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2.0 Development Approach 2.1 Estimating Process For the development of the capital cost estimate, CH2M HILL utilized our Power Plant Indicative Cost Estimating Methodology which is based upon the plant specific configuration, location specific productivity and labor cost factors, and our extensive current cost data base for equipment and material. These factors are processed using our proprietary Indicative Estimating Software Model to produce a detailed analysis of the cost elements for the project that are then compared to recently completed similar projects. Project Configurations CH2M HILL's experience with various plant configurations is extensive. The combustion turbines shown in the table below have been designed and installed in combined cycle, simple cycle and cogeneration modes. 1 X LMS 100 simple cycle 2 X F-class simple cycle 4 X LM 6000 simple cycle 12X FT-8 Twin Pack simple cycle 1X 1F-class combined cycle 2 X 1 F-class combined cycle 3 X 1 E-class combined cycle CH2M HILL's estimating team retains standard plant layout configurations that have been imported into the estimating data base for use in this study. The design basis for this study is a 2 x 0 - 7F class simple cycle plant, the details for which are defined in Sections 3.0 - Plant Scope and Section 4.0 - General Arrangement of this report. Variability by Location The US construction industry has the most variability in productivity and execution strategy by location than any other country in the world. Project execution ranges froin strong union locations such as New York City, Chicago, San Francisco and St. Louis to lower cost, merit shop locations such as the Gulf Coast and Southeast US. CH2M HILL's historical database tracks and updates labor productivity by location. CH2M HILL'S "base" productivity location is the Gulf Coast, like inany national contractors. At that location, the base productivity for each discipline trade is considered a 1.0 productivity factor and is considered the most efficient location to perform work based on worker skills and efficiency. That 1.0 productivity factor is then adjusted to reflect union labor, local labor rules and other historical data. Variability of Estimates for Material and Equipment Certain material and equipment costs are more volatile in the heavy industrial market than others. As examples, high temperature- high pressure pipe, electrical transformers and copper wire are high in demand in the oil & gas market as well as the power market. When both Page 4 of 24 The Brufrle Group 2011 PJM CONE Stiidy Appendix Puge A-7 6 6 6 6 6 0 0PDF Image | THE APPLICATION OF KENTUCKY POWER
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