HomeMy WebLinkAbout16 Contract for Failed Transformer at Truckee SubAgenda Item # 16
ACTION
To: Board of Directors
From: Joe Horvath
Date: July 15, 2015
Subject: Consideration of a Contract For Repair of a Failed Transformer at
Truckee Substation and Dispensing with Competitive Bidding
1. WHY THIS MATTER IS BEFORE THE BOARD
Only the Board can dispense with the competitive bidding process necessary to
rebuild or replace the failed substation transformer.
2. HISTORY
On the morning of Friday, February 6, 2015 a severe windstorm hit the greater
Truckee Tahoe area. Numerous trees fell into power lines across the District causing
multiple power outages. District crews worked through Sunday, February 8 to restore
service to all customers. At about 9:30AM on Friday morning, a tree fell into the
overhead lines near the District's Truckee Substation. The resulting fault current
brought about the operation of several protective devices including 12kV circuit
reclosers and the 60kV circuit breaker, which tripped the entire substation off-line.
Two of the reclosers involved with this incident failed catastrophically. These failures
were later found to be due to manufacturing defects. In addition, one of the substation
transformers (phase A unit) experienced a "sudden pressure" event and had tripped
the corresponding sudden pressure relay. A sudden pressure event is indicative of an
internal fault inside the transformer. As a precautionary measure, the District hired a
testing firm to take oil samples from all the substation transformers and to perform
addition electrical testing on the phase A transformer. Oil samples from the phase A
transformer displayed the presence of acetylene gas, an indicator of some level of
internal arcing due to a short circuit condition within the transformer. Subsequent
internal inspection discovered that pieces of winding insulation had broken off the core
and settled to the bottom of the tank. This was a clear indication of a transformer
winding failure. This unit cannot be re -energized and requires refurbishment or
replacement.
3. NEW INFORMATION
The Truckee Substation transformers were all manufactured by the R.E. Uptegraff
company of Scottdale, Pennsylvania. For interoperability and compatibility reasons, it
is important that the spare transformer continue to be from R.E Uptegraff whether as a
rebuilt or a new unit. This would greatly facilitate and ensure the seamless future
integration of the spare unit into the working lineup after removing another unit from
service. Therefore it is proposed that R.E. Uptegraff be considered as a sole source
vendor of proprietary materials per District Code Section 3.08.
The District has received firm quotes from the original manufacturer, R.E. Uptegraff,
for both the refurbishment and replacement options for the failed transformer (copy
attached). The cost to rebuild the failed transformer is $79,458 with a turnaround time
of 16 to 18 weeks. The cost to purchase a brand new transformer is $107,696 with a
delivery time of 22 to 24 weeks. Since the refurbishment cost is less and lead time is
significantly less than the purchase of a new unit, the advantages of rebuilding the
failed transformer make this the better of the two options available. The rebuilt
transformer would be identical to the other Uptegraff substation transformers at
Truckee Substation.
4. FISCAL IMPACT
Sufficient funds exist within the Electric Capital Replacement Fund for the rebuild and
refurbishment of the failed substation transformer.
The District has submitted a claim to our insurance provider for the damages at
Truckee Substation due to the windstorm event. There will be some proceeds
available from the insurance coverage although the payout amount and timing are not
known at this time.
5. RECOMMENDATION
a) Dispense with the competitive bidding process necessary to rebuild and refurbish
the failed substation transformer per District Code Section 3.08 - Sole Source
Vendors.
b) Authorize the General Manager to proceed with the rebuild and refurbishment of
the failed substation transformer by entering into a contract with R.E. Uptegraff in the
amount of $79,458, plus a 10 percent change order allowance in the amount of
$7,946 for an amount not to exceed $87,404 plus tax.
c) Authorize a transfer of up to $87,404 plus tax from the Electric Department Capital
Replacement Fund to the Electric General Fund.
d) Direct that the proceeds from the insurance coverage for the incident at Truckee
Substation be deposited into the Electric Department Capital Replacement Fund.
Stephen Hollabaugh
Assistant General Manager
Michael D. Holley
General Manager