The People Who Powered the Project
In many cases, an EPC contract means the owner has little control over final plant design and construction. "We’ll give you the key when we’re done" is the EPC contractor’s attitude. Not so with KBV, which worked with CWLP just as though its people were on the CWLP payroll. Miltenberger was complimentary of the CWLP project team for "embracing the partnering approach to managing the project. It knocked down a lot of barriers" that would otherwise have slowed progress.
CWLP was kept informed of every aspect of the project, and its people were expected at the daily safety and scheduling meetings, weekly quality and status meetings, monthly management meetings, and quarterly partnering meetings. Keeping CWLP involved in every aspect of the project helped maintain open communications among all the project participants and made possible a true open-door policy for everyone. This sort of organizational openness doesn’t eliminate the challenges that are inevitable on a project of this magnitude. But open communications made discussion and resolution of many challenges possible before those challenges became major issues that had to be passed up the organizational hierarchy for resolution. According to Brown, "It cannot be emphasized enough that the entire project was operated as a team with as much priority placed on the customer’s needs as was placed on the contractor’s profitability."
The plant’s operational plan is also strong. CWLP is fully staffed, and its people are well-trained and ready to assume O&M responsibility for Dallman 4 when final acceptance is achieved.
All of Springfield’s power plants are located within walking distance of each other, and this close proximity helped solve many staffing issues. A site generation director manages O&M resources for all the generating facilities.
Closure of the Lakeside facility freed up experienced O&M technicians for Dallman 4. Reporting to the generation director is a single maintenance superintendent, who is able to allocate maintenance resources as required. Also reporting to the generation director are two superintendents of operations, one for the three existing Dallman units and one for Dallman 4. Dallman 4 is staffed with five operators per shift, but a single shift supervisor covers all four coal-fired units. A recent poll of operators found that their preference remains eight-hour shifts, so CWLP uses a 5 x 8-hour schedule.
New jobs created by Dallman 4 turned out to be evenly filled by promotions, transfers, and new hires. Dallman 4 opened 24 new job opportunities; 12 were filled from within CWLP from the existing Dallman units. Those 12 jobs were then backfilled by 12 new hires. The remaining 12 new jobs were then advertised and hires were made from outside of CWLP. Interestingly, the same union local that represents some of the CWLP operators at the existing Dallman units (International Union of Operating Engineers) decided to go with a different agreement for the 24-member operating staff of Dallman 4. That new agreement is currently being negotiated.
Pay for Performance
Throughout the project KBV has been able to successfully meet or beat the project milestone dates. Groundbreaking was on November 30, 2006, and steam blow was completed 29 months later, on April 17, 2009. The unit was synchronized on May 11, 2009 — many months ahead of the planned project schedule of January 12, 2010. Start-up and testing will take place over the summer; commercial operation is slated for September 4, 2009, fewer than 36 months after groundbreaking. "It’s unheard of to be this far ahead of schedule and on budget," said Brown, the project manager.
This excellent performance enabled the plant to generate more than 5 MWh before June 1, which earned KBV a power production bonus, the first of two power production performance bonuses.
During the later stages of start-up, CWLP recognized the value that the intermittent electric generation was providing Springfield by offsetting expensive purchased power. As any city with an entrepreneurial spirit would do, it cut a deal with KBV: If KBV could schedule the generation of power during the on-peak hours of 7 a.m. to 10 p.m. from June 1 to September 18, 2009, and perform required maintenance as much as possible during off-peak hours, then a second power production bonus would be made available. Weekday generation is credited with 100% of the on-peak generation and weekends are credited at a rate of 50% of the on-peak generation. For each block of 5,000 MWh generated, KBV is awarded a bonus. The bonus rate for each block of 5,000 MWh is fixed for each month of the incentive period.
This is an excellent approach to motivating an EPC contractor to accelerate a schedule that benefits both the owner and the contractor.
The success of this project in the eyes of city residents has a single measure: electricity rates. Even after rate increases totaling about 33% over the past three years to pay for Dallman 4, CWLP rates are described as still being among the lowest in the state, and they are modest compared with rates in other parts of the country. For example, the current regular residential rates are $0.0706/kWh winter and $0.0851/kWh summer. Large commercial/industrial rates also remain very attractive, with a summer energy charge of 0.0509/kWh with a $13.97 demand charge and a $550 monthly customer charge.
"This is something the people of Springfield should be very proud of," said former Assistant General Manager Jay Bartlett. "We’ve taken our future, in terms of the energy crisis, and we’ve taken control of it."
Cool City Certification
Leveraging CWLP’s agreement with the Sierra Club, Springfield became a "Cool City" in August 2008 by ratifying the U.S. Mayors’ Climate Protection Agreement, whose goal is to reduce greenhouse gases 7% below 1990 levels by 2012. Springfield’s stated goal is to become one of the top 10 greenest cities in America, and building the coal-fired Dallman 4 brought the city a big step closer to making that goal a reality.
With Dallman’s contribution plus the purchase of 120 MW of wind capacity, energy conservation initiatives, closing of the Lakeside units, improved generating efficiency, and emissions reduction projects completed at each of the three existing Dallman units, CWLP’s carbon dioxide emissions for its native load customers will be lowered to 1990 levels by 2015. That’s a goal the Midwest hopes to attain by 2020, as stated in the Midwestern Greenhouse Gas Reduction Accord signed in fall 2007.
Springfield has shown the power industry that building a coal-fired power plant as part of a comprehensive energy plan can be very cool. Congratulations to CWLP, the City of Springfield, and the rest of the project team for a job well done.
—Dr. Robert Peltier, PE is POWER's editor-in-chief.
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