SUBJECT: RESOLUTION
Title
A Resolution of the Board of Trustees of the Town of Erie Approving an Agreement for Professional Services with Burns & McDonnell Engineering Company, Inc. for Design Services for a Hydroelectric Facility at the Lynn Morgan Water Treatment Facility Site in an Amount not to Exceed $150,000
Body
DEPARTMENT: Public Works
PRESENTER/PREPARER: Todd Fessenden, Public Works Director
Wendi Palmer, Civil Engineer
FISCAL INFORMATION:
Cost as Recommended: $134,726
Balance Available: $150,000
Fund: Water
Budget Line Item Number: 500-70-110-605000-100305
New Appropriation Required: No
STAFF RECOMMENDATION:
Recommendation
Resolution to approve agreement with Burns & McDonnell Engineering Company, Inc., and authorize the appropriate Town officer to execute the agreement, and authorize staff to expend budgeted funds.
End
SUMMARY AND BACKGROUND OF SUBJECT MATTER:
The 2019 Water Fund Budget has funds appropriated for designing a hydroelectric facility at the Water Treatment facility site.
At the June 12, 2018 Board of Trustees Meeting, the Board authorized the Award of a Consultant Contract to Burns & McDonnel, Inc. (B&M) for the Water Treatment Facility (WTF) Expansion Design, which included evaluating the feasibility of adding a hydro turbine on the incoming water line from the Southern Water Supply pipeline to the WTF. This turbine will generate electricity by spinning a motor in reverse, taking advantage of incoming raw water flow and pressure, which is currently being wasted through a pressure reducing valve. Based on existing power usage, B&M’s evaluation estimated the payback period for designing and constructing the hydroelectric facility would be 23 years, making it also economically feasible. This calculation also included a fairly large contingency at 20 percent. As plant flows increase over time with growth, the power produced will also increase. This particular line flows at a rate of about 1.5 million gallons per day (MGD) in the winter to supply all indoor water demands and 3.5 MGD (full capacity) during summer irrigation season.
The payback period did not take into consideration the cost of money over time by factoring the likelihood of bonding of future water projects or other economic changes, these factors could cause the payback period to extend longer than the 23 years and possibly as long as 38 years. The feasibility study also did not consider the payback period if the Town was successful in obtaining grants for the design and construction of the facility. The feasibility portion of this project was co-funded by a Colorado Water Resources & Power Development Authority (CWR&PDA) grant. Staff has had discussions with various funding authorities such as CWR&PDA, Colorado Department of Local Affairs (DOLA), and Colorado Water Conservancy Board (CWCB) which have been very positive regarding grant and low interest loan opportunities. There are a number of grants available which are targeted at green energy, and specifically for water-related green energy projects. Staff understands that the most likely scenario for a grant for construction would be a 50/50 cost-sharing approach, which would significantly reduce the payback period and may cut the payback period roughly in half.
Staff will continue to apply for grants to fund the construction of this project, however in order to obtain grants for the more costly portion of this project it must be “shovel-ready” or fully designed. Worth noting, roughly 80% of the equipment and infrastructure installed as part of this project has a lifecycle of 50 or more years with proper maintenance. This infrastructure will generate electrical power at a significant savings to the Town long after it has paid for itself.
The turbine also provides sustainable energy to supplement the electrical power needed at the water treatment facility. Most power generation facilities sell power back to the grid at a roughly 50% rate, because our facility will be located at our treatment plant we will be able to utilize the power and get full market value for any power we generate as we can feed it directly into the panel that powers our largest pumps. Burns & McDonnel provided a proposal for the design of a hydroelectric facility in the amount of $134,726.
At the May 14, 2019 Board of Trustees Meeting, the Board approved the second amendment to the Lynn R. Morgan Water Treatment Facility Expansion CMAR Contract with Garney Companies, Inc. Once the hydroelectric facility is designed and permitted, staff will present to the Board of Trustees for approval another amendment to the existing CMAR Contract with Garney to construct the hydroelectric facility, assuming the contractor is performing well on the expansion project.
ATTACHMENTS:
a. Resolution
b. Professional Services Agreement
c. Lynn R. Morgan Hydroelectric Feasibility Study