May 28th, 2024

City looks to move quickly on major maintenance projects

By Collin Gallant on May 9, 2024.

The city power department says it will spend $33 million on major overhauls and maintenance to its power facility in 2026.--NEWS PHOTO BRENDAN MILLER


City power officials are asking to move ahead with bidding out maintenance projects due in 2025 and 2026 to potentially save money and book limited shop time.

The issue, concerning more than $30 million in work, arose at the May 2 meeting of city council’s energy committee, and could lead to more proactive budgeting in the future, officials say.

Eight separate overhauls on gas- and steam-fired turbines are scheduled to take place over the next two years – a period comprising the city’s next budget cycle.

That budget would typically be presented for approval later this year, but components and services are in high demand, inflation and foreign exchange rates are changing and the package should be booked now to lock in dates and set prices.

“It highlights that we need to start awarding work now,” said energy division managing director Rochelle Pancoast, stating the work would still be done as scheduled by the start of 2027.

“It’s a large number, but it’s normal business approach to sustaining capital.”

Director of power generation Boyd Mostoway said the major maintenance schedule is well defined, and since 2025 and 2026 projects are moving up for approval, projects from the following two years could be presented in the next budget later this year.

Work would still be completed in those years, but money must be approved before contracts are awarded.

Coun. Alison Van Dyke said the city should avoid major delays or major cost changed

“We need to start planning for delays when we approve our budgets,” she said. Council will discuss the budget amendments, which would be funding out of the division’s working capital, later this month.

The two most expensive projects involve scheduled 50,000-hour overhauls of large capacity turbines next year.

The Unit 16 turbine, installed at the north-side facility in 2018, is due for a major overhaul in 2025 at a cost of $11 million. Unit 11 at the river valley plant would be similar maintenance at a cost of $12 million.

The city’s large steam-driven turbine is also due for a $2-million overhaul and $400,000 in rotor work in 2025, while a smaller unit needs $2.9 million in total work in 2026.

Of the total $33 million, about $19.7 million refers to equipment and services exposed to U.S. currency and potential changes in foreign exchange rate. As such, a hedging strategy would also be employed by the city’s finance department to lock in the most agreeable rates.

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