HomeMy WebLinkAbout _ 4.5(a)--Budget Reso & Change Order for Unit 9 Hydroelectric Turbine Overhaul � � �' � � �
� � � ' � �' � � ' � ` CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: November 19, 2024 FROM: Nick Zettel, Director of
ITEIVI NO. 4.5(a) Redding Electric I7tility
***APPROVED BY***
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nzettel@cityofredding.org btippin@cityofredding.org
SUBJECT: 4.5(a)--Approve Budget Resolution and Change Order to Bid No. 5513
Ins ection and Overhaul of the Unit 9 H droelectric Turbine
Recommendation
Authorize and approve the following actions regarding Bid Schedule No. 5513, Inspection and
Overhaul of the Unit 9 Hydroelectric Turbine and Auxiliaries:
(1) Authorize additional funding for hydroelectric turbine repairs in the amount not to exceed
$1,200,000;
(2) Authorize amendment to the Stephen's Mechanical contract resulting from Bid Schedule
No. 5513 for additional funding up to $1,200,000 ($'725,000 for generator rewinding;
$300,000 for turbine and bearing repair; and $175,000 of contingency);
(3) Authorize the City Manager, or designee, to execute change orders and/or amendment to
the Stephen's Mechanical contract up to the total amount of the project;
(4} Adopt Resolufion approving and adopting the 63rd Amendment to City Budget
Resolution No. 2023-060 appropriating $1,200,000 for the Unit 9 Hydroelectric Turbine
Overhaul; and
(5) Find that this project is categorically exempt from review under the California
Environmental Quality Act pursuant to Sections 15301 (Existing Facilities) and 15302
(Replacement or Reconstruction).
Fiscal Impact
To fund this project, $884,000 was allacated fram Redding Electric Utility's (REU) Major
Maintenance Fund in the Fiscal Year 2024-2025 Biennial Budget.
Report to Redding City Council November 13,2024
Re: 4.5(a)--Budget Reso& Change Order for Unit 9 Hydroelectric Turbine Overhaul Page 2
Original Contract Approved on September 17, 2024 Actual Costs
Inspection and Overhaul— Stephen's Mechanical Corporation $543,320
Contingency Utilized for Findings — Generator transport, runner
repairs, shutoff valve repairs and seals, and purchase and machining $300,680
of new wicket ate bushin s— Ste hen's Mechanical Co oration
Other Ancillary parts $40,000
TOTAL $884,000
Increased project costs and unplanned maintenance repair requirements have depleted the Major
Maintenance Fund; however, REU has sufficient reserves to support the inereased funding
required for this Unit 9 project. Additionally, it is anticipated that reserves will be refunded as
part of the planned 2025 bond issuance.
Proposed Amendments to Fand Additional Findings Estimated Costs
Generator Rewind- Stephen's 1Vlechanical Corporation $725,000
Turbine, Valve, and Bearing Repair - Stephen's Mechanical �300,000
Co oration
Contin enc $175,000
TOTAL $1,200,000
While not a direct project cost, it should be noted that REU must acquire replacement energy
during the Unit 9 outage. Replacement energy, inclusive of environmental attributes, is estimated
at approximately$10,000 per day, or$1.4 million during the 20-week outage.
Alte�native Action
The Redding City Council (Council) eould choose to reject additional funding, which would not
allow for the Unit 9 to be returned to service, or provide alternative direction to staff.
Backgrou n d/f1 n alysis
The City of Redding (City) owns and operates a 3S MW Vevey Hydroelectric Generating
Turbine (Unit 9) located at the base of Whiskeytown Dam. Unit 9 was commissioned in 1984
and provides continuous renewable energy to the City. Unit 9 consists of a turbine, generator,
penstock isolating valve, and an auxiliary oi1 system for hydraulics and control oi1. The turbine
runs exclusively on water from Whiskeytown Lake and generates carbon-free, eligible renewable
energy.
On September 17, 2024, the Council authorized an inspection and overhaul of Unit 9. During the
overhaul and inspection of the Unit 9 hydroelectric turbine and auxiliaries, the following age-
related equipment repair items were discovered:
1. Damage to generator windings of stator, field, and exciter(complete rewind);
2. Extensive damage to turbine sleeve valve (colnplete replacement);
3. Cavitation and impact damage to turbine rotor(repair);
4. Out-of-spec bearing tolerances (rework); and
5. Damage to turbine shut-off valve (repair).
Report to Redding City Council November 13,2024
Re: 4.5(a)--Budget Reso& Change Order for Unit 9 Hydroelectric Turbine Overhaul Page 3
The initial contract cost of overhaul services was $844,000, including the contingency. The
original contingency has already been allocated to mobilization and transport costs, as we11 as
additional repairs such as wicket gate bushing replacements. The discoveries listed above exceed
the contract contingency and require additional funding to restore the generating unit to service.
Envi�^onmental Review
This project is providing major maintenance on an existing turbine at the Whiskeytown Power
P1ant and therefore is categorically exempt from review under the California Environmental
Quality Act pursuant to Sections 15301 (Existing Facilities) and 15302 (Replacement or
Reconstruction).
Council PrioNity/City NfanageN Goals
This is a routine operational item.
Attachments
^Resolution
4.5(a)--Unit 9 Hydroelectric Turbine Overhaul9/17/24 staff report
Resolution No. 2024 -
A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE
63xD AMENDMENT TO CITI' BUDGET RESOLUTION NO. 2023-060
APPROPRIATING $1,200,000 FOR UNIT 9 HYDROELECTRIC TURBINE OVERHAUL
FOR FISCAL YEAR 2024-2025.
BE�T RESOL VED BY THE CITY COUNCIL OF THE CITY OF REDDING
THAT Budget Resolution No. 2023-060 be and is hereby amended as follows:
FUND DIVISION DESCRIPTION INCREASE DECREASE
211 8093 REI7—Capital/PP 1Vlajor 1Vlaint �1,200,000
THAT account titles and numbers requiring adjustments by this Resolution are as follows:
USE SOURCE
OF FUNDS OF FUNDS
Decrease(Increase)Fund Balance
211-8093-2910000-00000 Fund Balance $ 1,200,000
Increase Expenditures
2ll-8093-7800058-00000 REU-Power P1ant $ 1,200,000
Total $ 1,200,000 $ 1,200,000
THAT the purpose is to appropriate $1,200,000 for unit 9 hydroelectric turbine overhaul for fiscal
year2024-2025.
I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting of the
City Council of the City of Redding on the day of , 2024 and was duly
adopted at said meeting by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
TENESSA AUDETTE, Mayor
ATTEST: FORM APPROVAL:
SHARLENE TIPTON, City Clerk CHRISTIAN M. CURTIS, City Attorney
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� � � ' � �' � � ' � CITY OF REDDING
REPORT TO THE CITY COUNCIL
MEETING DATE: September 17,2024 FROM: Nick Zettel, Director of
ITEIVI NO. 4.5(a) Redding Electric I7tility
***APPROVED BY***
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SUBJECT: tf`�;;��(a)--Unit 9 Hydroel� r�ic Turbine Overhaul
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Authorize and approve the fo1lc��g actions r����ding Bid Schedule No. 5513, Inspection and
Overhaul of the Unit 9�Hyc�roel����c Turbine an� ;�uxiliarles
(1) Authori�e an�amount na�'�� exceed �881��j���b for I,��t 9 Hydroelectric Turl�ine��overhaul;
(2)� Award Bid to��Stephen's ����hamca�f,,���orat�,�,�z�� the amount�not�tio��exceed $844,00�
($543,320.20 for overhaii��,<i � „zl{t�,j f '�,''and {��������"�����t�d� for potential replacement of
components); 1,r���' ����, }
(3) Authorize the�City�Manager, or design����r��`execute cha����orders�up ta�the total�amount��
of the project contingency to adc�;�;��t�t�t�nforeseen w����'��item� discovered during the
OVf'.rllaUlpTOCf:SSj 2]1C� } �{ `1't j'x�� ts�%�4,'t t4{jl}trz.
4 Find that this ro'ect is ca� �'��i'ricall j`' j ' ! �'m re '' ' '� under the California
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Envi�onmental Quality Act pursuant to Secfi����`�`�5301 (E����tng�Facilities)�� and 15302
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(Replacement or�Reconstruction). ' `
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Description
� ���„J��� ��� Estimated
Cost
Overhaul Services- Stephen's Mechanical Corporation $543,320.20
Potential Replacement of Components(Equipment and Parts), $300 679.80
Including�Contingency- Stephen's 1Vlechanical Corporation '
Other Ancillary Parts $40,000.00
TOTAL $884,000.00
Report to Redding City Council September 21, 2024
Re. 4S(a)--Unit 9 Hydroelectric Turbine Overhaul Page 2
The� contract cost of overhaul services is $543,320.20. The potential replacement cost of parts
and equipment components, including a contingency for unfareseen expenses and change orders,
is estimated at$300;679.80.Additionally, $40,000.00 is anticipated for ancillary parts that, while
nat major companents, are essential for the system's overall functionality. This brings the total
projected cost of the projecti�to$884,000:00�.
Redding Electric Utility (REU) initially budgeted $600,000 in Major Maintenance funds for this
Fiscal Year 2024-25 project, based on historical activity. However, due to inflationary pressures
and supply chain disruptions affecting major parts and equipment, the costs of industrial work
have signi�'icantly increased. The necessary funds for the project, including contingency and
additional work, are available within REU's Major Maintenance Fund. The replenishment and
adjustment of the Major Maintenance Fund and the funding plan will be addressed during the
Fiscal Year�2026 27 b����;�f���d��et. At that time, actual project�expenditures will be�reviewed
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The City Cou4�;��;� could choose to re���;�,y}the proposed pricing, which would prevent the overhaul
and inspectio�'y��the Unit 9 Hydroelec��ic Turbine and Auxiliaries.
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The City of Reddmg (�ity) o���`'�d opera���t,,a 3 5-megawatt Vevey hydroelectric turbine
�designated as Generating Unit ��",� `nit 9 provld���'��newable energy to the Citq on a continuous
�basis. The �hydroelectric plant,��G";,located at th��j,��se of Whiskeytown Dam and consists of a
turbine, generator, penstock i�����mg valve�;��,�� �}��� an , t��;�lary oil system for hydraulics and
�control oil. The turbine runs exc�t���'��,l���s��,,`z����r fro;������'�;��town Lake and generates power�
�with no�carbon footprint. '"`'' �,�,���`�}�'����'°{ `'"��'���� ' '
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The hydroelectric plant has operated appx����;�tely 125,00(�,t�{,f,�urs since the last overhaul.
Although the equipment is still operation��l'���`���compone���r��ch a����� turbine shut-off valve�
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�are exhibiting the beginning signs of �J����e. '��,�,cont�����'r��elay ���t��naintenance reflects an
increase in operational�risk to�equipmenf`��s intern���{������;��ar��over�'���
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If maintenance is postponed, the possibility of an unplanned ori4'��astro��,��,t�����`�e increases.
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Failure will result in the cost of equipment replacement as well �`��t��l��t`�,#���'eplacement power�
�during downtime. Cost associated with this scenario ����1 be s��t��������y�higher than that of the
�overhaul, `���t,; ��� ���1�,���`�
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The bid review team evaluated two proposals submitted in response to RFP 5513 for technical
�t�ualifications�, schedule, and budget. Stephen's�Mechanical Co�rporatic�n'�s bid�represents the best�
overall value to the City as their praposal demonstrated they have the best understanding of the
project �needs, the criticality of��project timing, and the lowest cost, all of which reduce� �the
potential for�change�order�requests during the�overhaul process�.
Report to Redding City Council September 21, 2024
Re. 4S(a)--Unit 9 Hydroelectric Turbine Overhaul Page 3
EnvironmentalReview
This project is providing major maintenance on an existing furbine at the Whiskeytown
hydrogeneration facility and, therefore, is categorically exempt from review under the California
�Environmental� Quality Act pursuant to Sections �15301 (Existing Facilities} and 15302
�(Replacement�r Reconstruction).
Council PNiority/City Manager Goals
This is a routine operational item.
Attachments
^Attachment A=Fm�������'�����kings
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ATTACHMENT A
FINAL.PROPOSAL RANKINGS
MINIMUM PROPOSAL TECHNICAL COST EVALUATION TOTAL
RANK BIDDER COST REQUIREMENTS MET EVA�UATION SCORE SCORE
1 Stephen's Mechanical Inc $543,320.20 Yes 68.33 28 96.33
2 NMI $812,665.00 Yes 49.67 20.25 69.92
NA Ethos NA No NA NA NA
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