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EPC Best Practices: Planning, Flexibility and Communication

Good projects gone bad. They do happen and always leave “what ifs” in their wreckage.

Many engineering, procurement and construction (EPC) firms work with scores of utilities annually on major work at power plants throughout the industry spectrum. These range from utility-scale renewables to coal-fired upgrades, building gas-fired combined-cycle plants to massive scheduled outages at nuclear facilities.

So many different tasks and challenges, yet common themes emerge: Planning, flexibility and communication are key.

These talking points certainly gained consensus during a diverse panel session in the Gas-fired Turbines and Plants track at POWERGEN International in New Orleans last month. “EPC Best Practices” featured experts from Kiewit, Duke Energy, Portland General Electric, Seminole Electric Cooperative, Avista and Burns & McDonnell.

“One of the biggest factors that I have seen that can cause projects to go off path is a lack of communication,” Jason Graham, senior thermal generation engineer for Spokane, Washington-based utility Avista Corp, said in later outlining one major focus of the well-attended panel.

“Early, open and frequent communication of expectations and details is important for every project,” added Graham, who was a moderator at the EPC session and is on POWERGEN’s advisory committee.

How early, how open and how frequent? EPC lead contractors deal with thousands of issues which pop up during the design, building and commissioning phases. Jason Dedrickson, vice president of Kiewit Power and another panelist, think it all begins well before the first dig or even request for proposals (RFP).

Dedrickson sees bidding best practices as foundational to a successful EPC power plant project. Engaging early with potential bidders, even six months to a year ahead of the RFPs, offers specification development which can prove positive.

“Show where you’re going to be flexible,” he said.

He also advised potential customers to bring in all serious bidders for interviews and not just focus on the lowest.

“The high bidder may know something the other bidders don’t,” Dedrickson said during the panel. “You may be missing something important if you don’t interview. A wide bid spread spells trouble. . . don’t assume the low-bid guy is right and the high-bid guy is wrong.”

Jaisen Mody, who spent decades with Pacific Northwest municipal utility Portland General Electric (PGE) before retiring recently and becoming a consultant, offered a type of worst-case scenario for good projects gone bad. This one involved his own company and a contractor who did shoddy work and eventually went bankrupt.

These problems, discovered relatively late in the game, included bad flanges, insulator supports, feed-water pump grouting and much more. PGE eventually took control of the power plant and completed it on time and on budget, but it wasn’t easy.

“Defects that they hid because you can’t monitor 24/7, we had to address all of them,” Mody told the POWERGEN crowd. “You get what you pay for. . . What saved us was that we were very proactive.”

The careful selection of an EPC contractor, no surprise, is crucial. While planning and communication are key, so is flexibility. Trust but verify…but trust.

“Assuming you have a good contractor that will be looking out for its customer, there is a required level of respect and trust on both sides,” Graham added. “When that respect and trust is in place, both parties can increase flexibility and overall benefit to the project. When either the customer or the contractor is inflexible, one of the two, or both, will end up paying for it in some way.”

Thomas Reed, project manager with Seminole Electric Coop., another moderator on the panel and also a POWERGEN advisor, noted that projects are by nature dynamic and changing.

“Most projects experience significant challenges and changes,” he said later.

Reed has managed projects and engineering on both the utility and the EPC contractor sides. He has learned that early and unreasonable expectations often set the tone for a project’s direction both ill and well.

“Unsuccessful projects often start at the proposal and contract conformance stage,” Reed said. “Unsuccessful teams can sometimes be overly optimistic and actually set up a project to fail before a contract is signed.”

POWERGEN’s EPC Best Practices Panel also included Ayo Adeyefa, project director at Duke Energy; Todd Sundholm, vice president of energy operations with Burns & McDonnell, and Jeremy Morgan, engineering director with Power Plant Management Services.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at [email protected] and 918-813-9177).