Owner Challenges & Expectations to Build the Next Generation of Power Plants Callum Ford August 2008 Hilton Opera Hotel Hanoi, Vietnam

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1 Owner Challenges & Expectations to Build the Next Generation of Power Plants Callum Ford August 2008 Hilton Opera Hotel Hanoi, Vietnam

2 Agenda About STP Why are we doing this now? Current industry outlook New Build Opportunities Units 3&4 Another Opportunity Units 1&2 Question & Answers

3 Carl Sayko Current Position: General Manager of Support Services for Units 3 & 4, STP Nuclear Operating Company Responsibilities: Project information technology, scheduling, estimating, cost, purchasing, contracts, records management, document control, and human resources Experience: 35 years in nuclear power management positions 24 years with STP and 11 years with a major AE firm and as a consultant Accomplishments: As project manager, set four world records in Turbine Outage Schedule Performance. Project manager for STP Units 1&2 Turbine Replacement Project which was awarded the 2007 Power Engineering Magazine Nuclear Project of the Year Award. Education: Economics degree from the University of Pennsylvania Personal: Married to Pamela and has 4 children

4 About STP The South Texas Project Electric Generating Station is located 90 miles southwest of Houston, near Bay City, TX. South Texas Project Nuclear Operating Company (STPNOC) is jointly owned by Austin Energy (16%), CPS Energy (40%) and NRG Energy (44%) who share its output in proportion to ownership. The current Units 1&2 produce 2.7GW annually. On September 24th, 2007 STPNOC applied for a license to build and operate two new units. This was the first application for a new nuclear plant in almost 30 years.

5 STP Accomplishments 2008 May 7 -- STP receives another Best of the Best Award, the plant's third, and another Top Industry Practice Award, the plant's seventh, for developing and applying risk management for maintenance applications The South Texas Project s Unit 1 nuclear reactor safely led the nation and all 442 reactors worldwide in electric generation in In addition, STP s Unit 2 had the third highest production nationally and ranked number 14 globally despite a refueling and maintenance outage last year. Dec. 12, Power Engineering magazine presented a 2007 Project of The Year Award to the STP Nuclear Operating Company for excellence in replacing the low pressure turbines in both STP units. The publication honored STP's turbine replacement effort as the Best Nuclear Project worldwide. September STP reports lowest production cost among U.S. nuclear plants, cents per kilowatt-hour in 2006.

6 STP Accomplishments 2007 (Cont d) April The low pressure turbines and main generator rotor in Unit 2 were replaced in 28 days, setting a new world record. March STP completes a second, and consecutive, breaker-to-breaker production run. Unit 2 operated continuously for 508 days between scheduled refueling outages October The low pressure turbines in Unit 1 were replaced in 26.5 days, establishing a new world record. October 1 -- STP completes the first breaker-to-breaker production run in the plant's history. Unit 1 operated continuously for 532 days between scheduled refueling outages. STP Unit 2 led all 103 reactors nationwide in production, operating continuously all year and generating billion KwH. Its output was the third highest of the 442 reactors worldwide. STP Unit 1, which was routinely shut down 34 days last year for refueling and maintenance, generated billion KwH. Despite the outage, the unit still ranked sixth in the country and seventeenth globally.

7 The Outlook For Our Earth? 1.6 billion people one quarter of the world s population, have no access to electricity. The demand for electricity in developed countries continues to grow. 29,028 ft

8 Electricity Around the World

9 Forecast Electricity Demand

10 US Portfolio 3% Oil 18.6% Natural Gas 19.4% Nuclear Coal: 49.9% 6.4% Hydro 2.7% Renewables

11 US Nuclear Industry Plans Company Site Design Number of Reactors COL Application Filing Date Dominion Duke Power * North Anna (VA) Cherokee (SC) ESBWR AP Entergy FPL Grand Gulf (MS) TBD ESBWR TBD 1 TBD Exelon * Clinton TBD TBD TBD (ESP in review) Entergy TVA/Southern River Bend (LA) Bellefonte (AL) ESBWR AP Progress Energy Progress Energy Harris (NC) Location TBD (FL) AP 1000 TBD SCE&G/Santee Southern Cooper Co. Constellation/Unistar V.C. Summer (SC) Vogtle (GA) Calvert Cliffs (MD) AP 1000 AP 1000 EPR (ESP in 2008 review) STPNOC Texas Utilities Ameren/UniStar Amarillo Power/UniStar Nine Mile (NY) South Texas Project (TX) Comanche Peak (TX) Calloway Amarillo (TX) ABWR APWR EPR EPR

12 Why Build Nuclear? Performance of existing fleet Energy Policy Act of 2005 Predictable and economic Clean and low emissions

13 New Build Opportunities Units 3&4

14 The ABWR Existing design certified by the Nuclear Regulatory Commission Established supply chain Construction track record Four similar plants operating successfully in Japan Additional plants under construction Leading versus bleeding edge

15 New Build Objectives Units 3&4 Complete the project within established schedule and budget parameters. Achieve the Energy Policy Act benefits. Support the U. S. nuclear renaissance. Deploy an integrated IMS to facilitate state of the art project management tools through design, construction, commissioning and data handover to operations and maintenance. New build data and systems flange with operating and maintenance system being developed in existing units. Configuration management environment is highly transparent.

16 Project Focus Safe and reliable operation of existing units Total project approach COLA Contracts and procurement Modularisation plan Long-term staffing and training Challenges

17 Project Focus Safe and reliable operation of existing units Total project approach COLA Contracts and procurement Modularisation plan Long-term staffing and training Challenges

18 Previous Nuclear Construction Projects Standard construction techniques Hard copy drawings and specifications Limited Information Technology Schedules not electronically linked to design & procurement data bases Integration through communication and collaboration skills Site specific design Overlap in design and construction schedules

19 Project Culture Key Success Factors Project management finesse STP s facilitative culture High standards of excellence Planning mentality Strong communications Collaboration & decision making Teamwork Project management tools

20 Data Handover Paradigm Information organisation in the project execution phase is different than for the operational facility. Not all the information generated during the project is required in O&M we intend to identify this early and not leave until the end. Provide clear and precise guidelines as to what we receive and when we receive it and incorporate it into the EPC contract. Ensure that the information provided is consistent with our configuration and change management strategies and is readily transferable into our new company operations and maintenance system.

21 Engineering data in Execution is stateful, volatile, temporal and spread across disparate sources & owners Specifications & Standards Process Simulation Project Management Instrumentation Design Instrument Data Sheets PFD Requisitioning Time allocation & measurement Hazop Automation & Control Design Contracts P&ID Mechanical Equipment Design Electrical Design Procurement Cost Controls Progress Management Plant 3D Modeling HVAC Equipment Data Sheets SLD s & Schematitcs GA s and ISO s Civil & Structural Supplier Gateway Line Lists Shipping EDMS Valve Lists Cabling & Lighting Document Control Equipment Lists Project Portal Hook up & Installation Construction Sequencing Test & Commissioning EPC where time TO market is imperative planning logic connectivity layout actual completion

22 Engineering data in Operations spreads across multiple plant operational systems & time domains Extended Supply Chain Supply Chain Enterprise Plant Production Unit Production Process Machine SCADA Data Capture Control Logic Product / plant Lifecycle mgmt Batch Mgt SPC / Trends Automation Specialty Quality Admin In Process Testing Process Automation Product Specs EDMS Process Planning Optimisation Chemistry Mgt MES Data Historian Plant Centric ERP LIMS ERP Financials Procurement FCP Factory Schedule CRM Reliability monitoring & optimisation Trading Exchange Supply Chain OO where time IN market is imperative Machine Logic Process Control SPC Process Mgt Work Order Execution Plant Operations Production Schedule Business Process Supply Chain Customer Original diagram source courtesy: AMR Research

23 Configuration Management Purchasing Domain = typical Model (standard equipment) Pump Catalog Engineering Domain = logical N Centrifugal Model # CP-C-4020 N Operations Domain = actual Tag (functional location) 1 P-101 Logical or Functional Location what are the characteristics to fulfill the process need 1 Specifications: RPM: 1500 Material: Cast Steel 316 Model or Std Equipment what we can purchase to fulfill the process need and, if it breaks, where are the spares or where can we find a similar model? 1 1 Asset (inventoried item) Actual or Physical what we have installed to fulfill the process need

24 Units 1&2 Another Opportunity

25 Units 1&2 Introduction South Texas Project 1 Palacios, Texas, United States Pressurised Water Reactor (PWR) Westinghouse Electric Corp. Net Output: 1250 MWe Operable. Initial criticality: 03/1988; Commercial start: 08/1988 South Texas Project 2 Palacios, Texas, United States Pressurised Water Reactor (PWR) Westinghouse Electric Corp. Net Output: 1250 MWe Operable. Initial criticality: 03/1989; Commercial start: 06/1989

26 Units 1&2 Success Why Change? Commitment to operational and financial excellence Texas is a deregulated market Future financial improvements will largely come from technology and process improvements Attaining fleet like economies of scale is a key element of our Business Plan and requires common processes and systems for all 4 units

27 Units 1&2 Objectives Develop a strategic plan to capture relevant legacy data Paper Mylar CAD Files Raster Files Individual databases Evaluate commercial technologies to replace current in-house developed applications - i.e. master equipment database Integrate with new Operations and Maintenance system Provide a harmonised and integrated IT infrastructure and supporting technologies across Units 1&2, consistent with Units 3&4 Capitalise on 3-D modeling for continued outage and modification excellence

28 Question/Answer

29 Owner Challenges & Expectations to Build the Next Generation of Power Plants Callum Ford August 2008 Hilton Opera Hotel Hanoi, Vietnam