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THE APPLICATION OF KENTUCKY POWER

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THE APPLICATION OF KENTUCKY POWER ( the-application-kentucky-power )

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Thereare many different contract payment structures where the cash flow varies on an annual basis because of the delivery schedule of the parts for a scheduled event, and when the major maintenance events occur based on the plant’s operations. Plant operations will determine how long it takes for the plant to reach the total factored fired starts (FFS) or factored fired hours (FFH) limit requiring such a maintenance event to be scheduled. For your purposes, we understand the LTSA costs are intended to reflect the total variable costs of the LTSA including major equipment costs incurred during these maintenance events (including combustion and hot gas path parts). The simple cycle and combined cycle plants were modeled with nominal operating profiles of 50 starts and 150 starts per year, respectively, although the resulting variable cost numbers would be consistent with a range of operating profiles We assumed a seventeen (17) year contract The Simple Cycle configuration would have the same LTSA budget on a $/FFS and $/FFH basis with or without an SCR The nominal dollars reported are for the year starting June 1, 2015 and would be escalated with a 2.5% inflation rate thereafter For both the simple cycle and combined cycle plant, LTSA fees would be assessed on either an FFS basis or an FFH basis. If the plant is operating at greater than 27 FFH/FFS, the maintenance intervals would be hours based, otherwise the costs would be assessed on a starts basis. There are several factors that will affect the maintenance intervals regardless of whether the unit is hours or starts based . For example, fuel type, trips, type of NOx control, operational considerations, etc. will all affect how the FFS and FFH are calculated. General Electric GER3620, Heavy-Duty Gas Turbine Operating and Maintenance Considerations, provides details for why these factors affects the maintenance intervals. TheBIatrleGIoup201I PJMCONESrirdyAppeiidrxPngeC-20 19

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