04-20-12 BPU RPT 08 - Laserfiche WebLink

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W A T E R E N E R G Y L I F'F RIVERSIDE PUBLIC UTILITIES OW& Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: April 20, 2012 ITEM NO: 8 SUBJECT: EMERGENCY EQUIPMENT REPLACMENT AT THE SPRINGS GENERATION FACILITY TO ENHANCE SUMMER SYSTEM RELIABILITY ISSUE: That the Board of Public Utilities consider approval of Emergency Work in accordance with Section 1202(b)(2) of the City of Riverside Charter. RECOMMENDATION. That the Board of Public Utilities approve the estimated capital expenditure of$531,810 for Emergency Work in accordance with City Charter Section 1202(b)(2). BACKGROUND: The Springs Generation Facility was commissioned in 2002. As part of the plant design, a Selective Catalyst Reduction {SCR} system was installed to reduce air(NOx) emissions to acceptable levels identified in the power plant's South Coast Air Quality Management District's (AQMD) permit to operate. Catalysts degrade overtime whether or not the plant operates. The catalyst system for all four Springs Units are in varying stages of deactivation and can no longer consistently and reliably reduce air emissions to permitted levels. Periodic compliance tests have been performed since 2002, and in December 2011, Springs Units 1 and 3 failed emission testing, and hence are only available during emergency conditions. While Units 2 and 4 did pass compliance testing,these catalysts will continue to degrade and will likely be out of compliance within the next year. Recently staff petitioned and successfully obtained a permit variance from the AQMD to accelerate repairs/replacement and demonstrate permit compliance no later than November 1, 2012. Currently,two of RPU's generating resources are unavailable due to unforeseen breakdowns. Units 2&3 at San Onofre Nuclear Generating Station (SONGS) and Unit 1 at the Intermountain Power Project(IPP)are out of service for unplanned maintenance. With the summer months quickly approaching and the availability of these generating assets in question, it is critical to have all internal generation available to meet Riverside's demand and reserve margins as required by the City's and the California Independent System Operator(CAISO) Resource Adequacy policies. If any of the three units do not return for the summer peak demands, electric system reliability in Riverside and/or Southern California could be impacted. In reaction, staff worked with vendors to accelerate the SCR replacements to retum the units to service by June 1, 2012 to preserve life, health and property, including protecting public safety, as well as enhancing Riverside's and the CAISO's electric grid reliability and ability to meet summer peak demands. This required streamlining processes and combining project bids for full turnkey operation, including complete removal, engineering, installing, shipping, testing and commissioning of the new SCRs in a very compressed time period.