EPC Contracting in a Demand Driven Market (The Trimble County 2 Contracting Experience)

1
EPC Contracting in a Demand Driven Market(The
Trimble County 2 Contracting Experience)

• January 18, 2007

2
Trimble County 2 (TC2) Key Features

• Net Capacity 760 MW
• Net Heat Rate 8,662 Btu/Kwh
• Scheduled COD June, 2010
• Air Quality Control Train SCR, Dry
  Electrostatic Precipitator (ESP), Bag House,
• Wet Scrubber and Wet ESP
• Awarded a 125 Million ITC by the IRS for
  meeting 2005 EPAct Section
• 48A Standards for Efficiency and Emissions
• One of two PC based projects to receive awards

3
Key Steps in EPC Contracting Today

• Discuss Multiple Bidding Concepts with All
  Interested Parties
• Engineers / Constructors / OEMs / Owners
  Engineers
• Other Utilities or Generators / Financers /
  Partners / Legal Advisers
• Discover Current Practice in the Industry
• Risk Allocation Vs. Price
• Bidding and Construction Time Lines
• Develop a Plan that Meets the Owners and Bidders
  Needs
• Seek Commitments to Participate from Qualified
  Bidders
• Follow the Plan

4
TC2 Used a Two Stage Open Book Selection Process

• EPC Contractor Selected in Competitive Bid with
  Key Equipment Allowance
• Open Book Bidding and Selection of Key Equipment
  by Owner
• Boiler / Steam Turbine / AQCS
• Owner Approval of Additional Major Equipment
  Items
• Defined Equitable Adjustment Process for Changes
  in Key Equipment
• Final Evaluated Price Vs Allowance
• Installation and BOP Impacts
• Book Closes when Equitable Adjustment Process is
  Complete

5
Key Benefits and Risks of the TC2 Process

• Owner Benefits
• Freedom to Select EPC and Key Equipment
• May Lower EPC Price Premium
• Owner Risks
• Price Uncertainty Until Book Closes
• Contractor Benefits
• Lower Cost to Prepare Initial Bid
• Selection Based on Contractor Merits
• Mutual Benefits and Risks
• Well Understood Scope and Price
• Potential for Contentious Equitable Adjustment
  Process