HomeMy WebLinkAbout8 Donner Lake Feeder Project Agenda Item # 8
Public Utility District i
ACTION
To: Board of Directors
From: Sanna Schlosser
Date: July 15, 2009
Subject: Approve a Letter of Intent to Purchase Materials from NV Energy for
the Donner Lake Circuit No. 3 Feeder Project
1. WHY THIS MATTER IS BEFORE THE BOARD
Board authorization is required for expenditures in excess of $15,000.
2. HISTORY
The new Donner Lake Circuit 3 feeder is a new 12.47kV distribution feeder that will
originate at the District's Donner Lake Substation and connect to the Tahoe Donner
area. This new circuit is needed to increase capacity, improve system performance
and reliability. It will be approximately 2 miles long and will be built under existing
60kV transmission lines owned by the District and NV Energy. Major milestones in the
history of this project to date include:
January, 2007 - Initial Discussions with NV Energy
August 15, 2007 - Board Approval of a Task Order to prepare the CEQA Initial Study
December 5, 2007 - Board Approval of CEQA Initial Study
December 19, 2007 - Public Hearing on CEQA Initial Study
January 16, 2008 - Adoption of Final CEQA Document
October 15, 2008 - Board Approval of Design and Pole Contact Agreements with NV
Energy
3. NEW INFORMATION
NV Energy has completed the design for the portion of the transmission line they own,
and will construct this portion of the project. In order to complete the project in 2009,
certain materials must be procured immediately due to extended lead times. These
materials include several steel poles necessary for the project. NV Energy has
requested a Letter of Intent from the District regarding the purchase of these
materials. The Letter of Intent must state that the District will pay for these materials
when invoiced by NV Energy. The estimated cost of these materials is $257,908.
The anticipated project schedule is shown below:
July 15, 2009 - Consideration of Approval of a Letter of Intent with NV Energy (this
action)
August 2009 - Consideration of a Contract Approval with NV Energy to construct the
Donner Lake Circuit 3 Feeder and associated improvements on NV Energy's
transmission line
September 1, 2009 - Start of Construction
November 1, 2009 - Completion of Construction
November, 2009 - Consideration of Approval of a Tax Liability Payment to NV Energy
4. FISCAL IMPACT
The source of funding for the new Donner Lake Circuit No. 3 feeder is Facilities Fees
as this project provides increased electrical capacity and improves reliability. Sufficient
funds exist in the Electric Facilities Fees account to cover the monies due NV Energy
for these materials.
Authorization to construct this new distribution feeder will be brought to the Board for
action in August of 2009. Authorization to make payment to NV Energy for the tax
liability issue will be brought to the Board for action in November 2009, or when actual
construction costs are known.
5. RECOMMENDATION
Authorize the Board President to sign a Letter of Intent with NV Energy to purchase
materials in advance of construction for the Donner Lake Circuit 3 feeder.
Stephen Hollabaugh Michael D. Holley
Assistant General Manager General Manager
Truckee Donner Public Utility District
Directors
Joseph R, Aguera
Jeff Bender
J. Ron Hemig
John Hillstrom
Patricia S. Sutton
July 10, 2009 General Manager
Michael D. Holley
Shauna K.Adams
Manager Major Projects
NV Energy
PO Box 10100
Reno,NV 89520-0024
Dear Ms.Adams,
SUBJECT: 607 UNDERBUILD PROJECT
The Truckee Donner Public Utility District Electric Department has received your request for a formal letter of
intent from the Truckee Donner Public Utility District(the District). The District anticipates beginning
construction in September and completing the project this year. The District understands that some of the materials
needed for construction of this project have lead times of up to 10 weeks. Therefore, in order to meet our proposed
schedule, it is necessary to order materials as soon as possible.
Per NV Energy's letter to the District,materials which need to be ordered include light duty steel poles (10 week
lead time)and non-stock wood poles. The quoted prices for these materials are$91,379 and$166,529,
respectively. The District requests NV Energy to order these materials on behalf of the District and agrees to pay
for these materials when invoiced.
Sincerely,
J.Ron Hemig
President,Truckee Donner PUD Board of Directors
P.O.Box 309—Truckee,CA 96160—Phone 530-587-3896—www.tdpud.ors
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FVV E n e Qo,y
July 9,2009
Stephen I-Iollabaugh
Electric Utility Manager
Truckee Donner Public Utility District
P.O. Box 309
Truckee, CA 96160
Dear Steve:
Subject: 607 Underbuild Project
Please find the following estimate and request for a letter of intent pursuant to the Pole Contact
Agreement between Sierra Pacific Power Company, dba NVEnergy, (Sierra)and Truckee
Donner Public Utility District(TDPUD). This Agreement grants TDPUD a license to own and
operate a 12,47kV distribution feeder along Sierra's #607 60kV transmission line as specified in
the referenced contract Agreement.
The #607 transmission line is part of the defined Path 24, the"Sierra Summit Path", which ties
our system to the California Independent System Operator(ISO) Corporation. It has been
determined to be an operationally significant connection between Sierra and PG&E by Western
Electricity Coordinating Council (WECC). Sierra will commence rebuilding this line to
accommodate TDPUD's distribution circuit this fall with the understanding that a May 1, 2010
date is requested for project completion.
Sierra must order long lead materials now to meet the required construction window beginning
in September,2009. A letter of intent to construct and acknowledgement that payment will be
required upon delivery of materials is requested as assurances for ordering the non-stock
materials. This includes light duty steel poles that have a ten week lead time for $91,379 and
non-stock wood poles that have a 4 week lead time for$166,529, Once construction begins,
TDPUD will be invoiced for the remaining materials and progress payments for the labor.
The estimate for construction of the#607 60kV line is from $1,045,455 to $1,444,013.
Construction time ranges from six to ten weeks. This estimate includes the cost component to
cover Sierra's estimated liability for Federal Income Tax in accordance with California Public
Utilities Decision No. 87-09-026 issued in Investigation No. 86-11-019, Costs have been
estimated for this project by the least expensive method which is also in accordance with Sierra's
engineering and construction practices. The estimate also assumes:
o Worst case scenario for a ten week construction period
o A small amount of road construction for construction access
o A moderate amount of blasting will be required
o Traffic control on 1-80
P.O.BOX 98910, LAS VEGAS,NEVADA 89151-0001 6226 WEST SAHARA AVENUE,LAS VEGAS,NEVADA 89146
P.O,BOX 10100,RENO,NEVADA 89520-0024 6100 NEIL ROAD,RENO,NEVADA 89511 NVEnergy.com
o TDPUD will obtain and meet all mitigation measures outlined in the Federal, State and
Local permits. This includes obtaining required biological surveys prior to construction
and securing a contractor who will implement storm water pollution prevention measures
as required by your permits.
d An on-site fire crew
o Other items as detailed in the Agreement
Sierra welcomes the opportunity to accommodate TDPUD's request to utilize our facilities for
this project. Please contact me if you have any questions or concerns.
Sincerely,
Shauna K. Adams
Manager Major Projects
Cc: Samna Schlosser,TDPUD
Joe Ilorvath,"I"DPUD
Mike Braithwaite, NVE
Greg Lambert,NVE
Gary Porter,NVE
Colin Harlow,NVE
Kelly Toulouse,NVE
Ellen Costanza,NVE
copy�. RE C0E P 2 3 (2` 0
Sierra Pacific
POWER W E R C O M P A N V
www.sieffapacific.com
Gregory P.Lambert
Major Accounts FxeaiNve
6100 Neil Road,P.O.�Box 10100-Mail Code S2A41 Reno,Nevada 89520-0024•Phone:775.834.5247•Fax:775.834.5778•E-Mail:&mbcn aQ swc.com
September 22, 2008
Mr. Joe Horvath
Electric System Engineer
Truckee Donner PUD
P.O. Box 309
Truckee, CA 96160
Re: Truckee Donner PUD 607 Line 60kV Rebuild Project
Dear Steve:
Sierra Pacific is prepared to begin work on the project to (1) construct approximately two miles of
Sierra owned 60kV transmission line connecting TDPUD's Donner Lake and Tahoe Donner
Substations and (2) install the District's 3 phase 12.47kV distribution feeder as an underbuild circuit
along Sierra's line. This work is being requested by TDPUD to accommodate its plans to upgrade the
District's electric system in the area. Based on the information provided by TDPUD regarding the
project's requirements and scheduling needs, Sierra is prepared to begin the planning, design and
engineering phase of the project after it has received your authorization to proceed and your advance
payment in the amount of$31,939 to cover the costs associated with these activities.
An overview of the proposed project is provided in the sections that follow.
Scope of Project
The project involves the planning, design and construction of approximately two miles of Sierra's
60kV transmission line that connects TDPUD's Donner Lake and Tahoe Donner Substations and the
installation of TDPUD's 3 phase 12.47kV distribution feeder as an underbuild circuit along Sierra's
line. The starting point for the underbuild on the 607 line is to be the tap pole for the District's
Donner Lake Substation tap line (just south of I-80 next to Donner Lake Rd) and the end point is
where the 607 line crosses Ski Slope Way in the Tahoe Donner Subdivision, a distance of
approximately 10,000 feet.
The exact extent of the work to be performed, as well as the cost and project schedule, will be known
with a greater degree of certainty and will be reviewed with you, after the planning, design and
engineering phases of the project have been completed.
x,
Estimated Project Costs
As of the date of this letter, the total cost of the project is estimated to be approximately $480,525.
This estimate, which assumes all the work is performed by Sierra, is summarized below and is
described in greater detail in the accompanying Project Estimate worksheet. It includes a 10%
contingency to account for any unanticipated costs but does not make any provisions for tax liabilities
that may incurred as a result of the project or for any unforeseen permitting or environmental costs.
Truckee Donner PUD 607 Line 60kV Rebuild Proiect
Total Stores and Materials $382,815
Total Misc.Vouchers $ 569
Total Company Labor $46,457
Total Transportation S 7,000
Subtotal $436,841
Contingency 43,684
Total Estimate (excluding tax) $480,525
Estimated cost per mile $254,246
Portion attributable to Planning, Design,
Engineering, Surveying and Lands $ 31,939
Tax Liability calculated based on year in which project is completed.
2008 = 17%<69kV
15%> 69kV
2009 28%<69kV
24%> 69kV
(Note: See accompanying Project Estimate for more information)
The estimated costs will be monitored as the project progresses. If significant changes in costs begin
to arise as a result of currently unanticipated factors, this information will be communicated to
TDPUD. Such factors might include unforeseen increases in material, labor or equipment costs,
changes in project design or project scope, and/or delays in construction caused by inclement weather,
fires or other natural phenomena.
After the project has been completed, estimated costs will be adjusted to reflect actual costs incurred
and an invoice will be submitted to TDPUD for payment within 30 days after the date of the invoice.
This invoice will take into account all advance payments made by TDPUD and will constitute the
"net" amount due. The net amount due will calculated based on all available cost information and
invoices at the time the project is completed and will be subject to a final adjustment after Sierra has
finished its normal internal audit and review of the project's cost components.
2
Taxability
The act of constructing, upgrading and/or improving Sierra-owned facilities for the purpose of
accommodating their joint use by TDPUD has been determined to result in a non-cash contribution to
Sierra, the value of which triggers an income tax liability to Sierra under the 1986 Federal Tax
Reform Act and is thus subject to a tax gross up in accordance with California Public Utilities
Decision No. 87-09-026 issued in Investigation No. 86-11-019. This tax gross up shall be included in
TDPUD's total cost and shall be collected by Sierra. The current tax gross up rates for California
depreciable property are .15 (15%) for Transmission (greater than 69 kV) and .17 (17%) for
Distribution (less than 69 kV). These rates will change effective January 1, 2009, to .24 (24%) for
Transmission(greater than 69 kV)and to .28 (28%) for Distribution(less than 69 W). The tax gross-
up rate applied will be the one in effect at the time the project is completed.
Invoicing and Payment Procedures
Regarding the process of paying for costs incurred by Sierra as a result of its activities on this project,
TDPUD will be asked to submit to Sierra an advance payment in the amount of$31,939 to be applied
against expenses incurred by Sierra during the planning, design, and engineering phases of the
project. These expenses are listed on page 2 of 2 of the accompanying Project Estimate and are
identified as shown below.
Drafting $ 2,904
Civil Engineering $ 22,399
Surveying $ 3,318
Lands S-318
TOTAL $ 31,939
Should any portion of this advance not be spent, the amount remaining will either be refunded to
TDPUD, or will be applied against other expenses incurred by Sierra during the construction phase.
If TDPUD chooses to have Sierra construct the new line, prior to the purchasing of materials and the
actual start of construction, a second payment will be requested to pay for"total stores" and/or other
"voucher" or material costs that will be incurred by Sierra.
Should TDPUD choose to construct the new line, Sierra will require that one of its inspectors be on-
site to view the construction activities and ensure the line is built to Sierra's standards. The cost
associated with this function, which is to be borne by TDPUD, is estimated to be$14,518 and will be
billed to TDPUD after the project is completed.
As discussed earlier, after the project has been completed, estimated costs will be adjusted to reflect
actual costs incurred and an invoice will be submitted to TDPUD for payment within 30 days after the
date of the invoice. The net amount due will be calculated based on all available cost information and
invoices at the time the project is completed and will be subject to a final adjustment after Sierra has
finished its normal internal audit and review of the project's cost components, a process that takes
approximately ninety(90) days to complete. Once this process has been concluded and approval has
been given to the project and all of its costs, the final result will be compared against the total amount
paid by TDPUD. If necessary, an adjustment will be made in the form of either a refund to TDPUD
or a request for payment of the additional charge due.
3
Scheduling and Related Information
With regard to the schedule for this project,TDPUD has not yet determined a target date for when the
new line and underbuild should be placed in-service. In addition, TDPUD has indicated they would
like to assume responsibility for constructing the line. Given that these decisions regarding
scheduling and construction can be made at a later date, Sierra is prepared to move forward with the
planning, design and engineering phase of the project.
If the process described above meets with your approval, please indicate your acknowledgement and
acceptance by signing in the space provided below. To authorize Sierra to proceed with planning,
design and engineering, please return this signed letter, along your advance payment in the amount of
$31,939,to me at Sierra's main offices at 6100 Neil Rd.,P.O. Box 6100,Reno,NV, 89520-0024.
Should you require assistance or additional information,please contact me at(775)834-5247.
Sincerely, Accepted on o r t-n h P r 1 5 ,?n o s 2008
Signature. ti. o ;
T�s
Gregory P. Lambert
Major Account Executive Name: Tim F. T a y-1 or
Major Accounts Department
Sierra Pacific Power Company Title: P r P-,; r3 P n t- o f t riQ R oa rsd —
Truckee Donner PUD
Encl: Project Estimate
CC: Steve Hollabaugh,Assistant General Manager, Truckee Donner PUD
Shaun Adams, Major Projects Manager,Major Projects, SPPCo.
Michael Braithwaite, Sr. Engineer, Transmission Design/Civil Engineering, SPPCo.
Bob Pohl,Team Leader,Tax,Taxation Department, Sierra Pacific Resources
Ellen Costanza, Sr. Contracting Agent,Project Controls&Analysis, SPPCo.
4
PROJECT ESTIMATE PAGE 1 OF 2
04 4/08
PROJECT TITLE: Truckee Donner PUO 607 Lire 6OkV Rebuild
DESCRIPTION: Construct approx. 2 rrtiles of new 60kV line,,Oth list. 1nder.bUild.
JOB LENGTH: 1.89 miles
ESTIMATOR: Mike Braithwaite
SPPCO STOCK MATERIAL QUANTITY REO'D UNIT PRICE TOTAL COST
397.5 AA Carina Conductor 30,900 ft. $0.92 $28,514
6OkV Tanget Structure 25 ea. $9,000 $225,000
6OkV Dead End Structure 9 ea. $10,500 $94,500
Material contingency 10% $34,801
TOTAL STORES COST: ,
4iR' ;,` '�, o- .g, i,'"; l* .. x 3 ,, e s <a - s s / +C a`'✓ '"y.=T
,,.,.
VOUCHERS.-
MATERIALS QUANTITY REQ'D UNIT PRICE TOTAL COST
None 0 ea. $0 $0
TOTAL MATERIAL VOUCHERS:
CONTR LABOR & MISC QUANTITY REO'D UNIT PRICE TOTAL COST
Crew Expenses 1 Ls, $0 $0
Equipment rental 1 s. $0 $0
Misc vouchers 1 Ls. $0 $569
TOTAL MISCELLANEOUS VOUCHERS: 69
TOTAL VOUCHERS 569
WORK ORDER ESTIMATE SUMMARY(cunt.) PAGE 2 OF 2
LABOR:
SPPCO MAN-HOURS HOURS RATE-$JHR TOTAL COST
TRANSMISSION OPERATIONS
S'raigM Tame 4460 $65 $14,518
Overtime 466 $58 $0
GENERA!CONSTRUCTION 323
DRAFTING $62 $0
60 $62 $2,904
CIVIL ENGINEERING 30,E $66 $22,399
SURVEYING 260 $62 $3,318
LANDS 40 $62 $3,318
MISC - OTHER 40 $60 $0
TOTAL COMPANY LABOR: 6,45
TRANSPORTATION:
HOURS RATE-$1HR TOTAL COST
TRANSPORTATION $7,000
TOTAL TRANSPORTATION: ,0
00
SUBTOTAL WORK ORDER; 36,841
CONTINGENCY : 10% $43,68
TOTAL WORK ORDER; P0,525
Cost per mile: $254,246
GRAND TOTAL: L $480,525