Electric utilities now face the risk that existing assets, costs, or contract commitments may be "stranded" by increased competition, leaving shareholders rather than customers to bear the costs....
Squeezing Juice from Plants
explained that they operate merchant and cogeneration plants, as well as provide support for utility plants.
Rosiak pointed to a cogeneration facility, which Duke/Fluor Daniel built in 1992 and operated to supply steam to an industrial plant, with electricity made as a side product. But when the steam host closed its plant, the cogeneration facility owners, with assistance from Duke/Fluor Daniel, worked quickly to modify the power purchase agreement so the plant could continue to operate under that agreement. "The issue is how do you change the business structure of the facility. Doing that changes the way the plant is dispatched, which means maintenance practices have to change," Rosiak says.
Maintenance isn't the only thing that has to change-managing fuel and having the right employees count, too. So the transition to a new business approach had to be dealt with.
Glenn Burney, the project manager for that plant, explains that while the cogeneration plant can operate from a range of 18 MW to 132 MW, that it in fact operates under a long-term contract for 132 MW. That means that the challenge is that while no more MWs can be squeezed from the plant, he needs to make sure no MWs are lost, for example, as the plant experiences wear and tear. Under the contract, reliability is the key for that plant. "If it's not extremely reliable," Burney says, "we can suffer liquidated damages and lawsuits under the agreement." So the plant operates under a very predictive and intensive maintenance program.
Dean Blaha manages two municipal plants in Delaware, which consist of two natural gas-fired and oil-fired generating stations. He explained that prior to 1996, the plants were owned and operated by the city. When the city contracted with Duke/Fluor Daniel for operations and maintenance services, they operated as baseload units, with fairly small fuel oil storage capacity on-site. But Duke/Fluor Daniel saw there could be more profitability with those units functioning as peaking units, in order to take advantage of economics in the summer and winter, when it was more justified to run the plants, and then purchase power in the off seasons. Also the small fuel oil tank size made the plant very vulnerable to the fluctuations in fuel oil costs. So Duke/Fluor Daniel at no cost to the city purchased and installed a much larger fuel oil tank on-site, in order to buy fuel when the price was low and store it. Blaha says the combination of the two optimizations helped keep the cost of power low for the city. "So it's not necessarily a megawatt squeeze, but an economic squeeze," he concludes.
Rick Roberts runs operations and maintenance at a 480-MW coal-fired generating station in Texas, equipped with a General Electric turbine/generator and a Combustion Engineering boiler providing 2,400-psig steam. He presently is involved in working with the client concerning the single source of fuel supply and single method of transportation for getting that fuel to the plant. The single-unit plant obtains its fuel from a coal mine in Wyoming, and only one railroad is available for transport.