Operations Committee Meeting

January 14, 2009

Revised
XII. Review/Recommend Acceptance of the SCAPP Execution Plan

Southcentral Power Project

Deleted: C

Project Execution Plan

January 2009
Deleted: December 2008

Dustin Highers
Rev. 1 Formatted: Font: 9 pt
 SPP Project Execution Plan

Chugach Electric Association Page 2 of 34 December 12, 2008

 SPP Project Execution
Deleted: Plan
SCPP

Table of Contents

1 PROJECT
DESCRIPTION..........................................................................
1.1 Design
...............2
Basis..............................................................................
1.2 Cost
..........................2
Estimate...........................................................................
1.3
...........................2
Schedule...........................................................................
1.4 Project
...................................2
2 Funding............................................................................
PROJECT
.......................2
ORGANIZATION.........................................................................
2.1 Project Management
...........2
Team.............................................................................
2.1.1
....2 Permitting
Management........................................................................
2.1.2
........................2
Staff.............................................................................
2.1.3 Preliminary Engineering & Construction Management
..............2
Staff.....................2
2.1.4 Engineering & Construction
Staff..............................................................2
2.1.5 Quality Assurance
Staff..........................................................................
2.1.6 Safety
....2 Project Controls
Staff.............................................................................
2.1.7
.....................2
Staff..........................................................................
2.1.8 Materials Contracting & Procurement
........2
Staff...............................................2
3 PROJECT
MANAGEMENT...........................................................................
3.1 Communications
...........2
Management.........................................................................
3.1.1 Document
..2
Control...........................................................................
3.1.2 Owner Representation
............2
3.2Plan.........................................................................2
Project Controls (Scheduling & Cost
Control)...................................................2
3.2.1
Scheduling........................................................................
3.2.2
...........................2
Estimating........................................................................
3.2.3
...........................2
Budgeting.........................................................................
3.2.4
...........................2
Forecasting.......................................................................
3.2.5 Progress Assessment for Vendor Pay
...........................2
Requests..........................................2
3.2.6
Reporting.........................................................................
3.3 Contract
............................2
Management.........................................................................
3.3.1
................2
Compliance........................................................................
3.3.2 Contractor
.........................2
Interface.........................................................................
3.4 Risk
...........2
Management.........................................................................
3.4.1 Risk Management
......................2
Plans..........................................................................
3.4.2 Quality
....2 Site Safety & Loss
Assurance.........................................................................
3.4.3
..............2
Control........................................................................
3.4.4 Compliance (Environmental &
4 4.5 .2
Other)........................................................2
PROJECT
4.1
4.2
4.3
4.4
4.6.1
4.6
Study
Conceptual
Preliminary
Design
Startup
Performance
& and
PHASES...............................................................................
Planning...........................................................................
Engineering/Permitting.............................................................
Engineering........................................................................
Construction.......................................................................
Testing...........................................................................
Commissioning....................................................................
4.7 Warranty Administration and Project Close-out
.....................2
.......2
.............2
.....................2
.................................2
........2
............2
Plan........................................2
Chugach Electric Association Page 3 of 34 December 12, 2008
 SPP Project Execution
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SCPP

1 PROJECT DESCRIPTION

The Southcentral Power Project (SPP) will be a natural gas-fired combined

Deleted: Ccycle
power plant utilizing GE LM6000 PF-25 DLE combustion turbines Deleted:
in a three-on-one
SCPP
configuration, in which each combustion turbine exhausts to a heat recovery
steam
generator (HRSG). Steam generated in the HRSGs is piped to a condensing
turbine,steamwhich generates electrical energy in addition to that generated by the
combustion turbine generators. The steam turbine exhausts to a conventional steam
condensersurface
which is cooled by a closed-loop glycol / water system which rejects
heatthefrom
cycle via a large air-cooled heat exchanger consisting of banks of finned
fanstubes
for and
directing airflow through the tube banks. The turbine will be a 3,600
rpm, singlesingle flow, non-reheat machine and will operate in sliding pressure
casing,
themode with
turbines steam admission valves wide open. The generator associated with
the steamturbine will be a totally enclosed water-air cooled generator as will the
generators
associated with the combustion turbines. The combined cycle power plant will
have an
approximate net plant output and net plant heat rate of 182.5 MW and 6,382 Btu/kW-
hr, respectively, while operating at the annual average ambient temperature of
36F.
The unit will be equipped with a selective catalytic reduction (SCR) system for
reductionof NOX emissions and a CO oxidation catalyst for reduction of CO
emissions.
Power generated by the facility will be stepped up to 138 kV by four three-
phase step-up (GSU) transformers one transformer for each combustion
generator
turbine
generator and one for the steam turbine generator. The GSU transformers
will to
connected be a new 138 kV substation located on the International Generation
Terminal
(IGT) property near the generating facility. Station auxiliaries will be powered
from two unit auxiliary transformers.

1.1 Design Basis

The design basis for SPP was established through multiple studies prepared
Deleted: SCPP by
Black & Veatch Conceptual Engineering
for Chugach. The and Economic Assessment for IGT-2
3x1 LM6000
documents the general plant design criteria that will be used
during the
projects detailed design. The key design criteria are listed
below.
A three-on-one combined cycle configuration has three combustion
turbine
generators (CTG) exhausting flue gas through three HRSGs which supply
steam
to a single steam turbine generator (STG). The SPP plant will SCPP
Deleted: be based
LM6000PF-25
onThe
Electrics
Building
new DLE
combined
(Building
combustion
IGT property
cycleE).turbines
plant
Chugach
immediately
will
with
Electrics
be single
located
adjacent
fuel,
on
headquarters
and
thenatural
east
southof gas
side
are
the firing,
located
Chugach
of
GE
two-
Chugach
PCB
Chugach Electric at the
Association pressure
northernmost
Page 4 of 34 HRSGs, part
December and 2008
12, of
a non-reheat
the site. STG with axial exhaust.
 SPP Project Execution
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SCPP

The plant site elevation is at 130 fasl (feet above sea level) and its
average annual temperature is 36 F (dry bulb) and 68 percent relative
humidity.
Power generation by the plant will be stepped up to transmission voltage of
138 kV.

The new generation should be designed to provide the same redundancy,

reliability, and availability as that being incorporated into other state-
of-the-art, base loaded natural gas-fired, combined cycle power
plants.
The plant will be equipped with an auxiliary boiler. This equipment will
with initial inlet air heating of combustion air for the gas turbines and
assist
provide
sealing steam to the steam turbine glands to allow for vacuum buildup
during startup of the steam system.

Natural gas will be used as the only fuel for the CTGs and for the auxiliary
boiler. Natural gas for the new plant will be supplied by ENSTAR Natural Gas
Company. Chugach Electrics communication with ENSTAR revealed that the
natural gas supply system may be able to supply at least 30 MMscf per day
at required gas pressure of 675 +/- 20 psig a pressure in which
GEs
compressors
will not be required. However, future conditions are unknown and
compression
will be installed to accommodate any unforeseen pressure drops or other
future
deliverability problems. ENSTAR will need to upgrade their IGT
metering
station to accommodate the increased flows. If the supply pressure is
lower than expected, compression may be required as part of the
project.
Cycle heat rejection will be accomplished with a steam surface condenser
usedconjunction
in with a fin-fan cooler. Coolant for the heat rejection system
willpropylene-glycol
be a / water mixture instead of water. Closed cycle
component
cooling will be accomplished by utilizing a side stream circuit of coolant
from the heat rejection system. Use of a glycol system will open options for
cycle
plant
and external heating requirements, especially inlet air heating of the gas
turbines
to support more efficient operation, in terms of both thermal and
environmental characteristics.

The CT/HRSG combinations will be equipped with bypass stacks and diverter
dampers to allow for simple cycle operation of the CTGs.

adequately
Major
installed
for
Electrics
regular
indoors Black
equipment,
equipped start
especially
maintenance.
normal
within approach
with capability
the plantsrotating
tooling
Thetoplant is included.
and
maintenance.
and
main other
maintenance
spares
structuressensitive
inThis
consideration
shop
with
is and
toan equipment,
Deleted: atbe
warehouse
overhead
done
ofto the
least thecrane
will
extent
Chugach for
STG.
will
the
be
Chugach
primarily
Electric Ready
be access
forPage will
Association beDecember
5 of 34 provided to the CTGs, HRSGs,
12, 2008 as andtechnically
is BOP equipment
feasible,
 SPP Project Execution
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SCPP

reliability and availability issues. Maintenance will take significantly

longer to
accomplish on HRSG and steam systems with cold weather packages (heat
tracing) installed. The use of a building avoids the freeze up of
boilers, piping,
and instrumentation that will result in unexpected, forced outages.
Given this
plant will be vastly more efficient than all others on the Railbelt, these
production
losses will become increasingly unacceptable with ever increasing natural
gas
prices. Further, the proximity of these systems to residential areas will
lead to a
noise compliance issue. A building will have the added effect of noise
reduction
to avoid impact to the projects neighbors. The extent of the plant
building is be to
finalized during the preliminary engineering phase of the
project.
Raw water for cycle makeup and general use will be available from city
water located on-site.

Access to the site is readily available with one of Alaskas major

located within one-mile of the site. The Port of Anchorage is available to
highways
receive
shipments from ocean going ships, and the Alaska Railroad runs
immediately adjacent to the IGT site.

The plants construction workforce and Chugachs permanent operations

andmaintenance staff will reside in housing located within the greater
Anchorage area.

The Air Quality Control (AQC) systems will be designed to comply with all
applicable emissions requirements. The following is a summary of the
anticipated Best Available Control Technology (BACT) and emission levels:

o Nitrogen oxides--BACT is expected to be the use of Selective

CatalyticReduction (SCR) to achieve 3 to 5 ppmvd NOX at 15 percent O2.
o Carbon monoxide--BACT is expected to be the use of an oxidation
catalyst to achieve 3 to 10 ppm CO.
o Particulate matter (PM/PM10)--BACT is expected to be the use of natural
gas and good combustion practices.
o Volatile organic compounds (VOC)--BACT is expected to be the use of
natural gas and good combustion practices.
o Sulfur dioxide--BACT is expected to be the use of natural gas with
a maximum sulfur content of 2 grains per 100 scf.
o Sulfuric acid mist--BACT is expected to be the use of natural gas
development
systemsBlack with
ando of aVeatch
component
Actual
& the conceptual
final
utilized
design
emission
were
design
the based
levels
maximumabove
for on
the
described
will
sulfur these
SPP
be project.
criteria
dictated
contentgeneral and
by
Assumptions
plant
final
of 2 grainsareper
design
further
permitting
100for
criteria
scf.
conceptual
described
Chugach in the
inConceptual
efforts.
Electric Engineering
the Page
Association and Economic
6 of 34 December 12, 2008 Assessment for IGT-2 3x1 LM6000
report.
Deleted: IGT-2
 SPP Project Execution
Deleted: Plan
SCPP

1.2 Cost Estimate

In May 2008, the capital cost estimate was updated from previous figures
provided
2006 in by Black & Veatch. Estimates of total project costs were
and 2007
calculated
escalating by
the July 1, 2005 dollar value of the plant less the CTGs to April 1,
2007 USby a factor of 1.1082. The April 1, 2007 dollar value was then escalated
dollars
to MayUS dollars using a factor of 1.25 and GEs April 2008 proposed cost per
2008
CTG of
$20,903,299 (including stack) was added to the estimate. The total EPC project
cost was at $274,254,677. The conceptualized 3x1 combined cycle plant continued
estimated
the of GE LM6000PD DLE combustion turbines and included duct firing of the HRSGs,
use
but did not include black start generation. This estimate was considered as
adequate
relative for
comparison purposes to other plant configuration scenarios being
considered
the Chugach in economic analysis, but the estimate was noted by Black & Veatch as
now being an order of magnitude capital cost. COD was not
specified.
A new capital cost estimate will be prepared by the Owners Engineer, once
this firm is retained under contract. The estimate will be based upon
engineering
preliminary
engineering of a 3x1 combined cycle plant using GE LM6000PF-25 DLE combustion
turbines and will include simple cycle bypass stacks and black start generation.
Duct of the HRSGs will not be included in the plant design. The capital cost
firing
estimate
will be based upon a project schedule in which an EPC contractor will be given
Notice to Proceed by First Quarter 2009 and the COD will be set at June 30,
2013.
1.3 Schedule
Based on a construction start date of September 2009 and a 45 month
construction
schedule, plant commercial operation was projected to occur on June 30, 2013.
To
enable construction to begin at the end of September 2009, preliminary
engineering
should have begun in May 2008, air permitting should have begun in July 2008, and
the award of the EPC contract should happen by April 2009.

Critical path for the project was identified as the procurement of the steam
turbine (STG). A 24- to 36-month STG procurement duration is expected.
generator
STG durations will be reviewed once again by the OE at the time of
procurement
procurement.
A new project schedule will be prepared by the Owners Engineer, once this
engineering
firm is retained under contract. The project schedule will based upon
preliminary
engineering of a 3x1 combined cycle plant using GE LM6000PF-25 DLE combustion
turbines. The project schedule will consider having the Owners Engineer
contracted
February 2009,in the EPC contractor receiving Notice to Proceed by April 2009, and
The Participation
project
would
capacity be
wasachieved
ofput
the
Agreement
forward
newbypower
working
between
on the
plant.
together
basis
Chugach
This
that
with
Electric
resulted
economies
otherAssociation,
inutilities
of
thescale
successful
to
and
Inc.
increase
significant
(Chugach)
negotiation
the
the combined cycle plant COD set at June 30, 2013.
savings
and
Chugachsize
of Anchorage
theandAssociation
Electric Municipal
1.4 Project Light
Page 7 of and Power
Funding
34 December (ML&P). This Agreement contains the
12, 2008
 SPP Project Execution
Deleted: Plan
SCPP

requirement for a Financing Plan which describes the projects funding plans by
Chugach and ML&P. The relevant sections of the Financing Plan are as
follows:
Chugach Electric Association, Inc. (Chugach) intends to fund its
proportionate share
of the costs of the South Central Alaska Power Project (SCAPP),
through
establishment of a highly liquid Commercial Paper (CP) program in the amount
up to million. The facility will be backstopped by a combined senior unsecured
$300
credit from National Rural Utilities Cooperative Finance Corporation in the
facility
amount of $100 million and KeyBank in the amount of $200 million.

And,

Municipal Light & Power (ML&P) intends to fund its proportionate share of the
costs of the South Central Alaska Power Project (SCAPP) through establishment
of a paper (CP) program in an amount up to $90 million and through the
commercial
use of
retained earnings up to $10 million. The facility will be backstopped by a
senior credit facility in the amount of $90
million.
Chugach achieved the CP program and the backstop, thereby fulfilling requirements
of the Financing Plan.

The proportionate shares of the generation are defined in the Participation

Agreement with 70% to Chugach, and 30% to ML&P.

Chugach Electric Association Page 8 of 34 December 12, 2008

 SPP Project Execution
Deleted: Plan
SCPP

2 PROJECT ORGANIZATION

2.1 Project Management Team

2.1.1 Management
The Chugach Electric organization for SPP has been established by the
Deleted: SCPPSenior
Vice President, Power Supply. This position is the Program Manager which
holdsfor planning and execution of the project as a whole across the
responsibility
divisions of Chugach for all project Participants including ML&P.

The Chugach Project Manager is responsible to the Program Manager for

the and overall execution of the generation project, including
coordination
performing
work the
in accordance with the general policies of the company. The Project
Manager is for the progress, schedules, costs, and quality of the project
responsible
assistedSite
Chugach by the
Manager. He will be directly supported by the OE Project Manager
who
will be responsible for the activities performed by the engineering firm
providingincluding
services, OE such tasks as preliminary design development, permitting
support,
major equipment procurement specification preparation, proposal evaluations, EPC
bid package development, EPC bid package evaluation, construction support,
start-
up/commissioning support, etc. The OE Project Manager will have an OE
Assistant
Manager located in the field to work alongside Chugachs Project Manager to
represent
the OE in Chugach Electrics offices. The OE Assistant Project Manager will
not onlyChugach support during preliminary engineering and equipment procurement,
provide
but also during construction.

The Chugach Electric project organization includes project management and the
project
staff assigned to the project. Positions within the project organization will be
staffed by and/or temporary employees of Chugach Electric and the Owners
employees
Engineer
(OE). The project organization may also have contractors assisting in various
projectThe project team is shown in Attachment 1; the organizational structure
roles.
is shown in Figure 2-1.

2.1.2 Permitting Staff

The Project Permitting Manager will be responsible for all permitting activities on
the
project. Conceptual and preliminary environmental and air permitting forBoth
Deleted: SPP has
been
performed by the environmental professionals at Hoefler Consulting Deleted: Group in SCPP
Anchorage, Alaska under the direction of Chugachs Environmental Deleted: Manager. will Final
be
performed
project permitting
engineering by services
the engineering
services
and preliminary
will
firm beproviding
bid
design
as part
OE
technical
services.
of thedocuments
OE The
contract.
OE to
Project
support
The Manager
OE will
The
will
be
provide
permitting
supported
Owners
Chugach Engineer
byAssociation
Electric an Assistant
2.1.3work
(OE)
forProject
9 the
Project
of 34project.
Preliminary
Page Manager
Manager
Engineering
December 12,willlocated
&2008 be responsible
in the
Construction field
for to
Management thework
activities
Staff alongside
 SPP Project Execution
Deleted: Plan
SCPP

Chugach Electrics Project Manager and to represent the OE in Chugach Electrics

offices.

The OE Project Engineering Manager will oversee the day to day activities in the
Deleted: primary
design
office of the owners engineering firm and he will report directly to the OE
Project
Manager. Reporting to the OE Project Engineering Manager will be discipline
engineering leads, including OE Project Engineer Civil/Structural, OE Project
Engineer
Mechanical, OE Project Engineer Electrical, OE Project Engineer Controls,
and OE Project Engineer Chemical.

2.1.4 Engineering & Construction Staff

Design engineering will be awarded to either the Owners Engineer as an extension
of contract,
OE the or it may be put to bid at the direction of the Project Manager with
guidance
from the Operations Committee. The ability to assign this scope of work to the OE
will
be established in the OE contract but, due to the large value of this contract, the
assignment may only be accomplished with approval from the Chugach Board of
Directors in accordance with Chugach policy. Chugach will reserve the right to bid
the
design engineering scope for any reason. For this reason the OE Project Manager
may
become the Engineering Manager for the project. Alternatively the Engineering
Manager will be assigned by the successful bidder of the design
work.
Construction will be performed by an Construction Contractor under Deleted:
the direction
EPC of
a
Construction Manager. . The Construction Manager will have a construction
Deleted: the
management team led by a Project Field Manager who will likelyDeleted: EPCdirect
have Project reports
Director
including a Construction Manager, Controls Manager, Engineering/Start-up Manager,
Deleted: EPC Project Director
Lead Field Engineer, Quality Control Manager, and Safety/Health Manager. Chugachs
Project Manager, the OE Assistant Project Manager, and OE Project Safety Engineer
will
work closely with each member of the Construction Contractors construction
Deleted: EPC
management team.

The OE Assistant Project Manager will have field engineers for various periods
during
construction. The Field Civil/Structural Engineer will be on-site during site
development, installing underground utilities, installing foundations, and steel
erection.
The Field Electrical Engineer will be on-site once electrical wiring and components
are installed, and the Field Mechanical Engineer will support equipment and piping
being
installation throughout the plant.
Once
Thethe
Project
Construction
Quality Plan
Contractor
(PQP) will
beginsbestart-up
developedandandcommissioning
implemented byactivities,
the OE the
Deleted: EPC
up
Start-
Project
Commissioning
Chugach QA/QC
Electric Engineer
Electric
2.1.5
Association under
from
10inofthe
Quality
Page coordination
supervision
OEs staff
Assurance
34 December of
with
Staff
12, 2008the
will
the
OEbeChugach
Project
presentStartup
Manager.
to represent
Manager.
The Quality
Chugach
 SPP Project Execution
Deleted: Plan
SCPP

Management System (QMS) standards will be developed by the OE staff and the
Chugach Project Manager.

2.1.6 Safety Staff

The site safety program will be administered by the OE Project Safety Engineer, who
will advise the Chugach Electric Project Manager and the OE Assistant Project
Manager
whenever site personnel and construction workers are not following the
requirements of the program, especially as they relate to OSHA safety
regulations.
The Chugach Project Manager will work closely with the Chugach Safety Manager to
ensure that all company policies are followed while contractors are on
site.
2.1.7 Project Controls Staff
The Chugach Project Controls Engineer will be responsible for overall project cost
control and high level scheduling to coordinate efforts of the Owners Engineer and
other of the project, such as engineering and construction of the substation. The
aspects
Chugach Project Controls Engineer will work in close cooperation with the OE Project
Controls Manager.

The OE Project Controls Manager will be responsible for overseeing and monitoring
project planning, scheduling, and cost control, and will report directly to the OE
Project Manager.

2.1.8 Materials Contracting & Procurement Staff

Project procurement control is essential. Completing a project on time and within
budget
requires careful attention to materials contracting and procurement activities.
Detailed design depends on the prompt selection of equipment and schedule
engineering
certainty
relies on timely material purchase orders and subcontract selection. Continued
support after contract award includes control and monitoring of
costs.
Chugach internal materials contracting and procurement will be managed the
Chugach
Electric Purchasing Department. The OE Project Manager will be responsible
for
development of major equipment materials specifications, which will be
supportingfor the Requests for Proposal (RFPs) using the normal Chugach
documentation
bidding procedure.

Contract management for major equipment purchases and major contracts

qualifications.
projects
Engineer
contractsand
(Owners attorney,
andEPC
The
ensure
contracts,
Project
and
alla contracts
Controls
Subject
in particular)
Matter
Engineer
conform
Expert
will
to
will
the
(SME)
be
assist
RFP
negotiated
selected
prior
with to
negotiation
by
based
submission
a Chugach
on of
project
comprised
Chugach relevant
team
to theAssociation
Electric of the
Purchasing
Chugach Department
Page 11 ofProject Manager,
34 December for 2008
12, final
the review
ChugachandPurchasing
processing.
Manager, the
 SPP Project Execution
Deleted: Plan
SCPP

The OE Project Procurement Specialist will be responsible for overseeing and

monitoring
project materials contracting and procurement activities assigned to the Owners
Engineer, and will report directly to the OE Project
Manager.

Chugach Electric Association Page 12 of 34 December 12, 2008

 SPP Project Execution
Deleted: Plan
SCPP

ChugachProgram
Manager

ChugachProject
Manager

ChugachSite Manager

ChugachEnvironmental
Chugach ProjectControls ChugachPermiting
Engineer ManagerChugachStartup
Manager Manager

EngineeringManager OE ProjectManager ConstructionManage

r

OE ProjectSupport
Assistant

OE OE OE AssistantProject
OE Project ProjectEngineering
SafetyEngineerOE ProjectProjectProcurement
QA/QCEngineerOE ProjectControls
Manager Manager
Manager Specialist (On Site Liaison)

OE ProjectEngineer
OE Project CostControl (Civil/ OE Field
Engineer ElectricalEngineer
Structual)

OE ProjectEngineer OE FieldMechanical
OE
ProjectScheduler
(Electrical) Engineer

OE ProjectEngineer OE Field
Civil/Structural
(Mechanical) Engineer

OE ProjectEngineer OE Start-
upCommissioning
(Chemical) Engineer

Figure
Chugach Electric Association Page2-1. Project
13 of 34 DecemberStaffing
12, 2008 OE ProjectEngineer
(Controls)
 SPP Project Execution
Deleted: Plan
SCPP

3 PROJECT MANAGEMENT

3.1 Communications Management

3.1.1 Document Control

Chugach Electric will accept the OEs standard document filing and numbering
system
maintainto organization of OE submittals. This system will be used to identify and
file OE documents. The standard document filing and numbering system may be
project
adjusted
for project requirements, as mutually agreed between Chugach Electric and the OE
Project Manager. The OE will manage formal communications with the EPC contractor.

Chugach Electrics Project Manager, the OE Project Manager, the OE Assistant

Project and the OE Project Engineering Manager shall ensure that all project
Manager,
documents are properly numbered and filed. All OE project documents shall be
identified by the OEs standard file number. Chugach may adopt the OEs system
to organize and track internal project documentation once it is available for
review.
The OE Project Manager shall ensure that a review of the projects official file
system, and procedures is performed quarterly and that Chugach Electrics Project
process,
Manager shall be notified of the results of the
review.
The modes of communication to be used on the project are for both team members
located in Alaska and in the OEs primary design office. Instructions on
letterhead usage,
correspondence numbering, handling of meeting notes, phone calls, e-mail, and the
Project Correspondence Distribution Matrix are to be documented in a Project
Instructions Manual. The OE Project Support Assistant shall ensure effective and
consistent record and information sharing between various project groups and
Chugach
Electric. The OE Project Support Assistant shall ensure that official distribution
and
filing of key project information will be provided in accordance with established
interfaces and lines of communication protocol as outlined in a yet to be developed
communications procedure.

Project documentation submitted to Chugach will be stored in a protected network

filing
system, which is available to the Chugach Engineering Support department. OE
drawing will be entered into the Meridian Document Management System when formal
packages
internal reviews are required, and these will be cross referenced to the Chugach
standard
document naming convention. Ultimately all project documentation subject to
control
revisionwill reside in Meridian. Those packages not subject to future revision
(e.g.
quality
The
toChugach
the
Chugach
Operations
documentation
Electric
Electric Committee
Laserfiche
and
Program
required
3.1.2
Association ML&P. created
Owner
Page 14Manager
document
at34equipment
by
will
the
management
Representation
of December make
Participation
12, purchases)
2008monthly
Plan system.
will
project
Agreement
be entered
status
between
presentations
in Chugachs
Chugach
 SPP Project Execution
Deleted: Plan
SCPP

The Project Manager will provide the basis for these reports through consistent
reporting
from the Chugach Project Controls Engineer. Support will be received by the OE
Assistant Project Manager and the Project Permitting Manager along with other key
members of the project management team as is necessary to explain progress and/or
issues with design, schedule, procurement, permitting/licensing, construction,
safety, and project financials.

The meetings will be held in Chugach Electrics offices on the second Tuesday of
every and will be limited to a one-half day meeting. The agenda for each meeting
month
will
be issued to the Operations Committee members on the day prior to the meeting.
Each
meeting will be followed by a tour of the facility to provide an overview of the
progress of the project.

3.2 Project Controls (Scheduling & Cost Control)

Chugach will internally develop, maintain, and implement a logic-driven schedule
for the management team to confirm the requirements of the overall project are being
project
met. This project schedule will integrate project activities of the OE, the
Deleted: EPC
Engineering
Contractor, the Construction Contractor, and various Chugach departments at ac high
Deleted:
level
with associated Chugach projects and activities by the Chugach Project Controls
Engineer.

The successful completion of SPP on time and within budget requires carrying
Deleted: SCPP out
the
project in accordance with a well developed plan. Chugach Electrics objective is
to
implement a cost effective management tool that provides timely and accurate
reporting
of actual project costs against the project budget and actual project progress
against schedule,
project the thereby facilitating the management of project cost and schedule
risks
and helping to minimize disputes. It should provide the necessary information
needed to quickly identify and effectively address and resolve problems as they
arise.
Cost control is an integral part of successful project performance. The necessary
elements of a cost control system include accurate budget development, cost
reporting/
forecasting, cost tracking, and cash flow development. By implementing these
practices, the lowest cost project can be achieved.

3.2.1 Scheduling
Three levels of schedules will be developed over the course of the project with
each. This will be developed at the beginning of the project by the OE
increasing amount of detail, as follows:
significant
Project
Level
Chugach Scheduler
I Project
Electric events in and
Milestone
Association Page the
15 ofmaintained
project
Schedule and
The
34 December byLevel
12, planned
the Chugach
2008 dates Project
I schedulefor theinclude
shall Controls
accomplishment
Deleted: theEngineer.
and most of
is
 SPP Project Execution
Deleted: Plan
SCPP

Summary Schedule The Summary Schedule (sometimes referred to as a Level II

schedule) is a time sequence network of summary activities and their
associated
planned dates. It is developed by the OE Project Scheduler by summarizing
(i.e.,
rolling up) the Level III schedule and provides an overview of all phases of
the
project for periodic Chugach Electrics corporate management and SCPP
Deleted: the SPP
Partners. This Level II schedule will be incorporated into the schedule
maintained by the Chugach Project Controls Engineer, which also tracks
internal projects related to the construction of the power
plant.
Level III Control Schedule (CS) The Level III schedule will be prepared by the
OE Project Scheduler utilizing the precedence critical path method covering
all
phases of the project and incorporating milestones and other key events
defined
the Level in
I schedule. Activities included in the CS cover the permitting,
conceptual and detailed design, procurement, construction, and start-up.
Interfaces between all activities are included which assures integration of
all
phases of the project. The construction and start-up portions of the CS will
be
developed in sufficient detail to logically complete the project and to focus
engineering and procurement with early need dates. The CS will be utilized
by
the project team to monitor and analyze construction and start-up activities
and progress of the Engineering and Construction Contractors.
Deleted: EPC

3.2.2 Estimating
The most recent estimated total project cost for SPP was developedDeleted:
by Black
SCPP &
Veatch
May in The estimate is an order of magnitude capital cost. It was derived by
2008.
escalating a cost estimate that was developed two years earlier based on a plant
design
that was conceptual. Going forward, a new capital cost estimate will be prepared
by
OE,the
once this engineering firm is retained under contract. The estimate will be
basedpreliminary engineering of a 3x1 combined cycle plant using GE LM6000PF-25
upon
DLE combustion turbines and will include simple cycle bypass stacks and black start
generation. It will be based on a well defined site plot plan, general arrangement
drawings, process flow diagrams, electric one-line, detailed equipment list, award
pricing
for the combustion turbine generators, OEM budgetary prices for the steam turbine
generator, HRSGs, and fin-fan cooling heat rejection system, and takeoffs for the
balance-of-plant.

The project cost estimate will be updated with actual award procurements and
construction proposal pricing that are received as the project progresses. The
number of will be reduced and the accuracy of the estimate will therefore be
forunknowns
and
The become
project
the project
the
cost
project
cost
estimate
report.
budget.
will Normal
be
This
approved
project
Chugach
bycost
budgeting
Chugach
estimate
Electric
procedures
will and
serve
will
theasSPP
bethe
followed
improved.
starting
Participants
in point accordance with Chugach Board Policy.
3.2.3 Forecasting
3.2.4 Budgeting
Chugach Electric Association Page 16 of 34 December 12, 2008 Deleted: SCPP
 SPP Project Execution
Deleted: Plan
SCPP

The project will manage cost changes through Contract Change Orders. The purpose of
these documents will be to describe the change and impacts to the schedule and cost.
Chugach Electric will need to approve the Contract Change Orders prior to the work
being performed. The OEs Project Controls group will manage the process and
maintain
logs and files for the changes. Forecasts of cost to complete will be derived from
factoring the changes into the project cost estimate and thus reported on a monthly
basis.
3.2.5 Progress Assessment for Vendor Pay Requests
Project Schedule will be analyzed on a monthly basis and deviation andEPCanalysis
Deleted: The Contractors
reports
will be prepared by the OEs Project Controls group with support from the project
team.
Other reports will be developed as required and tailored specifically for the
projects
needs to assess actual progress by the Contractors. Progress payments will
Deleted: EPC be made
in accordance with the terms and conditions set forth in Deleted:
the relevant
EPC
contract.
3.2.6 Reporting
Monthly reports will be produced with a written summary prepared by the OEs
Project
Controls group that indicates float analysis, problem areas, trends, and risks for
Chugach
Electrics Project Manager and project team to review. For critical activities
that are 20 days or more behind, the EPC Contractor will be required to develop
trending
recovery plans to ensure the project completion date is not
impacted.

3.3 Contract Management

3.3.1 Compliance
A compliance plan will be generated for each major contract to ensure each
party hasthe agreed requirements. This plan will be reviewed by the Chugach
achieved
Project
Controls Engineer periodically, or as required by milestones achievement on
each contract.

3.3.2 Contractor Interface

Since the project involves a scope split of the permitting, preliminary and Owners
engineering, and construction, a detailed division of responsibility Deleted: by (DOR) document
an EPC contractor
shall
be prepared, communicated, maintained, finalized, and implemented. Review,
expansion, and refinement of the DOR will likely be required during project
execution.
The Chugach Project Manager, with the support the OE Project Manager and the OE
Assistant Project Manager, will be responsible for revising the scope of services as
required
with
obtained
requiredthe throughout
from
permitting
timelyChugach
andthe
company,
efficiently.
Electric
project.theandOwners
Athat
The list
OE influence
of
Engineer,
the Manager
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theand
information
performance
the Construction
and/or and
theofOEdata
contracted
Contractor
required
Assistant
Project
Assistant
services
work
are
from Manager
initiated
Project
Chugach Electric shall
Manager
by ensure
others
Association shall
Page 17that
isof also
maintained.
34aDecember
recorded
ensure12,that
history
The the
2008 OE Project
of
interface
the changes
Manager
information
to
and/or
theEPC
Deleted: scope
Deleted:and
the
c data
OEof