NLH 2012 Capital Budget Application: Report 24

A REPORT TO

THE BOARD OF COMMISSIONERS OF PUBLIC UTIUTIES

Electrical

Mechanical

Civil

Protection & Control

Transmission & Distribution

Telecontrol

System Planning

UNIT 1TURBINE GENERATOR MAJOR OVERHAUL

Holyrood Thermal Generating Station

July 2011

hyaroa nalcor energy compaoyUnit 1 Turbine Generator Major Overhaul

Newfoundland and Labrador Hydroi

Table of ContentsINTRODUCTION1PROJECT DESCRIPTION5

Age of Equipment or System9Major Work and/or Upgrades 10Anticipated Useful life 12Maintenance History 15Outage Statistics 16Industry Experience 16Maintenance or Support Arrangements 16Vendor Recommendations 16Availability of Replacement Parts 17Safety Performance 17Environmental Performance 18Operating Regime 18

JUSTIFICATION20Net Present Value 21Levelized Cost of Energy 21Cost Benefit Analysis 21Legislative or Regulatory Requirements 21Historical Information 22Forecast Customer Growth 23Energy Efficiency Benefits 24Losses during Construction 24Status Quo 24Alternatives 24CONCLUSION25Budget Estimate 25Project Schedule 26

APPENDIX A............................................................................................................................. A1APPENDIX B ............................................................................................................................. B1APPENDIX C ............................................................................................................................. C1APPENDIX D............................................................................................................................. D1Newfoundland and Labrador HydroPage

Newfoundland and Labrador Hydros Holyrood Thermal Generating Station is located within the town of Holyrood and is an integral part of the Island Interconnected System. The Generating Station itself (Figure 1) consists of three oil fired units capable of producing a total capacity of 490 MW which is approximately 33 percent of the Island Interconnected Systems installed capacity. Units 1 and 2 were commissioned in 1969 and 1970 respectively and Unit 3 in 1979. Units 1 and 2 were originally designed to produce 150 MW, but were upgraded to 175 MW in 1988 and 1989 respectively. Unit 3 retains its original configuration and is rated at 150 MW. In 1986, Unit 3 was retrofitted with synchronous condensing capability to provide voltage support on the eastern end of the Island Interconnected System during periods when power generation from the Holyrood station is not required.

Figure 1: Holyrood Thermal Generating Station

The three major components of the thermal generating process are the power boiler, turbine and generator. Through combustion of No. 6 fuel oil, the power boiler provides high energy steam to the turbine. The turbine is directly coupled to the generator and

provides the rotating energy necessary for the generator to produce rated output power to the Island Interconnected System. The turbine is a General Electric (GE) Lynn Model D3 made up of three stages each designed to extract maximum energy from the high pressure steam and in turn to provide maximum rotational energy to the generator. Each turbine is constructed of three stages: a single flow high pressure section, a single flow intermediate section (both in one high pressure-high temperature casing) and a separate double flow low pressure section. The high, intermediate and low pressure stages of the turbine rotor are built on a single shaft with solid couplings to form what is known as a tandem compound, double flow, reheat turbine. Each stage is designed such that it extracts energy from the supplied steam as efficiently as possible converting it into rotational energy.

The electrical generator is coupled to the steam turbine and converts the rotating energy into electrical power. The generator itself is a General Electric (GE) 194 MVA two pole unit rotating at 3600 rpm to produce 3 phase, 0.9 power factor, 60 cycle, 16,000 volt energy at its stator terminals. It is pressurized and cooled by hydrogen gas to provide maximum efficiency both in heat transfer and windage losses.

The generator has two basic components; a rotational excitation field and three stationary stator coils. The rotational field, through magnetic coupling, induces a high voltage into the stationary stator coils. The stator coils are connected via a step-up transformer to the main Holyrood terminal sub-station and then to the Island Interconnected System. The turbine generator (T/G) assembly is approximately 80 feet in length and 24 feet in diameter and is shown in the accompanying photos (Figures 2, 3, and 4) in both its assembled and disassembled states. The turbine is designed to operate using high energy steam at approximately 14,000 Kpa pressure and 500 C temperature. The generator operates at approximately 16,000 Volts and 7,000 Amps when providing full load (175 MW) to the island power grid.

Figure 2: Unit 1 Turbine Generator Assembled

Figure 3: Unit 1 LP Turbine Disassembled

Figure 4: Unit 1 HP/IP Turbine Disassembled

PROJECT DESCRIPTION

The scope of work for the project is to perform a scheduled major overhaul of Unit 1 turbine generator and auxiliary systems located at the Holyrood Thermal Generating Station.

Unit 1 turbine generator (Serial Number 940310 and 980485 respectively) was designed and built by General Electric. The turbine itself is constructed of special metal alloys to withstand the extreme temperatures and pressures and must conform to very close tolerances in order to convert the steam energy as efficiently as possible. The generator is subjected to significant electrical and magnetic stresses while providing megawatt and megavar loading for the Island Interconnected System. The generator stator windings have increased forces and loading induced upon them during severe system events. Unit 1 is no exception and encounters numerous power grid faults and swings in load during system events. To ensure that these units operate at peak performance and provide maximum energy on demand, it is necessary that they undergo major overhauls on a scheduled basis to return the equipment to design specification. The last major overhaul took place in 2003 and was completed by General Electric. In their report they noted that the generator testing showed signs of electrical and mechanical wear and recommended that this be investigated in a more indebt level during the next major overhaul. (Appendix A)

This major overhaul consists of a total dismantling of all turbine stages, removal of the generator rotor, and internal inspections of all systems including auxiliary equipment. The work is mainly completed by contracted services with assistance from plant personnel where and when required. The contracted work consists of technical services, labour, materials and supervision. Plant support is required for work protection application and services, parts procurement, removal of specific monitoring and control systems, overall contract management, and technical liaison with Hydros management personnel.

The work consists of three types: Routine Standard Work (Appendix B) that is defined by the equipment manufacturer, Defined Work which is extra to the standard work and identified prior to the overhaul, and the Unforeseen Work which may result from examination of the equipment during the internal inspection. The Contractor is responsible to schedule and complete the standard and defined work within the specified overhaul period. The unforeseen work and repair schedule is determined in consultation with Newfoundland and Labrador Hydro. A major overhaul requires approximately 12 weeks to complete with work crews working two shifts. Unforeseen work coupled with transportation costs due to out of province repairs could alter the schedule and have a significant effect on the overall cost. In addition to the major overhaul, a minor overhaul is performed every three years wherein the turbine generator control and stop valves and related auxiliary equipment are refurbished. The minor overhaul work is included as part of the work schedule for the nine year major overhaul.

For many years the North American standard for major turbine generator overhauls was based on a six year cycle. This frequency was in agreement with the original equipment manufacturers guidelines and was acceptable to the utility industry in general. In the late 1990s, in an effort to reduce operating costs, utilities began scrutinizing their turbine generator major overhauls, and in particular the six year schedules, to determine the viability of extending the overhaul frequency. Following comprehensive reviews, the utility industry, in general, endorsed the findings which resulted in the major overhauls being extended from the traditional six years to a nine year frequency.

In 2003, Hydro undertook a similar initiative and contracted Hartford Steam Boiler Inspection and Insurance Company (HSB) to review its turbine generator operation using their proprietary Turbine Outage Optimization Program (TOOP) to determine if Holyrood could extend its current overhaul program to a longer interval. All aspects of the turbine generator were reviewed (design, construction, historical experience, operation, maintenance, inspections and monitoring). Their findings were detailed in separate reports

which included risk ranking, outage extension calculations, conclusions and recommendations. The reports concluded that all three units could extend their major overhauls from the previous six year to a nine year frequency provided some upgrading and repairs were completed and instrumentation installed to enhance the existing turbine monitoring program. (Appendix C). Hydro completed an analysis of the reports and determined that the upgrades and improved monitoring required to extend the major overall frequency was warranted as a cost savings measure without jeopardizing the safe and reliable operation of either unit. The necessary upgrades were completed for all three units and the maintenance plan for major overhauls revised to the nine year frequency.

In January 2010, AMEC Americas Limited (AMEC) was contracted by Newfoundland and Labrador Hydro to conduct a Phase 1 Condition Assessment and Life Extension Study of the Holyrood Generating facility. This was a non-intrusive assessment concentrating mostly on historical data, maintenance reports, operations logs, existing maintenance and inspection plans and reviews with operations staff. Their investigation took a year to complete with a finalized report delivered to Holyrood management in March 2011 (Appendix D). The study agrees with the 2003 TOOP report to extend the major overhaul schedule for the turbine to the nine year frequency but recommends that overhauls on the generators revert back to the six year interval. This specific recommendation will be further reviewed by Hydro before a final decision is made. The AMEC study also agreed with the 2003 General Electric (GE) recommendation to complete a more indebt inspection of Unit 1 generator during the next major overhaul with a follow-up plan to recondition both the rotor and stator if required.

The first major overhaul since the nine year extension decision is scheduled for Unit 1 in 2012. Its last major overhaul was completed in 2003. Over the past eight years (2003 2011), Unit 1 has seen 38,674 operating hours or 4.42 unit years, and approximately 14 unit starts per year. Operating hours are low in comparison to industry standard hours for that period but the number of starts would be considered high and is one of the governing factors in any major overhaul schedule. This overhaul is necessary to inspect the turbine

components for wear, to inspect the generator for its electrical and mechanical condition, and to inspect all auxiliary equipment. This major overhaul is also the first under the extended maintenance plan and it will provide valuable data on the effects of a longer operating period.

EXISTING SYSTEM

Age of Equipment or System

Unit 1 turbine generator was installed and commissioned in 1969. In 1988 its maximum continuous rating (MCR) output was increased from 150 MW to 175 MW.

The Unit 1 operating hours to the end of February 2011 were 171,951. Assuming the generator operates for approximately 5,000 hours per year until 2012, it is expected to attain approximately 179,000 hours before the next major inspection in 2012. Due mainly to system requirements, the unit has averaged about 14 starts per year which when projected to 2012 will total about 126 for the nine year operating period. This is significant when compared to similar operations and has an overall negative effect on the turbine generators condition.

Following industry standards, Unit 1 has undergone scheduled major and valve overhauls on a one year frequency starting in 1969, increasing to a three and a four year frequency in the 1970s and major overhauls increased to a six year frequency from the mid 1980s to 2003. In 2007 Unit 2 turbine experienced an unscheduled overhaul to replace a damaged 1st stage nozzle block in the HP section. A remedial action from that event saw Unit 1turbine being dismantled in 2009 under a scheduled overhaul to inspect its 1st stage nozzle

block. It was found to be cracked but the peripheral damage had not migrated to the same degree as Unit 2. A follow-up investigation determined that the nozzle block installed during the turbine upgrade in 1988 by GE was substandard. A GE redesigned nozzle block was installed on both units.

Table 1 shows Unit 1 and plant performance for a five year period (2005-2009).Newfoundland and Labrador HydroPage

Table 1 Holyrood Unit 1 and Plant PerformanceFive Year Average 2005-2009

Unit

Capability Factor (%) All Causes

DAFOR(%)Failure RateHolyrood Unit 159.2423.1914.05Holyrood Plant60.0414.439.69CEA (2005-2009)74.7410.318.91Capability Factor is defined as unit available time. It is the ratio of the unit's available time to the total number of unit hours.DAFOR is defined as Derated Adjusted Forced Outage Rate. It is the ratio of equivalent forced outage time to equivalent forced outage time plus the total equivalent operating time.Failure Rate is defined as the rate at which the generating unit encouters a forced outage. It is calculated by dividing the number of transitions from an Operating state to a forced outage by the total operting time.Major Work and/or Upgrades

The following upgrades have occurred since Unit 1 was installed:Table 2 - Unit 1 Turbine Generator - Major Upgrades

YearMajor Work2009Redesigned 1st stage nozzle block installed2009Fast dump of generator hydrogen installed;2008Stator winding ground fault protection improved.2008Boroscope Inspection of the turbine (1st stage) nozzle block2003Hydrogen dryer and purity meter replaced;

2003Newly designed stator slot ripple springs installed and end- winding support system re-tightened;Defective RTD repaired;

Digital multi-functional generator protection relay installed (for improved winding ground protection, alarms connected, and sequence of events);New Mark V Governor

Four new cold gas RTDs in stator installed; Realigned hydrogen seal housing and rotor shaft line.2000

GE static exciter and AVR replaced;

1997New 18 %Mn/18 %Cr retaining rings;

Partial discharge monitoring installed - stator windings.1988

to 92Up-rated from 174.160 MVA at 30 psi hydrogen pressure, to

194.445 MVA at 45 psi hydrogen pressure; Retaining rings polished and NDE inspected in situ.

1969

to 2003Major overhauls occurred on a 6 year schedule and minor overhauls (valves) on a 3 year schedule. Major overhauls continued after 2003 on a 9 year frequency and minor overhauls on a 3 year frequency.

Anticipated Useful life

Holyroods Unit 1 turbine and generator were depreciated over a 40 year period (1969 - 2009). However, in its 2010 Holyrood condition assessment report, AMEC concluded that Unit 1 turbine has a reliable remaining life in the order of twenty years (to 2020), provided that sufficient inspection and testing is performed during the 2012 major overhaul and remedial action taken as required. AMEC also concluded that Unit 1 generator has a reliable remaining life in the order of five years (to 2015) due to the condition of the stator windings. Replacement of the stator windings will be required to extend the generator life beyond that date.

The life cycle curves for Unit 1 turbine generator (as presented in the AMEC report) are illustrated in Figures 5 and 6. The curves plot the historic and projected operating hours for equipment over time. They have several vertical lines representing different nominal age limits for various components and several horizontal lines that represent a range of practical operating-hour life limits based on historical information and expert opinions. The risk boxes provide an indication of potential issues either from an age or operating-hour perspective. The two early risk areas for the turbine are the high pressure and intermediate pressure valves beyond 2010 and the low pressure turbine beyond 2015. The two risk areas for the generator are the stator winding beyond 2015 and the rotor winding and cores beyond 2025. The major overhaul scheduled for 2012 will extend the turbine remaining life to the desired 2020 End of Life (EOL) date. The major risk factor for the generator is the stator rewind which will be covered under a separate capital budget proposal.Unit 1 Turbine Generator Major Overhaul

Newfoundland and Labrador HydroPage

350000

300000

4 0 Years800 0 Hr s/ Yr Maxi mum 1 970 + 30Years - HP,IP, & L P 1970+ 40Year s -HP, IP, LP 198 8+30Years - H P & IP

Risk Are-a LP Tur bi ne 1988+ 40Year s - HP &IP

250000

200000 3 0 Years800 0 Hr s/ Yr N ormal Maxi mum

200,000 H rsNom inal End of Life

Risk Ar ea- HP & IPValv es; SSR Ri sk Ar e-aHP/IP T urbi ne

HP 1969 Equip

HP 1988 Equip

I P 1969 E quip

150000 I P 1988 E quip

LP 1969 Equip

LI FE LOW E R

100000 LI FE UP PE R

LI FE M AX

50000

019 701 97 51 98 019 8 519 901 99 520 0 020 052 0 102 01 520 2 020 252 03 020 3 520 40Year

Figure 5Unit 1 Turbine Life Cycle Curves

400000

30 Years40 Years

350000 Next Overhaul

Hours of Life Used300000

250000

Lif e Maximum

Risk Area - Rotor Winding, Cores Generation (Gen) Hrs

Synchr. Condensing (SC) Hrs

200000 Rewind Unit 1 Max Recommended

Risk Area - Stator Winding LIFE LOWER

LIFE UPPERRewind Unit 1 Recommended

150000 LIFE MAX

30 Years

100000

40 Years

50000

0197019751980198519901995200020052010201520202025203020352040

Figure 6 Unit 1 Generator Life Cycle CurveUnit 1 Turbine Generator Major Overhaul

Newfoundland and Labrador HydroPage

Maintenance History

The 20 year maintenance history for Unit 1 turbine generator is shown in Table 3 below. The major overhaul cost for each of the years 1992, 1997 and 2003 is a total of the standard, defined and unforeseen work for those years. Escalation in the costs of the standard and defined work is mainly due to increases in contractual labour rates. The cost of any unforeseen work however is somewhat unknown until the T/G has been dismantled and internal inspections performed. Turbine valves provide primary protection for the turbine and are overhauled every three years. In 2009 the turbine nozzle block was replaced as a remedial action following a failure on Unit 2 in 2007.

Table 3: Unit 1 Twenty-Year Maintenance History

Year

Major Overhaul Cost ($000)

Valve Overhaul Cost ($000)

Unscheduled Maintenance Costs ($000)

Total Maintenance Cost ($000)

20123,500(Estimated)Included in major overhaul

3,500(Estimated)

2009

645nozzle block

2009

525

525

2006

353

153

2003

2,404Included in major overhaul

2,404

2000

262

262

1997

1,600Included in major overhaul

1,600

1994

111

111

1992

559Included in major overhaul

559

Outage Statistics

Other than the scheduled major overhauls outlined in Table 3, which also includes the 2009 overhaul to inspect the 1st stage nozzle block, there were no other documented outages for Unit 1 turbine generator.

Industry Experience

For many years the North American standard for turbine and generator major overhauls was based on a six year cycle. This frequency was in agreement with the original equipment manufacturers guidelines and was acceptable to the utility industry in general. In an effort to reduce operating costs, utilities began to scrutinize turbine generator major overhauls, in particular the six year cycle, to determine the viability of increasing the cycle time. Following comprehensive reviews performed both internally, and also by external experts in the field, many North American utilities accepted recommendations to extend the time between overhauls from the traditional six years nine.

Maintenance or Support Arrangements

Prior to 2011 General Electric had been contracted by Hydro under a maintenance services agreement to perform all major and minor overhauls on its Holyrood turbine generator units. In 2011, Hydro retendered its requirement for another three year period. Plant personnel assist the service contractor when required, oversee the work protection application, and provide overall management and liaison for the overhaul work.

Vendor Recommendations

For many years turbine generator major overhauls in North America were scheduled mainly around a six year frequency. However some utilities scheduled their overhauls at reduced

frequencies of three to four years. Since its installation Unit 1 has undergone scheduled major and valve overhauls on a 1 year frequency starting in 1969, increasing to a three and a four year frequency in the 1970s and for major overhauls a six year frequency from the mid 1980s to 2003. In the 1990s following deregulation, most utilities further extended major overhauls to the accepted nine year frequency.

In 2003, Hydro contracted Hartford Steam Boiler (HSB) to investigate the possibility of extending the traditional major overhaul interval. HSB recommended that a 9 year frequency be implemented. Hydro accepted their recommendation and revised the major overhaul schedule to the extended frequency. The OEM for Units 1 and 2, General Electric, did not formally document their opinion but verbally indicated that they did not endorse the 6 year overhaul frequency. The AMEC Condition Assessment and Life Extension study completed in 2011 agreed with the 2003 TOOP (HSB) report to extend the major overhaul schedule for the turbine to the nine year frequency but recommended that overhauls on the generator revert back to the six year interval.

Availability of Replacement Parts

The availability of replacement parts from the original T/G manufacturers (General Electric and Hitachi) has not been an issue to date. There has not been any correspondence from either of these OEMs that parts will not be available into the foreseeable future. GE as well as the other large generator manufacturers can provide replacement parts designed specifically for the Holyrood units and can provide reverse engineering and delivery times suitable to meet major overhaul schedules.

Safety Performance

Unit 1 turbine operates at very high steam flows which combined with high pressures and temperatures contribute to the wear and tear of internal components. The combined T/G

weight is approximately 60 tons, it is 80 feet in length, and rotates at 3600 rpm requiring specific speed governing and tripping mechanisms to eliminate any possibility of over- speed. The generator itself operates at high voltages and uses hydrogen gas as a coolant both requiring special containment mechanisms to prevent exposure to personnel and the environment. Maintenance of these systems is vital to ensure the units safety performance and as such forms part of the major overhaul criteria. There are, however, no specific safety performance regulations or codes requiring compliance.

Environmental Performance

Environmental performance details are not factors to be considered for this capital budget proposal. There are no specific environmental regulations or codes requiring compliance.

Operating Regime

Unit 1 is designed for continuous operation with varying loads but is typically operated as a seasonally base-loaded unit (November to March) to meet island system requirements. All three generating units at Holyrood provide about 33% of the Island Interconnected System load during the crucial winter peak period. Maintenance outages are taken during the summer months when its capacity is not required. Unit 1 has been operating in this mode, within design capability, since it was commissioned in 1969.

The anticipated operational schedule for Unit 1 during the period 2011 to 2041 is shown in the following table:

Table 4: Holyrood Generating Station Anticipated Mode of Operation 2011 through 20412011 through 2013 - Generation:

Capacity factor between 30% and 75%; Availability of 90% to 95%.

2014 through 2016 - Generation:

Capacity factor between 50% and 100%; Availability of 95%.

2017 through 2019 - Generation Standby:

Capacity factor less then 10%; Availability of 90% to 95%. 2020 Onward - Synchronous Condenser Mode:Synchronous Condenser Operation Capacity factor (MVAR only) 50% to 100%.

Availability of 95%.

Unit 1 turbine generator will continue as a generating unit with an increased operating regime until sometime after 2016. It is planned to retrofit the unit in 2017-2018 so it can also operate as a synchronous condenser for system VAR support.Newfoundland and Labrador HydroPage

JUSTIFICATION

This is a normal project that is justified on the requirement to maintain the generating equipment in its optimal operating condition for Hydro to provide safe, least-cost, reliable electrical service to its customers. The purpose of the major overhaul is to return the T/G and auxiliary systems to design specifications such that they can perform safely, efficiently, and reliably to meet island system demands until the next major overhaul. It will also identify any unusual findings (internally or externally) that if not corrected or controlled could lead to premature failure of the equipment.

Since the installation of Unit 1 in 1969, major overhauls of the T/G and auxiliaries have been performed on a scheduled basis that reflected industry standards. They ranged from a 1 year frequency in 1969 to a 6 year frequency prior to 2003. As noted previously, Holyrood contracted Hartford Steam Boiler (HSB) in 2003 to investigate the possibility of extending the traditional overhaul interval as a cost saving measure. The AMEC Condition Assessment and Life Extension study completed in 2011 agreed with the 2003 TOOP (HSB) report to extend the major overhaul schedule for the turbine to the 9 year frequency but recommended that overhauls on the generator revert back to the 6 year interval. The manufacturer (GE), in their 2003 report (FRS-No: 20350670), has identified some 50 recommendations to be completed during or immediately prior to the next major overhaul of Unit 1 T/G (Appendix A). Based on their conclusions and recommendations, and Holyroods implementation of their findings, the next major overhaul of Unit 1 will be in 2012 (9 year interval).

Holyrood supplies approximately 33 percent of the Island Interconnected Systems capacity and is particularly important due to its location on the Avalon Peninsula close to the large customer base. A loss of Unit 1 generation during high load requirements could have a significant impact on the Island Interconnected Systems ability to meet load demand.

In previous years Hydro used the Generally Accepted Accounting Principles (GAAP) guidelines for budgeting major unit overhauls and as such expenses were deemed an operating and maintenance cost which formed part of Holyroods operating, maintenance and administration (OM&A) budget. In 2012, Hydro will implement the International Financial Reporting Standard (IFRS) accounting guidelines which direct all major overhauls to be financed through capital expenditure. Prior to 2012 all Unit 1 major overhauls have been completed on a scheduled basis consistent with industry standards and have been included in Holyroods 10 year plan for Projected Operating Maintenance Expenditures.

Net Present Value

A net present value calculation was not performed as there are no viable alternatives.

Levelized Cost of Energy

As this project does not involve new generation sources , a levelized cost of energy analysis is not applicable.

Cost Benefit Analysis

A cost benefit analysis is not required for this project. There are no alternatives other than to delay the major overhaul which based on the manufacturers (GE) reports, independent expert reviews, and operations experience would not be acceptable.

Legislative or Regulatory Requirements

There are no legislative or regulatory requirements that would make this capital budget proposal necessary.

Historical Information

As noted previously, since 1969, major overhauls of Unit 1 T/G and auxiliaries have been performed on a frequency basis that matched industry standards ranging from a 1 year frequency in 1969 to a 6 year frequency prior to 2003. Minor overhauls (valves) have taken place on a 3 year frequency and is typically included in the 6 year major overhaul schedule. Holyrood contracted Hartford Steam Boiler (HSB) in 2003 to investigate the possibility of extending the traditional 6 year major overhaul frequency as a cost saving measure. Based on their conclusions and recommendations, and Holyroods implementation of their recommendation to extend the major overhaul cycle to 9 years, the next major overhaul of Unit 1 will take place in 2012.

Under the previously followed GAAP guidelines, the costs of all major overhauls were completed under Holyroods operating and maintenance budget. Table 5 details costs incurred for major overhauls on all units since 1992. The major overhaul costs for each of the years 1992 to 2007 is a total of the standard, defined and unforeseen work for those years. Escalations in the cost of the standard and defined work are mainly due to increases in contractual labour rates. The cost of any unforeseen work however is unknown until the turbine generator has been dismantled and internally inspected. Note that the $3,297,000 cost of Unit 3 in 2007 was escalated due to extra repairs noted by General Electric in their 2001 overhaul report. The primary cause was exfoliation carry-over from the power boiler.

Table 5: Maintenance History All Units

YearUnitType of OverhaulCosts ($ 000)20073Major3,29720052Major2,60920031Major2,40420013Major2,38119992Major1,84919971Major1,60019943Major1,26219932Major1,28719921Major559

Appendix 2 of Plan of Projected Operating Maintenance Expenditures 2011 2020 for Holyrood Generating Station Tab 1 from the 2011 Capital Application listed the Turbine Major Overhaul at a cost of $2,081,000. The increase to $4.2 million is due to the following:The original amount reflected the cost of a six year overhaul versus a nine year overhaul which is more extensive due to three more years of wear and tear. This is estimated to be approximately $3.2 million. In addition, the original $2.1 million had not been adjusted in recent years to reflect recent increases in material and external labour costs.Internal labour costs are not included in the system equipment maintenance cost.

This is approximately $0.3 million.

Interest and contingency have resulted in $0.7 million in increased costs.

Forecast Customer Growth

This project is required to maintain Unit 1 turbine generator in optimal condition to provide safe, least-cost, reliable electrical service to Hydros existing customers. Forecasted Customer Growth is not a consideration.

Energy Efficiency Benefits

This project will not provide any energy efficiency benefits other than to restore the T/G to its optimal performance condition.

Losses during Construction

Not applicable for this capital budget proposal.

Status Quo

Status Quo is not an acceptable option for this project. A major overhaul is a requirement to maintain the T/G and auxiliary equipment in optimal operating condition in order for Hydro to provide safe, least-cost, reliable electrical service to its customers. Industry standards, manufacturers recommendations, and consultants reports all deem these major overhauls to be required.

Alternatives

There are no alternatives to this project other than to delay the major overhaul which based on the manufacturers (GE) reports, independent expert reviews, and operations experience would not be acceptable.

CONCLUSION

This project is justified on the requirement to maintain the generating equipment in its optimal operating condition for Hydro to provide safe, least-cost, reliable electrical service to its customers. The purpose of the major overhaul is to return the T/G and auxiliary systems to design specifications such that they can perform safely, efficiently, and reliably to meet system demands until the next major overhaul. It will also identify any unusual findings (internally or externally) that if not corrected or controlled could lead to premature failure of the equipment and a significant unplanned unit outage.

There are no alternatives to this project other than to delay the major overhaul which based on the manufacturers (GE) reports, independent expert reviews, and operations experience would not be acceptable.

Budget Estimate

The budget estimate is shown in Table 5.

Table 5: Budget EstimateProject Cost:($ x1,000)20122013BeyondTotalMaterial Supply350.00.00.0350.0Labour257.10.00.0257.1Consultant0.00.00.00.0Contract Work2,850.00.00.02,850.0Other Direct Costs0.00.00.00.0Interest and Escalation395.20.00.0395.2 Contingency340.80.00.0340.8 TOTAL4,193.10.00.04,193.1

Project Schedule

Table 6: Project Schedule

ActivityMilestonePre-shutdown ChecksMay 2012MobilizeJune 2012Dismantle turbine, Generator, valves, and auxiliary equipmentJune/July 2012Equipment inspectionJune/July 2012Equipment repairsJuly/August 2012Assemble turbine, generator, valves, and auxiliary equipmentAugust 2012Operational checksAugust 2012DemobilizeSeptember 2012Unit 1 Turbine Generator Major OverhaulAppendix A

Newfoundland and Labrador HydroA

APPENDIX A

General Electric Major Overhaul Report - Frs Number 20350670 Unit 1 Steam Turbine Inspection Report May September 2003

Newfoundland and Labrador HydroA

Unit 1 Turbine Generator Major OverhaulAppendix B

Newfoundland and Labrador HydroB

APPENDIX B

Unit 1 Major Overhaul- Turbine Generator Standard Overhaul Work

Turbine Generator Major Overhaul Standard Outage Work:A. Generator

Pre-shutdown Checks(5 Days)

Mobilize(4 Days)

Remove Lagging(3 Days)

Disassemble Generator(15 Days)

Inspection(10 Days)

Electrical Tests (Stator & Rotor)(5 Days)

Visual Inspection(2 Days)

Assemble Generator(25 Days)

Excitation Inspection(3 Days)

Assemble Lagging(4 Days)

Pre-start and Operational Checks(5 Days)

Demobilize(5 Days)

B. Steam Turbine

Pre-shutdown Checks(5 Days)

Mobilize(6 Days)

Remove Lagging(5 Days)

Disassemble Turbine (HP/IP/LP)(20 Days)

Disassemble Valves (Main Stop/Control,(20 Days) Reheat Stops/Intercepts & Non-

Return Valves)

Bearing Inspection including Thrust(5 Days)

B. Steam Turbine (contd)

Turbine Controls (Actuators, Hydraulics)(7 Days)

Lube Oil System(10 Days)

Turning Gear(6 Days)

Steam Seal System(5 Days)

Turbine Supervisory Instrumentation(6 Days)

Assemble Turbine(25 Days)

Assemble Valves(20 Days)

Install Lagging(6 Days)

Pre-Start and Operational Checks(5 Days)

Demobilize(6 Days)

Unit 1 Turbine Generator Major OverhaulAppendix C

Newfoundland and Labrador Hydro

C

APPENDIX C

Hartford Steam Boiler (Hsb) Turbine Steam Optimization Program (TOOP)

Unit 1 Turbine Generator Major OverhaulAppendix D

Newfoundland and Labrador HydroD

APPENDIX D

Amec Condition Assessment And Life Assessment Study