Council approves scope amendment for High Dam work, removes Unit 4 from contractor scope

City Engineer Jeff Hinderliter told the Administrative Services Committee on Jan. 21 that the mayor should sign Amendment No. 1 with Siemens Industry Inc. to change the contractor's scope on the High Dam hydroelectric rehabilitation project. The amendment removes Unit 4 from the contractor's scope and reallocates those funds to work on Units 1, 2 and 3.

Hinderliter said the change responds to problems found during disassembly of Unit 1 and the risk that Unit 4 may not reassemble correctly if it were removed and rewound. "The concern right now is that if we were to do what we did to Unit 1 to Unit 4 that unit may not go back together where today it's able to operate," Hinderliter said. He described cracks and misalignment discovered earlier and said reallocating contractor resources toward Units 1'3 would let crews address the most-worn equipment while minimizing risk to currently operating units.

The amendment alters scope only, not the contract cost, Hinderliter said. He also detailed an operational barrier to selling dam-generated power on the open market: outdated relays and metering. Under the city's previous long-term power purchase agreement with National Grid, a "tracking account" had accumulated; the city removed that account when it moved to an open-market energy performance agreement and paid down the tracking balance using bond proceeds, Hinderliter said. To clear the path to market sales, National Grid requires modern multi-relay protection boxes and a metering installation with fiber so ISO/market operators can independently verify generation data.

Councilor Allen pressed for clarity on the schedule and financial outlook, saying the project has run long and that the city needs assurance it can reach a point of positive cash flow once the relays and meters are in place. Hinderliter said Siemens has ordered equipment and that parts of the project are already underway, though some work is roughly three months behind schedule. He offered to facilitate a joint briefing with Siemens project managers, the mayor and council leadership so councilors can ask Siemens experts directly about timelines and deliverables.

Council members voted to authorize the mayor to sign the amendment after discussion. The motion was recorded as passing with affirmative votes from Councilors Plunkett, Burge, Allen, Vinicci and Wallen.

Why it matters: The High Dam project is the city's primary municipal generation asset. Reallocating contractor work is intended to reduce operational risk to currently running units, but further work is necessary to modernize protective relays and meters before the city can reliably sell power on the open market at higher prices. Hinderliter said relay replacement is "a critical path item" that affects the plant's revenue potential.

Background: The city previously operated under a fixed-rate power purchase agreement with National Grid; that arrangement and a tracking account are part of the project's financial history. The city is also considering longer-term licensing and environmental obligations under federal and state relicensing processes, Hinderliter said.