The URL can be used to link to this page

Home My WebLink AboutMiddle Kuskokwim Regional Energy Project Construction Phase Jul-Sep 2005Middle Kuskokwim Regional Energy Project Construction Phase AEA Project Number 380329 Quarterly Report July 1, 2005 through September 30, 2005 Submitted October 31, 2005 od 1S) as io) hen! ja > oT} t= cD) S ae rs S eo) ro ot} D) laa & E oe) a x 2 = ae} ee Ss Alaska Energy Authority / Rural Energy Group Mike Harper, Deputy Director Rural Energy 813 West Northern Lights Boulevard Anchorage, Alaska 99503 Phone: (907) 269-3000 Fax: (907) 269-3044 MKREP EXECUTIVE SUMMARY This quarterly report serves as a Project Status Update for the period July 1, 2005 through September 30, 2005 with regard to project scope, schedule, budget, and related issues. The baseline for this update is the Middle Kuskokwim Regional Energy Project (MKREP) Project Statement presented to the Denali Commission August 10, 2004 and subsequent modifications as specified in the Quarterly Report dated July 1, 2005. The scope of this project has changed from the last quarterly report due to budget issues. The most significant changes are the deletion, at this time, of the river crossing at Sleetmute, the distribution tie-line between Sleetmute and Red Devil, and the distribution upgrades at Red Devil and Takotna. Construction in the various communities has taken longer than expected because of smoke, weather, and manpower limitations. The anticipated substantial completion for the five power house installations is December 31, 2005 and the substantial completion for bulk fuel upgrades is expected, for four or five communities, to be December 31, 2005. The actual number will depend on weather. The remaining sites will be substantially completed by June 30, 2006, with a final completion date of December 31, 2006. The initial budget estimate for this project was $12,500,000; the April 1st quarterly report revised this estimate to $13,100,000. As of September 30, 2005, approximately $12,600,000 has been spent or contracted. At this time, material costs have come in greater than budget, for several reasons that are outlined in the budget section of this report. The current budget estimate is $14,450,000. In May 2005, AEA conducted pre-construction community meetings in all seven project villages to discuss the project and community issues. Barge delivery of materials and equipment began June 15, 2005; welder training of 15 trainees, from four project villages, began June 23, 2005 in Aniak; and field construction began June 23, 2005 in Aniak. During July and August 2005, pile driving and other foundation work began in all project villages. Subsequently, in August and September 2005 fuel tanks and powerhouse modules were placed onto pilings, and piping work was on-going throughout the quarter. July - September 2005 Quarterly Report Page 1 MKREP SCOPE The baseline for the scope of this project is the August 10, 2004 Project Statement and subsequent project delineations outlined in the April 1, 2005 quarterly report. Minor design modifications have been incorporated in an Isswed for Construction design set dated June 9, 2005. Ata meeting between the Denali Commission staff and the Alaska Energy Authority on September 16, 2005 the Takotna power-distribution upgrades, the Sleetmute river crossing and the intertie to Red Devil were removed from the project scope. SCHEDULE Task Planned* Actual Projected 65% Design 7/15/04 7/15/04 Final Design Documents 10/22/04 10/22/04 Funding Secured 9/15/04 $ 900,000 11/10/04 $11,600,000 11/30/04 $ 800,000 8/22/05 Procurement (minor) 10/15/04 10/15/04 Procurement (major) 10/15/04 12/15/04 Shop Fabrication begins 11/ 1/04 1/15/05 Field work begins 6/15/05 6/23/05 Substantial Completion Aniak BFU 9/15/05 10/30/05 Chuathbaluk RPSU 10/ 1/05 10/30/05 Chuathbaluk BFU 10/ 1/05 10/30/05 Crooked Creek RPSU 10/15/05 11/30/05 Crooked Creek BFU 10/15/05 11/30/05 Red Devil BFU 9/15/05 11/30/05 Sleetmute RPSU 10/31/05 12/31/05 Sleetmute BFU 10/31/05 6/30/06 Stony River RPSU 10/ 1/05 12/31/05 Stony River BFU 10/ 1/05 6/30/06 Takotna RPSU 10/31/05 10/31/05 Takotna BFU 10/31/05 6/30/06 Intertie 3/ 1/06 Removed from SOW Final Completion 6/30/06 12/31/06 *Plan dates were updated in the April 1, 2005 quarterly report. The Baseline Schedule for this project was presented to the Denali Commission in the August 10, 2004 Project Statement. Powerhouse and tanks have all been set in place at their respective villages. Field progress has been slower than estimated in some communities. It is anticipated that when cold weather arrives it then will be more efficient to stop work in some of the communities and await spring weather to complete the work. All five powerhouses are planned to be connected and working by December 31, 2005. Aniak, Chuathbaluk, Crooked Creek and Red Devil bulk fuel upgrades are also expected to be substantially completed by that time. July - September 2005 Quarterly Report Page 2 MKREP BUDGET Project Budget vs Expenses $16,000,000 $14,450,000 |....cccoconnnnmmnnnninnnnnninnainnnninnininnnnnninnnnnnnninsn $14,000,000 + $13,300,000 $12,500,000 $12,000,000 $10,000,000 4 Status Date - 9/30/05 $8,000,000 4 $6,000,000 4 —*— Expense | fepecseccestes —— Budget : Field Construction Phase —a— Estimated $4,000,000 $2,000,000 $0 11/10/04 =2/10/05 5/10/05 = 8/10/05 11/10/05. 2/10/06 95/10/06 += 8/10/06 T T T T T Major procurement is complete. All contracts let to date have been competitively bid using Alaska Statute 36 protocol. In August it was noted that additional funding would be needed during early September. Additional funds of $800,000 were provided by the Denali Commission staff so that the project would not run out of funds prior to the next Denali Commission meeting. These funds brought the construction budget total to $13,300,000. Ata meeting, between the AEA and the Denali Commission staff on September 16", AEA was directed to remove the Takotna distribution upgrades, the Sleetmute river crossing and the intertie to Red Devil from the scope of work and provide an estimate to complete the bulk fuel facilities and the powerhouses. A completion budget estimate was provided to the Denali Commission on September 23, 2005. It was estimated that an additional $1,050,000 would be required to complete all of the bulk fuel facilities and the powerhouses. As of September 30, 2005, approximately $12,600,000 has been spent, or contracts have been issued. " July - September 2005 Quarterly Report Page 3 MKREP Costs have gone up for this project for several reasons, including: Design and Insurance Procurement Fires Apprenticeship/Training Program Construction Schedule Extension Fuel Prices Design Changes Design and Insurance The original estimate did not include the expense for designer assistance during construction. The use of a designer for the procurement and Quality Planning/Assurance/Control (QPAC) has been much greater than orginally estimated. Additionally, preparing regulatory plans for all of the participants will be costly. And, finally, the original budget estimate did not include insurance for the project. Material Costs Materials and services were procured with competitive bidding. The cost of materials and services during procurement has been about $900,000 higher than estimated. An increase in energy prices and the overall strength of the world economy also have contributed to increases above the 2004 project estimate. Wild Fires During August 2005 many large active wild fires were present in the middle Kuskokwim Valley. The dense smoke caused commercial air taxi operations to be cancelled on many days and barge traffic was also slowed because of low visibility. As a result, project progress was slowed at all locations because of the absence of needed men and materials. Primarily, the project labor budget has been affected by the smoke slow down. Apprenticeship/Training Program Funding for training did not arrive as expected. The original budget included $200,000 for training, which would have deflected a portion of the trainees’ and Journeymans’ wages for on-the-job training during the project construction phase. Additionally, administrative and training costs for local welder trainees, thus far, have been approximately $100,000. Therefore, the overall impact on the budget from increased training costs has been $300,000. Construction Schedule Extension A substantial amount of pipe missed the barge because of the supplier. Pipe and power modules were delivered to the communities later than anticipated. Therefore, as the schedule was delayed, the onset of colder weather and seasonal barge traffic stoppage further extended out the schedule. Additionally, project re-mobilizations and increased equipment rentals will be required for work to be performed in 2006. July - September 2005 Quarterly Report Page 4 MKREP Fuel Prices Increased fuel prices have affected both freight and air transportation. Air transportation of several crews of men and materials between seven communities has a significant budget impact. Design Changes Power module design was changed after the original estimate. Air intakes had to be placed in the ceiling, which therefore required a roof to be constructed on site. Cost for materials and labor to construct the five roofs on site was approximately $150,000. LOCAL WORKFORCE DEVELOPMENT In May 2005, the project’s construction management firm began workforce recruitment for this project. Fifteen trainees, from four of the project villages, attended welder classes or related instruction in Aniak - at the local Joe Parent Regional Voc Ed Center. The training was led by experienced journeyman trainers. The initial classroom phase of the training lasted three weeks, and upon completion, trainees began on-the-job training. Eleven apprentice trainees completed the classroom phase of the training. Currently, five of the original eleven apprentice trainees are working full-time on the project. Additionally, 25 local force account workers have been hired throughout the project. These include laborers, carpenters, equipment operators, housekeepers, supervisors, and local linemen. July - September 2005 Quarterly Report Page 5 MKREP PROGRESS Aniak The Aniak bulk fuel upgrade is substantially completed. Final completion is awaiting delivery of delayed materials. Chuathbaluk The Chuathbaluk powerhouse module and bulk fuel tanks have been delivered and placed at both construction sites, and piping and electrical connection work is proceeding. Chuathbaluk is near substantial completion. Linemen have completed the distribution tie-in to the new powerhouse site and the powerhouse module is scheduled for startup mid- October. July - September 2005 Quarterly Report Page 6 MKREP Crooked Creek The Crooked Creek powerhouse module and bulk fuel tanks have been delivered and placed at all three construction sites, and piping and electrical connection work is proceeding. Crooked Creek will be substantially complete this year. New fuel piping across wet ground areas will occur only after freeze-up. Linemen have completed the distribution tie-in to the new powerhouse site and the powerhouse module is scheduled for startup in early November. Red Devil The Red Devil bulk Fuel tanks have been delivered and placed at their site. July - September 2005 Quarterly Report Page 7 MKREP Sleetmute The Sleetmute powerhouse module and bulk fuel tanks have been delivered and placed at both construction sites. Linemen have completed the distribution tie-in to the new powerhouse site and the powerhouse module is scheduled for startup in early November. Stony River The Stony River powerhouse module and bulk fuel tanks have been delivered and placed at both construction sites. Most of the piping work will need to wait until 2006. However, linemen will complete the distribution tie-in to the new powerhouse site and the powerhouse module is scheduled for startup mid-November. July - September 2005 Quarterly Report Page 8 MKREP Takotna The Takotna powerhouse module and bulk fuel tanks have been delivered and placed in the community of Takotna (35 miles from the Kuskokwim River). Most of the piping work will need to wait until 2006. However, linemen are completing the distribution tie-in to the new powerhouse site and the powerhouse module is scheduled for startup by the end of October. July - September 2005 Quarterly Report Page 9 MKREP PROJECT PHOTOS Page 10 MKREP Aniak July - September 2005 Quarterly Report Page 11 MKREP Aniak July - September 2005 Quarterly Report Page 12 MKREP Chuathbaluk July - September 2005 Quarterly Report Page 13 MKREP Chuathbaluk July - September 2005 Quarterly Report Page 14 MKREP Crooked Creek July - September 2005 Quarterly Report Page 15 MKREP Crooked Creek July - September 2005 Quarterly Report Page 16 MKREP Red Devil July - September 2005 Quarterly Report Page 17 MKREP Red Devil July - September 2005 Quarterly Report Page 18 MKREP Sleetmute July - September 2005 Quarterly Report Page 19 MKREP Sleetmute July - September 2005 Quarterly Report Page 20 Iz e8eq voday Aprayzen? Gooz equiaidas - Ajnf JoaTy Au01s daa MKREP Stony River July - September 2005 Quarterly Report Page 22 MKREP Takotna ey eee ee eee July - September 2005 Quarterly Report Page 23 MKREP Takotna Page 24