Completed slightly ahead of schedule and costing about $50 million less than the original $306 million project cost, the Path 15 upgrade eliminated a longstanding transmission bottleneck that contributed to the 2001 Northern California rolling blackouts. It also brought a new way of doing business to the industry.
The upgrade was placed in commercial service on Dec. 22, 2004, just 15 months after construction started on the 84-mile, 500-kV transmission line in Central California. On Dec. 14, 2004, California Governor Arnold Schwarzenegger and U.S. Deputy Secretary of Energy Kyle McSlarrow attended a Path 15 commissioning ceremony in the California Independent System Operator Control Room in Folsom. It marked the first time a California Governor had visited the state ISO.
"Path 15 is a crucial link in our transmission grid," Schwarzenegger said. "This new line will allow the state to deliver power more effectively and prevent blackouts in California." McSlarrow agreed, saying Path 15 stymied Federal and state energy officials during the energy crisis that caused rolling blackouts in 2000 and 2001.
The Path 15 upgrade consists of:
"One thing that kept coming up over and over and over again was this thing called Path 15," McSlarrow said. "It was something everyone identified as needing to be fixed."
Western takes on new role
The project was initiated in May 2001 after Energy Secretary Spencer Abraham directed Western Area Power Administration to explore the possibility of constructing a transmission upgrade using a first-of-its-kind public-private partnership.Western received 13 responses to a Federal Register notice by the July 2001 deadline and recommended nine of them as project participants.
Six of the nine participants withdrew at various times in the process leaving the final project participants as Western—a Federal agency; Pacific Gas and Electric Company—an investor-owned utility and Trans-Elect New Transmission Development Company—an independent transmission company.
Western, as the project manager, completed all planning work, acquired land rights and managed the construction of the project. Western owns and maintains the transmission line, and retains a 10-percent share of the transmission rights.
PG&E performed the substation and 115- and 230-kV system work and receives about 18 percent of the new transmission capacity.
Trans-Elect provided the remaining funding for the transmission line and owns the remaining transmission rights (about 72 percent).
Congestion on Path 15 contributed to the Northern California blackouts of 2001, and the Path 15 upgrade was seen as a priority to eliminating the bottleneck. Throughout the project, Western participants looked for ways to fast track the work to eliminate the transmission bottleneck. The unique nature of the project, combined with other events, presented challenges to actually implementing a fast-track schedule.
Lenders were cautious about lending money due to:
Partners shape new way of business
Western and Trans-Elect needed to develop a model that was both practical and provided certainty to the financial community. To achieve that, a single contractor, Maslonka & Associates, was used for engineering, procurement and construction (EPC), also known as the design-build approach. The use of a single contractor, along with fast-track engineering and construction techniques, allowed Western to complete the project in 15 months. The use of a single contractor also provided certainty to lenders by making a single entity responsible for engineering, procurement and construction.
Streamlining the project began before the request for proposals from potential contractors was issued. Western provided potential contractors with a complete set of documents at the time it issued its request for proposals to complete the design, procure the materials and construct the line. Evaluation criteria, in addition to price, included consideration of such things as:
Price was a consideration but not the determining one. Based on the criteria, Western evaluated numerous bids and eventually awarded the contract to Maslonka & Associates.
Streamlining the process
Western took many steps to streamline the construction. Western required the EPC contractor to incorporate existing environmental and survey work. A transmission corridor had been previously identified through the Federal environmental process. PG&E had completed preliminary survey work and identified a centerline for the new line. Western acquired that work from PG&E and modified it based on Western’s own standards. Western also acquired the easements and provided right-of-way and access roads criteria, design criteria for operations and maintenance, a design family of towers and preliminary tower center points. Western also provided conductor and insulator requirements, preliminary tower type selections, and preliminary sag (clearance) calculations.This resulted in an approximately 60 percent design package when the contract was issued. Western created a unique bid item and paid Maslonka to accept and complete all designs. As part of the contract, the EPC contractor reviewed and accepted the existing information, and finished the design based on Western’s criteria. Maslonkacompleted final site surveys at each tower site and accepted all environmental requirements in the Biological Opinion and employed environmental monitors. Construction contractor staff confirmed the sag calculations, finalized the tower type and height, including body height and leg extensions and also did the geology work for the foundations and the foundation designs.
Maslonka fast-tracked construction to meet the schedule, doing geotechnical engineering, procurement and installation simultaneously. The right-of-way was divided into four sections. The construction contractor began ordering materials for the least-complicated section before geology or design work was done using a conservative design approach. Crews poured foundations before all the geology work was done using a conservative design and refined the design as the geology work proceeded. Different phases of construction were done simultaneously. For example, crews poured foundations in one area while constructing access roads in another area.
To minimize financial risk to the parties funding the project, Western’s EPC contract contained financial penalties whereby the contractor would pay liquidated damages if the work was not completed on schedule. The EPC contract also contains a 10 percent "retention" clause on payments during construction.
Maslonka contracted with vendors for materials, with matching financial penalties for a failure to meet the schedule and was responsible for acquiring all materials, therefore taking the risk of supplier non-performance. It was more efficient for Western to manage one construction contract on Path 15 instead of multiple contracts, as it did on the California-Oregon Transmission Project, a 350-mile line from the Oregon border to Central California constructed in the early 1990s.
Since the contractor was responsible for coordinating engineering, material deliveries and the construction workforce, any issues associated with this coordination was the contractor’s responsibility. This greatly reduced the risk to Western and the Project participants. As a trade-off, there were increased costs due to requiring the contractor to assume all design risks.
When all was said and done, the project came in on time, under budget and within scope. According to initial reports from the California Independent System Operator, south to north transmission loading on the newly increased Path 15 route show an up to a 40-percent increase in scheduled flows and the increased 1,500 megawatts of capacity has significantly reduced congestion costs.
The upgrade was placed in commercial service on Dec. 22, 2004, just 15 months after construction started on the 84-mile, 500-kV transmission line in Central California. On Dec. 14, 2004, California Governor Arnold Schwarzenegger and U.S. Deputy Secretary of Energy Kyle McSlarrow attended a Path 15 commissioning ceremony in the California Independent System Operator Control Room in Folsom. It marked the first time a California Governor had visited the state ISO.
"Path 15 is a crucial link in our transmission grid," Schwarzenegger said. "This new line will allow the state to deliver power more effectively and prevent blackouts in California." McSlarrow agreed, saying Path 15 stymied Federal and state energy officials during the energy crisis that caused rolling blackouts in 2000 and 2001.
The Path 15 upgrade consists of:
- A new 84-mile-long, 500-kV transmission line between PG&E’s Los Banos and Gates substations.
- Modification of the existing Los Banos and Gates substations to accommodate new bays and equipment.
- A second 230-kV circuit between Gates and Midway.
- Other related system improvements.
"One thing that kept coming up over and over and over again was this thing called Path 15," McSlarrow said. "It was something everyone identified as needing to be fixed."
Western takes on new role
The project was initiated in May 2001 after Energy Secretary Spencer Abraham directed Western Area Power Administration to explore the possibility of constructing a transmission upgrade using a first-of-its-kind public-private partnership.Western received 13 responses to a Federal Register notice by the July 2001 deadline and recommended nine of them as project participants.
Six of the nine participants withdrew at various times in the process leaving the final project participants as Western—a Federal agency; Pacific Gas and Electric Company—an investor-owned utility and Trans-Elect New Transmission Development Company—an independent transmission company.
Western, as the project manager, completed all planning work, acquired land rights and managed the construction of the project. Western owns and maintains the transmission line, and retains a 10-percent share of the transmission rights.
PG&E performed the substation and 115- and 230-kV system work and receives about 18 percent of the new transmission capacity.
Trans-Elect provided the remaining funding for the transmission line and owns the remaining transmission rights (about 72 percent).
Congestion on Path 15 contributed to the Northern California blackouts of 2001, and the Path 15 upgrade was seen as a priority to eliminating the bottleneck. Throughout the project, Western participants looked for ways to fast track the work to eliminate the transmission bottleneck. The unique nature of the project, combined with other events, presented challenges to actually implementing a fast-track schedule.
Lenders were cautious about lending money due to:
- accounting scandals on Wall Street • regulatory and economic uncertainty in the utility industry
- a new business model with the public-private partnership
Partners shape new way of business
Western and Trans-Elect needed to develop a model that was both practical and provided certainty to the financial community. To achieve that, a single contractor, Maslonka & Associates, was used for engineering, procurement and construction (EPC), also known as the design-build approach. The use of a single contractor, along with fast-track engineering and construction techniques, allowed Western to complete the project in 15 months. The use of a single contractor also provided certainty to lenders by making a single entity responsible for engineering, procurement and construction.
Streamlining the project began before the request for proposals from potential contractors was issued. Western provided potential contractors with a complete set of documents at the time it issued its request for proposals to complete the design, procure the materials and construct the line. Evaluation criteria, in addition to price, included consideration of such things as:
- Proof of the ability to obtain bonds from appropriate sources
- Proof that prime or major sub built 10 miles of 345kV or higher
- Plan for accessing capital and amount available
- Affirm other commitments would not preclude performance
- List of insurance policies
- A narrative description of the plan to achieve the schedule
- Supply information for major components
- Detailed construction and milestone schedule
- Milestone schedule with critical path
- Quantity and source for key resources
- Up to 5 past references for design work
- Up to 5 past references for construction work
- Historic Accident Incident Rate
- Description of Safety Program
Price was a consideration but not the determining one. Based on the criteria, Western evaluated numerous bids and eventually awarded the contract to Maslonka & Associates.
Streamlining the process
Western took many steps to streamline the construction. Western required the EPC contractor to incorporate existing environmental and survey work. A transmission corridor had been previously identified through the Federal environmental process. PG&E had completed preliminary survey work and identified a centerline for the new line. Western acquired that work from PG&E and modified it based on Western’s own standards. Western also acquired the easements and provided right-of-way and access roads criteria, design criteria for operations and maintenance, a design family of towers and preliminary tower center points. Western also provided conductor and insulator requirements, preliminary tower type selections, and preliminary sag (clearance) calculations.This resulted in an approximately 60 percent design package when the contract was issued. Western created a unique bid item and paid Maslonka to accept and complete all designs. As part of the contract, the EPC contractor reviewed and accepted the existing information, and finished the design based on Western’s criteria. Maslonkacompleted final site surveys at each tower site and accepted all environmental requirements in the Biological Opinion and employed environmental monitors. Construction contractor staff confirmed the sag calculations, finalized the tower type and height, including body height and leg extensions and also did the geology work for the foundations and the foundation designs.
Maslonka fast-tracked construction to meet the schedule, doing geotechnical engineering, procurement and installation simultaneously. The right-of-way was divided into four sections. The construction contractor began ordering materials for the least-complicated section before geology or design work was done using a conservative design approach. Crews poured foundations before all the geology work was done using a conservative design and refined the design as the geology work proceeded. Different phases of construction were done simultaneously. For example, crews poured foundations in one area while constructing access roads in another area.
To minimize financial risk to the parties funding the project, Western’s EPC contract contained financial penalties whereby the contractor would pay liquidated damages if the work was not completed on schedule. The EPC contract also contains a 10 percent "retention" clause on payments during construction.
Maslonka contracted with vendors for materials, with matching financial penalties for a failure to meet the schedule and was responsible for acquiring all materials, therefore taking the risk of supplier non-performance. It was more efficient for Western to manage one construction contract on Path 15 instead of multiple contracts, as it did on the California-Oregon Transmission Project, a 350-mile line from the Oregon border to Central California constructed in the early 1990s.
Since the contractor was responsible for coordinating engineering, material deliveries and the construction workforce, any issues associated with this coordination was the contractor’s responsibility. This greatly reduced the risk to Western and the Project participants. As a trade-off, there were increased costs due to requiring the contractor to assume all design risks.
When all was said and done, the project came in on time, under budget and within scope. According to initial reports from the California Independent System Operator, south to north transmission loading on the newly increased Path 15 route show an up to a 40-percent increase in scheduled flows and the increased 1,500 megawatts of capacity has significantly reduced congestion costs.
