Engineering Assessment Denver District Steam System. Prepared By Public Service Company of Colorado Engineering and Construction

Transcription

1 Page 1 of 37 Engineering Assessment Denver District Steam System Prepared By Public Service Company of Colorado Engineering and Construction Colorado PUC E-Filings System March 15, 2013

2 Page 2 of 37 Table of Contents Table of Contents 2 1. Overview 3 2. Assessment of the current condition of the Denver District Steam System 4 a. Summary 4 b. Overview of Steam Generation 5 i. Steam supply capacity and reliability 5 ii. Historical overview of steam production operations 6 iii. Steam system operations and maintenance practices 8 1. Pressure Vessels 9 2. Piping 10 c. Production and Distribution Facilities 10 i. Zuni Station 10 ii. Denver Steam Plant Maintenance practices at DSP have been robust DSP package boiler replacement versus Sun Valley 14 iii. State Steam Plant 14 iv. Distribution System The condition of the distribution system and ongoing maintenance Building interconnections Future Capital Investment and O&M Expenditure for the System (5 year, 10 year, and 20 year) Efficiency of district steam versus self generation by customers Water use: Public Service steam distribution system versus customer owned heating system Environmental emissions of central plants versus customer owned generation Conclusion 28 2

3 Page 3 of Overview The Colorado Public Utilities Commission ( Commission or CPUC ) in Decision No. C I directed Public Service Company of Colorado ( Public Service or the Company ) to provide additional information regarding the long-term viability of the Company s district steam business in support of its application for a certificate of public convenience and necessity ( CPCN ) for its proposed Sun Valley Steam Center ( Sun Valley ) and for approval of its proposed regulatory plan. This assessment ( Report ) provides certain of the information directed by the Commission in Decision No. C I with respect to the engineering assessment of the steam generating and distribution facilities, a description of the viability of the steam system as a whole, and a forecast of the capital investments and operating and maintenance expenditures to maintain steam utility service to customers over the next 5, 10, and 20 years. In addition, this report contains information regarding the relative efficiency of the steam system as compared with on-site furnaces or boilers fueled by natural gas at each customer site. This report also addresses the environmental differences between the centralized steam system and customer-sited heating systems. Finally, the report addresses the relative differences in water requirements between the centralized steam system and customer-sited heating systems. Given that the Commission has asked for information over the next 5, 10, and 20 years (Decision No. C I, 19), the focus of this assessment is primarily on the system over the next twenty years. However, all of the generating assets with the exception of Zuni will continue to operate over the next 20 years and beyond. For example, the Sun Valley Steam Center ( Sun Valley ) is proposed to replace Zuni Station Unit No. 1 ( Zuni ) in 2015 and its expected life is 60 years. As discussed herein, the steam generation assets are in good condition and have been properly maintained over the course of operation of the system. Capital investment is relatively low with the exception of the construction of the Sun Valley project in 2015 and 3

4 Page 4 of 37 the replacement of the unit 1 boiler at the Denver Steam Plant in All other capital is ongoing capital used to maintain the system. Operations and Maintenance expenses remain constant after the installation of the Sun Valley project and upgrades to the distribution system in the Central Platte Valley area. As discussed, the district steam system is more efficient than customer-sited systems at send out after the boilers; however, if the inherent losses in the steam distribution system are included, the two systems are approximately equivalent. The district steam system in its current open-loop uses about 98 percent more water than a customer-sited closed-loop system. Finally the district steam system has environmental controls that are effective in avoiding air emissions while customer-sited systems do not. 2. Assessment of the current condition of the Denver District Steam System a. Summary Public Service s downtown Denver District Steam System is regularly assessed based on a routine maintenance schedule. Any required repairs or other facility-related issues are addressed as they arise and are prioritized in the maintenance schedule. Overall, the steam system is in good condition. As we discuss in detail below, we routinely inspect our facilities, and based on these inspections, we are not aware of any major maintenance issues. Based on our engineering assessment of the systems, the Company s only expected major capital investment over the next 20 years, other than the Sun Valley project, is the replacement of the Unit #1 boiler at the Denver Steam Plant ( DSP ) in 2028 at a projected cost of six million dollars. The Company s future capital requirements are based on historical data from the previous ten years of capital investment needs adjusted for the current known condition of the equipment. Based on the assessment of condition of the equipment, the steam system has a capital plan that accounts for future upgrades and replacements as detailed in this report that allows the system to operate as expected. The only exception to the above assessment is Zuni Station, which, although not a steam energy department facility, provides steam production capability critical to the district steam 4

5 Page 5 of 37 business. According to the Company s Energy Supply group, Zuni Station has reached the end of its useful life for both steam and electric generation and is scheduled to come off line in 2015 due to the uneconomic cost of operations and maintenance given its age and condition as well as its duty cycle and use since it was first constructed. There are many common pieces of equipment that are at end of life and that are used for both steam and electric generation such as the boiler, boiler feed pump, water treatment equipment and other common equipment. Zuni Station is an electric generating plant asset, and steam purchases steam production from the electric department through an internal cost allocation. Steam is essentially a customer of the electric department and does not have dominion or control over the decisions affecting the plant, however once retired, steam must plan to replace Zuni s capacity. This report assumes that Zuni Station will be replaced by the Sun Valley Steam Center project, with a planned in-service timeframe during the fall of b. Overview of Steam Generation i. Steam supply capacity and reliability The Company s district steam system has access to approximately 660,000 pounds per hour ( pph ) in total boiler capacity comprised of generation from three steam plants: Zuni Station with an approximate capacity of 280,000 pph; DSP with an approximate capacity of 260,000 pph; and the State Steam Plant ( SSP also referred to as the Capitol Steam Plant ) with an approximate capacity of 120,000 pph. The Company has sized the Sun Valley Steam Center to approximate the steam capacity of Zuni Station and therefore the capacity of the total system will remain consistent after the replacement of the Zuni Station with Sun Valley; this was done to maintain and sustain current production operations. A three-plant arrangement allows sufficient capacity to maintain the steam production equipment during non-peak periods and allows sufficient redundancy so that the Company can reliably serve its current and foreseeable customer base without interruption. The three production plant system also allows customers to be served during distribution system maintenance. 5

6 Page 6 of 37 The steam system has a history of exceptional customer reliability with a record that reports no customer service interruptions over the last several decades. To be clear, individual elements of the system are out-of-service periodically, but the system as a whole has had no unplanned outages that impacted service to customers. To achieve this reliability, the steam system operating staff applies best practices from both Xcel Energy s Energy Supply power generation business and from the International District Energy Association ( IDEA ), a district energy industry trade organization. These practices are more fully described below in the maintenance and operations description for each plant. In addition to the application of best practices, the Company has a long history of operating its steam system and evaluating the characteristics of the system to optimally operate and maintain the system. The combination of employing best practices and applying this experience has resulted in very effective operations. ii. Historical overview of steam production operations Public Service s steam business has a long history of operation, having been originally incorporated as the Denver City Steam Heating Company in December From 1879 until the early 1940 s, the district steam business served its customers based solely on steam produced from the Denver Steam Plant, formerly referred to as the 1875 Delgany Plant. In the 1940 s, the Zuni Unit No. 1 became the primary source of steam after installation of a coal-fired cogeneration unit with steam extraction equipment. At that time, DSP became the secondary and backup source of steam production in the system. In 1964, Public Service signed a long-term lease with the State of Colorado and installed a new boiler that would be housed within the Capitol complex the State Steam Plant ( SSP ) - optimally located on the opposite side of the District Steam system from DSP and the Zuni Station. This addition established a three-pronged approach to the operation of the Company s district steam system that facilitated a reliable steam supply while adding flexibility to distribution operations because of the triangular positioning of the three plants within the network. For several years, the plants were dispatched with Zuni as primary, DSP secondary and SSP as backup. The dispatch priority remained with Zuni until a combination of the loss of steam extraction and the conversion from coal to natural gas eliminated the efficiency advantages of dispatching Zuni as the primary steam supply. In 1972 and 1974, two new 6

7 Page 7 of 37 boilers were built at DSP and the new DSP units (Units #1 and 2 that are in service today). These units were designed as modular package boilers and became the primary source of steam, with Zuni providing about 30 percent of the annual steam supply needs. In the 1990 s, an economizer was added to Unit #2 at DSP, further improving the overall system efficiency. In 2004, a new 20-year lease was signed with the State and Public Service replaced the old SSP boilers with a single 120,000 pph unit. In this brief historical account, it is important to note that all steam demand has been reliably served using these steam sources and that all three of these facilities are required to be in operation and generating steam to meet peak send out requirements during peak heating periods, which can run from December through March of each year. Figure 1 shows each of the steam generation systems in a triangular configuration to meet the needs of steam customers. 7

8 Page 8 of 37 Figure 1. District Steam System with Three-Plant Configuration iii. Steam system operations and maintenance practices The Company presently produces all steam for its steam system by burning natural gas as its primary fuel. Zuni can also burn #6 oil and DSP can also burn #2 oil during natural gas curtailments and for testing. Fuel use is based on daily load forecasting, which is comprised of weather, customer demand, and system availability. Operations are monitored and data is collected on a continuous basis. By having and maintaining the ability to burn 8

9 Page 9 of 37 oil, the steam system is able to take interruptible natural gas transportation service, which saves customers money over firm gas service. A work management system is utilized to prioritize and schedule preventative and corrective maintenance to ensure the reliability of the production facilities. Prioritization is based on a hierarchy of system categories, including critical equipment, regulatory requirements, safety, manufacturer recommendations, inspection and testing support. All of the plants and the distribution system have a preventative maintenance ( PM ) program and schedule. PM s are maintenance work orders defining what work is to be performed. The PM s are defined for each piece of equipment and reside in the Company s Maximo software system. These PM programs facilitate the proactive maintenance of the system, which increases the overall reliability and availability of the plants and the distribution system. The Company believes these programs have been instrumental in the steam system s stellar unplanned outage record. The annual scheduled maintenance is done on each production unit prior to the next heating season so that minimal maintenance is needed during peak season. All plant systems (air, fuel water, boiler, controls, etc.) are inspected and repaired or replaced as necessary and auxiliary equipment (pumps, boilers, fans, tanks transmitters and gauges) are inspected, calibrated and maintained. Standard scheduling tools are used to track and schedule the repair maintenance. Materials needed for repair are obtained using the Company s standard sourcing procedures. 1. Pressure Vessels A designated Company quality control inspector inspects the boilers during planned outage periods, which are scheduled to allow sufficient time to make any needed repairs or plan future work prior to the peak heating season. Any welding repairs that are done are given an R-stamp Number and/or Non Boiler External Piping ( NBEP ) # s in compliance with standards required for boiler pressure code piping or pressure piping by American Society of Mechanical Engineers, Power Piping Code ( ASME B31.1), which defines piping safety, minimum requirements for the design, materials, fabrication, installation, testing, inspection, operations and maintenance ( O&M ) of the piping systems. Our 9

10 Page 10 of 37 practices are in conformance with the 2011 National Board Inspection Code ( NBIC ). The boilers are also inspected by the Company s insurance carrier and state inspectors, as well as by the Company s certified boiler inspectors and chemists. The conclusions from these assessments are used in estimating the condition of the boiler based on parameters such as boiler tube wall thickness, boiler cleanliness, boiler tube failure concerns, visual assessment of the boiler internals and other engineering considerations. Each plant is assessed individually. 2. Piping The distribution system consists of 16 miles of pipe in and under the streets of downtown Denver. An important diagnostic parameter for the distribution system that is indicative of the health of the system and possibly a warning of problems within or upstream of the distribution network is the pressure, measured in pounds per square inch ( psi ). Each of the operations work shifts tracks and monitors the distribution system continually for irregularities in pressures at various points in the system. Normal pressures are generally 105 psi on the intermediate customer side and 25 psi on the low pressure customer side. All permitted facilities meet or exceed minimum environmental requirements. The schedule calls for operations and maintenance work to be completed prior to the next heating season. c. Production and Distribution Facilities i. Zuni Station Zuni Station, as shown in Figure 2 is located along the Platte River in the Sun Valley district of Denver. Zuni Unit 1 is an asset capable of providing approximately 280,000 pounds per hour of steam and 59 MW of electric generation capacity. This unit provides 50 percent of the peak steam load and accounts for 30 percent of the annual sales for the steam system. Zuni was last repowered in the mid 1940s and it has reached the end of its useful life. Zuni 1 was retired from electrical service at the end of 2009 and Zuni 2 and common plant are currently slated for retirement in late 2015 after the Sun Valley project becomes operational. The operations and maintenance costs for Zuni are increasing and any capital invested is depreciated over the then-shorter remaining life. These increasing O&M and capital costs have made Zuni uneconomic in the dispatch order for electric generation as 10

11 Page 11 of 37 compared to its fleet alternatives. Because of its high heat rate and relatively long start-up period, Zuni Station is operated very seldom for the electric system. In fact, since the 2007 resource plan, the Company has indicated a retirement date for Zuni Station of between 2012 and the end of Figure 2. Zuni Station If Zuni is to be kept in reliable operating condition beyond 2015, the Company will need to incur significant capital costs to replace boiler tubing, boiler burners, boiler controls and other associated equipment (pumps, fans, valves, etc.) given that the boiler at Zuni is over 67 years old and it has had significant operation over its lifetime. In addition to many years of base load operation, the unit was started frequently since its conversion to natural gas. ii. Denver Steam Plant DSP is centrally located at 1875 Delgany Street in the Central Platte Valley and nearby to the downtown business district. Steam has been supplied from this site since As indicated earlier, the DSP was completely rebuilt in 1972 and 1974 with new package boilers. DSP is currently first in the dispatch order and is the primary source of steam for the 11

12 Page 12 of 37 system. DSP accounts for 70 percent of the annual sales and 50 percent of the peak steam load. DSP will continue to operate well into the future because it has been well maintained, which includes routine equipment assessment, preventative maintenance, and because the two low pressure package units are in good operating condition. The advantage of package boilers is that the boilers and auxiliary equipment can be easily replaced as shown in Figure 3 where the deaerator is being replaced. As a result, there are no major capital expenditures planned for DSP until 2028 when boiler #1 is slated for replacement. The boiler replacement is included in the capital expenditure details. Figure 3. Denver Steam Plant Deaerator Replacement 1. Maintenance practices at DSP have been robust The fact that DSP is a package boiler facility and that periodic capital replacements have been made over time along with implementation of good operating and maintenance practices will allow the business to reliably produce steam from this unit well into the future. As a result, only incremental on-going capital investments have been required notwithstanding the age of the facility. Currently a repair is scheduled for the #2 boiler at DSP during the annual outage in 2013 and there are no unexpected maintenance issues that are classified as high priority. All other maintenance items including time sensitive repairs such as safeties are scheduled as part of the PM program and the cost of these repairs are included in the capital and operations and maintenance forecasts. Repair projects have been 12

13 Page 13 of 37 identified and established based on previous years work during annual outages. In the last two years approximately $75,000 was budgeted for those repairs. A plant inspection and evaluation process is updated and implemented on an annual basis and is comprised of major and minor systems inspections with all systems eventually assessed. For example reports, see Appendix A. As discussed, during annual outages inspections from certified Company boiler inspectors and State Boiler Inspectors are completed. The inspections include but are not limited to: Visual examination of the boiler internals and boiler externals such as the steam drum and the deaerator. Annual Non Destructive Evaluation (NDE) of the plant piping systems. Vibration analyses for the forced drive (FD) fans and pumps. Internal boiler inspections for the steam drums to include the fire box and numerous auxiliary systems by Public Service and vendor chemists on an annual basis. Inspection of auxiliary systems; for example the deaerator and degassifier. Completion of PM s and work orders for all major and auxiliary systems during a planned outage. Using the ascribed approach, the steam systems have had no forced outages due to boiler tube failures. After the annual plant outage, an evaluation is done using inspection reports and information on systems that may need repairs are identified and prioritized. The #2 boiler front replacement at the DSP is one example of a capital project repair as result of these evaluations. Based on the PM practices, inspections and historical findings, there are no plans for major replacements of equipment until 2028, which is the scheduled replacement of the #1 boiler. The Unit 1 boiler is over 40 years old and through continued proper maintenance in addition to modest capital investment, it is expected to last until At that time the Company plans to replace the unit. Unit 2 is expected to last for more than 20 years with an expected replacement around Although unit 1 and unit 2 were installed only two years 13

14 Page 14 of 37 apart, the current seven year forecasted difference in the replacement timeframe between unit 1 and unit 2 is because the unit 2 boiler is in relatively good condition and after the new plant is on line it will not need to operate as often. 2. DSP package boiler replacement versus Sun Valley There is a difference between the cost of replacing the package boilers at the DSP and the cost of a new facility such as the Sun Valley project because the Sun Valley project is a completely new plant. Costs for Sun Valley include site development, building construction, auxiliary and additional equipment needed for a new plant (water treatment, air compressors, maintenance shops, backup fuel storage, water and chemical storage, etc.), and facility interconnection costs (electric, water, steam, gas and sewer). This infrastructure is already in place at the DSP. The cost of the Sun Valley Steam Center s two boilers represents about 33 percent of the total costs with another 56 percent in direct installation costs such as demolition, siting, infrastructure development and buildings with the remaining 11 percent of the costs as indirect charges for technical services and management of construction. iii. State Steam Plant The State Steam Plant shown in Figure 4 was commissioned in 2005 as a replacement for another Company boiler previously in service at the Capitol Complex that had reached the end of its useful life. This plant can provide up to approximately 120,000 pph of steam to the system. This facility is relatively new and is in good condition thus it will not need major capital upgrades over the next 30 years. The maintenance practices at the SSP are similar to those for the DSP as discussed. Incorporating the State Capitol boiler into the steam system s distribution grid including the Denver Steam plant and Zuni Station resulted in a three production system approach that triangulates the entire system and enhances overall system reliability both from a production and a distribution perspective. The SSP is dispatched as a peaking plant but it facilitates distribution system maintenance without service disruptions by operating during planned outages which are planned for non-peak periods. Dual-fuel capability at the Denver 14

15 Page 15 of 37 Steam plant and Zuni complete the reliability outlook for customers. The life of the State boiler plant is expected to be 60 years. Figure 4. State Steam Plant Boiler Installation iv. Distribution System The main downtown Denver Steam distribution system has approximately 16 miles of steam main piping which connects all production facilities with a grid that delivers steam to a large area of the Denver core downtown business district as shown in the system map in Figure 1. The district steam business provides service to its approximately 133 customers (at year end 2012). Public Service and its predecessors have distributed steam in the downtown Denver service territory since the 1880 s. In the mid-1980 s, improvements in design standards, pressure support, and safety were incorporated into the distribution system, however there is no condensate return system. The system was upgraded in 1980 to include an intermediate pressure system, allowing for better pressure support to customers throughout the system. The improvements included some design standards as well as installation of new safety relief equipment on the system. 15

16 Page 16 of 37 The steam distribution system supplies intermediate pressure service at approximately 105 psi and low pressure service at approximately 25 psi. While direct buried steam mains are the backbone of the distribution system, operations are controlled using a series of expansion joints, valves, condensate removal equipment, and pressure reducing stations. Some of this equipment is shown in Figure 5. Much of this equipment is housed in underground installations referred to as vaults. The customers are served from the main pipeline through service laterals and are isolated from the system via customer-owned reducing stations and valves. Figure 5. Glenarm Main 1. The condition of the distribution system and ongoing maintenance Proper planned routine maintenance and capital upgrades are and have been made to the distribution system so that it remains reliable over time, similar to the Company s electric and gas distribution systems. The Steam system has a vault inspection program which consists of inspecting the vaults structurally along with the mechanical equipment within the vaults. The program targets a complete inspection of all the vaults on a two year cycle. 16

17 Page 17 of 37 During the inspections, minor items are corrected by the maintenance crew and more significant items are noted on the inspection report for follow-up. The findings are reviewed and logged by the Distribution Superintendent. The logs are constantly reviewed throughout the year and the items that are in need of attention are prioritized and corrected according to the severity and importance of the issue. Emergency items are completed immediately when public safety or reliability is impacted. An item noted on the inspection such as an isolation valve that will not hold, piping that is corroding due to outside environmental issues, or a vault that is deteriorating, would be reviewed and prioritized based on employee and public safety, funding, customer interruption or impact and scheduling for permits. Every January, a final re-prioritization is completed and the projects are assigned to the staff as capital or O&M projects for the current year work. Using this methodology, equipment conditions may be monitored over a number of years. In the case of main replacements, smaller repairs may be more prudent than wholesale main replacements. The effect of this methodology stretches out the funding requirements for replacement of even the remaining blocks of the oldest main. The design of the main piping includes a protective casing around the main as shown in Figure 6, and unless disturbed or hit during other utility construction, pipe age is not the deciding factor in determining whether a pipe should be replaced. 17

18 Page 18 of 37 Figure 6. Piping Cross Section These mains are under existing inspection programs and undergo the same review as other capital repairs. In addition to reviewing the need for replacing equipment based on age and condition to ensure reliability, the Company also considers the location of the equipment and the number of customers that the pipeline serves. Hence the Company considers the number of customers that would benefit from an upgrade in prioritizing work. If the work does not receive priority in the current year, then the project is moved to the next year and reevaluated during the next budget cycle. Some projects and maintenance issues require system outages in order to repair the equipment. Records are used to help plan when to address projects along with information about any new items that need attention and that fall within the outage area and are noted for correction during the outage timeframe. The Company uses historical data on prior annual distribution work which indicates that there will be 12 to 15 equipment replacement projects that fall within the capital criteria and make up a significant portion of the annual distribution capital budget. Since all of the next year s work is not known during the budgeting process, a set amount of funds is budgeted based on the previous year s work. 18

19 Page 19 of 37 The design of the distribution system is sound. The system conforms to standards required for pressure piping by ASME B31.1, which defines piping safety, minimum requirements for the design, materials, fabrication, installation, testing, inspection, operation and maintenance of the piping system. Upgrades to the Public Service Company system design are evaluated in several ways. Public Service is a member of the International District Energy Association ( IDEA ), which is the industry association of district heating and cooling system owners and participates in member technical exchanges. Technical exchanges include discussion on topics such as innovations on safe operation, design improvements in thermal distribution systems, confined spaces, urban construction, emergency preparedness, and customer service related to the installation, operation, and construction of steam networks. There is also an annual IDEA Distribution forum where peers discuss distribution issues and planning. In addition to IDEA activity, all Public Service system design, construction, and project management work has mechanical and civil engineering oversight. Construction activity for capital work is normally scheduled during the off-peak summer months and coordinated with the customer to minimize any negative impacts. Routine maintenance is also scheduled during outages to perform capital work in order to minimize customer disruptions. By planning the work during off-peak hours, performing routine maintenance during planned outages, and coordinating with customers, system interruptions are managed, and as a result there have been no unplanned outages in the last decade. The steam mains in the system are direct buried in most cases. The steam mains consist of a steam carrier pipe which is insulated and has a sealed outside conduit around the insulation as shown in Figure 7. The outer conduit is wrapped in various ways to provide cathodic protection to the main, which helps prevent corrosion of the metal piping and casing. 19

20 Page 20 of 37 Figure 7. Piping Cross Section Physical inspection of the system piping is rarely done because it requires excavation to expose the underground piping. On occasion excavation is done to expose very old mains that date back to 1911 in order to inspect a small section of the main. In such instances as shown in Figure 8, the overall condition of these mains has been found to be good. All of the older piping is on the low pressure, 25 psig, side of the system. Figure 8. Older Underground Main at Excavation 20