Turbine repairs on NLR agenda
Project cost put at $4.6 million
A $4.59 million maintenance and repair request for the Unit Two turbine at North Little Rock’s hydroelectric plant goes back to a “bag of goo” shown to the City Council in January, acting Electric Department general manager Jason Carter said last week.
At its 6:30 p.m. meeting Monday, the City Council is set to consider legislation to accept a low bid of $4,591,007, plus tax, by Hydro Consulting & Maintenance Services Inc. of Rotonda West, Fla., to overhaul the Unit Two turbine. The funds will come from the Electric Department’s operating budget, which includes revenue from the utility’s 37,000 ratepayers in North Little Rock and Sherwood.
Carter, who was named acting general manager in December, asked aldermen for approval, granted in January, for $582,573 in repairs by the same company to the Murray hydroelectric plant’s Unit Two, which was inoperable at the time. The work was to get the unit working through the spring and summer, the plant’s best months for generating electricity.
“It’s the cost of ownership,” Carter said. “If we’re going to own it, we have to
maintain it.”
The $88.5 million hydroelectric plant, dedicated in December 1988, relies on the flow of the Arkansas River to turn turbines that power the plants’ generators to produce electricity. It is adjacent to Murray Lock and Dam on the river just off Cook’s Landing in North Little Rock.
“We did some sufficient repairs to get it back in service in February,” said Carter, who is also North Little Rock’s elected city attorney. “The work we are proposing to do now is an overhaul of the turbine. We’ll open it up, clean it, repair all of the parts that need repair and put it back in service.
“Hydroelectric units like the Murray hydro are generally going to require this type of heavy maintenance every 20 years or so,” Carter added. “It’s due. In all honesty, it’s a little past due.
“And we knew we were having problems,” during the January repair request, Carter said. “I came to the City Council with a bag of goo. That bag of sludge, that’s what has been in there. That’s a problem. We have to fix those things as we find them. Unfortunately, we let that problem go for a while.”
The Murray plant annually produces about 15 percent of the utility’s power. The remainder is purchased from outside sources.
But the plant is expensive to keep up and running. A review of the plant’s financial history in 2012 showed the cost of operations, maintenance and frequent repairs have averaged about $2.3 million annually over the previous seven years. The hydroelectric plant was built using a $139 million bond issue that North Little Rock voters approved in 1984.
Last year, the City Council approved a refinancing of the bond debt that extended its payoff date from 2015 to 2025 — the fourth time the bonds have been refinanced. The city will have paid an estimated $320 million in debt service over 40 years by 2025. The 2012 refinancing, though, dropped the annual payment from $13.2 million to $2.2 million to improve the utility’s cash flow and its amount available to be placed into reserve.
During the 15 years before 2012, the plant had generated $97 million in revenue, meaning the amount it has provided in electric power that otherwise would have had to have been purchased under the utility’s power contract.
“It absolutely is a huge amount of money,” Mayor Joe Smith said about the $4.59 million request. “However, it’s 30 years of wear that we’re having to spend the $4.5 million on to rejuvenate the hydro. It’s just something that has to be done.”
Having more rain than usual in Arkansas for June and July, Smith said, the plant’s generation has resulted in “a pretty good summer.” From charts provided by Carter, the hydroelectric plant has generated more power in each of the past five months than during those same months for at least the past two years each.
“So we’re glad we put Unit Two back together in the spring and in anticipation of a good spring,” Smith said.
By generating about 18.5 million kilowatt hours in August — the most for August since 2008 and a high for 2013 — North Little Rock Electric avoided having to buy $997,346 worth of power at its current wholesale contract rate of $53.96 megawatt hours, Carter wrote in an email that had the chart attached.
“Obviously we don’t enjoy that level of production every month,” Carter said in the email. “However, if Murray Hydro is in proper working order, we should reasonably expect to generate electricity in accordance with our historic average of 142,076 [megawatt hours] annually. Under our present contract, this production would be worth $7,666,420.96.”
Once Unit Two is repaired, Unit One will be shut down for inspection, as Unit Two was earlier this year, to allow bidders to inspect it and issue a price. One unit is always supposed to be in operation.
“We haven’t observed the same kind of problematic symptoms out of Unit One that we have in Unit Two,” Carter said. “We expect to find a lot less damage and a lot less work that needs to be done than we found in Unit Two.”