Central MA Transmission Upgrades:TCA Revision

NEPOOL Reliability Committee

June 16, 2009

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Central MA Upgrades - History

18.4 applications approved in April 2004

Install 69 kV circuit breaker at Woodside Replace Millbury T1 and T2 115-69 kV transformers Install two additional 115-69 kV transformers at Pratts Junction, replace

69 kV circuit breakers, and transfer one-half Prospect Street load Wachusett 345-115-69 kV substation Reconductor 115 kV lines O-141N, P-142, W-175 Reconductor 69 kV lines M-39, N-40 Replace 115 kV circuit breaker at Rolfe Ave Upgrade W. Boylston protection systems Replace W-23E 69 kV line disconnect

3

Central MA Upgrades – TCA History

Initial TCA (15.5) – RC Action deferred in June 2004

Based on conceptual cost estimations, the initial TCA application submitted to RC in May 2004.

Revisions 0 & 1 – Approved in January 2005

Captured higher costs due to GIS instead of the originally scoped air insulated substation. Wetlands restrictions drove the design to GIS.

Revision 2 – Submitted now to capture “As-Built” costs

Wachusett Sub commissioned March 2007.

Punch List items extended into 2008 ($4.8M).

Actual Costs tracking delayed.

4

TCA & Project Timeline

18.4

Approved

Multi 15.5/TCA

$43.4 M

TCA - Rev 0

(Consolidated)

$54.7 M

TCA - Rev 1

Approved

$54.7 M

TCA - Rev 2

“As Built”

$69.7 M

2004 2005 2005 2009

Project Construction extended into 2008

- invoice processing/punch list closeout items,

- accounting retrieval/summary time – into 2009

2006 2007 2008

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Millbury Substation Upgrades

Scope:

Replace existing T1 and T2 (115-69 kV) with larger transformers

Millbury upgrades completed in 2005

Cost Estimate: 1.50 M

Actual Cost: 1.17 M

Favorable construction resulting in reduced cost

6

W-175 115 kV Line Upgrade

Scope:Reconductor 115 kV line.

Line upgrades completed in 2004 Cost estimate: .474 M Actual cost: .858 M

Reason for cost increase Additional work to increase clearances to comply with

NESC, Static wire severely deteriorated requiring replacement, Operational requirements and use of external

resources at increased cost.

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O-141N & P-142 115 kV Line Upgrades

Scope:Reconductor each 115kV line.

Line upgrades completed in 2005 Cost estimate: 1.625 M Actual cost: 1.509 M

Reason for cost decrease – favorable construction

Minor design changes tended to increase costs as did operational requirements and use of external resources but were offset by favorable construction.

8

O-141N & P-142 115 kV Line Protection Upgrades

Scope:Upgrade protection on line/breaker at Wachusett.

Line upgrades completed in 2007 Cost estimate: 0.440 M Actual cost: 1.357 M

Reason for cost increase– All 115 kV equipment (Ngrid & Municipal)– Control building extension to accommodate additional

equipment.

9

M-39 & N-40 69 kV Line Upgrades

Scope:Reconductor each 69kV line.

Line upgrades completed in 2004 Cost estimate: 2.181 M Actual cost: 5.737 M

Reason for cost increase Property rights issues prevented original planned pole

replacements/intermediate pole installations. Existing lattice towers instead reinforced,

Additional work to comply with NESC, Static wire severely deteriorated requiring replacement, Bird guards added to design, Operational requirements and use of external resources at increased

cost.

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Pratt’s Junction Upgrades

Scope:Install two additional 115-69kV transformers & replace eight circuit breakers.

Pratt’s Jct. upgrades completed in 2005 Cost estimate: 2.46 M Actual cost: 2.95 M

Reason for cost increase Temporary bus connections dictated by operational requirements Restricted line outage windows causing overtime costs Additional bus upgrade due to capacity, conductor strain & condition

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Wachusett Upgrades

Additions to 115-69 kV and new 345-115 kV substation: Wachusett 2nd 115-69 kV Xfmr completed in 2007

Cost estimate (rev.1): 2.53 MActual cost: 3.63 M

Wachusett 345-115-69 kV completed in 2007Cost estimate: 41.96 MActual cost: 48.54 M

Original Cost Est. – non-GIS (total) 26.50 M (prior to bids being available)

Reasons for cost increase

Turn key Project Costs (Rev #1) based on unsigned contracts,

Cost increases uncovered during detailed engineering design,

Contractual increases incurred,

Complexity of construction coordination involving multi-sites, scope,

AFUDC increase - Commissioning 4 month delay (relay & control cabinet delivery),

Increased material cost (see the next slide),

labor and other costs increase due to outage window constraints,

Increased contract vs. in-house crew costs (+25%)

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Wachusett Cost vs. Handy-Whitman Industry Cost Index

Construction Costs Over Time(January Data)

0.00

0.200.40

0.60

0.801.00

1.20

1.401.60

1.80

Year

No

min

al In

crea

se

Handy-WhitmanIndexWachusettProjects

Note: Handy-Whitman Index data taken from The Handy-Whitman Index of Public Utility Construction Costs report dated July, 2008 - Table E-1 “Total Transmission Plant” cost category.

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Breakdown of Actual Project Costs

TCA Rev #2

Materials

Construction Labor

Engineering/ Design

Other

Cost CategoryRev.2 ($M)

Materials 9,433

Construction Labor 7,196

Engineering/Design 40,184

Other 12,935

Total: 69,748

Other - includes AFDUC (3.3 M), Contractors (5.5 M), Miscellaneous (4.1 M) items

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Other Central MA Upgrades

In Svc Estimate Actual

Woodside 69 kV 2004 0.700 M 2.953 M Rolfe Ave Breaker 2005 0.366 M 0.402 M W. Boylston Protection Upgrades 2007 0.440 M 0.877 M Replace W-23E Disconnect 2004 0.020 M 0.108 M

Reasons for cost increases

Scope creep – Inclusion of other than originally designed

improvements added later in the preliminary engineering stage,

– (e.g. protection systems at W. Boylston, structure, and foundation work).

Utilization of crude study grade cost estimations in the original

application,

Operational outage considerations during construction (extra cost &

temporary work), and

Changing material and labor market.

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Overall Cost Summary (2004 Estimates vs. Actual)

In Svc Estimate Actual

Woodside 69 kV Breaker 2004 0.700 M 2.953 MWachusett 2nd 115-69 kV Xfmr 2007 2.530 M 3.634 MWachusett 345-115-69 kV 2007 41.959 M 48.542 MO-141/P-142 Protection Upgrades 2007 0.440 M 1.357 M Reconductor O-141N 2004 1.500 M 1.224 MReconductor P-142N 2005 0.125 M 0.285 M Reconductor M-39 2004 1.000 M 3.227 MReconductor N-40 2004 1.181 M 2.510 MReplace Rolfe Ave Breaker 2005 0.366 M 0.402 MReconductor W-175 2004 0.475 M 0.858 MW. Boylston Upgrades 2007 0.440 M 0.877 MReplace W-23E Disconnect 2004 0.020 M 0.108 M Millbury T1 & T2 2005 1.500 M 1.173 MPratt’s Jct. Transf & Bkr Changes 2005 2.460 M 2.953 M

Total: $54.696 M $69.748 M ($15.1 M Diff)

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Actual Costs – As Built

As Built costs exceed January 2005 TCA – Rev.1 values

by ~27% ($15.1 M)

Requires TCA revision (> 10%)

Total “As Built” PTF cost: $69.7M (vs. $54.7M estimated

in TCA – Rev.1)

Higher cost in general due to:

Scope of construction,

Required design changes,

Operational considerations during construction, and

Changing material and labor market.

17

Transmission Cost Allocation

Construction now fully complete

Seeking Reliability Committee Approval of increased PTF construction costs actually incurred

Increased Amount: $15.1 M

(actual dollars spent)

18

Questions?