WAPA Generator Leas...
 

WAPA Generator Lease ... A Good Deal ???  

 

Lucy
 Lucy
(@Lucy)
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Posts: 297
February 16, 2012 4:26 pm  

I must be missing something here or is someone taking advantage of the crisis situation?

http://stthomassource.com/content/news/local-news/2012/02/15/wapa-leasing-generator-aid-st-thomas-power-plant-repairs

This is a 25 MWe gross combustion turbine. Selling price is about $450 per kWe of capacity.

25,000 kWe x $450 = $11.25M to buy it versus $14.6M to lease it for 1.5 years

Assuming it runs 24/7 the whole time. 1.5 x 365 x 24 x 22,000 kWe (net) = 289,080,000 kWe-Hrs

Cost of the lease per kWe-Hr = $14,600,000.00 / 289,080,000 kWe-Hr = $0.05 per kWe-Hr just for the equipment

The article mentions "Hodge said that last year the PSC authorized a temporary 2.3 cent per kilowatt hour rate increase so WAPA can pay for the lease, but because the temporary new generating unit is more efficient than WAPA's units, which are both decades-old and badly in need of extensive maintenance, the generator lease should be cost-neutral to customers, as fuel savings counterbalance the upfront costs."

If this is such a great deal, why not make it permanent?


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DaChief
(@DaChief)
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Joined: 8 years ago
Posts: 129
February 16, 2012 6:01 pm  

Lucy;
From my research, $300 per kw for a Frame 5/ Frame 7 22.5 MW for a USED unit- generally refurbished. An entire power plant of this size is about 2000 to 3000 per KW. Let's say we get it slightly cheaper

Therefore-

Option 1-

Purchase a used but refurbished unit at $6,750,000
Transport it here- $500,000
Connect it- $675,000
Other Fees- $100,000
So- total $8,025,000

Option 2-

Purchase a new one- 36,500,000
Total now 38,675,000

So, we're spending in the neighborhood of 18 million to lease a machine that's within 50% of the cost of renewal...THIS IS JUST ONE MORE REASON TO PRIVATIZE WAPA.....


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vasecs
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Posts: 175
February 16, 2012 6:47 pm  

When you have no cash and "Slave to the Lender", you must bend over and grin!! 😮

It is the old monthly payment plan and never get the deed! Texas Contract.......


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Lucy
 Lucy
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Posts: 297
February 16, 2012 6:59 pm  

Chief - we have been saying the same thing for some time .... maybe someone of influence will notice. We need a 3rd party to run the utility like a for-profit business.

Here is a recent (2010) forecast for GTs and there is a lot of good stat.s on the GE LM2500

http://www.forecastinternational.com/samples/F649_CompleteSample.pdf

Even for a new plant in simple-cycle configuration, the total cost should be between $600 and $800 per kWe of capacity. This is on a greenfield site, so all the auxiliaries and construction would be included. But we are talking just a jet engine with a generator. No waste heat boiler or STG, etc.

WAPA would be better off as you said, buying used-refurbished.

See the LM2500 PE, model MDW (Looks NEW) on this page that sold for $6,850,000. That's $303 per kWe for 22.6 MWe of capacity.

http://www.generatormart.com/lm2500-by-descending-kw-1.shtml

http://www.generatormart.com/200801260041433345.shtml


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vasecs
(@vasecs)
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Posts: 175
February 16, 2012 7:06 pm  

I must be missing something here or is someone taking advantage of the crisis situation?

http://stthomassource.com/content/news/local-news/2012/02/15/wapa-leasing-generator-aid-st-thomas-power-plant-repairs

This is a 25 MWe gross combustion turbine. Selling price is about $450 per kWe of capacity.

25,000 kWe x $450 = $11.25M to buy it versus $14.6M to lease it for 1.5 years

Assuming it runs 24/7 the whole time. 1.5 x 365 x 24 x 22,000 kWe (net) = 289,080,000 kWe-Hrs

Cost of the lease per kWe-Hr = $14,600,000.00 / 289,080,000 kWe-Hr = $0.05 per kWe-Hr just for the equipment

The article mentions "Hodge said that last year the PSC authorized a temporary 2.3 cent per kilowatt hour rate increase so WAPA can pay for the lease, but because the temporary new generating unit is more efficient than WAPA's units, which are both decades-old and badly in need of extensive maintenance, the generator lease should be cost-neutral to customers, as fuel savings counterbalance the upfront costs."

If this is such a great deal, why not make it permanent?

lucy, you are a smart guy.....let me ask some dumb questions please;
1. If you were to pipe natural gas to STX, where might it come from?
2. Is it an option to drill for natural gas/oil off STX or where it might be located? Do we know if it is out there?
3. How do you force the Fed's to take over this bullshit from the idiots that mis-manage WAPA? I mean the Fed's own this island and should be making the rules....right?
4. How screwed up can one island be?? This is incredible! PEOPLE WAKE UP! GET OFF YOUR NO TAN ASS'S!!


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Lucy
 Lucy
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February 16, 2012 7:39 pm  

vasecs, who said anything about me being a guy.

The only way to get NG to STX would be in the form of LNG. The closest LNG terminal is in Tobago. Unfortunately, LNG on an energy basis is about the same price as fuel oil. Maybe a little less, but the price is increasing as it follows demand. NG in it's gaseous state is about 5x less expensive than LNG. I had it summarized in a different thread a month or so ago. I thought it would help until I ran the numbers.

On Item 3. I'm not sure what it will take for the Fed.s to jump in. The Dept. of Interior is the managing organization. We could lobby them, but I think it would take a Declaration of State of Emergency from the Governor.

Item 4. A referendum to sell WAPA might work, but another long process. The YES vote would be the easy part. Who, what, how and when to do the selling would get drawn out under the current operational model.

One thing I'm not sure about, is the WAPA procurement process. For the Alpine and PV solar PPA projects, they take a very long tortured path to get to a decision thru RFPs, evaluations, etc. I assume it would be the same for an out right major equipment purchase like a GT .... many months to fruition. As in this case, can the WAPA BOD on it's own authorize a lease of this magnitude? Maybe DaChief or someone else knows?


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poorthang
(@poorthang)
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Joined: 10 years ago
Posts: 312
February 16, 2012 10:43 pm  

Vasecs....Geez,I know with a name like yours,you may have been a little confused.:P I already have Lucy as some HOT! engineer type with her hair pulled up,Sarah Palin glasses,heels and a skirt a little above the knees .........and you ruined it !!:D Lucy ...I am sure he didn't mean it........okay you can start talkin sexy again with all that number gibberish;)


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vasecs
(@vasecs)
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Posts: 175
February 17, 2012 12:48 pm  

sorry for exposing his gender...............

I still think he is smarter than me.....! We should hire that girl that brought down BOFA to take on WAPA? Seize the opportunity to bring it to it's knees and have the Fed's take over. The Fed's can't manage anything efficiently, but even Washington could do a better job than the present management.


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Lucy
 Lucy
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Posts: 297
February 17, 2012 2:45 pm  

vasecs - if the Fed.s come in, they would at least require an overall assessment which will uncover all the corruption and inefficiencies. Then they would bring in industry experts (a real for-profit utility from the states) to manage things.

Here is a current article that discusses LNG and the obstacles. The WAPA current thinking is a "regional grid" (and maybe a regional utility) that would tie many islands together to improve reliability and also improve buying power. But with island cultures this might be a pipe dream and many years in the future to fruition. We should never count on that idea working.

http://virginislandsdailynews.com/news/hovensa-s-closure-makes-natural-gas-more-expensive-but-possible-1.1272460#axzz1meI1MrQv

However, they do mention Diesel Engine-Generators as an option. This would be the only bright move that they could make. Most other islands (Caymans, Bermuda and Bahamas, etc.) use recip. engines and are installing new one as we speak. With stack waste heat recovery, they have an electrical efficiency of about 50%. And they are duel fuel (fuel oil and NG). Use the fuel oil now and when the LNG is available, convert. BUT ---> Where does WAPA get the money ???


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aerobum
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Joined: 9 years ago
Posts: 44
February 17, 2012 8:16 pm  

Is anybody looking into buying or leasing one or more of the GTs from Hovensa since they won't need them all anymore? Whether you convert them to NG or keep them setup for fuel oil I suspect it's more economical than some options discussed here since they're already on island and not going to be used (might even be cheaper to keep them in place and connect Hovensa's power house to the grid no?)


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Lucy
 Lucy
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February 18, 2012 1:11 pm  

You would think that the Govt and WAPA is looking at that, but it would need to be their idea with them in control ..... or it will never go forward. With no money, they again would be forced to develop an RFP for a PPA. This always takes years with them. Also, the winning company of the PPA would need to negotiate a separate contract with Hovenza to acquire the equipment and also get approved as an IPP. This is do-able, but as with anytyhing that should be simple, the USVI process could make it very complicated.


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OldTart
(@the-oldtart)
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Joined: 8 years ago
Posts: 6523
February 18, 2012 1:18 pm  

The question was raised during the January meeting between Hess/Hovensa executives and the VI Legislature:

"Would Hovensa's generator be available for WAPA's use to generate electricity more efficiently, or at less cost than the utility's current turbines? (The generator will remain in place, Lever said, but because it runs on gas created as part of the refining process, and Hovensa will no longer be refining gas on the site, it can't be used economically.)"


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Lucy
 Lucy
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February 18, 2012 3:17 pm  

I believe the GT's firing system can be converted to run on fuel oil and NG. Most units are sold as duel fuel. That answer sounds line the Hovensa CEO has had enough of the VI BS and knows of the complications and headaches of dealing with WAPA.


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