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B-2 BC HYDRO – STAVE FALLS SPILLWAY GATES REPLACEMENT PROJECT EXHIBIT

Stave Falls Spillway Gates Replacement Project Workshop January 18, 2010

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Introduction

• BCUC Order
• Introduction to Spillway Gate Systems
• Spillway Gates Program
• Facility Description
• Need for the Project
• Project Description
• Alternatives Considered
• Project Costs
• Project Schedule
• Project Effects (Rate Impact, Environmental & Social)
• Project Risks
• Project Consultation
• Conclusions

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BCUC Order

• 44.2 (3)(a) of the Utilities Commission Act (the UCA)
• BCUC acceptance that the expenditures for Stave Falls Spillway

Gates Replacement Project are in the public interest

• Considerations:

> the Government’s energy objectives; > BC Hydro’s most recent Long-Term Resource Plan; > whether the expenditure schedule is consistent with sections 64.01 and 64.02 of the UCA in respect of electricity self sufficiency and clean and renewable resources; and > the interests of present and future ratepayers.

• Project Costs:

> Expected Cost: $61.5M > Authorized Cost: $70.6M

BCUC Order

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Functions of a Gate

Introduction to Spillway Gate Systems

Water barrier

• Part of the dam
• Don’t open without

demand Flood discharge

• Open on demand
• Close on demand

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Spillway Gate Operations

Introduction to Spillway Gate Systems

Operated to ensure:

• safe release of excess flows or floods to prevent
• vertopping
• essential to ensure safe dam operation

Other Operations :

• proper regulation of water flow downstream
• rapid release of water for emergency or

precautionary reservoir drawdown

• post catastrophe operational requirement

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Zipingpu Dam, China, 2005

• Concrete Face Rockfill

Dam

• Damage to upstream

concrete face slabs

• Reservoir was

immediately lowered

• Declared structurally

stable and safe

Emergency Reservoir Drawdown

Introduction to Spillway Gate Systems

Precautionary Reservoir Drawdown

W.A.C. Bennett Dam, 1996

Introduction to Spillway Gate Systems

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Post-Catastrophe Operational Requirement

Sayano Hydroelectric Plant, Russia, August 17, 2009

• 6400 MW Facility
• Unreliable backup power
• Overtopping potential in 2 days
• Just made it in time….

Introduction to Spillway Gate Systems

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Examples of Spillway Gate Failures

Introduction to Spillway Gate Systems

Structural Failures: Folsom Dam, California

• Commissioned in

1956

• Failed, July 1995
• Trunnion friction not

included in design; not checked

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Examples of Spillway Gate Failures

Introduction to Spillway Gate Systems

Operational Failures: Manatee Dam, Florida

• Spillway Gate

jammed in half-open position in July 2003

• 600 homes

evacuated

• Workers managed

to open Gate before dam overtopped

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Examples of Spillway Gate Failures

Introduction to Spillway Gate Systems

Tirlyan Dam, Russia

• August, 1994
• Spillway Gate jammed

in half-open position

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Examples of Spillway Gate Failures

Catastrophic Embankment failure

Introduction to Spillway Gate Systems

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Examples of Spillway Gate Failures

Introduction to Spillway Gate Systems

• caused about 20 deaths
• significant property destruction

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Spillway Gates Program

In 2005, BC Hydro began an initiative to improve equipment and procedures to ensure reliable

• peration of spillway gate systems
• Equipment
• Power supplies
• Control systems
• Testing and Maintenance, Management

2005 Condition evaluated against a set of design and operation principles

Spillway Gates Program

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Reliability Principles and ALARP

• Formalized and adopted in 2006, based on work by

external consultant on spillway gate systems

• New concept to hydroelectric industry, but common

practice in other high-hazard industries

• System should operate on demand with less than a

1 in 1000 chance of failure

• Reduce risk to As Low As Reasonably Practicable

Spillway Gates Program

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Prioritization of Sites

All 22 sites with spillways were evaluated and prioritized based upon:

• Current physical condition of equipment
• Availability of alternative ways to control water
• Frequency of use
• Current reliability
• Possibility of interim risk management methods
• Consequences of failure

Spillway Gates Program

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Summary

Spillway Gate Systems are:

• Critical Infrastructure for Public Safety
• Cannot be taken for granted

Spillway Gates Program

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Stave Falls Facility

Stave Falls Facility is located about 16 kilometres northwest of the town of Mission, on the Stave River.

Facility Description

Stave Falls Facility

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Stave Falls Facility

Facility Description

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Stave Falls Facility

• Originally constructed between 1910 and 1927
• Facility includes Stave Reservoir, Stave Falls

Generating Station, main dam, two intake structures and the Blind Slough Dam (provides flood discharge control)

• Part of the Alouette-Stave Falls Hydroelectric

System which consists of three facilities: Alouette (upstream), Stave Falls, and Ruskin (downstream)

• Operation of Stave Falls and Ruskin facilities closely

coordinated in order to maximize use of water and ensure water licence compliance

Facility Description

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Stave Falls Facility (Blind Slough Dam)

• Blind Slough Dam constructed to impound Stave Reservoir

and to provide controlled release of water during flood conditions

• Passing of water to the spillway is controlled via 4 radial

gates and 10 vertical gates

• When all 14 gates are fully open, they allow safe passage
• f the most severe inflow flood
• The four radial gates provide about 45% of the overall

discharge capacity and are the preferred means of passing water through Blind Slough because they allow BC Hydro to more precisely control water releases

Facility Description

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Stave Falls Facility (Blind Slough Dam)

Facility Description

Longitudinal view of Blind Slough Dam Spillway Gates

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Stave Falls Facility (Blind Slough Dam)

Facility Description

Radial Gate (Side Profile) Vertical Gate (Side Profile)

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Operating History

Facility Description

• The Blind Slough Dam’s radial gates were originally

installed around 1923

• BC Hydro refurbished the radial gates in 1997/1998

in order to extend their life by about 15 years; refurbishment consisted of replacing corroded components and repainting of the gates

• New radial gates are scheduled be installed in 2011

& 2012; about 14 years after the 1997/1998 refurbishment

• Radial Gate ropes replaced in 2007 as a result of

rope failure

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Key Concerns

• 1. Installed in the 1920s, the four radial gates and

hoists are at end-of-life and do not meet current seismic criteria.

• 2. Existing design deficiencies could lead to a common

cause failure which could result in all spillway gates becoming inoperable. Consequently, the Spillway Gate System cannot currently be relied upon to operate effectively during flood conditions

Need for the Project

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Key Concerns

Need for the Project

Hoist System Portion of Radial Gate

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Consequences of Failure

Dam Overtopping

• If the spillway gates become inoperable during flood

conditions, the Stave Falls Dam and Blind Slough Dam could be overtopped by 1 to 2 metres depth of water flow

• This level of overtopping would result in a

catastrophic dam failure at both the Stave Falls facility and the downstream Ruskin facility

• Catastrophic dam failures have the potential to result

in loss of life and significant financial and environmental damage

Need for the Project

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Consequences of Failure

Other Failure Modes Given the current condition of the Spillway Gates system, the gates could experience the following failure modes:

• gates not opening when commanded,
• gates opening when not commanded,
• gates over-travelling (moving beyond the intended position)

Failures of this type could lead to serious public and worker safety and environmental impacts

Need for the Project

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Project Scope

This project focuses on the upgrade of the radial gates and hoists and does not include the 10 vertical gates The radial gates are more critical because:

• The radial gates provide quick push button operation
• The radial gates can more easily be designed and
• Upgraded to meet a high level of reliability
• The radial gates are required to draw down the

reservoir after a seismic event

• Tighter hydraulic control

Project Description

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Project Scope

The Project will address:

• Replacement of radial gates and radial gate hoists,
• Installation of new seals, rollers and maintenance access

for radial gates, and

• Upgrades to electrical power supply system, protection

and controls.

Project Description

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Alternatives

• Alternatives that were considered but found to be

unacceptable include:

• Doing nothing
• Deferring capital improvements
• A component-by-component review of the Spillway

Gate System was then carried out to determine whether components should be replaced or refurbished

Alternatives Considered

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Alternatives – Replacement Selected

Replacement was selected over refurbishment due to the following factors:

• Age and condition of components (installed in

1920’s),

• Levels of corrosion for certain components,
• Inherent design deficiencies that would not be

addressed through refurbishment

Alternatives Considered

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Project Cost

Project Cost

PROJECT COMPONENT PROJECT COST ($ Millions) Identification Phase (Direct) 0.1 Definition Phase (Direct) 3.3 Capital Overhead and IDC 1.0 Total Identification and Definition Phase Cost 4.4 Direct Construction Cost 30.1 Project Management and Engineering 5.8 Project Contingency for Expected Cost 9.1 Dismantling and Removal and Inflation 0.5 Inflation, Capital Overhead and IDC 11.4 Implementation Phase Costs 57.0 TOTAL EXPECTED COST 61.5 Project Reserve 9.2 TOTAL AUTHORIZED COST 70.6

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Project Schedule

Date Decision Points and/or Milestones

December 2009 Application Submitted to the BCUC March 2010 Radial Gate and Hoist supply-install contract award June 2010 BCUC Decision Issued August 2011 Completion of installation of electrical power supply upgrade September 2011 Completion of installation of two of four radial gates and hoists September 2012 Completion of installation of remaining two radial gates and hoists May 2013 Project Completion Project Schedule

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Annual Incremental Rate Impacts

Project Effects

0.00% 0.05% 0.10% 0.15% 0.20% 0.25% F 2 1 F 2 1 1 F 2 1 2 F 2 1 3 F 2 1 4 F 2 1 5 F 2 1 6 F 2 1 7 F 2 1 8 F 2 1 9 F 2 2 F 2 2 1 F 2 2 2 F 2 2 3 F 2 2 4 F 2 2 5 F 2 2 6 F 2 2 7 F 2 2 8 F 2 2 9 F 2 3 F 2 3 1 F 2 3 2 F 2 3 3 F 2 3 4 Fiscal Year Per cent % Expected Cost Authorized Cost

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Environmental and Social Effects

• There are minimal adverse impacts as the project

footprint does not extend beyond existing BC Hydro property

• BC Hydro has carried out an archeological

assessment of portion the site being disturbed

• BC Hydro will continue to operate within the current

water license and water use plan.

• Potential for road closures of Dewdney Trunk Road

will be coordinated with the District of Mission and the Ministry of Transport.

Project Effects

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Project Cost Risks

Cost risks have been mitigated by:

• Clearly defining project scope
• Applying previous experience gained on other

Spillway Gates projects

• Monte Carlo simulations and appropriate contingency

level to accommodate risks

• Project procurement strategy
• Contract termination clauses should BC Hydro decide

to delay the Project

Project Risks

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Project Schedule Risks

Project Risks

Schedule risks are being managed by:

• Proactive project oversight including scheduling and

construction reviews

• Development of detailed project schedule
• Managing progress and contractor performance

relative to the approved construction schedule

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Safety & Environmental Risks

Safety Risks are mitigated by:

• BC Hydro and Contractor Safety Management

Plans which incorporate site specific safety and security work practices

• Monitoring by BC Hydro during construction

Environmental Risks are mitigated by:

• Environmental Management Plans and

Environmental Protection Plans enforced through the contracts

• On-site Environmental Monitor

Project Risks

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Consultation

• BC Hydro has undertaken consultation with First

Nations and with public stakeholders to identify issues specific to the Project

• No or very minimal adverse Project impacts have been

identified

• No opposition to the Project has been identified
• BC Hydro is of the view that the consultation

conducted for the Project to date has been adequate

• Consultation will be ongoing as the Project progresses

Consultation

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Conclusions

• BC Hydro is seeking BCUC acceptance that expenditures to replace

Stave Falls Spillway Gates system are in the public interest. Project costs are:

> Expected cost of $61.5 Million > Authorized cost of $70.6 Million

• BC Hydro has significant reliability concerns given the age of assets

and design deficiencies in the existing spillway gate system

• The project:

1. Addresses end-of-life condition of assets 2. Addresses design deficiencies that could lead to common cause failures and safety risks

• BC Hydro has identified and is managing project risks through

measures such as firm contractor pricing as well as schedule and performance guarantees Consultation

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Questions?