GE Power addressing issues with gas turbines

Technical problems force plant shutdown; company shares down

Schenectady-based GE Power is having technical issues with its cutting-edge HA gas turbine that forced power plant owner Exelon Corp. to shut down a facility outside Houston recently.

News of the failure of a single blade component in the HA turbine — one of the most important products that General Electric Co. sells to its industrial customers — spooked Wall Street, which pushed the company’s shares down late in the week.

“A few weeks ago, there was an event at Exelon’s Colorado Bend site that resulted from an issue with an HA turbine component,” GE Power spokesman Chris Shigas said. “We expect the same issue to impact other HA units.

We have identified the solution and have a plan in place, and we have been proactively working with customers on a case-bycase basis to address any impacted unit. We expect the Exelon unit to return to service soon.”

Exelon’s Colorado Bend power plant is located southwest of Houston. Exelon reportedly also shut down a similar power plant outside Dallas as a precautionary step.

The problem with General Electric’s HA turbine comes at an inopportune time for GE and its GE Power unit, which has laid off hundreds of white collar executives and union workers at its Schenectady campus, which not long ago boasted 4,000 workers.

Those layoffs have had to do with poor financial results at GE Power that were caused by overoptimistic revenue projections in the global power plant market.

However, the issues with the HA, which sent GE’S stock tumbling earlier in the week, are more technical in nature. The HA isn’t made in Schenectady, which specializes in manufacturing steam turbines and generators, although the HA is supported by engineering, sales and other staff locally.

The Colorado Bend site is a natural gas power plant that Exelon owns outside Houston. In 2014, Exelon ordered four of the HA turbines to upgrade the Colorado Bend facility and a second one known as Wolf Hollow outside Dallas. The upgrades were The problem with General Electric’s HA turbine comes at an inopportune time for GE and its GE Power unit, which has laid off hundreds of white collar executives and union workers at its Schenectady campus, which not long ago boasted 4,000 workers.

completed last year.

The HA turbines, plus steam turbines and generators, were designed to add 2,000 megawatts of electrical output to both sites and helped Exelon expand its market share in two fast-growing metro areas in Texas.

Reuters originally said that it shut down all four turbines after discovering a problem with one turbine at the Colorado Bend site. The three remaining turbines were shut down as a precaution, Reuters reported.

“GE is an industry leader with its HA gas turbine technology, which recently helped deliver two world records in performance, and HA gas turbines are meeting — and in many cases exceeding — their performance goals at every customer site today,” Shigas added. “There is an expectation that minor adjustments will be made along the way with any new technology, and we believe the adjustments we’re currently making will make the best turbine on the market even better.”

Shigas said the “HA continues to be the fastest growing fleet of advanced technology turbines in the world with more than 80 units on order, and it has achieved more than 175,000 operating hours to date.”

GE Power CEO Russell Stokes alluded to the problems on his Linkedin page on Wednesday. GE employs between 3,500 and 4,000 people in Schenectady, and many are with GE Power.

He said that he has supreme confidence in the HA turbine, which was launched two years ago. GE has sold 80 of the turbines, and 30 are operating in power plants across the world.

Stokes said that launching a new product is never without engineering issues that often involve trial and error.

“The HA is no exception. For example, we had some project delays affecting the completion of the three Ha-equipped power plants in Pakistan. These delays were caused by a mix of factors — some in our control and others that were out of our hands,” Stokes wrote.

He added that the company “identified an issue that we expect to impact our HA units” involving an “oxidation issue” that affects a single blade component.

“Obviously, this was a frustrating development, for us, as well as for our customers,” Stokes wrote. “But we have identified a fix and have been working proactively with HA operators to address impacted turbines.”

As of Friday afternoon, shares of GE were down 10 cents to $12.36. The shares fell 13 cents Thursday after the first stories on the problem appeared.