Transcript CNTC Project Estimate

Cost Estimates
Katherine Prewitt
[email protected]
Director, Planning
RSC Motions (Oct 2010)
• MOTION 1: RSC recommends that SPP review what is the best manner to
address significant cost increases and/or overruns of transmission
projects that are regionally funded.
• MOTION 2: RSC recommends that SPP review the Novation Process and
report to the RSC by April 2011.
• MOTION 3: RSC recommends that SPP consider establishing design and
construction standards for transmission projects at 200 kV and above that
are regionally funded.
• MOTION 4: SPP evaluate how cost estimates are established for
transmission projects before Cost Benefit Analysis are performed.
• MOTION 5: CAWG to study various methods on how costs that exceed
some standard can be addressed with different cost allocation
mechanisms and recommend strategies to RSC.
2
Cost Estimation Improvements
•
•
•
Standardized Cost Estimate Reporting Template
(SCERT)
–
All cost estimates
–
Quarterly reporting
Conditional Notification to Construct (CNTC)
–
> $20 Million
–
> 100 kV
Establish Project Estimate baseline
–
CNTC Project Estimate (CPE)
–
NTC Project Estimate (NPE)
3
Cost Estimation Improvements
•
Project Cost Working Group
•
Deviates or is expected to deviate +/- 10% from established
baseline cost
–
•
Report monthly
Deviates or is expected to deviate +/-20% from established
baseline cost
–
Provide detailed cost variances via updated SCERT with
explanations regarding the variances
4
Project Cost Working Group (PCWG)
•
Oversee a quarterly report
•
Study Estimate Design Guide (SEDG)
•
Review estimation variances
•
–
Regionally funded project >300 kV and >$20 million
–
Explanation for the cost estimate variances as well as
–
Reasons why the project should or should not move
forward
Develop business practices
5
Stages of Cost Estimation
•
•
Conceptual Estimate (Staff)
–
prepared by SPP from historical data
–
used for screening purposes only
Study Estimate (DTO)
–
•
•
submitted by DTO if project passes Conceptual screening and requires
more refined estimate
NTC Project Estimate (NPE)/CNTC Project Estimate (CPE) (DTO)
–
submitted by DTO in response to CNTC/NTC issuance
–
established as baseline for project cost variance
Design/Construction Estimate (DTO)
–
submitted by DTO in quarterly tracking process for cost estimates as
engineering and construction for project is underway/completed
6
Cost Estimate Stage Definition
Estimate Name
Conceptual
Study
CNTC Project (CPE)
Stage
Projects > 100
kV & > $20
Million
All other BOD
Approved
Projects
1
1
Level of Project
Scope
Definition
End Usage
Precision
Bandwidth
0% to 10%
Concept screening for
ITP20/ITP10
-50% to + 100%
10% to 20%
Study of feasibility
and plan
development for
ITP10/ITPNT
-30% to +30%
2
2
CNTC Issued
NTC Issued
3
N/A
20% to 40%
Final baseline (CNTC)
-20% to +20%
NTC Issued
NTC Project (NPE)
N/A
3
20% to 40%
Final baseline (NTC)
-20% to +20%
Design & Construction
4
4
40% to 100%
Design after NTC
issued and build the
project
-20% to +20%
7
Conditional Notification To Construct (CNTC)
•
Projects within the financial commitment window
–
Study Estimate > than $20 Million and > 100 kV
•
Additional time and cost recovery for DTO to refine
estimate
•
SPP re-evaluates project if CNTC Project Estimate
(CPE) outside accepted bandwidth
•
NTC issued
–
Cost variance is acceptable
–
BOD approves the refined cost analysis
8
Conditional NTC (CNTC)Project Estimate
Variance
•
CPE bandwidth exceeds Study Estimate bandwidth
–
–
•
Re-evaluate project
Make a recommendation to the BOD
Possible SPP staff recommendations:
–
–
–
–
Accept the cost variance and approve as is
Modify the project
Replace the project with new solution
Cancel the project
9
CPE Evaluation Illustrations
Study Estimate: $100 Million
$70 M
$100 M
-30%
$84 M
$130 M
+30%
$105 M
$126 M
CNTC Project Estimate: $105 Million
Action: SPP Issues NTC to DTO
If the +/-20% precision bandwidth of the project’s CPE is within the
accepted range, an NTC will automatically be issued
10
CPE Evaluation Illustrations
Study Estimate: $100 Million
$70 M
$100 M
-30%
$96 M
$130 M
+30%
$120 M
$144 M
CNTC Project Estimate: $120 Million
Action: SPP Re-evaluation and BOD Review
If the +/-20% precision bandwidth of the project’s CPE is outside the
accepted range, SPP Staff will re-evaluate the project and submit
updated analysis to BOD for review
11
Study Estimate Design Guide
12
Study Estimate Design Guide
• Study Estimate Design Guide (SEDG)
– Establish Study Estimate Design Guide to be used by the
SPP’s Transmission Owners (TOs) in developing Study
Estimates for SPP footprint projects rated at voltages at
100 kV and greater.
– These SEDGs are intended to ensure consistency in TO
Study Estimates.
13
Transmission Lines
• Minimum Conductor Sizing for normal ratings is
specified, e.g., 1,200 Amps for 230 kV and 3,000 Amps
for 345 kV
• Reconductoring should consider advanced conductors if
possible
• Reactive Compensation costs should be included in
project costs estimates
14
Reactive Compensation
Voltage (kV)
Reactive Compensation
(MVAR / mi)
100 - 200
0.1
230
0.3
345
1
500
2
765
4.5
15
Substations
• Substations should be designed with :
– Accommodations for future expansion
– Suggested bus configurations by voltage class and
number of terminals
– Minimum terminal equipment ratings
– Minimum bus ratings
16
Protection/Controls
• Protection and control designs should include:
– Redundancy
– PMUs or Intelligent Electronic Devices (EIDs) for 230 kV
and above
– SCADA and RTUs
17
SCERT Questions
•
Is there an instruction manual?
•
Should there be a confidentiality statement on the
estimate or documents?
•
How should the forms be submitted? PDF or hard
copy?
•
Do ROW/Land Rights cost need to be broken down in
more detail than one-line?
18
SCERT Questions
•
Will NTC be issued on a program or project basis?
•
Under Line Assumptions – Structure, are Tangents and
Dead Ends the number of assumed structures and
Underbuild?
•
For Station Assumptions – Breaker Scheme, are you
looking for information on substation arrangement?
•
How should or who should questions be submitted?
19
SCERT Question – Nominal vs Current $
•
Costs should be in current dollars
–
•
1st year cost should be in current dollars regardless of
start date
–
•
Unless a project is considered ‘multi-year’
Estimated as if they started today
All multi years projects calculated with escalation rate
chosen by DTO
20
SCERT Question – Nominal vs Current $
Example:
Year 1:
$100,000
Year 2:
$200,000
Year 3:
$100,000
Total $400,000
Using a escalation rate of 2%/yr
Year 1: $100,000
= $100,000
Year 2: $200,000 @ 2%
= $204,000
Year 3: $100,000 @ 2%
= $104,040
Total: = $408,040
21
SCERT Form
•
•
SPP provided
–
SPP Project Name
–
Project ID
–
Upgrade ID
–
RTO Determined Need Date
–
Estimate Request Date added (New)
DTO provided
–
Estimate Provider
–
Point of Contact
22