Partnering on a Utility Boiler Retrofit: Approach and Results

W.E. Becker Babcock & Wilcox Barberton, Ohio, U.S.A. Presented to: American Power Conference April 1-3, 1997 Chicago, Illinois, U.S.A. G.R. Veerkamp Pacific Gas & Electric San Francisco, California
BR-1632

Synopsis
In 1993, Pacific Gas and Electric (PG&E) began the process of evaluating contracting options and selecting a contracting approach for use on its NOx retrofit program, which had the goal of achieving significant reductions in emissions from its gas and oil fired units. PG&E determined that partnering was the preferred method, based on its greater potential for both improved quality, risk identification and management, and cost control. Ultimately, Babcock & Wilcox (B&W) was selected as one of two partners and was assigned the retrofit of PG&Es 750 MW Moss Landing Unit 7, a supercritical, opposed wallfired boiler that is configured with burners in three per cells and with modest flue gas recirculation (FGR) capability. The approach that B&W and PG&E used to implement our version of partnering at Moss Landing was founded on: the use of innovative (for PG&E) contracting terms and conditions; a limited use of integrated design teams; joint scoping, costing, and cost benchmarking efforts; mutual risk sharing; and an incentive program whose goal was to reward innovation and cost management while discouraging the use of change orders as the means to both maximize B&Ws return and minimize PG&Es bottom line cost. The scope of work ultimately implemented at Moss Landing using this contract structure consisted of the design, fabrication, installation, and startup/testing of 48 natural gas S-burners, 8 overfire air NOx ports and associated bent tube sections, optimized use of FGR, hardware and software modifications to the burner management and combustion control systems, and other ancillary modifications. In addition, PG&E elected to include within this partnering umbrella complementary major refurbishment work on the units two air preheaters, and waterwall replacement. (Under a separate but similar partnering contract, major overhaul work was performed

by the OEM on the HP/IP and LP steam turbine trains, and on the HP and LP generators.) The actual NOx and main unit overhaul contractual and system performance achieved on Unit 7 was very encouraging. During the course of the largest single unit overhaul in PG&Es history (based on dollar volume of work): No scope-related change orders were issued on any of the three B&W contracts; The final cost was less than the projects Target Price by nearly 13%; Material and design quality/design coordination were above average; Construction efficiency by all prime contractors was excellent; Construction coordination between PG&E, B&W, and the other outage contractors was outstanding; and The bottom line performance of the retrofit was good, with tuned full load NOx emissions at the design operating point (14% FGR to the windbox, 1.8% backend O 2, and CO < 200 ppmv) running in the range of 65-75 ppmv, versus a guarantee limit of 84 ppmv.

Background
In the first quarter of 1993, PG&E initiated the first of what would be two significant restructurings/downsizings of its Power Generation and Engineering/Construction business units, significantly reducing the size of the home office power plant engineering staff, and eliminating the construction component within Power Generation. At the same time, a major program was initiated to address new NOx emission rules being developed in the three air quality management districts within which their gas/oil fired power plants operate.

Babcock & Wilcox

This program was charged with several tasks: Participating in rule development and public comment discussions with the districts; Determining the anticipated scope and timing of the required retrofits; Identifying implementation risks/uncertainties, and methods to minimize those risks and uncertainties; Reviewing contracting strategies and selecting a contracting approach; and Managing the resulting retrofit projects and associated contracts. In assessing contracting strategies, major considerations included: The highly dynamic nature of PG&Es business environment; The recent restructurings, resulting in major reductions in both manpower and experience levels; A strong need for cost reductions in the midst of an increasingly demanding and uncertain regulatory climate, centered around expected major restructurings of the California power industry; Uncertainties with respect to both the timing and final scope of the expected retrofits; and Mixed experiences with traditional contracting approaches (typically Engineer Procure Construct [EPC]/ Lump Sum Turn Key [LSTK]). PG&Es resulting goal in reviewing contracting methodologies was to identify those that provided the greatest flexibility in addressing and managing the scope and timing risks, while minimizing costs and maintaining an acceptable level of quality. Because of its familiarity with EPC/LSTK contracting, PG&E initially directed its efforts along this line. This included the preparation by an A&E in late 1993 of an EPC Standard NOx Specification that could be used as the base from which unitspecific retrofit specifications could be generated. In parallel with this effort, PG&E began its detailed assessment of alternative strategies. Early on in this process it became evident that the risk transference that EPC contracting provides would be costly and of questionable benefit, especially given the scope and timing uncertainties. In addition, the level of PG&E manpower that would be required to support (for each project) specification preparation, bidding, contract administration (both technical and commercial), and engineering reviews, would tax the limited resources that were available, and rob them from other work required to support day-to-day operating needs. As a result, the EPC approach lost its appeal in favor of strategies that promoted flexibility. The two alternate methods that surfaced were: The use of an A&E firm to act as a combination Owners Engineer/Project Manager an approach used by numerous other utilities but not recently used by PG&E. This approach would assign to the A&E the responsibility for all design, procurement, contracting, and construction/construction management, with PG&E assuming a general management and oversight role. The brunt of PG&Es effort would be in the initial selection of the A&E, determining the timing and general scope of each retrofit, and reviewing/approving the cost estimates. The A&E would be fully charged with detailed scoping, cost estimating and project execution. Partnering a more novel approach that was at that time just beginning to surface as a legitimate strategy within

the industry, having been employed to a limited degree by Ontario Hydro and Florida Power & Light. In this instance, PG&Es major efforts would include partner selection; joint scoping, cost estimating and benchmarking with the partner; and to a limited degree joint design, with lead design responsibility for a given design area assigned to the party that could best manage that area. PG&Es partner would be responsible for its design areas, overall design coordination, material procurement and/or fabrication, and construction. In selecting a preferred approach, a combination qualitative and quantitative decision analysis was performed, comparing and contrasting the strengths and weaknesses of these two approaches along with EPC contracting. The analysis graded the approaches on a high (1) to low (3) scale for 10 key attributes, the most important being: Flexibility/Adaptability. The ability to easily respond to scope and/or schedule changes was expected to be best supported by partnering, based on experiences described by other companies contacted who had used the partnering approach. The proviso to this was that a strong working relationship between the partners needed to be achieved. Quality. With a joint focus on risk identification and management, PG&E felt that, during component and material sizing/selection, partnering would tend to promote a more reasonable balance between the legitimate requirements of the application and the desire to maximize return/minimize cost. Cost Management. Again, partnering appeared to have the edge. A key assumption was that joint risk assumption and management would focus both parties attention on how best to achieve the end objective. Further, the success of this effort would depend on a level of trust being attained between the partners. To achieve this, the support and commitment of management within both companies would be critical to both the development and acceptance of the unique terms and conditions that would be required, and to their equitable application on a day-to-day basis. Risk Management. With the implementation of risk sharing, and through the use of appropriate monetary incentives, it was felt that partnering offered the most potential for risk mitigation. PG&E Manpower. Partnering would require a greater upfront manpower commitment than would the use of an A&E as described previously, but less on average than EPC contracting. The major efforts that would be expended were in selecting a partner(s) and setting up the partnering arrangement; in the initial scoping, costing, and cost benchmarking efforts; and in the design efforts that would be ultimately assigned to PG&E. The advantages, in PG&Es opinion, far outweighed the need for additional internal resources, especially given that the increase was expected to be modest. A management review of the decision analysis supported the recommendation to partner, and the partner selection process was initiated in late 1993.

Project Setup
Partner Selection
A two step selection process was used. The first was a screening of thirteen A&E, system supplier, and OEM companies; the second was the issuance of a formal partnering Request for Proposal (RFP) to the short-listed companies.

Babcock & Wilcox

A screening Statement of Qualification and Interest (SQI) was prepared that solicited several types of information deemed fundamental to selecting a partner(s). These can be segregated into the following areas: Interest and Experience in Partnering . It was possible that one or more of the companies would not feel comfortable entering into a nontraditional contract. Further, it was highly desirable that a future partner have some experience with this approach. Each provided information on their interest in, experiences with, and commercial concerns relative to partnering (particularly as they pertained to cost/schedule/performance risk sharing, contractual terms, open book costing, and dispute resolution processes). Experience with and Understanding of NO x Reduction Technologies . Given the nature of the program, experience in NO x technologies was a must, along with the ability to both analyze the full range of potential technologies for a given application, and select the most cost effective technology/technology combination. Boiler/Draft System Analysis . In reviewing possible system retrofit strategies, PG&E determined that it was likely that certain units could benefit from an analysis of current combustion/draft system performance, and some level of optimization/tuning. In addition, draft margin was minimal on several others. To minimize the impact of the retrofits on boiler/draft system performance and to take advantage of possible cost effective tuning options, it was important that a partner have experience in this area. Staff Depth and Commitment . In conjunction with the above items, the depth of the staff that would be assigned to the work, and the level of commitment each company was willing to provide regarding the duration of the assignment of lead personnel to the NO x work was of interest. Design and Construction Coordination, Site Coordination. The ability to: manage (and preferably perform) both design and construction, and coordinate the two with the goal of identifying and managing scope, schedule, performance, construction, or other risks; and to identify and address constructability issues, were critical to project cost minimization. Further, the willingness to coordinate with other site contractors was important to PG&E in managing overall outage costs and risks. Financial Health . Each company provided an assessment of their current financial condition, which PG&E compared against its own information sources. To score the responses and select the final bidders, weightings were assigned to each of the above areas consistent with each ones relative importance to PG&E. The responses to the SQI in each of the areas were either quantitatively or qualitatively graded on a 1-10 scale, with an overall score developed by multiplying the grade by its weight, and then totaling up all of the resulting products. The partnering RFP was then issued to the five companies with the highest scores. As might be expected, the RFP was divided into technical and commercial sections. The technical portion provided for the following interchange: Information/Material provided: The intent of the RFP. To select at most two partners, each of which would be assigned the responsibility to scope, cost/benchmark, design, procure/fabricate, erect, and startup/ test the retrofit of at most two units (additional work, if any, would be subject to performance on these two jobs);

The expected unit-by-unit retrofit schedule; The Standard NO x Specification. Included to provide functional/performance requirements, and the industry codes and standards that would apply to the work; Conceptual designs for two units. These had been developed by PG&E and various contractors during earlier planning efforts, and consisted of general arrangement drawings for the retrofit of SCR on each unit, along with a written description of both the scope and boundary conditions that should be assumed for each retrofit. These scopes/arrangements, along with the other information included in the RFP, provided a consistent basis for each company to use in estimating staffing requirements, associated labor overheads required to support that staff, staffing durations per project, etc. These were in turn needed in setting chargeout rates and profit margins/fee percentages. Information requested: Staffing. The bidders were required to identify the lead staff that would be committed to the Program and the time period of their commitment, and to provide an expected resource loading curve for the duration of projects similar to those described by the conceptual designs. Final scoping/design/construction approach . Each company was requested to describe the approach they would use in preparing and optimizing the final scopes and cost estimates for the two conceptual jobs, and in conducting the design, procurement, construction, and startup/testing phases of a project in general. Benchmarking . The approach proposed for open book cost estimate preparation/reviews and benchmarking was to be submitted. Rates. Labor rates, per diems, multipliers, and proposed profit/fee structures were required. Partnering and/or Commercial Issues. Thoughts and proposals were requested on: appropriate goals and objectives for the projects; how risk would be shared; how costs would be monitored and change orders managed; and how disputes would be resolved. The commercial section provided PG&Es proposed Blanket Terms and Conditions that would apply to the overall conduct of the work. These included significant modifications from standard PG&E terms in the areas of indemnification, liability, warrantee requirements, and dispute resolution. This document also allowed for cost and risk sharing, with the specific details of how cost and risk would be shared to be determined for each project when its specific scope, cost, and risks had been identified. In evaluating both the resulting proposals and information received during follow-on site interviews, a qualitative/quantitative analysis similar in nature and methodology to that performed for the initial screening was performed. Of primary significance was the experience/depth of the staff and the process they would use in performing technology selection and scoping, cost estimating and benchmarking, and project execution; and the expected overall cost effectiveness of that entire process. Further, the methods proposed to identify, manage, and share risks; establish project-specific goals and objectives; and establish and manage a partnered contract were considered. The ultimate result of this evaluation was that B&W was selected as one of two partners.

Project Scoping
A two day partnering workshop was subsequently scheduled,

Babcock & Wilcox

directed by a jointly agreed-to facilitator. This meeting served three primary functions: 1) it provided a means for team members to meet each other; 2) it had as a primary goal the preparation of a mission statement, and goals and objectives; and 3) it allowed for an expeditious preparation of each companys phase 1 (preliminary scoping) responsibilities, along with a Phase I schedule. While any given project will have its own unique issues and objectives, the following seven primary goals and objectives, selected for the initially expected SCR retrofit project (and modified only slightly for the ultimate combustion modifications work scope), were identified at the workshop and are listed to provide an indication of the issues driving the Moss Landing Unit 7 retrofit: Safety. No safety incidents occur that affect people, the environment or equipment. The intent was to eliminate both lost time and recordable accidents; prevent damage to existing equipment; and perform the work in a manner that minimizes the chance for environmental incidents. Cost and Schedule . The project is completed at the lowest total life cycle cost and does not impact the overhaul schedule (e.g. maintain the competitive position of the unit in the generation market). Project Improvement. PG&E and B&W would jointly develop in a timely manner the detailed project scope; perform benchmarked cost comparisons with comparable projects and/or portions thereof; and then attempt to beat the Target Price estimate by at least 3%. Project Direction. The project is done right the first time (e.g. no equipment problems; no curtailments as a result of project activities; etc.); and the industry recognizes this as a trend setting project. Plant Impacts. During the outage, the project would not negatively impact either other projects; plant operations; or overall unit performance. Project Support. The project obtains regulatory, community, and labor support; positively impacts the local economy; and meets PG&Es small business/minority (EOPP) participation guidelines. Partnership Satisfaction . B&W will realize a financial reward commensurate with achieving the above goals (and by definition, although not specifically stated in this goal, PG&E will obtain a cost effective, well-running retrofit). At the conclusion of the main body of the workshop, PG&E and B&W project managers, lead engineers, and construction personnel met to lay out the projects Phase I (scoping) schedule. The planned outage start date was used to establish the expected start of pre-outage work. This was in turn used to determine dates of major Phase I milestones such as: providing information to support permit activities; preliminary review of applicable technologies/technology combinations; on-site reviews; development of the final project scope and cost; cost benchmarking; etc. Phase I scoping, which initially culminated in the preparation of a preliminary design (described in a Project Scope Book - PSB) and associated benchmarked Target Price for an SCR retrofit (defined in a Project Cost Book - PCB), included a high level review of a wide range of technologies that could meet the projects goals. The technologies reviewed included SCR (both conventional, and in-duct such that an air preheater relocation would not be required ), Selective Non-Catalytic Reduction (SNCR), low NOx burners, Overfire Air (OFA) ports,

and increased/optimized flue gas recirculation. SNCR, which had been reviewed in prior PG&E assessments, was eliminated based partly on its inability to meet the 10 ppmv NOx emission limit, but mainly due to expected high levels of ammonia slip (which was likewise regulated to 10 ppmv). Screening of the technical alternatives was performed using a matrix of thirteen independent variables shown as Options 1 through 10 below, and resulted in a matrix of 384 individual, unique cases. The basic options and subsets (note that the draftrelated options were included to address the limited margin on draft system capacity and associated furnace pressure design limits) were: 1. Relocate the existing air preheater 2. Change air preheater size 3. Use conventional SCR 4. Forced draft fan upgrades 5. 40 low NO x burners without Over Fire Air (OFA) ports (using existing 8 top burners as OFAs) Operate with maximum flue gas recirculation Operate with minimum flue gas recirculation 6. 48 low NO x burners with 8 new OFA ports Operate with maximum flue gas recirculation Operate with minimum flue gas recirculation 7. SCR Catalyst Type Size SCR for plate type catalyst Size SCR for honeycomb type catalyst 8. Consider economizer modifications to reduce draft loss 9. Remove the steam coil air heater 10. Change air preheater surface profile Subsequently, B&W and PG&E analyzed the impact of one additional variable: relocating the existing air heaters (in a disassembled state) as they were being refurbished (new rotors, heating elements, diaphragm sections, and seals) under a separate plant maintenance program. This analysis was conducted in a second matrix consisting of 96 cases. The operative assumption was that the cost associated with relocating a completely disassembled air heater should be less than relocating an entirely assembled one. This assumption proved correct, and the ultimate number of alternative arrangements screened was increased to 480. The screening matrices were constructed by developing all of the logical combinations of the independent variables and then using a spreadsheet to calculate the value of all of the dependent variables for each combination. The key dependent variables included: 1. Inlet NOx to the SCR; 2. Total catalyst volume required (plate or honeycomb); 3. Aqueous ammonia consumption rate; 4. Expected dP of the SCR system (including any future catalyst additions); 5. Net difference in operating kW, considering both FD and GR fan systems; 6. Total dP saved by the combined modifications; 7. Net dP increase/decrease; 8. Catalyst cost for type and volume selected; 9. Total erected cost for the related portion of project; 10. Hourly full load ammonia cost; 11. Hourly full load kW costs; 12. Ability to install additional future catalyst; and 13. Future catalyst replacement scenario. Scenario A was a full catalyst replacement every six years, while

Babcock & Wilcox

Scenario B was only a partial replacement over the same period. The selection process short listed 24 cases for economic evaluation, from which two arrangements were selected for final evaluation. These two arrangements, while using different catalyst types, both included the installation of 48 low NOx burners and 8 OFA ports. The scope for the arrangement selected was documented in the PSB, which included all of the detailed assumptions for and bases of the work that would be performed by both companies, along with the guarantee, warrantee, risk sharing, and other commercial terms specific to this project. Risk sharing on this project took two forms: 1) sharing of any overrun or underrun; and 2) sharing the cost for corrective/ warrantee work. For underruns, it was agreed that B&W would be paid a bonus that was a function of both the degree of underrun and the projects performance against its goals. In calculating performance, to the maximum degree possible quantitative measures that supported the previously stated goals were identified, with numeric ranges of 0 (failure) to 1 (perfection) established. Each specific measure had a weighting assigned based upon the relative importance of that measure. Total scores were then calculated as the sum, for all measures, of the value of each measure multiplied by its weight. For both overruns (in which case no bonus would be paid) and warrantee/corrective work, a schedule was prepared that defined (depending on the degree of overrun and/or the amount of corrective work), the percent participation for each company. An associated PCB detailing all of the costing assumptions, unit pricing information, labor rates, material pricing, etc., was also prepared. This pricing information and the associated Target Price were benchmarked to demonstrate the competitiveness of the project. The benchmark study was prepared by comparing the pricing (and its components) with recent B&W bid information, commercial data, and industry standard costing factors to verify competitiveness with both industry and recent B&W gasfired utility boiler low NOx projects. The highly site specific nature of this retrofit and the desire to corroborate B&Ws data base made it desirable to incorporate the use of commercial data and industry standards in the analysis to verify the cost of key material and erection components of individual subsystems. Out of this effort, several key facts resulted : The cost of the overall SCR and its subsystems (catalyst, ammonia storage and injection, and related controls/electrical) was in fact competitive, and less than comparable systems studied. The cost of site specific retrofit components (flues, ducts, steel, foundation, and demolition) was comparable to retrofits that had either been recently completed and/or bid for utilities in Southern California. The Moss Landing combustion system material costs (including engineering) were lower than comparable costs from three recent commercial burner and NOx port retrofit projects. Installation estimates for the flues, ducts, reactor, combustion system, and ammonia system compared favorably with both other competitively bid commercial projects and industry data.

tial amendments to the NOx rule. These discussions were begun at the completion of Phase I/the beginning of final design and procurement . The amendment that was ultimately enacted allowed deferral of Unit 7 SCR in favor of combustion modifications on both Unit 7 and its sister Unit 6: 1. The close scoping coordination facilitated the development, in a very short two week time frame, of technical documentation needed to substantiate preliminary performance predictions for the proposed combustion modifications-only retrofit. 2. Understanding the detailed bases and assumptions of the SCR scoping provided the ability to quickly convert that scope to the new low NOx burner/combustion modifications scope, with its final scope and cost books. 3. Since B&W had been released by PG&E to begin final SCR design and procurement, the ability to coordinate together to control that effort during rule negotiations allowed PG&E to minimize associated cancellation costs (a good for instance is catalyst procurement, the contract for which had already been let) while simultaneously developing the new work scope. As a result, the final SCR closeout costs were minimal. A new PSB and PCB were developed to reflect the major change in project direction allowed under the revised NOx rule. These new documents were created by eliminating the SCR portion in the original books, retaining the combustion portion, adding some new scope (e.g. increased reheat spray water capacity), and adjusting some of the guarantee and warrantee aspects of the commercial terms.

Concurrent Outage Scoping

In parallel with the above SCR detailed (Phase II) design and its subsequent conversion to the final combustion modifications scope, PG&E was reviewing and finalizing the scope of the overall Unit 7 overhaul. Because of historical problems with rotor post cracking on the horizontal shaft air preheaters, it had been decided to perform a full replacement of both wheels. In addition, furnace wall fireside thinning necessitated replacement of both of the opposed firing walls from part way up the hopper slope to above the top row of burner cells. Because of the extreme degree of material-related site congestion; the intimacy of the APH and waterwall work with the SCR and combustion work scopes respectively; and because of the generally favorable performance that had been achieved to date with the partnering arrangement, it was decided in early 1995 to include the APH demolition/construction activities under the partnering umbrella but with its own contract. A similar decision on the waterwall effort was made later that year. These contracts both used the partnering terms and conditions established for the NOx project, and were priced and benchmarked in the same fashion as for that project. The other major portion of the overhaul centered around the HP/IP and LP steam turbine/generator trains. Again, because of the satisfactory performance that had been realized up to that point under the B&W agreement; to hopefully attain a higher quality work product than had been realized using more traditional ST/G overhaul contracts; and to do this while also encouraging contractor coordination, PG&E decided to develop a partnering agreement with the OEM. Such an agreement, similar in nature to B&Ws, was executed in the latter half of 1995, and PG&E, B&W, and the OEM thereafter began coordinated outage planning.

Project Rescoping
Several key advantages of the contractual arrangement established for this project (and its associated joint SCR scoping/ costing effort) were demonstrated when PG&E and the local air pollution control district initiated discussions to review poten-

Babcock & Wilcox

Project Execution
While after Phase I scoping the project was, in many respects, executed in a standard fashion (e.g. completion of final design with two formal design reviews; material procurement, fabrication, and inspection largely coordinated by B&W; and erection largely supervised/performed by B&W), several things were done differently that, in the authors opinions, contributed significantly to the final results. These included:

raising and lowering load), boiler emissions of NOx and CO, stack opacity, tube metal temperatures, spray water flows, furnace pressure, and boiler efficiency. Baseline data also included burner-to-burner and FGR fan inlet traverses at maximum flue gas fan flow. This data was used both to determine windbox O2 (for calculating the degree of flue gas/combustion air mixing), and to establish an FGR flow profile. The flow profile was used as input data to both the numerical and cold flow models.

Integration of Forces
The strength of each companys engineering resources had previously been reviewed, with the aim of both establishing integrated design teams where appropriate and assigning lead design responsibilities in the projects various design areas. This was done to both reduce duplication of effort and to assign work to either B&W or PG&E based on each companys ability to best perform that work (and thus minimize project risk). Several teams resulted: Electrical/Controls . Led by PG&E, this design group was responsible for all electrical and controls design/optimization, DCS programming and hardware modifications to the burner management and combustion controls systems, preparing procedures for and performing/documenting the results of electrical pre-ops, and initial checkout of the software modifications. Combustion System Design. While B&W naturally had the lead in this area and largely performed the work without direct PG&E involvement (other than for design reviews), a small group of B&W and PG&E personnel was assigned the responsibility for coordinating and managing the physical and numerical flow modeling efforts that were central to one of the projects goals of optimizing the performance of both the forced draft and flue gas recirculation systems (and thus, hopefully, NOx performance). QA/QC . A team of B&W and PG&E inspectors was used to establish both fabrication and construction quality control requirements and acceptance criteria, monitor the construction effort, perform tests/inspections of the physical work, and document the results of same. This team was led by PG&E. System Testing/Tuning. B&W led this effort with a team consisting primarily of individuals from PG&Es power plant testing group, along with Service engineers from B&W. The actual testing/tuning plan was developed by B&W with input from PG&E, while data gathering and recording was primarily PG&Es responsibility.

Modeling
The design process included the use of both numerical and cold flow modeling. Numerical modeling using B&W proprietary software was used to locate the OFA ports so as to minimize CO, and also to calculate the mixing of flue gas with the combustion air on a burner-to-burner basis. Cold flow physical modeling with a 1/10th scale model was used to optimize the flue gas flow to the SCR and determine the expected increase in system pressure drop. As a result of SCR scope elimination, this model was modified to include the air preheaters, mixing foils, windbox, burners, and OFA ports. The objectives of the final cold flow boiler model were: a) to determine what flow balancing devices (e.g. turning vanes, perforated plates, etc.), if any, would be needed to balance air flows between the front and rear windboxes to within 2% of the overall bulk average, and between burners on a wall to within 10% of that walls average; and b) what modifications to the windbox and/or FGR mixing foils were needed to attain the same degree of FGR distribution (FGR was modeled using CO as a tracer gas). Combining the baseline test data with the results of the modeling effort, the as found condition was determined to be within our acceptance limits, and addition of flow devices was not needed.

Construction/Outage Integrated Planning and Scheduling

Several design and constructability reviews were performed at Moss Landing. These were attended by lead B&W construction and design personnel, along with PG&E designers and key plant personnel, and focused on operating interfaces, maintenance access, and constructability issues. These meetings, along with coordinated outage planning, helped to adjust the design to meet the needs of the plant and to minimize rework. Detailed outage planning began six months prior to outage start. This planning occurred on several levels. At the highest, the plant developed an overall outage plan and master schedule. This schedule was prepared with not only the input of plant personnel responsible for the various overhaul activities, but also with the participation of the lead contractors. In preparing the master schedule, PG&E and each contractor first developed their own schedules using their normal software tools and processes. Sequences were reviewed and modified as needed to minimize and, where possible eliminate work site congestion, access, laydown, utilities, or other construction coordination issues. When identified, additional resources (e.g. temporary construction power supplies, portable compressors, etc.) were included in the appropriate contractor and/or PG&E work plan. When this process was completed, the resulting contractor key activities and/or milestones were identified, and these items were mapped for statusing in the master schedule. This relatively detailed upfront planning allowed for numerous iterations and what ifs to be analyzed using the schedul-

EOC
Direct Management support and reviews were provided via the use of quarterly Executive Oversight Committee (EOC) meetings. This forum was used both as a vehicle for keeping management within both companies informed of project status, but also to relatively quickly discuss and resolve the few issues that arose during execution.

Baseline Testing
Baseline testing was performed to determine necessary design information. These baseline tests were also used to determine existing unit performance, since several guarantees were based on not degrading boiler performance. As a result, baseline testing established pre-retrofit capabilities for guarantees at maximum and minimum boiler load, boiler ramp rate (both for

Babcock & Wilcox

ing software, which in turn led to reductions in both the overall NO x retrofit duration and its cost. An example of a significant idea that resulted from this planning/constructability effort was the decision to shop fabricate the burners in a three per configuration that was essentially ready for installation on site. This contrasts with the original (and normal) process of fabricating and shipping burners and support hardware separately, and then individually installing the burners and supports via windbox access holes. This revised approach was practical since waterwall removal allowed the entire burner assemblies to be rigged into place through the lower corner hopper vestibule/furnace access holes that were cut for waterwall demolition and installation purposes. During the outage, the schedule activities were electronically statused and forwarded daily to PG&E using the plant local area network as the communication vehicle (each contractor had at least one net ID). Depending on contractor, either an Excel spreadsheet of current activity start and end dates and remaining durations, or a milestone status listing was provided. In addition to this statusing, daily outage coordination meetings (maximum of one-half hour) were held. These provided a forum to discuss and resolve unanticipated personnel, material, access, or other coordination issues. Those that could not be resolved within the time constraints of these meetings were addressed off-line by the affected individuals later that same day.

mum FGR. In addition, a significant 0.8% improvement in boiler efficiency at full load was achieved (primarily as a result of the APH modifications). A summary of key results is listed in Table 1.

Table 1 Baseline Unit 7 Load, MW 750 Steam Flow, 10 3 PPH 5200 O 2 @ Economizer Outlet, % 1.8 NOx @ 3% O 2 , ppmv 115 CO @ 3% O2 , ppmv 174 Flue Gas to Secondary Air, % 8 FD Fan Discharge, in. wg. NA Windbox to Furnace 7.0 Differential, in. wg. Furnace Pressure, in. wg. 21.5 Reheat Spray Flow, 103 PPH 17 Max. FGR 750 5100 1.1 58 297 17 NA 5.8 23.5 101 Expected FGR 750 5100 1.8 73 179 14 35.3 5.3 22.2 120

Contractor Cooperation
Certainly during these meetings, but also during the overhaul in general, a high degree of cooperation was demonstrated not only between PG&E and B&W, but between contractors. It was not uncommon, when a site visitor was about to leave, for that individual to make a remark to the effect of Ive never seen this level of teamwork before. An example of this cooperation is the numerous times that either B&W, PG&E, or the main unit OEM provided the use of either their own personnel, material, or equipment to address and resolve a near term, critical need of another. In the authors opinion, there were two primary motivating forces at work: The relatively strong working relationships that developed between both the contractors and PG&E leads during the final scoping and integrated schedule development efforts. With these individuals given the authority and responsibility by their respective organizations to make it happen, this relationship provided the catalyst needed to promote on-site cooperation. The risk/reward sharing features of the contracts. With the focus of both contractors directed towards achieving their contractual performance goals rather than on identifying change orders as the means of maximizing profit; with these goals tied to quality, safety, and final equipment/system performance targets of importance to PG&E; and with each contractors goals structured such that they did not force one into an adversarial position with the other; a situation where collaboration could be (and was) achieved resulted.

Results
The obvious goal of the project was to reduce NO x. This objective was achieved, with initial startup and tuning of Unit 7 resulting in performance 15% below the guaranteed NOx level at the design point, and up to 30% below guarantees at maxi-

Especially for the maximum FGR operating condition noted below, reheat spray water flow and boiler furnace pressure were at the high end of the expected range. Moss Landing personnel were concerned that, over time, furnace pressure would increase (primarily as a result of the impact of degraded turbine efficiency on boiler firing rate), resulting potentially in lower FGR, higher NOx, and/or continuous operation at or in excess of maximum reheat spray water capacity. Data from previous pre and post outage testing, along with baseline performance tests and a sensitivity analysis that used a computer boiler model, indicated that the boiler was performing as expected, although very little operating margin remained. Because of the concern over lack of margin, potential fixes were identified (scoped and costed) for implementation should furnace pressure increase over time. These included creating lanes in the horizontal reheater to reduce draft loss between the furnace and stack, and increasing reheat spray capacity. Either or both of these fixes will be implemented at a later date if necessary. Aside from these technical results, several other boiler-related and general project/contractual performance items should be noted: The outage safety record was exceptional. Out of 110,000 total work hours, B&W experienced only one OSHA recordable incident and no lost times; the OEMs record was zero and zero. The electrical/controls design team was able to significantly improve the design from that originally envisioned during Phase I scoping, reducing the cost and enhancing constructability. One consequence of this improvement was that the preoperational checks and startup testing and tuning went very smoothly. As an example, out of approximately 500 circuits pulled and terminated, fewer than 10 misterminations were found. The amount of corrective punchlist work was minimal. No scope-related change orders were issued against any of the three B&W contracts, and in fact savings for each were realized. The savings specific to the NO x project was

Babcock & Wilcox

slightly less than 13% of the Target Price. The majority of these savings were the result of construction efficiencies identified either during constructability reviews or on-site during final outage planning and execution. An example is the identification by the construction leads of savings that could be attained by shop fabricating the burners in the three per cell configuration previously noted. All critical schedule milestones were achieved. The Mechanical Completion date (combustion system ready for boiler cold air testing and then unit startup) was bettered by one day, and could have been pulled up by an additional 4-6 days had it been necessary. Instead of pulling up the date, the work plan was adjusted during the latter half of the overhaul, with the workforce size and extent of two shift construction reduced to minimize costs while meeting the required date. Similar performance was achieved on the turbine/generator overhaul contract. While in this case there were change orders (which would be difficult to avoid given the nature of the work), those for extra work essentially balanced out those for scope reductions. When combined with the efficiencies realized by the OEM in its use of internal engineering and shop resources, the final cost was within literally a few dollars of that contracts final Target Price. This cost performance was the result of thorough preplanning and a high degree of teamwork between the OEM and PG&E, and contrasts with PG&Es historical experience on most turbine/generator overhauls of cost increases of about 3-10% over the go-in contract price. Steam turbine/generator performance during startup, initial testing, and normal operation was quite good. The unit was able to achieve in excess of 650 MW prior to placing a balance shot, and only two shots were required (the prior overhaul on the same unit had required numerous shots three alone prior to parallel). In addition, HP/IP efficiency increased about two points. Since releasing the unit for normal operation, no forced outages or curtailments have been encountered due either to the NOx/air preheater work performed by B&W or the steam turbine/generator work performed by the OEM. However, some corrective work was required on the boiler during startup testing and tuning - most on components not addressed by B&W during the overhaul. In achieving these results, the importance of Management support and commitment cannot be overemphasized. It is one thing for companies to say they are going to partner, share risk, and in so doing be required to trust each others judgment. It is quite another to put your money where your mouth is and do it. To a significant (but certainly not perfect) degree, this is what occurred. PG&E management committed to conducting this project in a totally new manner at a time of major changes and uncertainty for the company, and gave the project the requisite support and freedom of action. During the projects execution, B&W management was subjected to significant organizational changes. These and other internal pressures resulted in some differences of opinion within their Management on how best to execute a partnering contract (and thus share risk) where the customer is privy to all of the details, with the largest issues raised by the construction arm. To a reasonable degree these issues were resolved over the duration of the contract as both the organizational changes were finalized and the credibility of the project team grew.

As previously noted, Management support and guidance were also provided in a hands on form via the use of the quarterly EOC meetings. These meetings - attended by key executives and managers from both companies - provided a forum where the project managers could review status; present problems, issues, or concerns for discussion; and receive immediate resolution/direction. While the vast majority of project issues were resolved at or below the project manager level, this forum was extremely valuable for resolving in a timely manner the few key issues that arose.

Lessons Learned
Much went right with this project. However, there naturally are things that things that could have been done better, with the most notable including: Design/construction coordination: this project was reasonably successful at involving the construction leads in the scoping and design process (and even more so in scheduling), and in the use of integrated design teams in the electrical/controls, QA/ QC, and testing areas. These efforts can and should be expanded on future projects. It was very easy for the project to revert to the traditional mode of B&W scopes and executes, and PG&E reviews and inspects, and this indeed happened at various points. However, it should also be noted that the areas of the project with the fewest problems and the greatest support from both organizations tended to be those that made maximum use of both integrated design teams (including construction involvement) and plant staff. As a result, future projects should involve key design, construction and plant personnel from both organizations in all scoping, design, constructability reviews (including operating and maintenance access) and final execution. Material quality control: a few quality control issues arose that could have been prevented had the appropriate procurement QA/QC personnel from both organizations been integrated better into the team during project execution. The relatively minor cost required to provide this support, especially during material procurement/fabrication, would have more than paid for itself in reduced field rework. Bonus arrangement : for this project, a bonus would only be awarded if the Target Price was underrun, regardless of the results achieved on the performance measures. This stipulation was based on PG&Es correct desire to focus the project on cost management. In practice, this led to adding some margins to the Target Price buildup so that the probability of an underrun (and resultant bonus) would be increased. The lesson learned is to choose a formula that decouples cost management incentives from all other incentive mechanisms, while shifting the bonus emphasis to overall job performance. By contrast, the OEMs turbine/generator contract included a two-part bonus: the OEM and PG&E unconditionally split any underrun; and an additional (and potentially more significant) bonus component was calculated based solely on the OEMs performance against their performance measures. This promoted a closer alignment between PG&E and the OEM during the scoping and costing effort, resulted (as perceived by PG&E) in a tighter final estimate, and helped further focus PG&Es and the OEMs efforts on results. Cost Forecasting: as a project moves forward, accurate forecasting is critical to projecting cash flow, profitability, etc. On a project such as this one, the utility and the supplier can often have different philosophies and levels of conservatism when preparing cost forecasts and subsequent updates.

Babcock & Wilcox

During the job, unofficial end-of-job cost forecasting was performed on numerous occasions and more rigorous estimates were prepared for the EOC meetings. Because B&W management has historically viewed a forecast for a project as a commitment from the organization to perform no worse than that forecast (while PG&E views them as a prediction, and not an absolute expectation), these estimates tended to be overly conservative, especially during the construction phase. This conservatism made it difficult to prepare meaningful forecasts, making cash flow management more challenging than was necessary. Future jobs should have the ability to prepare forecasts that do not have this expectation associated with them. Risk Sharing: as previously noted, some reservations rela-

tive to risk sharing existed, especially in the early stages of the project. These reservations persisted until the credibility of this business arrangement developed. With that credibility established, future project teams should act more aggressively in defining scope and cost, in setting cost and risk sharing agreements, and set even more substantial goals and objectives than were established for this first partnering endeavor. Phase 1 duration: the initial SCR scoping effort extended over a 6+ month period. While this duration is understandable for defining and documenting all of the technical and commercial details of this initial partnering contract, a three to five month duration (length dependent on project scope) is practical and should be the goal for follow-on projects.

Babcock & Wilcox