Decommissioning: The Benefits, Risks and Liabilities

www.trcsolutions.com

POWER ENGINEERING Webinar

August 7, 2014

"Fossil Fuel Plant Retirement:

Planning and Lessons Learned”

Introduction to TRC

• TRC [TRR:NYSE] is a national energy, environmental

and infrastructure engineering and construction

management firm with $425M in sales and 3,000

professional and technical employees.

• TRC has been a partner to the utility sector since 1969

and derives 40% of its revenue from energy clients.

• Developed its RE POWER™ Program in 2007 - Over

Twenty Decommissioning Projects to Date.

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Announced Power Plant Closures

Market Opportunities and Timing

• 150 Sites, 500 Boiler-Turbine Units

• Markets Started in Oil Burners on the Coasts

• Economic Drivers – Gas Prices and Heat Rate

• Regulatory Drivers – MATS, CSAPR, 316(b),

CCRs

• Peak Closure Years 2015-6

• $2B decommissioning market using EPRI

numbers

• Major Driver of Transmission Projects

Reserve Margins

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TRC RE POWER™ Initiative

• Created in 2007 to help generating companies transform

aging power plants through replacement, retirement, retrofit or

redevelopment

• Twenty-two projects, fifteen as Owner’s Engineer, five as

Prime Contractor and two as a Consultant

– Playbooks

– Engineering and construction management during decommissioning

– Turnkey solutions as prime contractor

• Working relationships with power utilities, independent power

national, asset recovery and abatement and demolition

contractors

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RE POWER™ Project Goals

• Safety

– Protect the health and safety of workers and the public and third party

property.

• Environmental excellence

– Compliance with law and regulation, maximizing beneficial reuse of

building materials and real estate.

• Cost

– Maximizing asset recovery, managing carry and decommissioning

costs, recovering costs in regulated states and maximizing

redevelopment credits.

• Schedule

– Meet schedule commitments.

• Quality,

– Stakeholder requirements, including system reliability.

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Power Plant Retirement Business Models

• Retain Assets for Reuse as Generation or Transmission

• Retrofit for CSAPR, MATS, GHG Regulations

• Sell for Utility Use by Another Firm

• Sell for Redevelopment / Adaptive Use

• Sell for Scrap – Caveat Emptor

• Donations and Public-Private Partnerships with Local Government

• Declare Bankruptcy and Auction Sites

RE POWER™ Playbooks

It’s Best to Have a Plan

• Based on Existing Information

• Asbestos, Hazardous and Regulated Materials

• Transmission and Other Utilities

• Asset Valuation – Salvage, Scrap and Real Estate

• Permits

• Environmental Site Assessments

• Means and Methods Constraints

• Community and Stakeholder Relations

• Future Use Scenarios

• Cost Estimate

• Schedule

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RE POWER™ Engineering During

Decommissioning

• Pre-demolition Surveys

• Plans and Specifications

• Commercial Requirements and Pricing Sheet

• Allocation of Risk

• Bid Package

• Work Plans

• Permit Applications

• Community and Stakeholder Relations

• Procurement Support Services

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RE POWER™ Construction Support Services

• Project Management

• Site Management

• Contract Administration

• Change Management

• Health And Safety Inspections

• Environmental Coordination

• Project Documentation

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Asset Recovery – Salvage and Scrap Metal

• Think about fair price for salvage equipment – what would you

pay for salvage equipment?

• Scrap quantities correlate well with steam capacity

• Average scrap steel prices have ranged from less than $200

to more than $400 per long ton for plate and structural steel,

prepared and delivered to mill or port.

• Copper quantities somewhat less predictable.

• American Metal Market and LME Published Indices

• Risk / reward options

– assign quantity and market risk to demolition contractor or share risk &

reward

– risk sharing based on open book or published index e.g. American Metals

Market plate & structural

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Waterside Station, New York City

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Austin Energy Holly Street

• TRC is Serving as Prime

Contractor for abatement,

demolition and restoration of this

570 MW power plant

• Prescriptive requirements, over

and above legal, regulatory and

commercial requirements

• Extensive community involvement,

35% M/WBE participation

• Future use is transmission and

waterfront park in Austin, TX

14www.trcsolutions.com

National Grid Portfolio

Far Rockaway

Barrett

Glenwood

Port Jefferson

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New York Power Authority Poletti Station

• TRC provided permitting support for the new

NYPA 500 MW plant, Astoria Energy I & II,

totaling 1500 MW of CCGTs with air cooled

condensers

• TRC won competitive bid for engineering

during decommissioning of Poletti Station, an

825 MW Plant

– asset recovery

– pre-demolition surveys

– plans and specifications for bid

– procurement support

– engineer of record

– health, safety and environmental

inspections during decommissioning.

• LVI is performing abatement & demolition

16www.trcsolutions.com

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PPL Hydroelectric Expansion

Geotechnical Study

• TRC was retained as the

geotechnical engineer-of-record to

execute a geotechnical investigation

associated with A 125 MW

expansion of PPL’s Holtwood hydro-

electric generating facility on the

Susquehanna River. The

investigation included a coal ash

landfill, which was subsequently

covered with 750,000 CY of rock

from the one-mile long channel

below the powerhouse.

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Questions?

Ed MalleyT: 646.522.6488 | E: [email protected]

www.trcsolutions.com