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Due Diligence

By James L. Gordon, B.Sc., hydropower consultant

In late winter, George was walking toward a new hydroelectric powerhouse across the crest of a new concrete dam. He was at the project to assist an equipment contractor with a turbine alignment problem.

During this walk, George noted the numerous small stoplog spillway openings, which were not equipped with hoists. Ice was lodged against the stoplogs, and the downstream piers and guides had a thick coating of ice from seepage. George looked for a hoisting mechanism and spotted a mobile crane with two flat tires, parked off the road. Curious about the situation, he continued walking past the powerhouse. There, he found a single half-open tainter spillway gate that was passing the flow (the turbines were not yet operational, so the flow through the project was going through this one gate). The spillway piers were thin, and the whole gate structure was vibrating.

George entered the powerhouse and was met by Brad, the operator, who said, "Who are you?" George introduced himself and told Brad that he would be working for the turbine contractor. Brad said he would have to telephone the project owner to determine if George was allowed on the site. A few minutes later, Brad advised George that permission to work on the site was denied and he was to leave immediately. If he did not leave, George would be arrested for trespassing. George decided it would be prudent for him to leave the site temporarily until the issue could be resolved.

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 The downstream piers and guides at this dam had a thick coating of ice from seepage. Because the spillways were not equipped with hoists and the mobile crane had two flat tires, the frozen stoplogs could not be removed fast enough to pass a spring flood.

About four hours later, George was back on site, with strict instructions to look at the turbine and nothing else! George, Joe (the chief erector for the turbine contractor), and Joe's crew began to work on the alignment problem (see "Lessons Learned: The Flexible Powerhouse," in the May 1998 edition of HRW).

The next day, George was sitting on a powerhouse roof hatch, eating his lunch, when he noticed two men sitting on another hatch. George had seen them walking around the powerhouse, taking copious notes, and wondered what they were doing. So he introduced himself and asked if he could join them. They mentioned their names and affiliation, and George asked what they were doing at the site. The two men told George that they were undertaking due diligence for an insurance company interested in purchasing the facility.

George had never heard of the company they worked for, so he politely asked about their experience in the hydro industry. They enthusiastically replied, "None, we are HVAC engineers. Isn't this a fascinating development! And by the way, we don't think the HVAC is going to work very well." George concurred with this remark, considering that the heating, ventilation, and air conditioning (HVAC) consisted of two adjustable louvers in the side walls of the powerhouse and two more louvers on the downstream wall equipped with fans.

George now understood why he had been instructed to look only at the turbine. The spillway needed more reliable hoists, and the frozen stoplogs could not be removed fast enough to pass a spring flood. There were other operating difficulties, such as the vibrating tainter gate (described earlier) and no road access to the powerhouse.

A year later, George heard that the insurance company had purchased the facility. To operate and maintain this new facility, the company engaged a utility that owned and operated several small hydro plants. The utility undertook its own assessment of the project and advised that several million dollars would be needed to upgrade the spillway. To accomplish this upgrade, mass concrete was poured around the piers. Hydraulic hoists were added to several of the stoplog openings, and the stoplogs were converted to timber gates. A bubbler system was used to keep the logs ice-free, and a new mobile crane was purchased to lift the gates without hydraulic hoists.

The facility operated without incident for several years. The only complaint was from insurance company personnel, who did not understand why revenue from the run-of-river project varied so much from the average. They had been looking for a steady income stream to match payments on life annuities used to purchase the plant.

A few years later, there was an incident during an outage on the transmission line. Power was lost on the bubbler system and to the tainter gate hoist. All the gates remained closed during an early winter flood. Water flowed over the gates, and nearly over the concrete dam crest onto the powerhouse roof, before the units could be started manually to pass the inflow. After this frightening incident, the insurance company sold the facility to a large utility.

Lessons learned

As a result of electric industry deregulation, some hydro facilities change owners frequently. Based on anecdotal evidence, one plant in the northeastern United States has had five owners in five years! This frequent changing of ownership provides considerable work on due diligence for hydro consultants. Prospective owners should always engage a consultant with extensive experience in hydro work for a due diligence assessment.

Also, sufficient time must be allowed for the inspection. Deficiencies sometimes can only be detected after testing equipment and spending considerable time digging into plant records regarding energy production and operating costs.

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