies of the new power plant were initiated in 2004. Work achieved to dateincludes:

Economic assessment and cost estimates of the plant with various assumptions forgas turbine selection (updated three times since 2006, most recently in May2008).

Siting work has progressed significantly:o Joint Siting Study performed to identify the most appropriate location of

the plant, including an assessment of infrastructure to support the projectfeatures.

o New site underground facilities located and properly identified on existingChugach drawings.

o Selection and negotiation of terms and conditions for the purchase of landto be used for laydown and storage of displaced Chugach assets.

o Site preparation is been performed; laydown areas have been identified interms of lots.

Conceptual engineering performed:o Identification of plant design criteria.o Layout drawing of 3x1 combined cycle power plant on the selected

Chugach property. Major contracts have been anticipated or, in the case of gas turbines, completed:

o Turbine Purchase Agreement (TPA) negotiated with favorable terms andconditions for three (3) LM6000PF units, and a spare engine, with GeneralElectric.

o Contractual Service Agreement (CSA) negotiated with favorable termsand conditions with General Electric (“Unplanned-Uncapped” conceptwas a first for GE).

o Draft Request for Proposal (RFP) for the Owner’s Engineer (OE) contract.o Draft RFP for the Engineer, Procure, and Construct (EPC) contract.

Permitting Plan (Level I) developed and initial work begun:o Conceptual plant design was reviewed with each Municipality of

Anchorage (MOA) permitting agencies in 2005.

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o NSPS notification submitted as required by the Alaska Department ofEnvironmental Conservation (ADEC).

o FAA Form 7460 submitted and re-submitted as required in November2008. Clarified FAA position as favorable for selected project site.

Preliminary engineering steps have been taken to reduce uncertainty in EPC bidestimates:

o Geotech work was performed on the new site by Black & Veatch; report isdue in December 2008.

o A waste heat utilization study has been bid and an award is expected inDecember 2008.

This initial phase of the project will come to a close at the end of 2008. The projectaccounts will be brought over from the “study” accounts into the “capital” account codesand preliminary engineering will continue first with bids for the Owner’s Engineercontract.

4.2 Conceptual Engineering/Permitting

At the outset of the project, the permitting consultant (Hoefler Consulting Group or“HCG”) addressed project requirements for regulatory permitting and licensing,

including the identification of “air” and “non-air” environmental regulatory requirementsand the establishment and implementation of a comprehensive licensing strategy. The airquality scientists and engineers with the permitting consultant shall performmeteorological/climatological assessments associated with air quality permitting, developair dispersion models, and prepare air quality permit applications for construction

permits.

The OE for SPP will work with the permitting consultant to provide the engineering dataneeded to support permitting. The OE will also answer technical questions fromapplicable regulatory agencies and participate in meetings with applicable agenciesduring the preliminary design development activities described in Section 4.3 below.Most of the plant conceptual design and project specifications needed for theenvironmental permitting process will be produced during these project development

activities.

The OE typically provides the following engineering services and conceptual designtechnical documents to support the preliminary environmental permitting work for a project.

• Site Arrangement Drawing.• Plant Arrangement Drawing.• Heat Balance Diagram(s).• Process Diagrams.• Preliminary Water Balance.• Electrical Single Line Drawing.• Controls Architecture Drawing Depicting the Layout of the Overall Plant Control

System.

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• Equipment List Denoting all Major Project Mechanical, Electrical, and ControlsEquipment.

• Plant Descriptions• Other technical input for the permitting process.

The permitting consultant will develop a list of federal, state, and local “non-air”

environmental permits that may be required to construct and operate Chugach Electric’scombined cycle plant (such as Construction/Operation Spill Prevention Control &Countermeasure Plans, Risk Management Plan, Threatened & Endangered Species,

NPDES Hydrostatic Test Discharge Permit, etc.). The list of non-air permits shall be presented in a matrix format that would include the following for each permit:

• Permit Title• Agency• Regulated Activity• Required Phase of Project• Expected Duration of Agency Review• Applicability to Project• Assumptions• Party Responsible for Obtaining Permit

The permitting consultant will prepare a permitting schedule “fragnet” that can be inputinto the overall project schedule.

In support of permitting and preliminary engineering, the facility noise assessment previously performed for Chugach Electric by Black & Veatch in August 2006 shall berevisited. The updated assessment shall include an updated review of applicable noiseregulations and an evaluation of potential facility noise emissions. The following itemsoutline the specific activities that will be performed.

• Regulatory Review: A thorough review of the applicable local noise regulationswill be conducted. The regulatory review will involve reviewing the regulations

and ordinances of all local jurisdictions applicable to the facility including theCity of Anchorage. Because there is a residential area northeast of the SPP site inthe vicinity of Dorbrandt Street, the combined cycle facility sound levels in thisarea will likely have to comply with the residential nighttime limit of 50 dBA(Chapter 15.70 of the Anchorage Municipal Charter Code and Regulations).Other limits may apply to the facility as well.

• Project Sound Level Design Criteria: Sound level design criteria shall beestablished for the proposed facility. The overall criteria shall be selected basedon complying with the applicable local noise regulations and minimizing thenoise impact on neighboring noise-sensitive receptors (e.g. residences, schools,churches, and hospitals), as applicable. The criteria for noise impacts on noise-sensitive receptors will be based on industry guidelines and standards including,

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but not limited to, the U.S. Environmental Protection Agency (EPA) as well asambient sound level survey results.

• Project Noise Modeling: Noise modeling shall be conducted to estimate the potential noise emissions associated with the proposed combined cycle power plant during normal operation. The facility noise emissions shall be modeled in

accordance with ISO 9613 using noise prediction software (Cadna/A version3.6.119). Noise modeling will be conducted to identify the equipment andmitigation requirements necessary to support compliance with the applicableregulations and minimize impacts on sensitive rece ptors. The project noisemodeling will include the development of noise contour plots for normaloperation.

• Noise Mitigation Analysis: Noise mitigation strategies shall be developed andevaluated to meet the project design criteria, as necessary. The mitigationstrategies shall be coordinated directly with the OE to confirm performance andconstructability impacts are acceptable.

4.3 Preliminary Engineering

The OE will prepare a preliminary design for the project, which will includeconsideration of maintainability, efficiency, availability, reliability, constructability,operability, and safety. The project design criteria will be developed to include requiredconsiderations for the project located in a high seismic area.

• Plant Optimization Studies: The OE will conduct specific plant optimizationstudies to support the preparation of the site arrangement, project design basis,and EPC bid specification. Currently known optimization studies to be performedinclude:

- Cycle Optimization: Previous performance runs for SPP have been centeredon the average annual ambient temperature of 36°F for Anchorage.

- Heat Rejection System Optimization: Previous performance runs for SPP have

assumed the use of air cooled condensers instead of actually modeling the wetsurface condenser used in conjunction with a fin-fan cooler. Closed cyclecooling water will be factored into the sizing of the fin-fan cooler. Rejectedheat is expected to be used for gas turbine inlet heating.

• Plant Performance: The following plant performance parameters will bedeveloped:

- Design criteria: Basic plant criteria, applicable design codes and predicted orexpected performance parameters (including emissions) will be determined.

- Heat Balance Diagrams: Heat balance diagrams for the selected technologywill be developed at maximum load at three different site ambient

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temperatures (extreme high, extreme low, and average annual temperatures).Two additional heat balance cases to cover reduced load conditions will also

be developed. Heat balance data sheets which further define the heat cycleinformation will be provided for each balance.

- Water Mass Balance Diagrams: A plant water mass balance diagram will be

prepared to show the plant water usage for average and maximum operationconditions. Major plant and equipment water usage will be represented on thediagrams from the sources of water to the site, treatment facilities, wastestreams, evaporation, and any other usage of water. The usage will be shownin gallons per minute.

• Plant Configuration and System Descriptions: The preliminary design willinclude brief descriptions of major plant systems. The descriptions will addressthe following sufficiently to define the design requirements for the facility to anEPC Contractor:

- Combustion Turbine Generator and auxiliaries- Steam Turbine Generator and auxiliaries

- Heat Recovery Steam Generators and auxiliaries- Fuel supply system- Air emissions control- Heat rejection system- Water supply and treatment systems- Compressed air system- Fire protection system- Plant electrical systems (transformers, switchgear, motor control centers,

uninterruptible power supply, grounding, lighting, communications) up to anincluding the high voltage side of the generator step-up transformers

- Controls and instrumentation- Civil and structural works- Wastewater collection and treatment system.

The EPC Contractor will be required to expand and update these systemdescriptions based on the final detailed design and the equipment and systemsactually purchased for the project.

• Develop Preliminary Site Arrangement : The OE will prepare a site arrangementfor the IGT site, which will identify the location and layout of major structuresand facilities, the natural gas fuel supply equipment, water supply facilities,storage tanks, administration building, warehouses, and access roads. This layoutdrawing will illustrate the general area requirements, orientation, and relative

positioning of the power plant major equipment and facilities.

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• Construction Logistics and Infrastructure Evaluation: The constructabilityreview and infrastructure evaluation will include equipment access, material lay-down area, transportation access, heavy haul access, interface with the fuelsupply, interface with water supply, and completeness of furnished site data forthe selected plant site. In addition the following aspects will also be reviewed:

- Lay-down areas and staging areas- Construction utilities, power, water, etc.- Labor availability, productivity, rates.

• Develop Steam Turbine Purchase Specifications: The OE will prepare TechnicalSpecifications which will be incorporated into an RFP for purchase of the steamturbine. These specifications will be based on the design work performed to date.This will be done to address the long lead time associated with this piece ofequipment.

Not included in the current OE scope of services is the preliminary design of the 138 kVIGT substation and any required interconnecting transmission lines.

The OE shall prepare separate Technical Specifications for the design and construction ofthe new combined cycle power station. The Technical Specification shall be written insufficient detail to ensure that SPP will be a power plant of high-quality, with the desiredfunctionality at a reasonable cost. A performance-based specification typically identifiesthe desired plant desired performance, generation technology, and high-level designinformation (e.g., preliminary layout, configuration, and preferences regardingredundancy and other critical Owner preferences).

4.4 Design Engineering

Upon issuance of Limited Notice to Proceed (LNTP) to the selected EngineeringContractor, activities that are required to establish the design in sufficient detail tosupport the scheduled construction mobilization date and SPP’s commercial operationdate (COD) will begin. During this stage of project development, the Engineering

Contractor will perform the following:

• Define key major equipment supply and technical specifications.• Bid and negotiate with provisional equipment suppliers.• Develop and finalized the overall cycle design.• Incorporate Chugach Electric operations and maintenance (O&M) considerations

into the design basis.• Refine the project schedule and plans.

The Engineering Contractor’s design activities during the LNTP phase will likelyinclude:

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• Develop and publish system design specifications and obtain Chugach Electric’sconcurrence with the concept, redundancy levels, and design criteria.

• Develop piping and instrument diagrams (P&IDs).• Develop plant arrangement drawings.• Develop initial design to support purchase of provisional equipment (including

steam turbine-generator, HRSG, generator step-up transformers, and cycle heat

rejection system fin fan cooling system).

The Engineering Contractor will focus on development of specifications, securing bids,and negotiating terms and conditions for provisional equipment. The intent for thisactivity is to identify and negotiate contracts with provisional equipment suppliers to beable to execute the contracts immediately upon Chugach Electric’s issue of the Full

Notice to Proceed (FNTP).

Detailed plant design will proceed during the LNTP phase in support of procurementactivities. Completion of design activities will also support early construction activities.Listed below are some of the detailed engineering activities that will occur during the

pre-construction phase:

• Site preparation drawings.• Preparation of P&IDs and system calculations.• One-line diagrams.• Control system architecture.• Plant arrangements.

The construction management staff of the Engineering Contractor will provideconstructability input on a regular basis as the design develops. This will includesequencing, construction concepts, access, etc. Activities carried out in the LNTP phaseof the project will continue during the FNTP phase of the project. Work will be

prioritized in accordance with the project schedule to support the project mechanicalcompletion date.

Design engineering results in the finished designs, drawings, lists, and technicalspecifications for procurement and construction. The system-engineering concept iscarried forward throughout the design engineering phase and is integrated with theconstruction-by-area concept. Design is initiated with construction and plant start-up inmind, thereby improving efficiencies, reducing contingencies, and minimizing cost andschedule.

Other activities occurring during the pre-construction phase of the project, followingFNTP, include:

• Procurement execution and implementation of materials management program.• Expediting of equipment and materials.• Quality assurance activities for equipment supply along with monitoring shop

fabrication.

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• Subcontract administration, including supplier pre-qualification, scheduling, and post-award operational oversight.

• Project controls establishment to plan and budget work; monitor and report project costs and trends, and then measure project progress to ensure timelycompletion of intermediate and final milestones.

4.5 Construction

Construction execution will be either by a direct-hire work model or subcontracted labormodel. The type of work model to be used will be as proposed by the selected EPCContractor and will be dependent upon the contractor’s working relationship withsubcontractors within the region and the availability of skilled cr aftsmen representing allrequired disciplines.

Work expected to be contracted with subcontractors in the region follows:

• Temporary facilities delivery, setup and demobilization (office complex, storageunits, warehouse, etc.)

• Piling or drilled piers.• Pre-engineered metal buildings (the EPC Contractor will install foundations).• Field-erected tanks (the EPC Contractor will install foundations).

• Fire protection.• Paint.• Insulation.• Specialty coatings and linings.• Roadway grading and paving.• Heavy-haul.• Concrete pumping.• Concrete testing.• Stress relief.• Radiography.• Boiler and pre-boiler chemical cleaning.• Transformer dress-out and oil fill.

The means, methods, and construction sequencing will be as proposed by the selectedConstruction Contractor. Areas that the Construction Contractor shall address in his

proposal shall include the following:

• Construction mobilization/logistics.• Personnel assignments/Working hours.• Weather impacts and considerations.• Permits and regulations.• Access to construction site.• Temporary facilities and laydown space utilization.• Construction utilities requirements.• Construction equipment and tools.• Construction warehouse space.

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• Heavy-haul.• Cost control.• Project scheduling.• Construction management staffing.• Medical services.• Security services.

• Construction quality.• Construction testing.• Chemical cleaning and steam blow.• Commissioning and plant turnover.• Initial operation.• Training.• Performance testing.• Warranty administration and project close-out.

4.6 Startup and Commissioning

The planning for a successful start-up program begins during the detailed design and procurement phase of the project. For example, P&IDs will be reviewed so that thequantity and location of isolation valves to facilitate start-up by subsystems are

adequately incorporated. A detailed start-up schedule will be developed so that all start-up and commissioning activities and required testing procedures are completed in supportof the commercial operation date.

Early in the project, a list of all of the turnover packages, description of the scope of each package, and the required construction completion date and turnover date will bedetermined. Two to three weeks prior to the scheduled construction turnover of a

particular package, a joint walkdown between construction, start-up, and ChugachElectric’s personnel will be conducted. Outstanding construction work and/ordeficiencies will be identified and recorded on a Master Punchlist. These items will be

prioritized, assigned to the craft or subcontractor for resolution, a date established forresolution, and documentation prepared to show that a particular issue has beenaddressed.

During the construction completion phase, the construction team will install and erectequipment in accordance with project design and specifications. Certain tests will becompleted during this phase and that are within Construction’s scope of responsibility.These tests will include, but are not limited to, the following:

• Hydrostatic, pneumatic, initial service leak tests.• Nondestructive testing of field welds.• Wiring integrity (hi-pot and megger tests) and continuity checks.• Initial equipment alignment and adjustment.• Initial lubrication of equipment.

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Once all Construction’s activities for a subsystem are complete, the ConstructionContractor’s Turnover Coordinator will turn over the subsystem package to the Start-upGroup for checkout. When a subsystem is accepted by the Start-up Group, boundaryvalves, electrical switchgear, and major components of the subsystem are tagged toindicate that the system is under the Start-up Group’s control. At this point, all work onthe subsystem must be authorized by the Start-up Manager.

The Start-up Manager directs the checkout of each system and the start-up team, underthe direction of responsible start-up engineers, flushes systems as required, performs loopchecks on control circuits, and functionally checks all equipment (some of which willrequire vendor participation to preserve warranties). As a part of the operator training

program, the Start-up Manager will invite Chugach Electric’s operators to participate inthe testing and initial operation of the subsystems. Once a subsystem package is testedand the remaining exceptions, if any, are determined to be minor, the subsystem will be

put into initial operation under the direction of the responsible start-up engineer. Thestart-up engineer will subsequently address any equipment malfunctions, determine ifconstruction involvement is required, and expedite resolution of any problemsencountered during the initial operation.

After the individual equipment is commissioned, the Start-up Group functionally testsand tunes the various systems to demonstrate the plant is operative and safe. Start-up

personnel perform more complex commissioning tasks, involving multiple systems, priorto total unit coordinated commissioning. Normal and off-normal operation is simulatedto verify that individual systems and multiple interacting systems will function properly.After these systems are checked out in this manner, the unit undergoes coordinatedcommissioning to check out coordination of controls and systems operation. Systematicobservations are made during coordinated commissioning to detect any possible problemsor out of specification operating conditions such as flows, temperatures, piping andsupport interaction, thermal growth interferences, etc. Unit control logic is fine tuned atthis time.

The Start-up Group then conducts or coordinates performance tests, environmental

compliance testing, availability, and/or reliability as required to demonstrate thatcontractual guarantees have been met. As a final step, the Start-up Group compiles alltesting and calibration data required to complete the turnover packages for release toChugach Electric.

4.6.1 Performance Testing

The overall objectives of Performance Testing will be to determine if the plant performance guarantees for net plant electrical generating capacity as well as net plantheat rate are met. The Construction Contractor will provide the necessary start-up andcommissioning support, as well as the necessary craft labor in support of these efforts.The Construction Contractor’s activities associated with preparation for performancetesting include the following:

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• Review and approve the detailed test plan and procedures (developed by the OEand others) that will govern the conduct of the plant performance tests.

• Provide and install all additional temporary instrumentation necessary to conductand record the results of the tests.

• Manage calibration of instrumentation with the exception of the net power outputsignal. Chugach Electric’s meter is anticipated to be used for this measurement.

• Ensure that the distributed control system is operational prior to commencingtests.

The Engineering Contractor will have the overall responsibility for conducting the performance tests and for directing operation of the unit during performance testing. Theresponsibilities during and following the conclusion of the testing as included in the finalEngineering Contract may include:

• Plant overall performance (output, heat rate, etc.)• Plant emissions• Noise tests• Individual component performance testing (CTG, HRSG, STG, Condenser, Cycle

Heat Rejection Fin-Fan Cooler)• Reliability run (7 days)• Demonstration tests.

4.7 Warranty Administration and Project Close-out Plan

The objectives of Warranty Administration and Project Close-out Plan are to provideassurance that, if any warranty issues arise during the warranty period, they shall beaddressed in a timely manner in accordance with contract requirements. In addition, asthe project nears completion, the Project Close-out Plan addresses any remaining contractobligations to see that they are completely fulfilled. The following warrantyadministration and project close-out activities are required:

• A Warranty Administrator will be designated by the Construction Contractor forthe duration of the contract warranty period. The Warranty Administrator will be

available throughout the warranty period to address all warranty issues.• Upon notification of a warranty issue, the Warranty Administrator will investigate

the root cause of the problem and identify the appropriate corrective action.• The Warranty Administrator will coordinate the performance of the warranty

work so that impact to plant operation is minimized.• The Warranty Administrator will coordinate the performance of warranty work by

original equipment manufacturers and suppliers to ensure that warranty issues areaddressed in a timely fashion.

• Completion of documentation.• Completion of punchlist items.

Chugach Electric’s Project Manager or his designee will be responsible for the followingregarding warranty and project close-out issues:

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• Notification regarding warranty issues in accordance with the contract.• Investigation of suspected warranty issues to exclude maintenance and/or

operational problems.• Administer and perform warranty work on Chugach Electric furnished equipment.

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Attachment 1Project Team Name Title Phone No. /

Cell No.

E-mail Address Company

Location

Owner Staff

Paul Risse Program Manager 907-762-4532 [email protected]

Chugach

Dustin Highers Project Manager [email protected]

Chugach

Site Manager Chugach

Peter Poray Permitting Manager 907-762-4788 [email protected]

Chugach

Project Controls Engineer

Mike Henrich Startup Manager [email protected]

Chugach

Kathryn Linn Project Clerk [email protected]

Chugach

Dan Mattson Controls Engineer [email protected]

Chugach

Mechanical Engineer Chugach

Contract Staff

OE Project ManagerOE Project Support AssistantOE Assistant Project Manager(On-Site)OE Project Engineering ManagerOE Project Engineer – Civil/StructuralOE Project Engineer – MechanicalOE Project Engineer –Control/ElectricalOE Project Engineer – ChemicalOE Project Controls ManagerOE Project Cost Control EngineerOE Project SchedulerOE Project QA/QC Engineer

OE Project Safety EngineerOE Project Procurement SpecialistOE Field Engineer – Civil/StructuralOE Field Engineer – ElectricalOE Field Engineer – MechanicalOE Start-up/Commissioning Engineer

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Project Execution Plani.pdf

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Transcript of Project Execution Plani.pdf