Capital Projects 2012 Year-End Review VELCO Main Office – Rutland, VT December 2012
2012 Capital Projects Capital Program at a Glance VELCO from 1956 to 2005: • Built, operated and maintained 586 miles of transmission lines (mostly build before 1980’s): o 115 kV (420 miles) o 230 kV (32 miles) o 345 kV (79 miles) o 450 kV DC (53.5 miles) • Built, operated and maintained 40 substations and switching stations Note : 370 Line (345 kV from W. Rutland to New Haven) • Built, operated and maintained a HVDC Back to Back converter station VELCO since 2005: Based on the Transmission improvements required to maintain the reliability of the system, VELCO established a formal Capital Program to manage its projects including: • Substation Reinforcements more than doubling its infrastructures o Constructed 12 new substations and switching stations Note : New Haven Substation o Rebuilt or expanded 14 substations or switching stations • Transmission Lines construction o Built 133 miles of new transmission lines (90 miles of 345 kV & 43 miles of 115 kV) As part of this program of work VELCO managed more than $660M in capital investment since 2005. The overwhelming majority of these projects were driven by regional reliability needs and were funded through the regional network service transmission rates as Pool Transmission Facilities (Network Facilities). Note : Vernon Substation 2
2012 Capital Projects Capital Program & Major Transmission Reinforcements since 2005 Northwest Vermont Reliability Project (2005-2008): • Permitting in 2003-2005 last component commissioned in 2008 • 8 substation upgrades, 5 new substations, 36 miles of 345 kV H-Frame transmission line, 26 miles of 115 kV single pole transmission line. • Total Investment: $303 million Lamoille County Project (2009): • Permitting from 2006 to 2008, project commissioned in 2009 • 2 substation upgrades,1 new substation, 9.4 miles of new 115 kV T-Line • Total Investment: $43 million Taft Corner, East Avenue, Lime Kiln, Lyndonville (2009-2010): • Project commissioned in 2009 • Taft Corner & East Avenue substation expansion • Lime Kiln & Lyndonville substation addition • 4.8 miles of new 115 kV T-Line (East Avenue to Essex). • Total Investment: $34.5 million Southern Loop Coolidge Connector (2010): • Received State permits in 2008 • 2 substation upgrades, 1 new substation • 53 miles of new 345 kV T-Line construction • Total Investment: $204 million 3
2012 Capital Projects Capital Program Overview Project Development Methodology and Continuous Improvement • Planning Studies: Essentially driven by Long Range Plan (LRP) and ISO-NE 2012 Active Project Development Area Studies aims to identify deficiencies early Capital Program Portfolio – Completed assessment of all options (T and NTA) to resolve deficiencies – Public meetings and comments provided input to LRP Projects commissioning this year • New Jay and Georgia stations – Provided information for evaluation of Transmission alternatives by ISO-NE • Coolidge & Vernon reactors • Public Outreach: Engaged affected stakeholders with detailed plans to • Highgate Converter upgrade obtain feedback for project design and mitigate project opposition • Statewide radio project & Fiber project – Landowners – State and Federal Agencies (e.g. DPS, ANR, ACOE) Projects under construction • §248 Filing: Detailed design including construction plans, assessment of • Ascutney substation impacts and accurate cost estimates • Bennington substations – Shortened regulatory review period - MOUs with DPS and ANR on all 248 • New Haven reactor application since NRP and Lamoille County Projects – Excellent performance against budget Projects in permitting • K-41 Line upgrade • Construction and Commissioning: • Grand Isle Terminal upgrade – Project plan and oversight (e.g., effective project controls and contract • K-35 Line repairs management) – Improved commissioning process reduced likelihood of system events Projects in planning / development • Future Areas of Improvement • Ascutney to Coolidge line upgrade – Safety: Jay accident highlights need to enhance safety culture and performance • Substation Condition Assessment – Scheduling: Improve resource management and work scheduling incorporating • Structure Condition Improvement all of Velco’s work including operation and maintenance – “Hard Wire” improvements and ensure best practices across entire organization • Nurture Learning Organization culture 4
2012 Capital Projects Commissioned Projects Financial & Schedule Review Project Schedule Performance Review • 2012 had many projects under construction with critical commissioning targets in the third and fourth quarters. • The scope and complexity of some of these projects required rigorous outage coordination with risk mitigation measures. • Full substation construction from CPG filing to commissioning in less than 24 months. • Permitting timelines have improved significantly since the Northern Loop and the Northwest Reliability Projects, as a result of effective public outreach with detailed designs . • New review process in place for all project commissioning activities which maintains balance between quality controls and schedule performance. In-Service 2011 -1st 2011 - 2nd 2011 - 3rd 2011 - 4th 2012 - 1st 2012 - 2nd 2012 - 3rd 2012 - 4th Projects Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Date Coolidge & Permitting Construction 12/18/2012 (7 Months) (11 Months) Vernon Reactors 10/14 10/21 7/22 12/18 3/21 Jay Permitting Construction 09/26/2012 Substation (7 Months) (13 Months) 9/26 1/19 7/29 8/1 9/12 Georgia Permitting Construction 10/18/2012 (6 Months) Station (11 Months) 10/18 4/7 10/18 10/21 10/5 Highgate E&D & Procurement Pre- 11/06/2012 (Contract 3/19/11) Converter Const. 11/6 1/16 Radio Construction 36 Sites 12/16/2012 Project (38 Months) 10/2009 12/16 Fiber Backbone Fiber Deployment 770 Miles 12/16/2012 Project (26 Months) 10/2010 12/16 5
2012 Capital Projects Commissioned Projects Financial & Schedule Review Project Financial Performance Review • This year, more than $100M of transmission assets will be placed in service improving the reliability of the transmission network and enhancing Velco’s telecommunication infrastructure. This work was accomplished while maintaining a good financial performance. • Scope and schedule management enabled the team to maintain a good cost performance index—a measure that compares the value of work completed to the actual cost, or in our case our forecasted cost at completion. • Effective management of the project regulatory phase has enabled the team to maintain solid financial performance. Focus remains on maintaining good regulatory project execution. • Estimation and project scope definition methodology remained key in avoiding scope changes, estimating errors, scope creep, and associated cost overruns. • . Project Overall Project Actual vs. Cost Performance Projects Budget Forecast Budget Index (EV/AC) Coolidge & Vernon Reactors $15.7M $14.0M (11%) 1.12 Jay Substation $16.8M $13.7M (18%) 1.22 Georgia Station $16.6M $14.6M (12%) 1.13 Highgate Converter $35.6M $29.5M (17%) 1.15 Radio Project $30.7M $26.9M (12%) 1.13 Fiber Backbone $53.2M $47.3M (7%) 0.97 Total $168.6M $146.0M (13%) 1.09 Note : A CPI greater than 1.0 indicates a cost underrun of performance to date 6
2012 Capital Projects Jay Substation Project Highlights Project Overview • Addressed reliability deficiencies on VELCO and VEC electric transmission facilities in northern Vermont • Least cost alternative when evaluating transmission and non-transmission alternatives Jay Substation Quick Facts • 115/46 kV Station • 115 kV Breaker Ring Bus • (4) 115 kV Breakers • (2) 46 kV Breakers • (2) 115/46 kV Transformers Note : Jay 115/46 kV Substation 7
2012 Capital Projects Jay Substation Project Highlights Significant Accomplishments & Challenges • Project completed ahead of schedule and under budget. • Cut preliminary engineering & CPG permit application time in half, expediting receipt of permits. • Supported new VEC reliability criteria for restoration within seconds to minutes, not hours/days. • Significant space constraints due to small parcel size, presence of existing infrastructure, wetlands, and wetland/streams. • Continual assessment and sequencing of constrained engineering and testing/commissioning resources among other VELCO capital projects. Note : Jay Site Work • Continual coordination with DUs on planning, construction, & operational needs as project augmented and replaced existing infrastructure. • Minimized costs by avoiding construction during winter conditions, combining purchase of multiple transformers from a US-based equipment manufacturer, and negotiating favorable construction rates. • Safety incident in which a VEC worker was injured. Performed RCI, implemented corrective actions, and held safety “summit” with Vermont utilities to share findings and improve safety practices. Note : Jay Control Building Construction 8
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