October 1, 2009

Top Plants: Nebraska City Station Unit 2, Nebraska City, Nebraska

Dr. Robert Peltier, PE

Project Accounting

NC2’s EPC contract was the largest contract ever signed by OPPD. The contract’s essential terms cover the expected performance, emissions, and completion date guarantees. The size of the plant was required to be at least 663 MW net with a maximum heat rate of 9,188 Btu/kWh (34.2% net efficiency). The guaranteed price for the plant — set at $629,600,000, or $950/kW installed — certainly came after some sharp bargaining by OPPD.

Other OPPD-specific work was performed outside of the EPC contract. For example, costs related to plant interface modifications to common systems, spare parts and other inventory, and overhead brought the total project budget to $710,000,000, or $1,041/kW. The coal delivery system was also upgraded, and a new 50-mile 345-kV transmission interconnect was constructed to move the power to a new substation in southeast Nebraska. Those upgrades added another $76,600,000 to OPPD’s construction tab and were handled through a separate agreement with other regional utilities. Overall, the project and necessary capital improvements remain a bargain for all the project’s participants at $786,600,000 or $1,153/kW when all the cost categories are included.

The EPC contract included various liquidated damage clauses for failing to meet key contract performance goals, but with the stick comes the carrot. Bonuses were paid to NCPP for exceeding the plant guaranteed output and for keeping the heat rate low. NCPP broke ground for the facility in September 2005; the construction completion date was set for May 2009 and was met by NCPP (Table 4).

Table 4.    Key Nebraska City Station Unit 2 project milestones. Source: OPPD