Newman Station Units 1, 2, and 4 Condition Assessment Report

Home , Stator

prepared for

El Paso Electric, Inc. El Paso, TX

April 2010

Project No. 53549

prepared by

Burns & McDonnell Engineering Company, Inc. Kansas City, Missouri

Newman Station Units 1, 2, and 4 Condition Assessment Report

prepared for

El Paso Electric, Inc. El Paso, TX

April 2010

Project No. 53549

prepared by

Burns & McDonnell Engineering Company, Inc. Kansas City, Missouri

Condition Assessment Report Newman Units 1, 2, & 4

TABLE OF CONTENTS

Page No.

EXECUTIVE SUMMARY ...... 1

1.0 INTRODUCTION ...... 1-1 1.1 General Description ...... 1-1 1.2 Project Overview ...... 1-2 1.3 Study Contents ...... 1-2 1.4 Limitation of Liability ...... 1-3

2.0 BOILER ...... 2-1 2.1 Unit 1 Boiler ...... 2-1 2.1.1 Introduction ...... 2-1 2.1.2 Waterwalls ...... 2-1 2.1.3 Superheater ...... 2-1 2.1.4 Reheater ...... 2-2 2.1.5 Economizer ...... 2-3 2.1.6 Drums and Headers ...... 2-3 2.1.7 Safety Valves ...... 2-4 2.2 Unit 2 Boiler ...... 2-5 2.2.1 Introduction ...... 2-5 2.2.2 Waterwalls ...... 2-5 2.2.3 Superheater ...... 2-5 2.2.4 Reheater ...... 2-6 2.2.5 Economizer ...... 2-6 2.2.6 Drums and Headers ...... 2-7 2.2.7 Safety Valves ...... 2-8 2.3 Unit 4 Heat Recovery Steam Generators ...... 2-8 2.3.1 Introduction ...... 2-8 2.3.2 Superheater ...... 2-9 2.3.3 HP Evaporator ...... 2-9 2.3.4 HP Economizer ...... 2-9 2.3.5 LP Evaporator ...... 2-10 2.3.6 Drums and Headers ...... 2-10 2.3.7 Safety Valves ...... 2-11

3.0 BOILER AUXILIARY SYSTEMS ...... 3-1 3.1 Newman Unit 1 ...... 3-1 3.1.1 Fans ...... 3-1 3.1.2 Air Heater ...... 3-1 3.1.3 Flues & Ducts ...... 3-1 3.1.4 Blowdown System ...... 3-1

El Paso Electric Company i Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4

3.2 Newman Unit 2 ...... 3-2 3.2.1 Fans ...... 3-2 3.2.2 Air Heater ...... 3-2 3.2.3 Flues & Ducts ...... 3-2 3.2.4 Blowdown System ...... 3-2 3.3 Newman Unit 4 ...... 3-2 3.3.1 Flues & Ducts ...... 3-2

4.0 TURBINE GENERATOR ...... 4-1 4.1 Newman Unit 1 ...... 4-1 4.1.1 Introduction ...... 4-1 4.1.2 Turbine ...... 4-1 4.1.3 Turbine Valves ...... 4-2 4.1.4 Generator ...... 4-2 4.2 Newman Unit 2 ...... 4-3 4.2.1 Introduction ...... 4-3 4.2.2 Turbine ...... 4-3 4.2.3 Turbine Valves ...... 4-3 4.2.4 Generator ...... 4-4 4.3 Newman Unit 4 ...... 4-4 4.3.1 Introduction ...... 4-4 4.3.2 Gas Turbines ...... 4-5 4.3.3 Gas Turbine Generators ...... 4-6 4.3.4 Steam Turbine ...... 4-6 4.3.5 Steam Turbine-Generator ...... 4-6

5.0 HIGH ENERGY PIPING SYSTEMS ...... 5-1 5.1 Newman Unit 1 ...... 5-1 5.1.1 Main Steam Piping ...... 5-1 5.1.2 Hot Reheat Piping ...... 5-1 5.1.3 Cold Reheat Piping ...... 5-2 5.1.4 Extraction Piping ...... 5-3 5.1.5 Feedwater Piping ...... 5-3 5.2 Newman Unit 2 ...... 5-4 5.2.1 Main Steam Piping ...... 5-4 5.2.2 Hot Reheat Piping ...... 5-5 5.2.3 Cold Reheat Piping ...... 5-5 5.2.4 Extraction Piping ...... 5-6 5.2.5 Feedwater Piping ...... 5-7 5.3 Newman Unit 4 ...... 5-7 5.3.1 Main Steam Piping ...... 5-7 5.3.2 Feedwater Piping ...... 5-8

6.0 BALANCE OF PLANT ...... 6-1

El Paso Electric Company ii Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4

6.1 Newman Unit 1 ...... 6-1 6.1.1 Condensate System ...... 6-1 6.1.2 Feedwater System ...... 6-2 6.1.3 Deaerator Heater & Storage Tank ...... 6-2 6.1.4 Condensate and Boiler Feed Pumps ...... 6-2 6.1.5 Circulating Water System ...... 6-3 6.1.6 Water Treatment, Chemical Feed, & Sample Systems ...... 6-3 6.1.7 Stack ...... 6-4 6.1.8 Plant Structures ...... 6-4 6.2 Newman Unit 2 ...... 6-4 6.2.1 Condensate System ...... 6-4 6.2.2 Feedwater System ...... 6-5 6.2.3 Deaerator Heater & Storage Tank ...... 6-5 6.2.4 Condensate and Boiler Feed Pumps ...... 6-5 6.2.5 Circulating Water System ...... 6-6 6.2.6 Chemical Feed, & Sample Systems ...... 6-6 6.2.7 Stack ...... 6-6 6.2.8 Plant Structures ...... 6-6 6.3 Newman Unit 4 ...... 6-7 6.3.1 Condensate System ...... 6-7 6.3.2 Feedwater System ...... 6-7 6.3.3 Deaerator Heater & Storage Tank ...... 6-7 6.3.4 Circulating Water System ...... 6-7 6.3.5 Chemical Feed, & Sample Systems ...... 6-8 6.3.6 Stack ...... 6-8 6.3.7 Plant Structures ...... 6-8

7.0 ELECTRICAL AND CONTROLS ...... 7-1 7.1 Newman Unit 1 ...... 7-1 7.1.1 Transformers ...... 7-1 7.1.2 Medium Voltage Switchgear ...... 7-2 7.1.3 480V Loadcenters, Switchgear, & Motor Control Centers ...... 7-2 7.1.4 Station Emergency Power Systems ...... 7-3 7.1.5 Electrical Protection ...... 7-3 7.1.6 2.4KV Motors and Cables...... 7-3 7.1.7 Substation ...... 7-4 7.1.8 Control Systems ...... 7-4 7.1.9 Miscellaneous ...... 7-4 7.2 Newman Unit 2 ...... 7-5 7.2.1 Transformers ...... 7-5 7.2.2 Medium Voltage Switchgear ...... 7-5 7.2.3 480V Loadcenters, Switchgear, & Motor Control Centers ...... 7-6 7.2.4 Station Emergency Power Systems ...... 7-6 7.2.5 Electrical Protection ...... 7-6 7.2.6 2.4KV Motors and Cables...... 7-7 7.2.7 Substation ...... 7-7

El Paso Electric Company iii Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4

7.2.8 Control Systems ...... 7-7 7.2.9 Miscellaneous ...... 7-7 7.3 Newman Unit 4 ...... 7-8 7.3.1 Transformers ...... 7-8 7.3.2 Medium Voltage Switchgear ...... 7-9 7.3.3 480V Loadcenters, Switchgear, & Motor Control Centers ...... 7-9 7.3.4 Station Emergency Power Systems ...... 7-9 7.3.5 Electrical Protection ...... 7-10 7.3.6 2.4KV Motors and Cables...... 7-10 7.3.7 Substation ...... 7-10 7.3.8 Control Systems ...... 7-10 7.3.9 Miscellaneous ...... 7-11

8.0 EXTERNAL AND ENVIRONMENTAL FACTORS ...... 8-1 8.1 Introduction ...... 8-1 8.2 Fuel Supply ...... 8-1 8.3 Water Supply ...... 8-1 8.4 Air Emissions & Environmental Issues ...... 8-2 8.5 Wastewater Discharge ...... 8-2 8.6 Odor, Visibility, & Noise ...... 8-3

9.0 NEW GENERATION ...... 9-1 9.1 Assumptions ...... 9-1 9.1.1 General Assumptions and Clarifications ...... 9-1 9.1.2 Project Indirect Costs ...... 9-2 9.1.3 Evaluation ...... 9-4

10.0 RECOMMENDATIONS AND CONCLUSIONS ...... 10-1 10.1 General Recommendations ...... 10-1 10.2 Unit 1 Recommendations ...... 10-1 10.3 Unit 2 Recommendations ...... 10-3 10.4 Unit 4 Recommendations ...... 10-4 10.5 Analysis...... 10-6 10.6 Conclusions ...... 10-7

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El Paso Electric Company iv Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4

LIST OF TABLES

Page No.

Table 9-1 Combined Cycle Gas Turbine Screening Information ...... 9-5 Table 10-1: Implementation Schedule for B&McD Recommendations for Newman Unit 1 ... 10-2 Table 10-2: Implementation Schedule for B&McD Recommendations for Newman Unit 2 ... 10-4 Table 10-3: Implementation Schedule for B&McD Recommendations for Newman Unit 4 ... 10-5 Table 10-4: Net Present Value of Total Estimated Costs as Percentage of Equivalent New Unit ...... 10-7 Table 10-5: Total Cost Comparison on a $/Nominal Capacity Basis as Percentage of Equivalent New Unit ...... 10-7 Table 10-6: Total Cost Comparison on a $/MWhr Basis as Percentage of Equivalent New Unit ...... 10-7

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El Paso Electric Company v Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Executive Summary

EXECUTIVE SUMMARY El Paso Electric (EPE) retained the services of Burns & McDonnell (B&McD) to perform a study to assess whether Newman Units 1, 2, and 4 could operate reliably until their desired retirement dates (December 2015, December 2013, and December 2015, respectively) and potentially up to six additional years, in two year increments. This study includes a review of the current condition of the plant, current plant maintenance and operations practices, and a review of external factors influencing the retirement dates. The unit remaining life was based on plant maintenance data and historical operations data provided by EPE, maintenance and operating practices of units similar to Newman, and Burns & McDonnell’s professional opinion regarding the expected remaining life of the facilities. B&McD has estimated capital and incremental O&M costs for any recommendations made to maintain unit reliability. In addition, B&McD has provided a “screening level” estimate of the capital and O&M cost for new generation.

The approach utilized for this study was to review plant documentation, interview plant personnel, and conduct a walk-down of the plant to obtain information to complete the Newman Units 1, 2, and 4 plant condition assessments. As a result of our review of the design, condition, operations and maintenance procedures, long-range planning, availability of consumables, and programs for dealing with environmental considerations, it is B&McD’s opinion that Newman Units 1, 2, and 4 are capable of extending their scheduled retirement by 6 years to December 2021, December 2019, and December 2021, respectively. This assumes that the recommended inspections and assessments do not discover any significant findings. However, comparing the capital and incremental O&M cost estimated to extend the life of the three units against the estimated cost for new generation, it is B&McD’s opinion that it is not economically justified to extend the life of the existing units the full six years. As indicated in Table 10-6, the equivalent new unit becomes less expensive on a $ per MWhr basis sometime between the 2-year and 4- year study period for Newman units 1 and 2. For Newman Unit 4, the equivalent new unit becomes less expensive on a $ per MWhr basis after the 4-year life extension period.

However, future operating capability can only be predicted from one inspection to the next inspection. For example, in the 2006 overhaul of GT-2, cracks were observed in the fourth row disc, requiring replacement of that major component before continued operation. The costs of that replacement were high enough that total replacement of the GT-2 was evaluated. The decision of EPE at that time was that the disc replacement was the economic course of action, and the unit was placed back in continuing service with a new fourth row disc.

The Newman units were placed into commercial service May 1960, June 1963, and June 1975, respectively. Although the units are nearing the end of their anticipated life cycle, they have yet

El Paso Electric Company ES-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Executive Summary

to show the characteristic upswing in Equivalent Forced Outage Rate (EFOR) that is indicative of general degradation of the major components. This is due to a number of factors including:

• Avoidance of cycling operation during the majority of their life, • Proper attention to water chemistry, and • An aggressive Predictive Maintenance (PdM) program Across the industry, external factors, such as availability of fuel or water, or environmental factors have been the cause of generating units to be taken out of service. In this case, there are no external or environmental factors detected which would limit or restrict the operation of Newman units in the foreseeable future. There is a potential for NOx emissions regulations that may require the addition of control technology to the units, or the purchase of emissions allowances.

Based on the information acquired and presented in this report, the following conclusions have been made:

1. The overall condition of the Newman units appears to be very good considering their age. There are no conditions that have been identified as being detrimental to achieving the desired retirement date, plus up to six additional years. In general, operational and maintenance problems which could affect operation are actively being addressed. However, the metallurgical condition of critical components is unknown at this time due to the lack of an ongoing Non-Destructive Examination (NDE) program. Consequently, in providing this relatively clean bill of health, our confidence level is moderated by this unknown condition (see further discussion in item 7 below).

2. Unit operations and maintenance are generally well planned and carried out in a manner consistent with or exceeding utility industry standards.

3. The predictive maintenance program used throughout the EPE system has been highly successful in minimizing forced outages in the rotating equipment area. This program has received industry recognition and, where feasible, should be extended to other critical equipment, such as control valves, and certain heat exchangers.

4. Certain conditions on major unit components may develop in the future, and the cost of repairing or replacing such components would make the continued operation of a generating unit imprudent. The end of the expected useful life of any of the Newman

El Paso Electric Company ES-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Executive Summary

units may occur upon the failure or prediction of eminent failure, of the steam drum or the concurrent failure of one or more simultaneous major plant components.

Based on the information provided by EPE, there were no reported indications or predictions of potential failure of these major unit components anticipated in the foreseeable future. However, currently there is no NDE program in place to monitor the condition of these major components.

5. Economic pressure to cycle the units at night and on weekends is currently present and will continue to grow as the fuel price disparity between gas and coal / nuclear becomes greater. With the addition of Newman Unit 5, EPE has been forced to cycle the less efficient units. As new failure trends are established, a new end-of-life determination will need to be made.

6. The Newman units have typically achieved better than average plant availability, and equivalent forced outage rates. This results from a combination of the predictive maintenance program, coupled with proper attention to water chemistry and the aforementioned dispatch philosophy intended to minimize cycling. As EPE decides to cycle the units, existing metallurgical weak points that may be lurking unseen within the steam cycle components will become more evident. In addition, oxygen infiltration into the steam cycle during shutdowns will introduce not only general corrosion, but oxygen pitting. In those areas that are highly stressed, these pits serve as initiation points for cracks that, through repeated cycles, grow to failure points. Therefore, to minimize the impact of cycling, we recommend inerting the steam cycle components during shutdowns.

7. EPE is currently operating its system with little reserve margin during peak seasons. Given this, EPE should closely scrutinize the vulnerabilities of these units, and by extension the rest of its generating fleet. Several vulnerabilities that we have observed at the Newman units are:

a. The unknown metallurgical condition of the unit’s critical components. Given the age of the units, we believe that implementation of an NDE program would be prudent in order to provide early warning of major component deterioration. We recommend that this be made part of EPE’s existing PdM program in order to translate the findings into maintenance planning.

b. The units have virtually no protection against Turbine Water Induction. While these incidents do not occur frequently, when they do, they can be quite damaging

El Paso Electric Company ES-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Executive Summary

to the turbine and result in lengthy outages. We recommend that EPE review the ASME TWIP guidelines (ASME TDP-1-2006) and develop a cost effective modification plan for these units.

c. Monitor the auxiliary transformer for combustible gas due to age to provide early warning of component failure.

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El Paso Electric Company ES-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 1 - Introduction

1.0 INTRODUCTION

1.1 GENERAL DESCRIPTION El Paso Electric (EPE) is an investor-owned electrical utility responsible for supplying power through an interconnected system to a service territory encompassing approximately 334,000 customers in the Rio Grande Valley in west Texas and southern New Mexico. EPE has interests in Palo Verde Nuclear Plant and Four Corners Station to supply its base load. Both Rio Grande and Newman stations provide load following services. Newman Unit 1 began commercial operation on May 1960, Newman Unit 2 began commercial operation in June 1963, and Newman Unit 4 began commercial operation in June 1975.

Newman Unit 1 includes a natural circulation El Paso style boiler designed by Babcock and lb Wilcox for 560,000 /hr steam flow at 1,510 psig outlet pressure and 1,005°F superheater and reheater outlet temperatures. The boiler has a pressurized furnace, and a single regenerative Ljungstrom air preheater. The Allis Chalmers steam turbine is a tandem compound, impulse reaction double-flow 21 stage condensing unit. The generator is currently rated at 75 MW, but capable of producing 81.5 MW. Cooling water is circulated through a cross-flow cooling tower with treated makeup water provided from the local municipal sewage treatment plant outfall. Note that boiler makeup water and plant service water is provided from a local well system.

Newman Unit 2 includes a natural circulation El Paso style boiler designed by Babcock and lb Wilcox for 560,000 /hr steam flow at 1,510 psig outlet pressure and 1,005°F superheater and reheater outlet temperatures. The boiler has a pressurized furnace, and a single regenerative Ljungstrom air preheater. The General Electric steam turbine is a tandem compound, double- flow condensing unit. The steam turbine/generator is nominally rated at 75 MW, but has a MCR of 97 MW. Cooling water is circulated through a cross-flow cooling tower with treated makeup water provided from the local municipal sewage treatment plant outfall. Note that boiler makeup water and plant service water is provided from a local well system.

Newman Unit 4 is a Westinghouse PACE 260 plant consisting of Westinghouse 501B gas turbines in a 2 x 1 combined cycle configuration. The total unit is rated at 223.5 MW at 4,065 feet elevation, 80°F ambient air and 3.5 inches HG condenser pressure. The gas turbines, originally Westinghouse 501B2 units, were upgraded to 501B6 models in 1994 and 1995. The lb HRSGs are single pressure vertical flow with 440,000 /hr steam flow at 1250 psig outlet pressure and 950°F steam outlet temperature. The steam turbine is a Westinghouse single case, non- reheat, single flow, axial exhaust condensing unit rated at 107 MW. Cooling water is circulated through a cross-flow cooling tower with treated makeup water provided from the local municipal sewage treatment plant outfall. Note that boiler makeup water and plant service water is provided from a local well system.

El Paso Electric Company 1-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 1 - Introduction

1.2 PROJECT OVERVIEW El Paso Electric (EPE) retained the services of Burns & McDonnell (B&McD) to perform a study to assess whether Newman Units 1, 2, and 4 could operate reliably until their desired retirement dates and potentially up to six additional years, in two year increments. B&McD has estimated capital and incremental O&M costs for any recommendations made to maintain unit reliability. In addition, B&McD has provided a “screening level” estimate of the capital and O&M cost for new generation. This study includes a review of the current condition of the plant, current plant maintenance and operations practices, and a review of external factors influencing this retirement date. The unit remaining life was based on plant maintenance data and historical operations data provided by EPE, maintenance and operating practices of units similar to Newman, and Burns & McDonnell’s professional opinion regarding the expected remaining life of the facilities.

To complete this assessment, Burns & McDonnell engineers reviewed plant documentation, interviewed plant personnel, and conducted a walkdown of the plant to obtain information on the condition of the Newman Units.

1.3 STUDY CONTENTS The following report details the current condition of the plant, its future operating capability, and recommendations for improvements / additional testing or inspections. This information was compiled based on existing plant records, general plant and equipment observations, comparison to similar units and equipment, and in-house expertise.

Since virtually any single component within a power plant can be replaced, the remaining life of a plant is typically driven by the economics of replacing the various components as necessary to keep the plant operating economically versus shutting it down and either purchasing power or building a replacement facility. For this reason, it is important for EPE to periodically update the condition assessment of the Newman Units to project out the major future expenditures that will be required to maintain the facility. Specifically, the critical physical components that will likely determine the facility’s remaining life include the following:

• Steam generator drum, headers, and downcomers. • High energy piping systems. • Steam turbine rotor shaft, valves, and steam chest. • Gas turbine rotor shaft. • Main generator rotor shaft, stator windings, stator insulator, and retaining rings. The following items, although not as critical as the above, are also influential components that will also play a role in determining the remaining life of the plant:

El Paso Electric Company 1-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 1 - Introduction

• Steam generator tubing, ductwork, air preheater and FD fan. • Steam turbine blades, diaphragms, nozzle blocks, and casing and shells. • Gas turbine blades, diaphragms, combusters, casing and shells. • Generator stator-winding bracing, DC exciter, and voltage regulator. • Balance of plant condenser, feedwater heaters, feedwater pumps & motors, controls, and auxiliary switchgear. • Cooling tower structure, structural steel, stack, concrete structures, and station main GSU and auxiliary transformers. External influences that will probably be the major determinant of the future life of the units include:

• Environmental influences, including water availability and future environmental compliance requirements such as CO2 emissions. • Economics, including fuel costs, comparative plant efficiency, and system needs. • Obsolescence such as the inability to obtain replacement parts and supplies.

1.4 LIMITATION OF LIABILITY In the preparation of this Report, the information provided to us by EPE was used by B&McD to make certain assumptions with respect to conditions which may exist in the future. While B&McD believes the assumptions made are reasonable for the purposes of this Report, B&McD makes no representation that the conditions assumed will, in fact, occur. In addition, B&McD has no reason to believe that the information provided by EPE, and on which this Report is based, is inaccurate in any material respect. However, B&McD has not independently verified such information and cannot guarantee its accuracy or completeness. To the extent that actual future conditions differ from those assumed herein or from the information provided to B&McD, the actual results will vary from those forecast.

Estimates, forecasts, projections, and schedules prepared by B&McD relating to costs, quantities, demand or pricing (including, but not limited to, property costs, construction, operations or maintenance costs, and/or energy or commodity demand and pricing), are opinions based on B&McD's experience, qualifications, and judgment. B&McD has no control over weather, cost and availability of labor, material and equipment, labor productivity, energy or commodity pricing, demand or usage, population demographics, market conditions, changes in technology, and other economic or political factors affecting such estimates or projections. EPE acknowledges that actual results may vary significantly from the representations and opinions herein, and nothing herein shall be construed as a guarantee or warranty of conclusions, results, or opinions. B&McD makes no guarantee or warranty (actual or implied) that actual rates, demand, pricing, costs, performance, schedules, quantities, technology, and related items will not

El Paso Electric Company 1-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 1 - Introduction vary from the opinions contained in the estimates, forecasts, projections, schedules, results, or other statements or opinions prepared by B&McD.

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El Paso Electric Company 1-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

2.0 BOILER

2.1 UNIT 1 BOILER 2.1.1 Introduction The boiler in Newman Unit 1 is a natural circulation, pressurized furnace unit designed by Babcock and Wilcox to burn natural gas or light fuel oil. The unit was originally designed for a lb maximum continuous rating (MCR) of 560,000 /hr main steam at a superheater outlet condition of 1510 psig and 1,005° F. The outlet reheat conditions are 416 psig, 1,005° F. The superheater and reheater outlet temperatures are controlled by desuperheater sprays. The boiler design also included an economizer and Ljungstrom type air heater for flue gas heat recovery.

Boiler chemical cleaning frequency is on a 4-6 year cycle with the last cleaning occurring in December 2005. No further boiler chemical cleaning is scheduled due to the imminent retirement of the unit. Should the life of the unit be extended, another boiler chemical cleaning is recommended.

EPE has not instituted a condition assessment program for the critical boiler components. There were no non-destructive examination (NDE) or physical examination reports available to assess the condition of the critical boiler components. However, EPE has reported there is no ASTM A335-P11 seamed piping in the boiler.

2.1.2 Waterwalls From the information provided by EPE, the boiler waterwall tubes appear to be in good condition. Relatively few waterwall leaks have occurred over the life of the unit due to the proven design of the boiler and the clean fuel. Because of this fact, the station currently has no tube mapping program in place, nor does it have a regular Non-Destructive Examination (NDE) program established.

In general, the overall condition of the furnace is reported to be good. However, since there is no regular NDE program to identify weakened tubes, our confidence in this assessment is moderated. Typically, the most common damage mechanisms that force replacement of the waterwall tubes are thermal fatigue, and fire side corrosion. Eventually, spot replacements, as needed, will likely be necessary to prevent tube rupture related outages.

2.1.3 Superheater The superheater sections of the boiler are used to raise the temperature of the steam above the saturation temperature (i.e. superheat the steam). Saturated steam exiting the top of the steam drum passes through the various sections of the superheater and the temperature is continually increased until the steam finally exits the superheater outlet header and continues through the

El Paso Electric Company 2-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler main steam line towards the high pressure steam turbine. The superheater is divided into two stages, primary and secondary, with attemperators positioned in between. At Newman Unit 1, the design of both stages allows for draining the superheaters during outages and/or startup. This facilitates faster startup, since the startup is not delayed by the time required to drain the superheater.

The secondary superheater at Newman Unit 1 was replaced in 2000. Considering the relatively recent replacement of the secondary and the lack of tube leaks on the primary, both stages of the superheater are believed to be in good condition. However, our confidence in this assessment is moderated by the fact that there is no regular NDE program established.

Future inspection should focus on identifying signs of creep, fatigue, and gas side corrosion, as they are the most common damage mechanisms in superheater tubes. If tube failures become a problem or if future NDE programs reveal a significant amount of deterioration, higher grade material (if signs of creep or fatigue are identified) should be considered on future tube replacements to prolong the life of the replacement tubes.

Inspection of the attemperators and piping systems downstream of the attemperators is recommended, since the attemperator operation, at the loads where it first initiates flow, creates thermal shocking, and potentially a shortened life expectancy for those components.

2.1.4 Reheater The reheater section of the boiler increases the superheat of the steam discharged from the high pressure turbine. Steam exiting the high pressure turbine is transported by the cold reheat steam lines to the reheater inlet header, where it then passes through the reheater and the temperature is continually increased until the steam finally exits the reheater outlet header and continues through the hot reheat steam line towards the intermediate pressure steam turbine. At Newman Unit 1, the design of the reheater allows for draining the reheater during outages and/or startup.

The reheater, like the secondary superheater, was replaced in 2000. Consequently, due to its low number of operating hours and lack of tube failures, the reheater is believed to be in good condition.

Future inspections should focus on identifying signs of creep, fatigue, and corrosion, as they are the most common damage mechanisms in reheater tubes. If tube failures become a problem or if future NDE programs reveal a significant amount of deterioration, higher grade material (if signs of creep or fatigue are identified) should be considered on future tube replacements to prolong the life of the replacement tubes.

El Paso Electric Company 2-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

2.1.5 Economizer The economizer section of the boiler is used to improve the efficiency of the thermal cycle by using the exhaust gases to raise the temperature of the feedwater entering the boiler. The boiler feedwater system receives feedwater from the condensate system through the deaerator storage tank and utilizes the boiler feed pumps to convey feedwater through the high pressure feedwater heaters before arriving at the economizer inlet header. From the economizer inlet header, the feedwater temperature is then increased throughout the economizer tube sections in the boiler before exiting through the economizer outlet header and traveling to the steam drum.

The economizer inlet header is always a source of concern for plants, as it is subject to considerable thermal stresses during startups and shutdowns. Thus, the inlet header should be inspected for signs of creep and fatigue as they are the most common damage mechanisms in the economizer section. Flow-accelerated corrosion (FAC) has also been an industry wide problem in many economizers. Since it is composed of carbon steel tubes and headers (FAC only affects carbon steels, typically with inadequate levels of chromium, copper, or molybdenum) and typically operates near the 250°F to 350°F temperature range where FAC is most prevalent, the economizer tubes and headers are particularly susceptible to FAC and ultrasonic thickness inspections should be used to monitor for any signs of this damage mechanism.

2.1.6 Drums and Headers There is one steam drum and two lower waterwall headers on the unit. The plant personnel stated that the boiler drum had been visually inspected, but since there is no record that the drum internals had been removed as part of the process, a question remains as to the extent of the internal inspection. Since the drum is most susceptible to fatigue and corrosion damage, the inspection methods should include a detailed visual inspection, magnetic particle examination of all girth, socket, and nozzle welds, and ultrasonic inspection of the welds and thickness readings at the water level.

The lower temperature headers include the economizer inlet and outlet headers. Despite being at a relatively low temperature, these headers, in particular the economizer inlet header, tends to be susceptible to ligament cracking caused by thermal stresses incurred during startups and shutdowns. These headers should be inspected in the near future and then periodically (based on the findings of the initial examination) to monitor for signs of this type of damage. The low temperature headers should be inspected using the following non-destructive methods:

El Paso Electric Company 2-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

• Full borescope examination of the headers. • Dimensional analysis of the headers. • Magnetic particle examination at all girth and select socket / butt weld locations to detect surface discontinuities in the metal. The high temperature headers include the primary and secondary superheater outlet and reheat outlet headers. These headers operate under severe conditions and are particularly susceptible to localized overheating, leading to creep damage, and other stress related cracks caused by temperature imbalances side-to-side across the headers. These headers should be regularly inspected to determine their condition and assess their remaining life using the following non- destructive testing methods:

• Full borescope examination of the headers, with particular attention to the evaporation zone downstream of any desuperheaters, since thermal cycling is common in those zones. • Acid etching of the headers to determine whether longitudinal seam welds exist in the headers. • All girth welds, socket welds, and longitudinal welds (if applicable) should be inspected using ultrasonic thickness examination to determine the integrity of the weld and thickness of the material. • All girth welds, socket welds, and longitudinal welds (if applicable) should be inspected using magnetic particle examination to detect surface discontinuities in the metal. • Replications should be performed at the welds in the hottest locations along the headers. These replications should be taken across the weld, base metal, and heat affected zone for best results. The replications should then be sent out to a professional materials testing laboratory for analysis by professional metallurgical engineers to examine the pipe material’s grain structure and determine if heat has affected its metallic properties and if the pipe has been exposed to extreme temperatures. • Hardness tests should be completed at all replication locations to assess the material’s Ultimate Tensile Strength and determine if the material has undergone a reduction of its metallic properties. • Pi Measurement tests, used as a gauge to detect long term creep by identifying pipe swelling, should be performed along the headers. • A header straightness examination should also be performed to identify any signs of sagging associated with long term creep damage. 2.1.7 Safety Valves There does not appear to be an ongoing plan in place to test the safety valves. At a minimum, the valves should be tested in accordance with ASME code requirements, but it is not uncommon to test more frequently if required by the facility’s insurance company. Annual inspections by the safety valves’ Original Equipment Manufacturer (OEM) are recommended to determine if refurbishment or replacement is required.

El Paso Electric Company 2-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

2.2 UNIT 2 BOILER 2.2.1 Introduction The boiler in Newman Unit 2 is a natural circulation, pressurized furnace unit designed by Babcock and Wilcox to burn natural gas or light fuel oil. The unit was originally designed for a lb maximum continuous rating (MCR) of 560,000 /hr main steam at a superheater outlet condition of 1510 psig and 1,005° F. The outlet reheat conditions are 416 psig, 1,005° F. The superheater and reheater outlet temperatures are controlled by desuperheater sprays. The boiler design also included an economizer and Ljungstrom type air heater for flue gas heat recovery.

Boiler chemical cleaning frequency is on a 4-6 year cycle with the last cleaning occurring in April 2007. No further boiler chemical cleaning is scheduled due to the imminent retirement of the unit. Should the life of the unit be extended, another boiler chemical cleaning is recommended.

2.2.2 Waterwalls From the information provided by EPE, the boiler waterwall tubes appear to be in good condition. Relatively few waterwall leaks have occurred over the life of the unit due to the proven design of the boiler and the clean fuel. Because of this fact, the station currently has no tube mapping program in place, nor does it have a regular NDE program established.

2.2.3 Superheater The superheater sections of the boiler are used to raise the temperature of the steam above the saturation temperature (i.e. superheat the steam). Saturated steam exiting the top of the steam drum passes through the various sections of the superheater and the temperature is continually increased until the steam finally exits the superheater outlet header and continues through the main steam line towards the high pressure steam turbine. The six sections or stages of the superheater are as follows, starting at the steam drum and progressing towards the superheater outlet header:

• The backpass wall and roof section, which form the sides and roof of the vertical gas path and part of the horizontal gas path.

El Paso Electric Company 2-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

• The low temperature horizontal sections, located above the economizer in the rear backpass of the boiler. • The low temperature pendant section, located in the furnace rear backpass above the low temperature horizontal sections. • The division panel section, located directly above the furnace, between the front wall and the pendant platen section. • The pendant platen section, located directly above the furnace in front of the furnace arch. • The finishing section, located in the horizontal gas path in the back of the screen wall tubes. Future inspection should focus on identifying signs of creep, fatigue, and corrosion, as they are the most common damage mechanisms in superheater tubes. If tube failures become a problem or if future NDE programs reveal a significant amount of deterioration, higher grade material (if signs of creep or fatigue are identified) should be considered on future tube replacements to prolong the life of the replacement tubes.

2.2.4 Reheater The reheater section of the boiler increases the superheat of the steam discharged from the high pressure turbine. Steam exiting the high pressure turbine is transported by the cold reheat steam lines to the reheater inlet header, where it then passes through the reheater and the temperature is continually increased until the steam finally exits the reheater outlet header and continues through the hot reheat steam line towards the intermediate pressure steam turbine. At Newman Unit 2, the design of the reheater allows for draining the reheater during outages and/or startup.

2.2.5 Economizer The economizer section of the boiler is used to improve the efficiency of the thermal cycle by using the exhaust gases to raise the temperature of the feedwater entering the boiler. The boiler feedwater system receives feedwater from the condensate system through the deaerator storage tank and utilizes the boiler feed pumps to convey feedwater through the high pressure feedwater

El Paso Electric Company 2-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler heaters before arriving at the economizer inlet header. From the economizer inlet header, the feedwater temperature is then increased throughout the economizer tube sections in the boiler before exiting through the economizer outlet header and traveling to the steam drum.

2.2.6 Drums and Headers There is one steam drum and two lower waterwall headers on the unit. The plant personnel stated that the boiler drum had been inspected, but since there is no record that the drum internals had been removed as part of the process, a question remains as to the extent of the internal inspection. Since the drum is most susceptible to fatigue and corrosion damage, the inspection methods should include a detailed visual inspection, magnetic particle examination of all girth, socket, and nozzle, and ultrasonic inspection of the welds and thickness readings at the water level.

El Paso Electric Company 2-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

inspected to determine their condition and assess their remaining life using the following non- destructive testing methods:

• Full borescope examination of the headers, with particular attention to the evaporation zone downstream of any desuperheaters, since thermal cycling is common in those zones. • Acid etching of the headers to determine whether longitudinal seam welds exist in the headers. • All girth welds, socket welds, and longitudinal welds (if applicable) should be inspected using ultrasonic thickness examination to determine the integrity of the weld and thickness of the material. • All girth welds, socket welds, and longitudinal welds (if applicable) should be inspected using magnetic particle examination to detect surface discontinuities in the metal. • Replications should be performed at the welds in the hottest locations along the headers. These replications should be taken across the weld, base metal, and heat affected zone for best results. The replications should then be sent out to a professional materials testing laboratory for analysis by professional metallurgical engineers to examine the pipe material’s grain structure and determine if heat has affected its metallic properties and if the pipe has been exposed to extreme temperatures. • Hardness tests should be completed at all replication locations to assess the material’s Ultimate Tensile Strength and determine if the material has undergone a reduction of its metallic properties. • Pi Measurement tests, used as a gauge to detect long term creep by identifying pipe swelling, should be performed along the headers. • A header straightness examination should also be performed to identify any signs of sagging associated with long term creep damage. 2.2.7 Safety Valves There does not appear to be an ongoing plan in place to test the safety valves. At a minimum, the valves should be tested in accordance with ASME code requirements, but it is not uncommon to test more frequently if required by the facility’s insurance company. Annual inspections by the safety valves’ Original Equipment Manufacturer (OEM) are recommended to determine if refurbishment or replacement is required.

2.3 UNIT 4 HEAT RECOVERY STEAM GENERATORS

2.3.1 Introduction The Heat Recovery Steam Generators (HRSGs) in Newman Unit 4 are forced circulation, lb vertical gas path units. The units were originally designed for an un-fired rating of 440,000 /hr of steam at an outlet condition of 1250 psig and 950° F. The guaranteed rating, with duct lb burning, is 886,954 /hr of steam at an outlet condition of 1277 psig and 925° F.

El Paso Electric Company 2-8 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler

2.3.2 Superheater The superheater sections of the HRSGs are used to raise the temperature of the steam above the saturation temperature (i.e. superheat the steam). Saturated steam exiting the top of the steam drum passes through the various sections of the superheater and the temperature is continually increased until the steam finally exits the superheater outlet header and continues through the main steam line towards the high pressure steam turbine. The superheater is divided into two stages, primary and secondary, with attemperators positioned in between. The design of both stages allows for draining the superheaters during outages and/or startup. This facilitates faster startup, since the startup is not delayed by the time required to dry the superheater.

Future inspection should focus on identifying signs of creep, fatigue, and corrosion, as they are the most common damage mechanisms in superheater tubes. If tube failures become a problem or if future NDE programs reveal a significant amount of deterioration, higher grade material (if signs of creep or fatigue are identified) should be considered on future tube replacements to prolong the life of the replacement tubes.

2.3.3 HP Evaporator Water from the steam drum is circulated through the HP evaporator by a HP circulating pump. In general, the overall condition of the HP evaporator is reported to be good. However, since there is no regular NDE program to identify weakened tubes, our confidence in this assessment is moderated. Typically, the most common damage mechanisms that force replacement of the HP evaporator tubes are thermal fatigue, and fire side corrosion. Eventually, spot replacements, as needed, will likely be necessary to prevent tube rupture related outages.

2.3.4 HP Economizer The HP economizer section of the HRSG is used to improve the efficiency of the thermal cycle by using the exhaust gases to raise the temperature of the feedwater entering the steam drum. The integral deaerator receives condensate from the condensate pumps and preheats the condensate to 250°F. A portion of this water is conveyed through the HP economizer by the boiler feed pump. From the economizer inlet header, the feedwater temperature is then increased throughout the economizer tube sections in the boiler before exiting through the economizer outlet header and traveling to the steam drum.

El Paso Electric Company 2-9 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler in many economizers. Since it is composed of carbon steel tubes and headers (FAC only affects carbon steels, typically with inadequate levels of chromium, copper, or molybdenum) and typically operates near the 250°F to 350°F temperature range where FAC is most prevalent, the economizer tubes and headers are particularly susceptible to FAC and ultrasonic thickness inspections should be used to monitor for any signs of this damage mechanism.

2.3.5 LP Evaporator A portion of the water in the integral deareator is circulated through the LP evaporator to form steam for the deareator. In general, the overall condition of the HP evaporator is reported to be good. However, since there is no regular NDE program to identify weakened tubes, our confidence in this assessment is moderated. Typically, the most common damage mechanisms that force replacement of the HP evaporator tubes are thermal fatigue, and fire side corrosion. Eventually, spot replacements, as needed, will likely be necessary to prevent tube rupture related outages.

2.3.6 Drums and Headers There is one steam drum on each unit. The plant personnel said that the steam drum had been inspected, but since there is no record that the drum internals had been removed as part of the process, a question remains as to the extent of the internal inspection. Since the drum is most susceptible to fatigue and corrosion damage, the inspection methods should include a detailed visual inspection, magnetic particle examination of all girth, socket, and nozzle, and ultrasonic inspection of the welds and thickness readings at the water level.

The lower temperature headers include the LP evaporator inlet and outlet headers, the HP economizer inlet and outlet headers, and the HP evaporator inlet header. Despite being at a relatively low temperature, these headers, in particular the economizer inlet header, tends to be susceptible to ligament cracking caused by thermal stresses incurred during startups and shutdowns. These headers should be inspected in the near future and then periodically (based on the findings of the initial examination) to monitor for signs of this type of damage. The low temperature headers should be inspected using the following non-destructive methods:

El Paso Electric Company 2-10 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 2 - Boiler damage, and other stress related cracks caused by temperature imbalances side-to-side across the headers. These headers should be regularly inspected to determine their condition and assess their remaining life using the following non-destructive testing methods:

• Full borescope examination of the headers, with particular attention to the evaporation zone downstream of any desuperheaters, since thermal cycling is common in those zones. • Acid etching of the headers to determine whether longitudinal seam welds exist in the headers. • All girth welds, socket welds, and longitudinal welds (if applicable) should be inspected using ultrasonic thickness examination to determine the integrity of the weld and thickness of the material. • All girth welds, socket welds, and longitudinal welds (if applicable) should be inspected using magnetic particle examination to detect surface discontinuities in the metal. • Replications should be performed at the welds in the hottest locations along the headers. These replications should be taken across the weld, base metal, and heat affected zone for best results. The replications should then be sent out to a professional materials testing laboratory for analysis by professional metallurgical engineers to examine the pipe material’s grain structure and determine if heat has affected its metallic properties and if the pipe has been exposed to extreme temperatures. • Hardness tests should be completed at all replication locations to assess the material’s Ultimate Tensile Strength and determine if the material has undergone a reduction of its metallic properties. • Pi Measurement tests, used as a gauge to detect long term creep by identifying pipe swelling, should be performed along the headers. • A header straightness examination should also be performed to identify any signs of sagging associated with long term creep damage. 2.3.7 Safety Valves There does not appear to be an ongoing plan in place to test the safety valves. At a minimum, the valves should be tested in accordance with ASME code requirements, but it is not uncommon to test more frequently if required by the facility’s insurance company. Annual inspections by the safety valves’ Original Equipment Manufacturer (OEM) are recommended to determine if refurbishment or replacement is required.

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El Paso Electric Company 2-11 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 3 – Boiler Auxiliary Systems

3.0 BOILER AUXILIARY SYSTEMS

3.1 NEWMAN UNIT 1 3.1.1 Fans There is one Westinghouse double inlet centrifugal forced draft (FD) fan that provides secondary (combustion) air to the furnace. The air is heated in the air heater and is then delivered to the furnace through the boiler wind boxes.

This fan has typically been visually inspected every year during the summer preparation outages, and no significant problems have been noted. The inlet vanes are cleaned and inspected yearly. In addition, vibration readings are performed monthly and trended as part of the PdM program for rotating equipment. Oil samples are also taken monthly.

The fan appears to be in good condition based on inspections and on-going maintenance.

3.1.2 Air Heater Air heating is accomplished by one Ljungstrom type regenerative air heater. This heater is inspected during every outage with minor repairs done immediately.

The air heater baskets (cold side) were previously replaced with like design baskets. The shaft and hot side baskets were replaced during the January 2006 outage.

3.1.3 Flues & Ducts The ductwork transports combustion air to the boiler and also transports hot flue gas away from the boiler, through the air heater, and on to the stack. Since the boiler has operated on natural gas for most of its life, the ducts and flues are considered to be in good shape. As part of the predictive maintenance program, station personnel routinely perform thermography to detect hot spots and leaks in the ductwork and flues.

3.1.4 Blowdown System At Newman Unit 1, there is an intermediate pressure blowdown tank and another continuous blowdown flash tank. The blowdown system is used to control the water silica levels and remove sludge formations from the steam drum. The continuous blowdown from the steam drum is flashed into the intermediate pressure blowdown tank where the flash steam is exhausted to the deaerating heater and the remaining water continues on to the continuous blowdown tank.

The blowdown system appears to be in good condition based on inspections and on-going maintenance.

El Paso Electric Company 3-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 3 – Boiler Auxiliary Systems

3.2 NEWMAN UNIT 2 3.2.1 Fans There is one Westinghouse double inlet centrifugal forced draft (FD) fan that provides secondary (combustion) air to the furnace. The air is heated in the air heater and is then delivered to the furnace through the boiler wind boxes.

The fan appears to be in good condition based on inspections and on-going maintenance.

3.2.2 Air Heater Air heating is accomplished by one Ljungstrom type regenerative air heater. This heater is inspected during every outage with minor repairs done immediately.

3.2.3 Flues & Ducts The ductwork transports combustion air to the boiler and also transports hot flue gas away from the boiler, through the air heater, and on to the stack. Since the boiler has operated on natural gas for most of its life, the ducts and flues are considered to be in good shape. As part of the predictive maintenance program, station personnel routinely perform thermography to detect hot spots and leaks in the ductwork and flues.

3.2.4 Blowdown System At Newman Unit 1, there is an intermediate pressure blowdown tank and another continuous blowdown flash tank. The blowdown system is used to control the water silica levels and remove sludge formations from the steam drum. The continuous blowdown from the steam drum is flashed into the intermediate pressure blowdown tank where the flash steam is exhausted to the deaerating heater and the remaining water continues on to the continuous blowdown tank.

The blowdown system appears to be in good condition based on inspections and on-going maintenance.

3.3 NEWMAN UNIT 4 3.3.1 Flues & Ducts The ductwork transports combustion turbine exhaust gas through the HRSG and on to the stack. Since the unit has operated on natural gas for most of its life, the ducts and flues are considered

El Paso Electric Company 3-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 3 – Boiler Auxiliary Systems to be in good shape. As part of the predictive maintenance program, station personnel routinely perform thermography to detect hot spots and leaks in the ductwork and flues.

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El Paso Electric Company 3-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator

4.0 TURBINE GENERATOR

4.1 NEWMAN UNIT 1

4.1.1 Introduction The Newman Unit 1 steam turbine-generator was manufactured by Allis Chalmers (AC). AC describes the steam turbine as a tandem compound impulse reaction double flow 21 stage condensing unit.

Even though Allis Chalmers has been out of business for some time, the turbine is still supported by Siemens and/or Turbocare.

4.1.2 Turbine The LP and HP turbines were last overhauled by GE Energy Services (GE) during the spring 2006 outage extending from January 16, 2006 to May 9, 2006. The HP/IP and LP turbine sections were disassembled, blast cleaned and NDE'd by Turbine Masters, Inc. All component repairs to the rotors and stationary steam path components were made by GE Preferred Machine & Tool (PMT) in their St. Louis, Mo. shop.

Both the turbine valves steam side and hydraulic sides were disassembled and inspected with new stem bushings installed for the main stop, control and intercept valves. Both main stop valve seats were removed and replaced due to cracking in the seat weld areas as well as crack indications in the seating surfaces. All of the turbine control components were found to be in acceptable condition based on the information from the last unit inspection. The front standard components (thrust bearing, main oil pump and the main oil pump volute) were inspected. All turbine and generator bearings along with the generator hydrogen seals were reconditioning and installation of dual element thermocouples and Bentley vibration proximity probes.

Borescopic examinations of the turbine and generator rotors were performed within the last 20 years. It is recommended that these examinations be repeated, and the results compared with the previous examinations. All large forgings such as these rotors have internal flaws, but those flaws are only significant if the extent or size of the flaws have grown over the years.

The turbine is a major focus of the EPE predictive maintenance program. Advanced vibration analysis, as well as monthly oil analysis is performed to establish trends. These trends then influence the preventive maintenance routines and frequencies. This program was established in 1995 and has been well recognized within the PdM community.

El Paso Electric Company 4-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator

Turbine overhauls are scheduled on an 8 year cycle. EPE has not scheduled another turbine inspection and overhaul, due to Unit 1’s planned retirement in 2015. Another turbine inspection will be required should EPE decide to continue operation of Unit 1 through 2021.

4.1.3 Turbine Valves The turbine valves are maintained on a 4 year cycle, which has proved adequate. During the last overhaul, GE recommended replacement of all the turbine valve studs and nuts due to reduced tensile strength. In addition, they recommended regular inspection of the main steam stop valve bodies due to numerous crack indications.

B&McD recommends replacing the valve studs and nuts and additional turbine valve inspections should EPE decide to continue operation of Unit 1 though 2021.

4.1.4 Generator The main generator is a 1960 vintage Allis Chalmers rated 96 MVA at 13.8KV. The stator output is 4017 amps at 0.85 power factor. The rotor is hydrogen cooled and the stator windings are water cooled. The exciter is believed to be a 1990 vintage static exciter rated 1000 amps at 250VDC. The voltage regulator is a Westinghouse 1990 analog type located on the ground floor under main generator.

The protection relays have been upgraded from electromechanical to ABB GPU solid state relays. This should provide adequate protection for the generator.

The generator was last overhauled in 2006, during which a Megger test and Hipot test were performed. GE found evidence of relaxed stator bar wedging. They recommended re-wedging the generator to prevent degradation of the insulation system through abrasion. GE also found evidence of a fault in the stator core iron. Evidence of stator bar to frame arcing was found on the turbine end of the stator during EL CID testing. GE considered the fault serious; however EPE chose to return the unit to service with no issues. However, a thermocouple was installed as near to the damaged area as possible for baseline comparison data for the continued operation of the unit.

The following is a list of tests and repairs performed over the generator life:

• Retaining ring ultrasonic inspection-1983 • Stator rewind-1972 • Stator rewedge-1998 • Rotor reblocking-1983

El Paso Electric Company 4-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator

The exciter is a Westinghouse static type. The exciter was last inspected in 1998. The exciter condition is good. The voltage regulator is a Westinghouse analog type.

4.2 NEWMAN UNIT 2

4.2.1 Introduction The Newman Unit 2 steam turbine-generator was manufactured by General Electric (GE). GE describes the steam turbine as a tandem compound double flow 21 stage condensing unit.

4.2.2 Turbine The LP and HP turbines were last inspected by The Wood Group during the fall 2004 outage extending from October 6, 2004 to January 14, 2005. The HP/IP and LP turbine sections were disassembled, blast cleaned and NDE'd.

The first eleven stage rotor buckets were replaced due to severe erosion, foreign object damage, and pitting. The second through fifth and eighth through eleventh stage diaphragms required major repairs. In addition, the nozzle plate was repaired, as was a crack in the IP turbine shell.

Turbine overhauls are scheduled on an 8 year cycle. EPE has not scheduled another turbine inspection and overhaul, due to Unit 2’s planned retirement in 2013. Another turbine inspection will be required should EPE decide to continue operation of Unit 2 through 2019.

4.2.3 Turbine Valves The turbine valves are maintained on a 4 year cycle, which has proved adequate. In general, they usually exhibit minor SPE when inspected.

B&McD recommends additional turbine valve inspections should EPE decide to continue operation of Unit 2 though 2019.

El Paso Electric Company 4-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator

4.2.4 Generator The main generator is a 1963 vintage General Electric rated 96 MVA at 13.8KV. The stator output is 4017 amps at 0.85 power factor. The rotor is hydrogen cooled and the stator windings are water cooled. The exciter is believed to be a 1990 vintage static exciter rated 1000 amps at 250VDC. The voltage regulator is a Westinghouse 1990 analog type located on the ground floor under main generator.

The protection relays have been upgraded from electromechanical to ABB GPU solid state relays. This should provide adequate protection for the generator.

The generator was last inspected in 2005, during which a Megger test and Hipot test were performed and the stator was re-wedged. The generator has since performed well and its condition is considered good.

The following is a list of tests and repairs performed over the generator life:

• Retaining ring ultrasonic inspection-1983 • Stator rewind-1972 • Stator rewedge-2005 • Rotor reblocking-1983 The exciter is a Westinghouse static type. The exciter was last inspected in 1998. The exciter condition is good. The voltage regulator is a Westinghouse analog type.

The Wood Group performed an overhaul of the generator and their January 2005 report suggested some testing to determine if the rotor needed to be rewound.

4.3 NEWMAN UNIT 4

4.3.1 Introduction The Newman Unit 4 gas turbines are Westinghouse 501B6 units. The steam turbine is a Westinghouse single case, non-reheat, single-flow, axial exhaust condensing unit.

Newman Unit 4 is in relatively good condition considering the total service to date. The gas turbines are critical in any consideration of extension of life. These gas turbines have approximately 200,000 hours on each unit, the equivalent of over 25 years of service. This equals the basic design life of gas turbines. However, this basic design criterion normally includes the number of thermal cycles (starts), and since these units have substantially less than the basic design of 5000 thermal cycles, they can be expected to have available future operating

El Paso Electric Company 4-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator

life. That future operating life capability can only be predicted from overhaul inspection to the next overhaul.

For example, in the 2006 overhaul of GT-2, cracks were observed in the fourth row disc, requiring replacement of that major component before continued operation. The costs of that replacement were high. The total replacement of the GT-2 was evaluated. The decision of EPE at that time was that the disc replacement was the economic course of action, and the unit is back in service with a new fourth row disc.

Future overhaul costs of the gas turbines should therefore anticipate substantial replacements of major components at irregular intervals. However, the inspection intervals of four years between major gas turbine overhauls should be adequate, although inspections may indicate shorter intervals as the units continue to age and are used more extensively in cycling service.

The remainder of Newman Unit 4 major equipment, the HRSG’s and the steam turbine, can be expected to have overhaul costs and inspection intervals continuing similar to the other steam turbine units.

4.3.2 Gas Turbines 4.3.2.1 Gas Turbine 1 Newman Unit 4 Gas Turbine 1 was subjected to a major overhaul in the spring of 2009. Outage work began on Feb 9, 2009 and was completed on May 19, 2009. Outage work was preformed by Wood Group HIT Field Services. Leading Edge reworked the turbine rotor, replacing Rows 1 through 4 blades. During the outage, the upper and lower compressor diaphragms were replaced. A borescopic examination was performed with no indications were noted.

4.3.2.2 Gas Turbine 2 Newman Unit 4 Gas Turbine 2 received a major inspection during the fall of 2003. Work was performed from November 4, 2002 through March 21, 2003. During an inspection in the spring of 2006 it was decided to replace the turbine row 4 disc. B&McD has not had an opportunity to review any borescopic examination reports on this gas turbine.

It is recommended that these borescopic examinations be repeated, and the results compared with the previous examinations. All large forgings such as these rotors have internal flaws, but those flaws are only significant if the extent or size of the flaws have grown over the years.

The turbine is a major focus of the EPE predictive maintenance program. Advanced vibration analysis, as well as monthly oil analysis is performed to establish trends. These trends then

El Paso Electric Company 4-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator influence the preventive maintenance routines and frequencies. This program was established in 1995 and has been well recognized within the PdM community.

4.3.3 Gas Turbine Generators 4.3.3.1 Gas Turbine 1 Westinghouse 501B6, 1975 vintage, rated at 70 MVA at 13.8 KV. Air cooled generator.

4.3.3.2 Gas Turbine 2 Westinghouse 501B6, 1975 vintage, rated at 70 MVA at 13.8 KV. Air cooled generator. During the last inspection the generator rotor was completely re-wedged. The stator end windings were re-wedged.

4.3.4 Steam Turbine The last turbine inspection was performed in the early spring of 2003. Work was performed from November 4, 2002 through May 23, 2003. The L-0 through L-2 blades were replaced. The unit experienced a broken L-0 blade at 3600 rpm, no-load during December 2008. Siemens Turbine Services supervised the replacement of the L-0 blades.

EPE has raised the minimum load on the Unit 4 steam turbine to minimize erosion of the L-0 and L-1 blades due to moisture in the steam.

A rotor boroscope examination was performed during the 2003 outage and no indications were found. Siemens recommended a re-inspection in 10 years.

Turbine overhauls are scheduled on an 8 year cycle. EPE has not scheduled another turbine inspection and overhaul, due to Unit 4’s planned retirement in 2015. Another turbine inspection will be required should EPE decide to continue operation of Unit 2 through 2021.

4.3.5 Steam Turbine-Generator The Newman Unit 4 steam turbine generator is hydrogen-cooled with a rating of 133.3 MVA. The generator was last inspected in 2003 when meggar, hipot and El Cid testing was performed. During the 2003 outage, the generator stator was completely re-wedged.

El Paso Electric Company 4-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 4 – Turbine Generator

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El Paso Electric Company 4-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems

5.0 HIGH ENERGY PIPING SYSTEMS

5.1 NEWMAN UNIT 1

5.1.1 Main Steam Piping The main steam piping, composed of two ASTM A335 P-11 steam lines, transfers steam from the boiler superheater outlet header to the HP steam turbine. The system operates at approximately 1500 psig and 1,005°F.

Since this operating temperature is within the creep range (greater than 800° F), this piping system is of particular concern. Creep is a high temperature, time dependant phenomenon that can progressively occur at the highest stress locations within the piping system.

In prior years EPE performed an investigation throughout their system to confirm that their critical piping systems had no seam welds thus eliminating the creep concern at seam welds. However, creep is still a general concern in high stress areas of the piping system. These areas should be identified and monitored.

During our walkdown with the unit running, we identified two hangers on the Main Steam system that were bottomed out. These were the two hangers closest to the superheat outlet header. We also noted that very few of the variable or constant support hangers were marked to indicate the proper cold and hot positions. B&McD recommends that the piping and support system be visually inspected annually. The hangers and snubbers should be inspected to verify they are operating within their indicated travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing / contracting in the right directions between cold and hot positions, that the actual load being carried is close to its design point and has not changed, and that the pipe support hardware is intact and operating as designed. It is recommended that the spring hangers be load tested in the near future to determine their actual current loading and a stress analysis should be completed to verify that all loads and stresses are within the allowable limits.

EPE currently has no regular NDE program to monitor this piping system. Therefore, before the expected life of this system can be evaluated with any confidence, we also recommend that NDE be performed in the high stress areas of the system. This will also establish a baseline for future monitoring.

5.1.2 Hot Reheat Piping The hot reheat piping, consisting of two ASTM A335 Gr P-11 steam lines, transfers steam from the boiler’s reheater outlet header to the IP steam turbine. The system operates at approximately

El Paso Electric Company 5-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems

410 psig and 1,005° F. Since this operating temperature is within the creep range (greater than 800° F), this piping system is of particular concern. As mentioned in the Main Steam section above, EPE has confirmed this system does not have seamed piping or fittings. However, creep is still a concern in the high stress areas of the system. These areas need to be identified by stress analysis and monitored.

During our walkdown, with the unit running, we noted two HR hangers that were bottomed out. These hangers were the two nearest the boiler. We also noted that very few of the variable or constant support hangers were marked to indicate the proper cold and hot positions. B&McD recommends that the piping and support system be visually inspected annually. The hangers should be inspected to verify that they are operating within their indicated travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing / contracting in the right directions between cold and hot positions, and that the actual load being carried is close to its design point and has not changed. It is recommended that the spring hangers be load tested in the near future to determine their actually current loading and a stress analysis should be completed to verify that all loads and stresses are within the allowable limits.

5.1.3 Cold Reheat Piping The cold reheat piping transfers steam from the discharge of the HP steam turbine to the boiler reheater inlet header. The original material specification for the system reportedly called for the use of ASTM A106 Grade B seamless piping which was confirmed by EPE.

The system operates at approximately 550 psig and 720°F. Since this temperature is below the creep regime (less than 800°F), creep is not a concern for this system. Thus the system should not require the level of examination recommended on the main steam and hot reheat system. B&McD recommends inspecting only the highest stress weld locations using replication examinations to determine the extent of any carbide graphitization from high temperature operation that may have occurred.

El Paso Electric Company 5-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems changed since previous inspections, that the pipe is growing and contracting in the right directions between cold and hot positions, and that the actual load being carried is close to its design point and has not changed. An inspection program should be developed to inspect this piping in the near future.

5.1.4 Extraction Piping The extraction piping transfers steam from the various steam turbine extraction locations to the feedwater heaters. This piping system is not typically a major concern for most utilities and is not examined to the extent that the main and reheat steam systems are.

B&McD recommends that the piping and support system be visually inspected on a regular basis. The hangers should be inspected to verify that they are operating within their indicated travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing / contracting in the right directions between cold and hot positions, and that the actual load being carried is close to its design point and has not changed.

We noted in our walkdown that this system is not in compliance with ASME TDP-1-2006, “Recommended Practices for the Prevention of Water Damage to Steam Turbines Used for Electric Power Generation”. These practices are not requirements, but recommendations. Therefore, EPE is free to decide for themselves, in conjunction with their insurance carrier, whether they should implement any or all of the recommendations. The EPE system operates with little reserve margin during the peak seasons. Water induction incidents can result in lengthy forced outages. Industry-wide, a significant factor in turbine damage incidents is turbine water induction from the extraction system, feedwater heater, and associated drains, EPE should consider implementation of these ASME recommendations.

The plant personnel should ensure that the extraction steam non-return valves are tested on a regular basis to confirm proper operation and reduce the risk of turbine over-speed.

5.1.5 Feedwater Piping The feedwater piping system transfers water from the deaerator storage tank to the boiler feedwater pumps and then on through the high pressure feedwater heaters and eventually to the

El Paso Electric Company 5-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems

boiler economizer inlet header. Although at a relatively low temperature, the discharge of the boiler feedwater pumps is the highest pressure location in the plant and thus, should be monitored and regularly inspected.

To date, there is no record indicating that the feedwater lines have been inspected for signs of flow accelerated corrosion (FAC). This type of inspection should be completed by the plant in the near future. FAC has been an industry wide problem, and special attention should be given to the first elbows and fittings downstream of the boiler feedwater pumps. During this inspection, a permanent grid should be marked on the piping at the inspection locations so that future inspections can track the rate of deterioration, if present.

5.2 NEWMAN UNIT 2

5.2.1 Main Steam Piping The main steam piping, composed of two ASTM A335 P-11 steam lines, transfers steam from the boiler superheater outlet header to the HP steam turbine. The system operates at approximately 1500 psig and 1,005°F.

During our walkdown with the unit running, we noted that very few of the variable or constant support hangers were marked to indicate the proper cold and hot positions. B&McD recommends that the piping and support system be visually inspected annually. The hangers and snubbers should be inspected to verify they are operating within their indicated travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing / contracting in the right directions between cold and hot positions, that the actual load being carried is close to its design point and has not changed, and that the pipe support hardware is intact and operating as designed. It is recommended that the spring hangers be load tested in the near future to determine their actually current loading and a stress analysis should be completed to verify that all loads and stresses are within the allowable limits.

El Paso Electric Company 5-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems

5.2.2 Hot Reheat Piping The hot reheat piping, consisting of two ASTM A335 Gr P-11 steam lines, transfers steam from the boiler’s reheater outlet header to the IP steam turbine. The system operates at approximately 410 psig and 1,005° F. Since this operating temperature is within the creep range (greater than 800° F), this piping system is of particular concern. As mentioned in the Main Steam section above, EPE has confirmed this system doesn not have seamed piping or fittings. However, creep is still a concern in the high stress areas of the system. These areas need to be identified by stress analysis and monitored.

During our walkdown with the unit running, we noted that very few of the variable or constant support hangers were marked to indicate the proper cold and hot positions. B&McD recommends that the piping and support system be visually inspected annually. The hangers should be inspected to verify that they are operating within their indicated travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing / contracting in the right directions between cold and hot positions, and that the actual load being carried is close to its design point and has not changed. It is recommended that the spring hangers be load tested in the near future to determine their actually current loading and a stress analysis should be completed to verify that all loads and stresses are within the allowable limits.

5.2.3 Cold Reheat Piping The cold reheat piping transfers steam from the discharge of the HP steam turbine to the boiler reheater inlet header. The original material specification for the system reportedly called for the use of ASTM A106 Grade B seamless piping which was confirmed by EPE.

The system operates at approximately 550 psig and 720°F. Since this temperature is below the creep regime (less than 800°F), creep cracking is not a concern for this system, The system should not require the level of examination recommended on the main steam and hot reheat

El Paso Electric Company 5-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems

system. B&McD recommends inspecting only the highest stress weld locations using replication examinations to determine the extent of any carbide graphitization from high temperature operation that may have occurred.

Furthermore, B&McD recommends that the piping and support system be visually inspected annually. The hangers and snubbers should be inspected to verify that they are operating within their indicated travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing and contracting in the right directions between cold and hot positions, and that the actual load being carried is close to its design point and has not changed. An inspection program should be developed to inspect this piping in the near future.

5.2.4 Extraction Piping The extraction piping transfers steam from the various steam turbine extraction locations to the feedwater heaters. This piping system is not typically a major concern for most utilities and is not examined to the extent that the main and reheat steam systems are.

El Paso Electric Company 5-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems

forced outages. Industry-wide, a significant factor in turbine damage incidents is turbine water induction from the extraction system, feedwater heater, and associated drains, EPE should consider implementation of these ASME recommendations.

The plant personnel should ensure that the extraction steam non-return valves are tested on a regular basis to confirm proper operation and reduce the risk of turbine over-speed.

5.2.5 Feedwater Piping The feedwater piping system transfers water from the deaerator storage tank to the boiler feedwater pumps and then on through the high pressure feedwater heaters and eventually to the boiler economizer inlet header. Although at a relatively low temperature, the discharge of the boiler feedwater pumps is the highest pressure location in the plant and thus, should be monitored and regularly inspected.

To date, there is no record indicating that the feedwater lines have been thoroughly inspected for signs of flow accelerated corrosion (FAC). This type of inspection should be completed by the plant in the near future. FAC has been an industry wide problem, and special attention should be given to the first elbows and fittings downstream of the boiler feedwater pumps. During this inspection, a permanent grid should be marked on the piping at the inspection locations so that future inspections can track the rate of deterioration.

5.3 NEWMAN UNIT 4

5.3.1 Main Steam Piping The main steam piping, composed of a ASTM A335 P-11 steam line, transfers steam from the HRSG superheater outlet header to the HP steam turbine. The system operates at approximately 1250 psig and 950°F.

B&McD recommends that the piping and support system be visually inspected annually. The hangers and snubbers should be inspected to verify they are operating within their indicated

El Paso Electric Company 5-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 5 – High Energy Piping Systems travel range and are not bottomed out, that their position has not significantly changed since previous inspections, that the pipe is growing / contracting in the right directions between cold and hot positions, that the actual load being carried is close to its design point and has not changed, and that the pipe support hardware is intact and operating as designed. It is recommended that the spring hangers be load tested in the near future to determine their actually current loading and a stress analysis should be completed to verify that all loads and stresses are within the allowable limits.

5.3.2 Feedwater Piping The feedwater piping system transfers water from the deaerator storage tank to the boiler feedwater pumps and then on to the boiler economizer inlet header. Although at a relatively low temperature, the discharge of the boiler feedwater pumps is the highest pressure location in the plant and thus, should be monitored and regularly inspected.

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El Paso Electric Company 5-8 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant

6.0 BALANCE OF PLANT

6.1 NEWMAN UNIT 1

6.1.1 Condensate System 6.1.1.1 System Overview The condensate system transfers condensed steam in the condenser hotwell through the low pressure heaters to the deaerator.

6.1.1.2 Condenser The condenser tubes were replaced in January 2006 with like-kind admiralty tubes. The condenser neck expansion joint was also replaced.

In general, the condenser has performed well and any condenser tube leaks are promptly repaired.

6.1.1.3 Condenser Vacuum System The condenser vacuum system is intended to maintain a negative pressure, or vacuum, in the condenser by removing all air that collects in the condenser. This is accomplished by means of an Allis Chalmers hogging vacuum pump and a Westinghouse Steam Jet Air Ejector (SJAE), and backed up by one 100% Nash vacuum pump. The pumps are in good condition.

6.1.1.4 Low Pressure Feedwater Heaters There are two low pressure (LP) closed feedwater heaters and one evaporative condenser installed downstream of the condensate pumps. The heaters were manufactured by Yuba Heat Transfer Corporation. The low pressure heaters warm the condensate water by transferring heat from the turbine extraction steam to the condensate water in the closed shell and tube, two-pass vertical U-tube design heat exchangers. There are no TWIP (Turbine Water Induction Prevention) features incorporated into the Unit 1 design.

The evaporative condenser is permanently out of service, but the condensate is still routed through the tubes. The feedwater heaters should be inspected by eddy current testing at each unit annual planned outage, as necessitated by past feedwater heater failures.

El Paso Electric Company 6-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant

6.1.2 Feedwater System 6.1.2.1 System Overview The feedwater system is an open-loop system that transfers water from the deaerator storage tank to the boiler feedwater pumps and then on through the high pressure feedwater heaters and eventually to the boiler economizer inlet header.

6.1.2.2 High Pressure Feedwater Heaters There are two high pressure (HP) closed feedwater heaters installed downstream of the feedwater pumps. These heaters were manufactured by Yuba Heat Transfer Corporation and Senior Engineering. The HP heaters increase the efficiency of the plant by transferring heat from the turbine extraction steam to the feedwater in the closed shell and tube, two-pass vertical U-tube design heat exchangers. There are no TWIP features incorporated into the Unit 1 design.

The feedwater heaters should be inspected by eddy current testing at each unit planned outage, as necessitated by past feedwater heater failures. The 1st point feedwater heater (highest pressure) was replaced in 1989 and the 2nd point heater was replaced in 1994. Each may need replacement again, but if regular eddy current tests are performed and failed tubes are preemptively plugged, the lives of each could possibly be extended to the retirement date and beyond.

6.1.3 Deaerator Heater & Storage Tank The open, tray type deaerator consists of a single vessel containing both the deaerating heater section and storage tank. The deaerator system was manufactured by Cochrane. In the deaerator, extraction steam is used to de-oxygenate and release non-combustible gasses from the water cycle to the atmosphere.

The deaerator vessel should be visually inspected at each unit planned outage. All girth and penetration welds should also be inspected using magnetic particle and dye penetrant examination. Ultrasonic thickness examinations should also be performed every 3-5 years, with special attention being paid to the water level in the storage tank where cracks have been a problem industry wide.

6.1.4 Condensate and Boiler Feed Pumps The two 570 GPM Byron Jackson electric driven vertical pumps each supply 50-percent of the full load demand. The 125 HP Westinghouse motors are mounted directly on top of the vertical turbine pumps.

The two main boiler feed pumps are motor-driven barrel type Allis Chalmers pumps rated for 688 gpm. The two 50% capacity pumps are each driven by a 1250 HP Siemens motor, which

El Paso Electric Company 6-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant were both installed in 1997. Since there is no installed spare pump, the station has a spare rotating element in stock. The pumps and motors are reportedly in good condition.

6.1.5 Circulating Water System The circulating water system is used to reject heat from the condenser to condense the steam leaving the low pressure turbine. The system utilizes two 50% circulating water pumps, to pump cooling water from the cooling tower basin through the circulating water pipe to the condenser water box and then return the water to the cooling tower.

The two electric driven horizontal centrifugal circulating water pumps were manufactured by Westinghouse. Each 50-percent capacity pump is rated for 19,000 GPM and driven by a 450 HP, Westinghouse electric motor.

The circulating water piping near the suction and discharge of the circulating water pumps and all buried circulating water piping under the powerhouse structure are carbon steel. The carbon steel circulating lines under the powerhouse are encased in concrete. In addition, the above grade and buried piping near the cooling tower is carbon steel. Some sections of the steel piping are exhibiting significant corrosion. These sections were coated during the spring 2006 outage.

The current cooling tower was entirely replaced in 1992. It is a Marley, 5-cell, cross-flow induced draft tower handling 38,000 gpm. It is designed for a range of 21.1°F with a 14°F approach at a 67.5°F wet bulb. It is inspected annually, and is reportedly in good condition.

6.1.6 Water Treatment, Chemical Feed, & Sample Systems The water treatment system is supplied from local deep-wells. The water is filtered and sent through two stages of reverse osmosis (RO) and further demineralized as it passes through a single mixed bed polisher before being directed to the storage tanks.

Because there are still copper alloys within the steam cycle, the station performs boiler chemical cleanings every 4 – 6 years, with the last one in 2005. The next chemical cleaning will be in 2010.

Newman Unit 1 uses a combination of phosphate and oxygen scavenger for feedwater treatment. Oxygenated water treatment is the trend in the utility industry. B&McD does not feel there is a need to change the feedwater treatment processes considering the relatively low boiler pressure and short remaining unit life expected for Newman Unit 1.

El Paso Electric Company 6-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant

6.1.7 Stack The prefabricated steel stack is 36.5 feet tall from its base, which rests on boiler room structural steel. It has a brick liner which has never been repaired. The plant should schedule an inspection to determine the actual condition of the stack and liner.

6.1.8 Plant Structures The plant structures generally appear to be in good condition even though the boiler room steel is outdoors.

6.2 NEWMAN UNIT 2

6.2.1 Condensate System 6.2.1.1 System Overview The condensate system transfers condensed steam in the condenser hotwell through the low pressure heaters to the deaerator.

6.2.1.2 Condenser In general, the condenser has performed well and any condenser tube leaks were promptly repaired.

6.2.1.3 Condenser Vacuum System The condenser vacuum system is intended to maintain a negative pressure, or vacuum, in the condenser by removing all air that collects in the condenser. This is accomplished by means of an Allis Chalmers hogging vacuum pump and a Westinghouse steam jet air ejector (SJAE), and backed up by one 100% Nash vacuum pump. The pumps are in good condition.

6.2.1.4 Low Pressure Feedwater Heaters There are two low pressure (LP) closed feedwater heaters and one evaporative condenser installed downstream of the condensate pumps. The heaters were manufactured by Yuba Heat Transfer Corporation. The low pressure heaters warm the condensate water by transferring heat from the turbine extraction steam to the condensate water in the closed shell and tube, two-pass vertical U-tube design heat exchangers. There are no TWIP (Turbine Water Induction Prevention) features incorporated into the Unit 2 design.

The feedwater heaters should be inspected by eddy current testing at each unit annual planned outage, as necessitated by past feedwater heater failures.

El Paso Electric Company 6-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant

6.2.2 Feedwater System 6.2.2.1 System Overview The feedwater system is an open-loop system that transfers water from the deaerator storage tank to the boiler feedwater pumps and then on through the high pressure feedwater heaters and eventually to the boiler economizer inlet header.

6.2.2.2 High Pressure Feedwater Heaters There are two high pressure (HP) closed feedwater heaters installed downstream of the feedwater pumps. These heaters were manufactured by Yuba Heat Transfer Corporation and Senior Engineering. The HP heaters increase the efficiency of the plant by transferring heat from the turbine extraction steam to the feedwater in the closed shell and tube, two-pass vertical U-tube design heat exchangers. There are no TWIP features incorporated into the Unit 2 design.

The feedwater heaters should be inspected by eddy current testing at each unit planned outage, as necessitated by past feedwater heater failures.

6.2.3 Deaerator Heater & Storage Tank The open, tray type deaerator consists of a single vessel containing both the deaerating heater section and storage tank. The deaerator system was manufactured by Cochrane. In the deaerator, extraction steam is used to de-oxygenate and release non-combustible gasses from the water cycle to the atmosphere.

6.2.4 Condensate and Boiler Feed Pumps The two 570 GPM Byron Jackson electric driven vertical condensate pumps each supply 50- percent of the full load demand. The 125 HP Westinghouse motors are mounted directly on top of the vertical turbine pumps.

The two main boiler feed pumps are motor-driven barrel type pumps rated for 688 gpm. The two 50% capacity pumps are each driven by a 1250 HP motor. Since there is no installed spare pump, the station has a spare rotating element in stock. The pumps and motors are reportedly in good condition.

El Paso Electric Company 6-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant

6.2.5 Circulating Water System The circulating water system is used to reject heat from the condenser to condense the steam leaving the low pressure turbine. The system utilizes two 50% circulating water pumps, to pump cooling water from the cooling tower basin through the circulating water pipe to the condenser water box and then return the water to the cooling tower.

The two 50-percent capacity electric driven horizontal centrifugal circulating water pump is rated for 19,000 GPM and driven by 450 HP Westinghouse electric motors.

The cooling tower is a 5-cell, cross-flow induced draft tower handling 38,000 gpm. It is designed for a range of 21.1°F with a 14°F approach at a 67.5°F wet bulb. It is inspected annually, and is reportedly in good condition.

6.2.6 Chemical Feed, & Sample Systems Because there are still copper alloys within the steam cycle, the station performs boiler chemical cleanings every 4 – 6 years, with the last one in April 2007. The next chemical cleaning will be in 2012.

Newman Unit 2 uses a combination of phosphate and oxygen scavenger for feedwater treatment. Oxygenated water treatment is the trend in the utility industry. B&McD do not feel there is an incentive to change the feedwater treatment processes considering the relatively low boiler pressure and short remaining unit life expected.

6.2.7 Stack The prefabricated steel stack is 36.5 feet tall from its base, which rests on boiler room structural steel. It has a brick liner which has never been repaired. The plant should schedule an inspection to determine the actual condition of the stack and liner.

6.2.8 Plant Structures The plant structures generally appear to be in good condition even though the boiler room steel is outdoors.

El Paso Electric Company 6-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant

6.3 NEWMAN UNIT 4

6.3.1 Condensate System 6.3.1.1 System Overview The condensate system transfers condensed steam in the condenser hotwell to the integral deaerator.

6.3.1.2 Condenser In general, the condenser has performed well and any condenser tube leaks were promptly repaired.

6.3.1.3 Condenser Vacuum System The condenser vacuum system is intended to maintain a negative pressure, or vacuum, in the condenser by removing all air that collects in the condenser. This is accomplished by means of a hogging vacuum pump and a steam jet air ejector (SJAE), and backed up by one 100% vacuum pump. The pumps are in good condition.

6.3.2 Feedwater System 6.3.2.1 System Overview The feedwater system is an open-loop system that transfers water from the deaerator storage tank to the boiler feedwater pumps and eventually to the HRSG HP economizer inlet header.

6.3.3 Deaerator Heater & Storage Tank The open, tray type deaerator consists of a single vessel containing both the deaerating heater section and storage tank. In the deaerator, extraction steam is used to de-oxygenate and release non-combustible gasses from the water cycle to the atmosphere. Additional steam is supplied by the LP evaporator

6.3.4 Circulating Water System The circulating water system is used to reject heat from the condenser to condense the steam leaving the low pressure turbine. The system utilizes two 50% circulating water pumps, to pump

El Paso Electric Company 6-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 6 – Balance of Plant cooling water from the cooling tower basin through the circulating water pipe to the condenser water box and then return the water to the cooling tower.

The circulating water piping is carbon steel. Some sections of the steel piping are exhibiting significant corrosion.

The cooling tower is a 5-cell, cross-flow induced draft tower. It is designed for a range of 21.1°F with a 14°F approach at a 67.5°F wet bulb. It is inspected annually, and is reportedly in good condition.

6.3.5 Chemical Feed, & Sample Systems Newman Unit 4 uses a combination of phosphate and oxygen scavenger for feedwater treatment. Oxygenated water treatment is the trend in the utility industry. We do not feel there is an incentive to change the feedwater treatment processes considering the relatively low boiler pressure and short remaining unit life expected for Newman Unit 1.

6.3.6 Stack The prefabricated steel stack rests on HRSG structural steel. The plant should schedule an inspection to determine the actual condition of the stack.

6.3.7 Plant Structures The plant structures generally appear to be in good condition.

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El Paso Electric Company 6-8 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

7.0 ELECTRICAL AND CONTROLS

7.1 NEWMAN UNIT 1

7.1.1 Transformers 7.1.1.1 Startup Transformer The startup transformer is a 1960’s vintage Westinghouse unit located outdoors near the turbine building. The startup transformer is rated 6 MVA with a 65º C temperature rise and has an impedance of 7.9% at 6 MVA. The oil preservation system is a nitrogen blanket type. A cable bus connects the startup transformer to the switchgear terminals.

The startup transformer is protected using ABB TPU microprocessor relays.

The transformer is rated for 55° C rise over a 40° C ambient. This results in a maximum rated winding temperature of 95° C. No winding temperature gauges were visible, but the oil temperature was visible.

The startup transformer is rarely heavily loaded and should have a long thermal life.

7.1.1.2 Main Transformer (Generator Step-up Transformer) The main transformer (GSU) is a 2008, Siemens three phase unit located outdoors near the turbine building. The transformer is rated 70/90/112/125.5 MVA with a 55/65 ºC temperature rise and has an impedance of 9.7% at 70 MVA. The oil preservation system is a nitrogen blanket type. A common spare main transformer for Units 1 and 2 is located on site. A firewall is installed between the GSU and auxiliary transformers. A fire protection deluge system and oil spill containment are furnished for the GSU.

The main transformer protection is an ABB GPU relay. The unit also has a Hydran M2 oil monitor that is used by the substation department.

Cable bus connects the main transformer to the generator terminals. The cable bus is rated at 13.8 KV and 5000 Amps. The bus is naturally cooled.

Since the transformer is new and has a much higher MVA rating than the generator, it should exceed the life of the plant.

7.1.1.3 Auxiliary Transformer The unit auxiliary transformer is a 1960’s vintage Westinghouse three-phase unit located outdoors near the turbine building. The unit auxiliary transformer is rated at 5/5.6 MVA with a

El Paso Electric Company 7-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls rise of 55/65ºC and has an impedance of 5.5% at 5 MVA. The oil preservation system is a nitrogen blanket type. A deluge fire protection system and oil spill containment are provided. A cable bus connects the auxiliary transformer to the switchgear terminals.

The transformer is protected using ABB TPU microprocessor relays.

With the present testing and maintenance regiment, the transformer should have 10 years or more remaining life. However increased surveillance is advised, especially dissolved gas in oil testing.

7.1.2 Medium Voltage Switchgear The original 1960’s vintage 2.4 KV switchgear consists of Westinghouse 150 MVA air magnetic circuit breakers rated at 4.16 KV installed on the ground floor of the turbine building in an open area. The main breaker is a Westinghouse model 50DH150E rated at 1200 amps, 24 kA symmetrical interrupting, and 39 kA close and latch. The feeder breakers are a 50DH150E model air magnetic rated at 1200 amps, 24 kA symmetrical interrupting, and 39 kA close and latch. The control power is 125 VDC.

The main unit loadcenter consists of one (1) three-phase, 300kVA, 2.4/480V, indoor, VPI dry- type loadcenter transformer in a free-standing configuration. The Cooling tower loadcenter is a three-phase, 500kVA, 2.4/480V, outdoor, dry-type, VPI dry-type transformer in a free-standing configuration.

Based on wide industry experience, the Westinghouse 50DH150E breakers have good reliability if the insulation kept free from moisture and normal preventative maintenance is performed. The breakers are inspected, adjusted, and tested (hipot, megger, contact resistance, etc.) on a 5 year schedule.

Spare parts are generally available and most components are relatively inexpensive to replace. The 2.4 kV switchgear bus is a relatively low temperature component. The cleanliness of the insulators and tightness of connections primarily determine the expected life. With good maintenance practice, the life of the bus is virtually unlimited.

7.1.3 480V Loadcenters, Switchgear, & Motor Control Centers The 1960’s vintage 480V switchgear is equipped with Westinghouse 25 kA air-magnetic circuit breakers. The main breakers are Westinghouse db-25 model rated at 600 amps and 25 kA interrupting with 125 VDC control power. The switchgear is located indoors.

El Paso Electric Company 7-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

No motor control centers are installed. The motor starters are located near the loads in individual enclosures.

Load-center transformers typically have a useful life of 40 to 50 years. These transformers are relatively inexpensive to replace and are readily available. A tie to the Unit 2 480V switchgear is available; therefore, a load center transformer failure has little impact on plant availability.

7.1.4 Station Emergency Power Systems One station battery is provided to supply critical plant systems in both units 1 and 2. The battery is located in an open area ventilated by plant area ventilation. The battery is a GNB model 2- PDQ-17 flooded-cell lead-acid type rated at 1000 amp-hours. A crosstie is provided between the station batteries to allow one battery to feed two DC systems.

The emergency diesel generator is a Caterpillar unit. The EDG is located outside of the turbine building.

The DC system batteries are tested for specific gravity, cell voltage, and fluid level on a regular basis. The battery is 10 years old. Station batteries are designed for a 20 year life.

The DC switchboard breakers are operated infrequently and typically have life in excess of 50 years. The battery charger is relatively new and should be operable for another 10 years.

7.1.5 Electrical Protection The plant ground grid consists of copper conductors buried in the soil under and around the plant. Equipment and structures appeared to be adequately grounded. Steel columns are grounded in numerous places. All equipment and panels were grounded except 2.4 kV motor frames .

The plant is located in an isokeraunic area with an average of 40 thunderstorm days/year. The plant is protected from lightning by the steel plant stack. Shield wires are installed on the transmission lines and lines to the GSU and startup transformers.

7.1.6 2.4KV Motors and Cables Plant medium voltage cables are primarily Kerite unshielded type.

The plant has a very competent PdM group that performs comprehensive testing on 2.4kV motors and cables. The motors or cables should be reconditioned or replaced as determined by the PdM testing.

El Paso Electric Company 7-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

7.1.7 Substation The 115 kV substation has a number of obsolete dead-tank oil circuit breakers. Although, the breakers are obsolete, spare parts are available from the supplier or third parties.

The breakers are tested and maintained on intervals determined by the number of operations.

The plant has experienced a total blackout condition in 2002. The plant does not have onsite blackstart capability. If a system blackout occurs, the plant relies on transmission system for startup power.

7.1.8 Control Systems The plant control system is the original pneumatic system augmented with analog electronic controllers. The plant burner management is supplied by Forney.

The annunciator is a Panalarm system. A sequence of events recorder is not installed, nor required.

The burner management system was upgraded to a Foxboro DCS.

7.1.9 Miscellaneous Explosion-proof fittings are installed at the burner front.

General plant lighting typically consists of the following fixtures:

• General plant lighting-incandescent • Turbine bay lighting-incandescent • Maintenance shop lighting-flourescent • Office lighting-incandescent • Emergency lighting-station battery • No areas were found to have lighting problems. Freeze protection is provided for piping in the outdoor areas. Cathodic protection consists of a rectifier type system installed to protect natural gas piping.

Plant revenue metering is electromechanical type located in the control room and fed from instrument transformers located on the low side of the main transformers.

El Paso Electric Company 7-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

7.2 NEWMAN UNIT 2

7.2.1 Transformers 7.2.1.1 Main Transformer (Generator Step-up Transformer) The main transformer (GSU) is a 1960’s vintage Westinghouse three-phase unit located outdoors near the turbine building. The transformer is rated 98.5 MVA with a temperature rise of 65 ºC and has an impedance of 11.8%. The oil preservation system is a nitrogen blanket type. A common spare main transformer for Units 1 and 2 is located on site. A firewall is installed between the GSU and auxiliary transformers. A fire protection deluge system is furnished for the GSU. No leaks were evident.

The transformer protection is an ABB GPU relay.

7.2.1.2 Auxiliary Transformer The unit auxiliary transformer is a 1960’s vintage Westinghouse three-phase unit located outdoors near the turbine building. The unit auxiliary transformer is rated at 5/5.6 MVA with a 55/65ºC temperature rise and has an impedance of 5.7% at 5 MVA. The oil preservation system is a nitrogen blanket type. A deluge fire protection system is installed on each transformer. A cable bus connects the auxiliary transformer to the switchgear terminals.

The transformer is protected using ABB TPU microprocessor relays.

With the present testing and maintenance regiment, the transformer should have 10 years or more remaining life. However increased surveillance is advised, especially dissolved gas in oil testing.

7.2.2 Medium Voltage Switchgear The original 1960’s vintage 2.4 kV switchgear consists of Westinghouse 150 MVA air magnetic circuit breakers rated at 4.16 kV installed on the ground floor of the turbine building in an open area. The main breaker is a Westinghouse model 50DH150E rated at 1200 amps, 24 kA symmetrical interrupting, and 39 kA close and latch. The feeder breakers are a 50DH150E model air magnetic rated at 1200 amps, 24 kA symmetrical interrupting, and 39 kA close and latch. The control power is 125 VDC.

The main unit loadcenter consists of one three-phase, 300kVA, 2.4/480V, indoor, VPI dry-type loadcenter transformer in a free-standing configuration.

Based on wide industry experience, the Westinghouse 50DH150E breakers have good reliability if kept free from moisture and normal preventative maintenance is performed. The breakers are

El Paso Electric Company 7-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

inspected, adjusted, and tested (hipot, megger, contact resistance, etc.) on a 5 year schedule. Spare parts are generally available and most components are relatively inexpensive to replace. The2.4 kV switchgear bus is a relatively low temperature component. The cleanliness of the insulators and tightness of connections primarily determine the expected life. With good maintenance practice, the life of the bus is virtually unlimited.

7.2.3 480V Loadcenters, Switchgear, & Motor Control Centers The 1960’s vintage 480V switchgear is equipped with Westinghouse 25 kA air-magnetic circuit breakers. The main breakers are Westinghouse db-25 model rated at 600 amps and 25 kA interrupting with 125 VDC control power. The switchgear is located indoors.

No motor control centers are installed. The motor starters are located near the loads in individual enclosures.

Load-center transformers typically have a useful life of 40 to 50 years. These transformers are relatively inexpensive to replace and are readily available. A tie to the unit 2 480V switchgear is available; therefore, a load center transformer failure has little impact on plant availability.

7.2.4 Station Emergency Power Systems One station battery is provided to supply critical plant systems in both units 1 and 2. The battery is located in an open area ventilated by plant area ventilation. The battery is a GNB model 2- PDQ-17 flooded-cell lead-acid type rated at 1000 amp-hours. A crosstie is provided between the station batteries to allow one battery to feed two DC systems.

The emergency diesel generator is a Caterpillar unit. The EDG is located outside of the turbine building.

The DC system batteries are tested for specific gravity, cell voltage, and fluid level on a regular basis. The battery is 10 years old. Station batteries are designed for a 20 year life.

The DC switchboard breakers are operated infrequently and typically have life in excess of 50 years. The battery charger is relatively new and should be operable for another 10 years.

7.2.5 Electrical Protection The plant ground grid consists of copper conductors buried in the soil under and around the plant. Equipment and structures appeared to be adequately grounded. Steel columns are grounded in numerous places. All equipment and panels were grounded except 2.4kV motor frames .

El Paso Electric Company 7-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

7.2.6 2.4KV Motors and Cables Plant medium voltage cables are primarily Kerite unshielded type.

The plant has a very competent PdM group that performs comprehensive testing on 2.4kV motors and cables. The motors or cables should be reconditioned or replaced as determined by the PdM testing.

7.2.7 Substation The 115 kV substation has a number of obsolete dead-tank oil circuit breakers. Although, the breakers are obsolete, spare parts are available from the supplier or third parties.

The breakers are tested and maintained on intervals determined by the number of operations.

7.2.8 Control Systems The plant control system is the original pneumatic system augmented with analog electronic controllers.

The annunciator is a Panalarm system. A sequence of events recorder is not installed. The Panalarm system is obsolete and parts may be difficult to obtain. A PLC system could be installed that would provide alarming and sequence of events.

The burner management system was upgraded to a Foxboro DCS.

7.2.9 Miscellaneous Explosion-proof fittings are installed at the burner front.

General plant lighting typically consists of the following fixtures:

• General plant lighting-incandescent • Turbine bay lighting-incandescent • Maintenance shop lighting-fluorescent

El Paso Electric Company 7-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

• Office lighting-incandescent • Emergency lighting-station battery • No areas were found to have lighting problems. Freeze protection is provided for piping in the outdoor areas. Cathodic protection consists of a rectifier type system installed to protect natural gas piping.

Plant revenue metering is electromechanical type located in the control room and fed from instrument transformers located on the low side of the main transformers.

7.3 NEWMAN UNIT 4

7.3.1 Transformers 7.3.1.1 Main Transformer (Generator Step-up Transformer) GT1 and GT2 main transformers (GSU) area 2001, GE three-phase units located outdoors near the turbine building. The transformers are rated 70/90/112/125.5 MVA with a 55/65 ºC temperature rise and an impedance of 9.7% at 70 MVA. The oil preservation systems are nitrogen blanket type. A firewall is installed between the GSU and associated auxiliary transformers. There is deluge fire protection on both units, but no oil containment was found under either transformer.

Both transformers are protected by an ABB GPU relay.

Since the transformers are new and have a much higher MVA rating than the generator, they should both exceed the life of the plant.

ST main transformer (GSU) is an Allis Chalmers three-phase unit located outdoors near the turbine building. The transformer is rated 125MVA with a 55ºC temperature rise and an impedance of 10.7% MVA. The oil preservation system is a nitrogen blanket type. A firewall is installed between the GSU and auxiliary transformers. A deluge system is provided for fire protection. However, no oil containment was found under the transformer.

The transformer is protected using an ABB GPU microprocessor relay.

Since the transformer is new and much higher MVA rating than the generator, it should exceed the life of the plant.

7.3.1.2 Auxiliary Transformer The unit auxiliary transformer is a Westinghouse three-phase unit located outdoors near the turbine building. The transformer is rated at 5.6 MVA with a 55/65ºC temperature rise and an

El Paso Electric Company 7-8 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls impedance of 5.5% at 5 MVA. The oil preservation system is a nitrogen blanket type. A deluge fire protection system and an oil containment is provided. A cable bus connects the auxiliary transformer to the switchgear terminals.

The transformer is protected using ABB TPU microprocessor relays.

With the present testing and maintenance regiment, the transformer should have 10 years or more remaining life. However increased surveillance is advised, especially dissolved gas in oil testing.

7.3.2 Medium Voltage Switchgear The original 2.4 KV switchgear consists of Westinghouse 150 MVA air magnetic circuit breakers rated at 4.16 KV installed on the ground floor of the turbine building in an open area. The main breaker is a Westinghouse model 50DH150E rated at 1200 amps, 24 kA symmetrical interrupting, and 39 kA close and latch. The feeder breakers are a 50DH150E model air magnetic rated at 1200 amps, 24 kA symmetrical interrupting, and 39 kA close and latch. The control power is 125 VDC.

The main unit loadcenter consist of one three-phase, 300kVA, 2.4/480V, indoor, VPI dry-type transformer in a free-standing configuration.

Based on wide industry experience, the Westinghouse 50DH150E breakers have good reliability if the insulation is kept free from moisture and normal preventative maintenance is performed. The breakers are inspected, adjusted, and tested (hipot, megger, contact resistance, etc.) on a 5 year schedule. However, spare parts are generally available and most components are relatively inexpensive to replace.

7.3.3 480V Loadcenters, Switchgear, & Motor Control Centers The 480V switchgear is equipped with Westinghouse 25 kA air-magnetic circuit breakers. The main breakers are Westinghouse DB-25 model rated at 600 amps and 25 kA interrupting with 125 VDC control power. The switchgear is located indoors.

7.3.4 Station Emergency Power Systems One (1) station battery is provided to supply critical plant systems in unit 4. The battery is located in an open area ventilated by plant area ventilation. The battery is a GNB model 2-PDQ- 17 flooded-cell lead-acid type rated at 1000 amp-hours.

The emergency diesel generator is a Caterpillar unit. The EDG is located outside of the turbine building.

El Paso Electric Company 7-9 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls

The DC system batteries are tested for specific gravity, cell voltage, and fluid level on a regular basis. The battery is 10 years old. Station batteries are designed for a life of 20 years.

The DC switchboard breakers are operated infrequently and typically have life in excess of 50 years. The battery charger is relatively new and should be operable for another 10 years.

7.3.5 Electrical Protection The plant ground grid consists of copper conductors buried in the soil under and around the plant. Equipment and structures appeared to be adequately grounded. Steel columns are grounded in numerous places. All equipment and panels were grounded except 2.4kV motor frames are not.

7.3.6 2.4KV Motors and Cables Plant medium voltage cables are primarily Kerite unshielded type.

The plant has a very competent PdM group that performs comprehensive testing on 2.4kV motors and cables. The motors or cables should be reconditioned or replaced as determined by the PdM testing.

7.3.7 Substation The 115 kV substation has a number of obsolete dead-tank oil circuit breakers. Although, the breakers are obsolete, spare parts are available from the supplier or third parties.

The breakers are tested and maintained on intervals determined by the number of operations.

7.3.8 Control Systems The plant control system is the Allen Bradley PLCs. The plant burner management is supplied by Forney.

The annunciator is a Panalarm system. A sequence of events recorder is not installed. The Panalarm system is obsolete and parts may be difficult to obtain. A PLC system could be

El Paso Electric Company 7-10 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 7 – Electrical and Controls installed that would provide alarming and sequence of events. The burner management system was upgraded to a Foxboro DCS.

7.3.9 Miscellaneous General plant lighting typically consists of the following fixtures:

Plant revenue metering is electromechanical type located in the control room and fed from instrument transformers located on the low side of the main transformers.

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El Paso Electric Company 7-11 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 8 – External and Environmental Factors

8.0 EXTERNAL AND ENVIRONMENTAL FACTORS

8.1 INTRODUCTION

External factors, such as availability of fuel or water, or environmental factors have been the cause of other generating units to be taken out of service in the past. Transmission congestion is another potential problem that can lead to costly transmission upgrades in some cases.

8.2 FUEL SUPPLY

EPE employs a full time fuel resource planning department for management of reliable fuel sources for the Newman station. The Newman plant has been served by both intrastate and interstate pipelines since the 1970’s. The plant is fed by three fuel supply sources: (1) natural gas supplies delivered over the El Paso Natural Gas (EPNG) interstate pipeline, (2) natural gas supplies delivered thru the ONEOK intrastate pipeline and, (3) an on-site emergency fuel oil supply. EPE purchases only firm natural gas supplies for the Newman plant. One five year, long term fuel contract is held with ONEOK intrastate pipeline and the remaining gas supply is met by short term, firm fuel contracts which are transported through the EPNG under long term, firm transportation agreements. EPE has confidence that the ONEOK fuel supply contract can be extended. Fuel reliability is maintained through fuel supply diversity through the redundant fuel supply sources to the plant. Each fuel supply tap has two meters and flow regulators which further improve the fuel reliability to the plant. The natural gas supplies to the Newman station are properly managed and provide a reliable and continuous fuel supply to the plant.

8.3 WATER SUPPLY

Water to the plant for the various users, including demineralized water, service water, and cycle water is currently supplied from deep well pumps that are owned by El Paso Water Utilities (EPWU). The water source is owned by the City of El Paso and El Paso Electric has a long term agreement for supply of well water to the plant.

The majority of the total unit water usage is used in the cooling towers. EPWU supplies grey water from the EPWU wastewater treatment facility for cooling tower makeup water.

The plant has long-term contracts in place for their water supplies with EPWU and only a significant drought lasting several years would potentially interrupt their existing water supply. These water supply contracts have not been reviewed as a part of this report; the above statement relies on assurances from the Staff.

El Paso Electric Company 8-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 8 – External and Environmental Factors

With the continued urban growth in the EPWU service area, water supply for the Newman station may become more available because its primary source is from the EPWU wastewater treatment plant effluent; however, the cost of this effluent is currently scheduled to continue to escalate. EPE has reported there does not appear to be any water supply concerns over the next ten years that would prevent the continued operation of the Newman Units.

8.4 AIR EMISSIONS & ENVIRONMENTAL ISSUES

The plant has continued to meet its NOx discharge requirements, so there is no need to install equipment to lower NOx. EPE has received the renewal and approval of its Federal Operating Air Permit from the Texas Commission on Environmental Quality (TCEQ). This permit expires on August 25, 2010. EPE does not anticipate any problems with renewal.

Two environmental regulations are considered in this report; the Clean Air Interstate Rule (CAIR) and the Regional Haze Rule (RHR). Regarding CAIR, Newman Station is an applicable CAIR unit due to its location in the El Paso area. The El Paso area is currently considered non-

attainment for PM10 and CO.

8.5 WASTEWATER DISCHARGE

Wastewater from the boiler blowdown, laboratory drains, sampling streams, and floor drains is routed through an oil/water separator which is discharged to on-site sumps. Cooling tower blowdown is routed to separate sumps without treatment. Wastewater from all the sumps is pumped to a 45 acre evaporation pond located on the Newman site. Wastewater from the demineralizer and reverse osmosis equipment is neutralized and pumped to a smaller 2.4 acre onsite evaporation pond which, in turn, is pumped to the 45 acre evaporation pond. Periodic discharges of metal cleaning wastes from the Rio Grande plant are also trucked to the Newman site and discharged into the Newman evaporation pond system. Waste water from the 45 acre evaporation pond is pumped to an off-site irrigation field consisting of 793 acres of land cover consisting of native vegetation used for grazing land.

This existing discharge scheme is scheduled to be eliminated within the next year by the installation of a waste water treatment and recycling system that is currently under construction. This waste water treatment system effluent will be of quality better than the existing cooling tower makeup feed, and will be utilized in the cooling tower. The new wastewater treatment will essentially zero discharge; the concentrated solids will be eventually landfilled.

The 45 acre evaporation pond is scheduled to be abandoned, since the new recycling system will only use a small sludge drying pond.

El Paso Electric Company 8-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 8 – External and Environmental Factors

The Newman station is not subject to the National Pollution Discharge Elimination System (NPDES) since it does not discharge water into navigable waters. The discharge water permit for the Newman Units is the Texas Pollution Discharge Elimination System (TPDES) permit which must be renewed every five years and is scheduled for renewal in September 2010. El Paso expects to receive approval of this permit renewal. There have been inquiries from EPWU, but no pressure on EPE from the TCEQ, to reduce wastewater discharge from the plant. It is expected that with continued urban growth around the Newman station, greater challenges may be encountered to address waste water disposal. The Newman station does not have water discharge permitting issues that will prevent its continued operation for the next 10 years.

Since the new zero discharge waste water system does not have any effluent leaving the plant site, it may not require future TPDES permits.

8.6 ODOR, VISIBILITY, & NOISE

The plant did not report any significant issues with odor or visibility. The plant does not have residential neighbors within three miles of the plant. This distance provides a buffer zone and minimizes the potential for complaints from disgruntled neighbors; however, continued urban growth is bringing residential neighborhoods closer to the plant. There have been no complaints of noise from the Newman station. Noise compliance may currently be an issue with the El Paso Municipal Code and the current operations at Newman. EPE is evaluating noise compliance alternatives for the Newman station.

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El Paso Electric Company 8-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

9.0 NEW GENERATION EPE has also retained B&McD to assess the option of building new generation to replace Newman units 1, 2 and 4. For this assessment, EPE decided that B&McD would evaluate a greenfield combined cycle gas turbine (CCGT) arrangement that includes two (2) General Electric 7EA frame gas turbines, two (2) heat recovery steam generators (HRSGs) and one (1) steam turbine. This evaluation includes “screening-level” estimated capital and operations and maintenance (O&M) costs and estimated performance.

It should be noted that the information presented is screening level in nature and intended to allow for general evaluation of whether additional studies are merited. Additional studies will be required to fully define the selected option to support budgeting and develop a defined scope and execution plan.

This assessment provides a comparison of technical features, costs and performance. The costs presented are based upon preliminary proposals received from suppliers. As such, information contained herein may not reflect actual firm bid proposals that will be received during execution of the project. This study provides comparative information, but a vendor selection cannot be made until firm proposals have been received.

9.1 ASSUMPTIONS

This section provides overall assumptions used in developing the capital cost estimates, performance estimates, and O&M estimates for this study.

9.1.1 General Assumptions and Clarifications

• Plant site is a relatively level greenfield site, clear of trees and wetlands. There are no existing structures or underground utilities. • Site elevation is 4000 feet above sea level. • Sufficient area to receive, assemble and temporarily store construction materials is available. • Piling is required under heavily loaded foundations. • Construction costs are based on a multiple contract contracting philosophy. • Capital cost estimates do not include escalation. • Sufficient housing is available to support construction labor. • Performance estimates are based on new and clean equipment. Degradation is not included. • Wet cooling is used for the base estimate, but an alternate for dry cooling is included. • An evaporative cooler is utilized that is on for ambient conditions of 59°F and above.

El Paso Electric Company 9-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

• The gas pipeline pressure at the site is sufficient. Gas compressors have not been included. • Duct firing is included in capital costs and performance estimates. • Emission estimates are shown to provide the basis for O&M costs and to provide a basis for the required air pollution control equipment included in the capital cost estimates. These emissions represent B&McD’s best estimate of required BACT emission limits at this time. However, actual BACT requirements will not be fully realized until the permitting process is complete. 9.1.2 Project Indirect Costs The following project indirects are included in capital cost estimates:

• Construction power. • Performance testing and CEMS/stack emissions testing (where applicable). • Initial fills and consumables, preoperational testing, startup, startup management, and calibration. • Construction/startup technical service. • Site surveys and studies. • Engineering and construction management. • Construction testing. • Operator training. 9.1.2.1 Owner Indirect Costs The following Owner indirects are included in capital cost estimates:

• Project development. • Owner’s operations personnel prior to COD. • Owner’s legal costs. • Owner construction management. • Owner start-up engineering. • Owner construction power and water. • Permitting and licensing fees. • Site security. • Fuel, water, chemicals and power used during startup and testing. • Permanent plant equipment & furnishings.

El Paso Electric Company 9-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

• Builder’s risk insurance. • Onsite switchyard. • Owner’s contingency (5%). 9.1.2.2 Capital Cost Exclusions The following costs are excluded from the capital cost estimates:

• Allowance for Funds Used During Construction (AFUDC). • Financing Fees. • Natural gas supply pipeline. • Raw water supply. • Land. • Performance and payment bond. • Sales tax. • Transmission Upgrades. • Water Rights. • Off-site Infrastructure. • Owner’s Corporate Staffing. • Escalation to a COD. • Spare parts. 9.1.2.3 Operations and Maintenance Assumptions and Exclusions The following are assumptions and exclusions used for determining the operations and maintenance costs:

• All O&M costs are based on a greenfield facility. • All O&M cost estimates are in current 2010 dollars. • O&M estimates do not include emissions credit costs, property taxes, or insurance. • O&M estimates do not include start-up costs. • Fixed O&M cost estimates include labor, office and administration, training, contract labor, safety, building and ground maintenance, communication, and laboratory expenses. • Variable O&M costs include makeup water, water treatment, water disposal, ammonia, SCR replacements, and other consumables not including fuel. Variable O&M costs also include maintenance on equipment.

El Paso Electric Company 9-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

• Gas turbine spare parts (combustion spares, hot gas path spares, and major spares) are not included in the O&M cost. • O&M estimates are based on a 50 percent capacity factor. • Gas turbine major maintenance is based on third party services, not on long term service agreements (LTSA) with the OEM. 9.1.3 Evaluation The results of this new generation evaluation can be seen in the table below. An optional cost section is also included for dry cooling. Based on the previously mentioned assumptions, the 2x2x1 7EA combined cycle with wet cooling has an estimated capital cost of $1,000/kW. The owner’s cost for this new generation is estimated to be $140/kW. The fixed O&M costs are estimated to be $20.29/kW-yr and variable O&M (excluding major maintenance) is estimated to be $1.73/MWh. Third party gas turbine major maintenance for this plant is estimated to be $185/GT-hr. The 2x2x1 7EA combined cycle arrangement with wet cooling is predicted to provide a net output of 302 MWs and have a heat rate of 8690 Btu/kWh (HHV) at the assumed site conditions (59oF, 60% RH, 4000 ft elevation) with full duct firing.

El Paso Electric Company 9-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

Table 9-1 Combined Cycle Gas Turbine Screening Information

El Paso Electric Company 9-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

EL PASO ELECTRIC COMPANY COMBINED CYCLE GAS TURBINE SCREENING INFORMATION BMcD Project 53549

PROJECT TYPE 2x2x1 Fired 7EA CCGT

BASE PLANT DESCRIPTION Number of Gas Turbines 2 Number of HRSGs 2 Number of Steam Turbines 1 Steam Conditions (Main Steam / Reheat) 1050 F/1050 F Main Steam Pressure 1905 psia Steam Cycle Type Subcritical Capacity Factor (%) Intermediate (50%) Fuel Design Natural Gas Heat Rejection Wet Cooling

NOx Control DLN/SCR SO2 Control N/A Particulate Control Good Combustion Practice Base Load Unfired Performance @ 59F, 60% RH Unfired Net Plant Output, kW 221,300 Unfired Net Plant Heat Rate, Btu/kWh (HHV) 8,070 Unfired Heat Input, MMBtu/h (HHV) 1,786

Base Load Fired Performance @ 59F, 60% RH Fired Net Plant Output, kW 302,000 Fired Net Plant Heat Rate, Btu/kWh (HHV) 8,690 Fired Heat Input, MMBtu/h (HHV) 2,624

Procurement Costs, $/kW $470 Construction Costs, $/kW $350 Project Indirects, $/kW $180 Owner's Costs, $/kW $140 Project Total, $/kW $1,140

Fixed O&M Cost, $/kW-Yr $20.29 GTG Major Maintenance, $/GTG-hr $185 GTG Major Maintenance, $/GTG-start $5,700 Variable O&M Cost (Excluding GTG Major Maintenance), $/MWh $1.73

ESTIMATED BASE LOAD OPERATING CONDITIONS, lb/MMBtu

NOX 0.011

SO2 < 0.0051 CO 0.056

CO2 118

PM/PM10 0.02

PERFORMANCE AND COSTS FOR DRY COOLING Performance @ 59F, 60% RH Unfired Net Plant Output, kW 214,900 Unfired Net Plant Heat Rate, Btu/kWh (HHV) 8,310 Unfired Heat Input, MMBtu/h (HHV) 1,786

Base Load Fired Performance @ 59F, 60% RH Fired Net Plant Output, kW 293,200 Fired Net Plant Heat Rate, Btu/kWh (HHV) 8,868 Fired Heat Input, MMBtu/h (HHV) 2,600

Project Total, $/kW $1,246

Fixed O&M Costs, $/kW-yr $20.74 Variable O&M Costs (Excluding GTG Major Maintenance), $/MWh $1.67

El Paso Electric Company 9-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Unit 1, 2, & 4 Section 9 – New Generation

CCGT SCREENING INFORMATION NOTES

The following assumptions, in conjuction with those stated in the report, govern this analysis:

General - All estimates in this table are "screening-level" and are not to be guaranteed. - Fuel is pipeline quality natural gas with less than 3 grains Sulfur/100 scfm. - Option includes an SCR to achieve NOx emissions down to 3 ppm. - Option does not include a CO catalyst. - All emissions limits are subject to the BACT process.

Capital Cost Estimates - A multiple contracting method is assumed for this project, using open shop labor. - Capital costs provided include escalation to support a COD of May 2013. - Owner's costs do not include financing fees, IDC, transmission upgrades and interconnects. - Plant capital cost ($/kW) is based on fired plant performance at 59F ambient condition. - The plant site is a greenfield site that is clear of trees, structures and wetlands and is reasonably level. - Sufficient laydown area is available. - Piling is included under heavily loaded foundations. - Typical buildings are included. - Off-site pipeline costs are excluded.

Tie-Ins - Raw water supply tie in is at the site boundary. No additional costs for wells or water pipeline have been included. - Natural gas is available at the site boundary at adequate pressure, flow, and quality. - Base plant costs include switchyard. Transmission lines or transmission upgrades are not included.

Performance Estimates - Performance estimates provided are based on a site elevation of 4000 ft. - Performance assume evaporative cooling is installed and operating at 59ºF/60%RH. - Output and heat rate estimates assume new and clean equipment.

O&M Estimates - O&M Costs do not include emissions allowances. - O&M is estimated at 59F ambient condition. - Estimated staff requirements and salaries are included in the fixed O&M analysis.

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El Paso Electric Company 9-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

10.0 RECOMMENDATIONS AND CONCLUSIONS

10.1 GENERAL RECOMMENDATIONS

The following is a summary of the recommended actions suggested to maintain the reliability of Newman Units and reduce the potential for extended forced unit outages. The following recommendations are presented herein:

• External & Environmental Factors: o Continue to monitor changing air emissions regulations (CAIR and RHR).

10.2 UNIT 1 RECOMMENDATIONS

The following is a summary of the recommended actions suggested to maintain the reliability of Newman Unit 1 and prevent the potential for extended forced unit outages. The following recommendations are presented herein:

• Boiler: o Conduct non-destructive examination of selective areas of water wall tubing, steam drum and connections to the steam drum, superheater outlet header and branch connections to the superheater outlet header, reheater outlet header and branch connections to the reheater outlet header, and flow accelerated corrosion testing of the economizer inlet header. o Inspect the superheater and reheater attemperators and downstream piping • Steam Turbine-Generator: o Continue steam turbine-generator inspections on an 8-year schedule. o Continue steam turbine valve inspections on a 4-year schedule. o Perform boroscope examination of the turbine rotor. • High Energy Piping Systems: o Visually inspect the main steam, hot reheat, cold reheat, and feedwater piping hangers on a regular basis. o Perform piping non-destructive examinations as detailed in Section 5.0 of this report. o The extraction system, feedwater heater piping, and associated drains should be modified for compliance with the turbine water induction prevention recommendations of TDP-1- 2006. o Inspect the feedwater piping downstream of the boiler feed pumps for signs of FAC. • Balance of Plant:

El Paso Electric Company 10-1 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

o Conduct eddy current testing of low pressure and high pressure feedwater heater tubing. o Conduct deaerator and storage tank non-destructive testing on a periodic basis. o Continue inspection of the carbon steel portions of the circulating water piping. o Schedule an inspection of the stack. • Electrical: o Monitor the auxiliary transformer for combustible gas due to age. o Conducting a study of high energy electrical equipment arc-flash potential in compliance with OSHA standards. Table 10-1 indicates the proposed schedule for the implementation of the above recommendations.

Table 10-1: Implementation Schedule for B&McD Recommendations for Newman Unit 1 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Boiler Conduct non-destructive examination of selective areas X X Inspect superheater and reheater attemperators and downstream piping X Test safety valves X X X X X X X X X X X Chemically clean boiler X X Turbine-Generator Perform turbine inspection X Perform boroscopic examinations of turbine rotor X Perform turbine valve inspection X X Replace turbine valves studs and nuts X High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater piping hangers X X Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater X X piping Inspect boiler feed pump discharge piping for FAC X X Balance of Plant Conduct eddy current testing of feedwater heater tubing X X X X X X X X X X Conduct non-destructive examination of deaerator and storage tank X X Conduct visual inspection of circ water piping X X X X Conduct inspection of stack X Comply with ASME TDP-1-2006 X Electrical and Controls Monitor auxiliary transformer for combustible gas X X X X X X X X X X

El Paso Electric Company 10-2 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

Inspect, adjust and test medium- voltage switchgear X Conduct high energy arc-flash potential study X

10.3 UNIT 2 RECOMMENDATIONS

The following is a summary of the recommended actions suggested to maintain the reliability of Newman Units and prevent the potential for extended forced unit outages. The following recommendations are presented herein:

El Paso Electric Company 10-3 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

o Monitor the auxiliary transformer for combustible gas due to age. o Conducting a study of high energy electrical equipment arc-flash potential in compliance with OSHA standards. Table 10-2 indicates the proposed schedule for the implementation of the above recommendations.

Table 10-2: Implementation Schedule for B&McD Recommendations for Newman Unit 2 2011 2012 2013 2014 2015 2016 2017 2018 2019 Boiler Conduct non-destructive examination of selective areas X X X Inspect superheater and reheater attemperators and downstream piping X X Test safety valves X X X X X X X X X Chemically clean boiler X Turbine-Generator Perform turbine inspection X Perform boroscopic examinations of turbine rotor X Turbine valve inspection X High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater piping hangers X Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, X and feedwater piping Inspect boiler feed pump discharge piping for FAC X Balance of Plant Conduct eddy current testing of feedwater heater tubing X X X X X X X X X Conduct non-destructive examination of deaerator and storage tank X X Conduct visual inspection of circ water piping X X X Conduct inspection of stack X Comply with ASME TDP-1-2006 X Electrical and Controls Monitor auxiliary transformer for combustible gas X X X X X X X X X Inspect, adjust and test medium-voltage switchgear X Conduct high energy arc-flash potential study X

10.4 UNIT 4 RECOMMENDATIONS

• HRSGs:

El Paso Electric Company 10-4 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

o Conduct non-destructive examination of selective areas of superheater outlet header and branch connections to the superheater outlet header, and flow accelerated corrosion testing of the economizer inlet header. • Gas Turbine-Generators: o Continue regular inspections. • Steam Turbine-Generator: o Continue regular inspections. • High Energy Piping Systems: o Visually inspect the main steam, and feedwater piping hangers on a regular basis. o Perform piping non-destructive examinations as detailed in Section 5.0 of this report. o Inspect the feedwater piping downstream of the boiler feed pumps and HRSG circulating pump for signs of FAC. • Balance of Plant: o Continue inspection of the carbon steel portions of the circulating water piping. o Schedule an inspection of the stack. • Electrical: o Monitor the auxiliary transformer for combustible gas due to age. o Consider conducting a study of high energy electrical equipment arc-flash potential in compliance with OSHA standards. Table 10-3 indicates the proposed schedule for the implementation of the above recommendations.

Table 10-3: Implementation Schedule for B&McD Recommendations for Newman Unit 4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Heat Recovery Steam Generator Conduct non-destructive examination of selective areas X X Inspect superheater attemperators and downstream piping X X Test safety valves X X X X X X X X X X Turbine-Generator Gas Turbine 1 Perform combustion inspection X X X X Perform hot gas path inspection X X X X Perform major inspection X X Gas Turbine 2 Perform combustion inspection X X X X X Perform hot gas path inspection X X Perform major inspection X X X

El Paso Electric Company 10-5 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Steam Turbine Perform turbine inspection X X Perform boroscopic examinations of X X turbine rotor High Energy Piping Inspect main steam and feedwater piping hangers X X Conduct non-destructive examination of selected areas of main steam and X X feedwater piping Inspect boiler feed pump and HRSG circulating pump discharge piping for X X FAC Balance of Plant Conduct non-destructive examination of deaerator and storage tank X X Conduct visual inspection of circ water piping X X Conduct inspection of stacks X Electrical and Controls Monitor auxiliary transformer for combustible gas X X X X X X X X X X Inspect, adjust and test medium- voltage switchgear X Conduct high energy arc-flash potential study X 10.5 ANALYSIS

To properly compare the cost of extended operation of Newman units 1, 2, and 4 compared to new generation, B&McD estimated the cost for the recommendations listed above and developed an implementation schedule. El Paso furnished other proposed life extensions cost and operating cost. Details can be found in Appendix A, Appendix B, and Appendix C. The following assumptions were made: • Generation, Fixed O&M Costs, Variable O&M Costs, and Fuel Costs for existing units for the years 2010 through the expected retirement date were pulled from ProdMOD data provided by El Paso. Where no ProdMOD data was available, the average of the previous three years was used. • NOx emissions are based on 2008 data provided by El Paso. • The capacity factor for the equivalent new unit is assumed to be the 50 percent for comparison to Newman 1 and 2. The capacity factor for the equivalent new unit is assumed to be 75 percent for comparison to Newman 4. • Cost for the equivalent new unit was based on a equivalent capacity portion of the GE 7EA 2 x 1 combined cycle unit described in Section 9 (i.e., for Newman Unit 1, a 74-MW portion of the new unit was calculated). The results of the analysis are shown below in Tables 10-4, 10-5, and 10-6

El Paso Electric Company 10-6 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

Table 10-4: Net Present Value of Total Estimated Costs as Percentage of Equivalent New Unit 2-year Extension 4-year Extension 6-year Extension Newman Unit 1 37% 39% 41% Newman Unit 2 46% 52% 44% Newman Unit 4 71% 74% 77%

Table 10-5: Total Cost Comparison on a $/Nominal Capacity Basis as Percentage of Equivalent New Unit 2-year Extension 4-year Extension 6-year Extension Newman Unit 1 37% 39% 41% Newman Unit 2 46% 52% 44% Newman Unit 4 71% 74% 77%

Table 10-6: Total Cost Comparison on a $/MWhr Basis as Percentage of Equivalent New Unit 2-year Extension 4-year Extension 6-year Extension Newman Unit 1 96% 103% 110% Newman Unit 2 98% 106% 87% Newman Unit 4 90% 98% 105%

10.6 CONCLUSIONS

Based on the information acquired and presented in this report, the following conclusions have been made:

1. The overall condition of the Newman units appears to be good considering their age. There are no conditions that have been identified as being detrimental to achieving the desired retirement date, plus up to six additional years. In general, operational and maintenance problems which could affect operation are actively being addressed. However, the metallurgical condition of critical components is unknown at this time due to the lack of an ongoing NDE program. Consequently, in providing this relatively positive report, our confidence level is moderated by this unknown condition (see further discussion in “8” below). 2. Unit operations and maintenance are generally well planned and carried out in a manner consistent with or exceeding utility industry standards. 3. The predictive maintenance program used throughout the EPE system has been highly successful in minimizing forced outages in the rotating equipment area. This program has received industry recognition and, where feasible, should be extended to other critical equipment, such as control valves, and certain heat exchangers. 4. Certain conditions on major unit components may develop in the future, and the cost of repairing or replacing such components would make the continued operation of a generating unit imprudent. The end of the expected useful life of any of the Newman

El Paso Electric Company 10-7 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

Units may occur upon the failure, or prediction of eminent failure, of the steam drum or the concurrent failure of one or more simultaneous major plant component. 5. Based on the information provided by EPE, there were no reported indications or predictions of potential failure of these major unit components anticipated in the foreseeable future. However, currently there is no NDE program in place to monitor the condition of these major components. 6. Economic pressure to cycle the unit at night and on weekends is currently present and will continue to grow as the fuel price disparity between gas and coal / nuclear becomes greater. With the addition of Newman Unit 5, EPE has been forced to cycle the less efficient units. As new failure trends are established, a new end-of-life determination will need to be made. 7. The Newman units have typically achieved better than average plant availability, and equivalent forced outage rates. This results from a combination of the predictive maintenance program, coupled with proper attention to water chemistry and the aforementioned dispatch philosophy intended to minimize cycling. As EPE decides to cycle the units, existing metallurgical weak points that may be lurking unseen within the steam cycle components will become more evident. In addition, oxygen infiltration into the steam cycle during shutdowns will introduce not only general corrosion, but oxygen pitting. In those areas that are highly stressed, these pits serve as initiation points for cracks that, through repeated cycles, grow to failure points. Therefore, to minimize the impact of cycling, we recommend inerting the steam cycle components during shutdowns. 8. EPE is currently operating its system with little reserve margin during peak seasons. Given this, EPE should closely scrutinize the vulnerabilities of this unit, and by extension the rest of its generating fleet. Several vulnerabilities that we have observed at the Newman units are: a. The unknown metallurgical condition of the unit’s critical components. Given the age of the units, we believe that implementation of an NDE program would be prudent in order to provide early warning of major component deterioration. We recommend that this be made part of EPE’s existing PdM program in order to translate the findings into maintenance planning. b. The units has virtually no protection against Turbine Water Induction. While these incidents do not occur frequently, when they do, they can be quite damaging to the turbine and result in lengthy outages. We recommend that EPE review the ASME TWIP guidelines (ASME TDP-1-2006) and develop a cost effective modification plan for these units.

El Paso Electric Company 10-8 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4 Section 10 – Recommendations and Conclusions

c. Monitor the auxiliary transformer for combustible gas due to age to provide early warning of component failure. As a result of our review of the design, condition, operations and maintenance procedures, long- range planning, availability of consumables, and programs for dealing with environmental considerations, it is B&McD’s opinion that Newman Unit 1, 2, and 4 are capable of extending their scheduled retirement by 6 years to December 2021, December 2019, and December 2021, respectively. This assumes that the recommended inspections and assessments do not discover any significant findings. However, comparing the capital and incremental O&M cost estimated to extend the life of the three units against the estimated cost for new generation, it is B&McD’s opinion that it is not economically justified to extend the life of the existing units the full six years. As indicated in Table 10-6, the equivalent new unit becomes less expensive on a $ per MWhr basis sometime between the 2-year and 4-year study period for Newman units 1 and 2. For Newman Unit 4, the equivalent new unit becomes less expensive on a $ per MWhr basis after the 4-year life extension period.

* * * * *

El Paso Electric Company 10-9 Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri Condition Assessment Report Newman Units 1, 2, & 4

APPENDIX A - Newman Unit 1 Economic Analysis

El Paso Electric Company Burns & McDonnell Engineering Co. Project 53549 Kansas City, Missouri El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 1

2011 2012 2013 2014 2015 2016 2017 B&McD Recommended Expenditures Boiler Conduct non-destructive examination of selective areas $ 180,000 $ 180,000 Inspect superheater and reheater attemperators and downstream piping $ 40,000 $ 40,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Chemically clean boiler $ 1,250,000 Turbine-Generator Perform turbine inspections $ 2,000,000 Perform boroscope examinations of turbine rotor $ 40,000 Replace turbine valves studs and nuts $ 150,000 Perform turbine valve inspection $ 300,000 High Energy Piping Inspectp,, main steam, hot reheat, cold reheat and feedwater piping hangers $ 50,000 $ 50,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 100,000 $ 100,000 Inspect boiler feed pump discharge piping for FAC $ 20,000 $ 20,000 Balance of Plant Conduct eddy current testing of feedwater heater tubing $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Conduct non-destructive examination of deaerator and storage tank $ 20,000 $ 20,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stack $ 25,000 Comply with ASME TDP-1-2006 $ 320,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 4,265,000 $ 30,000 $ 45,000 $ 330,000 $ 440,000 $ 35,000 $ - Owner Planned Expenditures Boiler N/A Turbine-Generator Generator Re-winding $ 2,000,000 High Energy Piping N/A Balance of Plant N/A Electrical and Controls 2400V Switchgear replacement $ 300,000 Total Owner Planned Expenditures $ 2,300,000 $ - $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 181,902 81,792 133,841 153,544 83,589 123,658 120,264 Capacity Factor = 19% NOx Emissions, tons 199.17 89.56 146.54 168.12 91.52 135.39 131.68 NOx emissions = 0.001094913 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.59 $ 0.61 $ 0.60 $ 0.60 Escalation Rate = 8% Fixed Operating Cost $ 2,196,551 $ 1,896,458 $ 1,932,761 $ 2,155,330 $ 2,189,910 $ 2,092,667 $ 2,145,969 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 158,255 $ 46,621 $ 78,966 $ 90,591 $ 50,989 $ 73,783 $ 72,025 Discount Rate = 6% NOx Emissions Allowances $ 119,500 $ 53,733 $ 87,927 $ 100,870 $ 54,914 $ 81,237 $ 79,007 Fuel Cost $ 12,218,000 $ 4,156,000 $ 8,533,000 $ 9,260,000 $ 4,241,000 $ 7,344,667 $ 6,948,556 Estimated Operating Expenditures $ 14,692,306 $ 6,152,813 $ 10,632,654 $ 11,606,791 $ 6,536,813 $ 9,592,353 $ 9,245,556 Net Present Value $ 81,202,000 $ 22,957,890 $ 7,211,633 $ 13,450,769 $ 16,239,873 $ 10,251,227 $ 15,277,399 $ 15,845,258 Nominal Rating in kW 74,000 Estimated Cost per kW $ 1,097 Estimated Cost per MWhr $ 92 Projected Retirement Date

New Generation Net Generation, MWhr 324,120 324,120 324,120 324,120 324,120 324,120 324,120 Capacity Factor = 50% Capital cost$ 74,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 Capital Cost = 1000 $/kW Variable Operating Cost$ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 Fixed O&M = 20.29 $/kW Fuel Cost$ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 Variable O&M = 1.73 $/MW-hr Net Present Value $ 219,172,800 $ 100,490,222 $ 22,215,840 $ 23,993,107 $ 25,912,555 $ 27,985,560 $ 30,224,404 $ 32,642,357 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 2,962 Estimated Cost per MWhr$ 97

NM1 - Two Year Extension Page 1 El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 1

2011 2012 2013 2014 2015 2016 2017 2018 2019 B&McD Recommended Expenditures Boiler Conduct non-destructive examination of selective areas $ 180,000 $ 180,000 Inspect superheater and reheater attemperators and downstream piping $ 40,000 $ 40,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Chemically clean boiler $ 1,250,000 $ 1,250,000 Turbine-Generator Perform turbine inspections $ 2,000,000 Perform boroscope examinations of turbine rotor $ 40,000 Replace turbine valves studs and nuts $ 150,000 Perform turbine valve inspection $ 300,000 High Energy Piping Inspectp,, main steam, hot reheat, cold reheat and feedwater piping hangers $ 50,000 $ 50,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 100,000 $ 100,000 Inspect boiler feed pump discharge piping for FAC $ 20,000 $ 20,000 Balance of Plant Conduct eddy current testing of feedwater heater tubing $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Conduct non-destructive examination of deaerator and storage tank $ 20,000 $ 20,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stack $ 25,000 Comply with ASME TDP-1-2006 $ 320,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 4,265,000 $ 30,000 $ 45,000 $ 330,000 $ 1,690,000 $ 35,000 $ 30,000 $ 30,000 $ - Owner Planned Expenditures Boiler N/A Turbine-Generator Generator Re-winding $ 2,000,000 High Energy Piping N/A Balance of Plant N/A Electrical and Controls 2400V Switchgear replacement $ 300,000 Total Owner Planned Expenditures $ 2,300,000 $ - $ - $ - $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 181,902 81,792 133,841 153,544 83,589 123,658 120,264 109,170 117,697 Capacity Factor = 19% NOx Emissions, tons 199.17 89.56 146.54 168.12 91.52 135.39 131.68 119.53 128.87 NOx emissions = 0.001094913 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.59 $ 0.61 $ 0.60 $ 0.60 $ 0.60 $ 0.60 Escalation Rate = 8% Fixed Operating Cost $ 2,196,551 $ 1,896,458 $ 1,932,761 $ 2,155,330 $ 2,189,910 $ 2,092,667 $ 2,145,969 $ 2,142,849 $ 2,127,162 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 158,255 $ 46,621 $ 78,966 $ 90,591 $ 50,989 $ 73,783 $ 72,025 $ 65,704 $ 70,517 Discount Rate = 6% NOx Emissions Allowances $ 119,500 $ 53,733 $ 87,927 $ 100,870 $ 54,914 $ 81,237 $ 79,007 $ 71,719 $ 77,321 Fuel Cost $ 12,218,000 $ 4,156,000 $ 8,533,000 $ 9,260,000 $ 4,241,000 $ 7,344,667 $ 6,948,556 $ 6,178,074 $ 6,823,765 Estimated Operating Expenditures $ 14,692,306 $ 6,152,813 $ 10,632,654 $ 11,606,791 $ 6,536,813 $ 9,592,353 $ 9,245,556 $ 8,458,346 $ 9,098,765 Net Present Value $ 103,231,900 $ 22,957,890 $ 7,211,633 $ 13,450,769 $ 16,239,873 $ 12,087,887 $ 15,277,399 $ 15,896,673 $ 15,711,336 $ 18,188,473 Nominal Rating in kW 74,000 Estimated Cost per kW $ 1,395 Estimated Cost per MWhr $ 93 Projected Retirement Date

New Generation Net Generation, MWhr 324,120 324,120 324,120 324,120 324,120 324,120 324,120 324,120 324,120 Capacity Factor = 50% Capital cost$ 74,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 Capital Cost = 1000 $/kW Variable Operating Cost$ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 Fixed O&M = 20.29 $/kW Fuel Cost$ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 Variable O&M = 1.73 $/MW-hr Net Present Value $ 263,827,400 $ 100,490,222 $ 22,215,840 $ 23,993,107 $ 25,912,555 $ 27,985,560 $ 30,224,404 $ 32,642,357 $ 35,253,745 $ 38,074,045 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 3,565 Estimated Cost per MWhr$ 90

NM1 - Four Year Extension Page 2 El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 1

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 B&McD Recommended Expenditures Boiler Conduct non-destructive examination of selective areas $ 180,000 $ 180,000 Inspect superheater and reheater attemperators and downstream piping $ 40,000 $ 40,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Chemically clean boiler $ 1,250,000 $ 1,250,000 Turbine-Generator Perform turbine inspections $ 2,000,000 $ 2,000,000 Perform boroscope examinations of turbine rotor $ 40,000 $ 40,000 Replace turbine valves studs and nuts $ 150,000 Perform turbine valve inspection $ 300,000 High Energy Piping Inspectp,, main steam, hot reheat, cold reheat and feedwater piping hangers $ 50,000 $ 50,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 100,000 $ 100,000 Inspect boiler feed pump discharge piping for FAC $ 20,000 $ 20,000 Balance of Plant Conduct eddy current testing of feedwater heater tubing $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Conduct non-destructive examination of deaerator and storage tank $ 20,000 $ 20,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stack $ 25,000 Comply with ASME TDP-1-2006 $ 320,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 4,265,000 $ 30,000 $ 45,000 $ 330,000 $ 1,690,000 $ 35,000 $ 30,000 $ 2,070,000 $ 35,000 $ 30,000 $ - Owner Planned Expenditures Boiler N/A Turbine-Generator Generator Re-winding $ 2,000,000 High Energy Piping N/A Balance of Plant N/A Electrical and Controls 2400V Switchgear replacement $ 300,000 Total Owner Planned Expenditures $ 2,300,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 181,902 81,792 133,841 153,544 83,589 123,658 120,264 109,170 117,697 115,710 114,193 Capacity Factor = 19% NOx Emissions, tons 199.17 89.56 146.54 168.12 91.52 135.39 131.68 119.53 128.87 126.69 125.03 NOx emissions = 0.00109 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.59 $ 0.61 $ 0.60 $ 0.60 $ 0.60 $ 0.60 $ 0.60 $ 0.60 Escalation Rate = 8% Fixed Operating Cost $ 2,196,551 $ 1,896,458 $ 1,932,761 $ 2,155,330 $ 2,189,910 $ 2,092,667 $ 2,145,969 $ 2,142,849 $ 2,127,162 $ 2,138,660 $ 2,136,223 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 158,255 $ 46,621 $ 78,966 $ 90,591 $ 50,989 $ 73,783 $ 72,025 $ 65,704 $ 70,517 $ 69,421 $ 68,552 Discount Rate = 6% NOx Emissions Allowances $ 119,500 $ 53,733 $ 87,927 $ 100,870 $ 54,914 $ 81,237 $ 79,007 $ 71,719 $ 77,321 $ 76,016 $ 75,019 Fuel Cost $ 12,218,000 $ 4,156,000 $ 8,533,000 $ 9,260,000 $ 4,241,000 $ 7,344,667 $ 6,948,556 $ 6,178,074 $ 6,823,765 $ 6,650,132 $ 6,550,657 Estimated Operating Expenditures $ 14,692,306 $ 6,152,813 $ 10,632,654 $ 11,606,791 $ 6,536,813 $ 9,592,353 $ 9,245,556 $ 8,458,346 $ 9,098,765 $ 8,934,229 $ 8,830,451 Net Present Value $ 127,295,300 $ 22,957,890 $ 7,211,633 $ 13,450,769 $ 16,239,873 $ 12,087,887 $ 15,277,399 $ 15,896,673 $ 19,487,234 $ 18,258,438 $ 19,353,097 $ 20,589,423 Nominal Rating in kW 74,000 Estimated Cost per kW $ 1,720 Projected Retirement Date Estimated Cost per MWhr $ 95

New Generation Net Generation, MWhr 324,120 324,120 324,120 324,120 324,120 324,120 324,120 324,120 324,120 324,120 324,120 Capacity Factor = 50% Capital cost$ 74,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 $ 1,501,460 Capital Cost = 1000 $/kW Variable Operating Cost$ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 $ 560,728 Fixed O&M = 20.29 $/kW Fuel Cost$ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 $ 16,984,314 Variable O&M = 1.73 $/MW-hr Net Present Value $ 310,183,000 $ 100,490,222 $ 22,215,840 $ 23,993,107 $ 25,912,555 $ 27,985,560 $ 30,224,404 $ 32,642,357 $ 35,253,745 $ 38,074,045 $ 41,119,969 $ 44,409,566 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 4,192 Estimated Cost per MWhr$ 87

NM1 - Six Year Extension Page 3 Condition Assessment Report Newman Units 1, 2, & 4

APPENDIX B - Newman Unit 2 Economic Analysis

2011 2012 2013 2014 2015 B&McD Recommended Expenditures Boiler Conduct non-destructive examination of selective areas $ 180,000 Inspect superheater and reheater attemperators and downstream piping $ 40,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 Chemically clean boiler $ 1,250,000 Turbine-Generator Perform turbine inspections $ 2,000,000 Perform boroscope examinations of turbine rotor $ 40,000 Perform turbine valve inspection High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater pppiping g hangers g $ 50,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 100,000 Inspect boiler feed pump discharge piping for FAC $ 20,000 Balance of Plant Conduct eddy current testing of feedwater heater tubing $ 20,000 $ 20,000 $ 20,000 $ 20,000 Conduct non-destructive examination of deaerator and storage tank $ 20,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 Conduct inspection of stack $ 25,000 Comply with ASME TDP-1-2006 $ 320,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 825,000 $ 3,320,000 $ 45,000 $ 30,000 $ - Owner Planned Expenditures Boiler Lower header modifications $ 300,000 Turbine-Generator Generator stator rewind $ 1,000,000 High Energy Piping N/A Balance of Plant Replace #2 feedwater heater $ 500,000 Electrical and Controls Replace exciter and voltage regulator $ 250,000 2400V Switchgear replacement $ 300,000 Total Owner Planned Expenditures $ 600,000 $ 1,750,000 $ - $ - $ - Operating Costs Net Generation, MWhr 24,214 201,237 219,031 148,161 189,476 Capacity Factor = 23% NOx Emissions, tons 24.09 200.17 217.87 147.37 188.47 NOx emissions = 0.000994693 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.68 $ 0.61 Escalation Rate = 8% Fixed Operating Cost $ 2,278,781 $ 1,767,121 $ 1,800,937 $ 1,948,946 $ 1,839,001 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 21,066 $ 114,705 $ 129,228 $ 100,255 $ 116,002 Discount Rate = 6% NOx Emissions Allowances $ 14,451 $ 120,101 $ 130,721 $ 88,425 $ 113,082 Fuel Cost $ 14,260,000 $ 10,245,000 $ 12,891,000 $ 12,465,333 $ 11,867,111 Estimated Operating Expenditures $ 16,574,298 $ 12,246,927 $ 14,951,886 $ 14,602,960 $ 13,935,196 Net Present Value $ 83,246,700 $ 19,439,242 $ 20,198,464 $ 18,891,758 $ 19,907,980 $ 20,475,375 Nominal Rating in kW 76,000 Estimated Cost per kW $ 1,095 Projected Retirement Date Estimated Cost per MWhr $ 106

New Generation Net Generation, MWhr 332,880 332,880 332,880 332,880 332,880 Capacity Factor = 50% Capital cost$ 76,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 Capital Cost = 1000 $/kW Variable Operating Cost$ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 Fixed O&M = 20.29 $/kW Fuel Cost$ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 Variable O&M = 1.73 $/MW-hr Net Present Value $ 180,917,800 $ 103,206,174 $ 22,816,268 $ 24,641,569 $ 26,612,895 $ 28,741,926 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 2,380 Estimated Cost per MWhr$ 109

NM2 - Two Year Extension Page 1 El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 2

2011 2012 2013 2014 2015 2016 2017 B&McD Recommended Expenditures Boiler Conduct non-destructive examination of selective areas $ 180,000 $ 180,000 Inspect superheater and reheater attemperators and downstream piping $ 40,000 $ 40,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Chemically clean boiler $ 1,250,000 Turbine-Generator Perform turbine inspections $ 2,000,000 Perform boroscope examinations of turbine rotor $ 40,000 Perform turbine valve inspection $ 300,000 High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater pppiping g hangers g $ 50,000 $ 50,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 100,000 $ 100,000 Inspect boiler feed pump discharge piping for FAC $ 20,000 $ 20,000 Balance of Plant Conduct eddy current testing of feedwater heater tubing $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Conduct non-destructive examination of deaerator and storage tank $ 20,000 $ 20,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stack $ 25,000 Comply with ASME TDP-1-2006 $ 320,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 825,000 $ 3,320,000 $ 45,000 $ 30,000 $ 440,000 $ 335,000 $ - Owner Planned Expenditures Boiler Lower header modifications $ 300,000 Turbine-Generator Generator stator rewind $ 1,000,000 High Energy Piping N/A Balance of Plant Replace #2 feedwater heater $ 500,000 Electrical and Controls Replace exciter and voltage regulator $ 250,000 2400V Switchgear replacement $ 300,000 Total Owner Planned Expenditures $ 600,000 $ 1,750,000 $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 24,214 201,237 219,031 148,161 189,476 185,556 174,398 Capacity Factor = 25% NOx Emissions, tons 24.09 200.17 217.87 147.37 188.47 184.57 173.47 NOx emissions = 0.000994693 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.68 $ 0.61 $ 0.63 $ 0.64 Escalation Rate = 8% Fixed Operating Cost $ 2,278,781 $ 1,767,121 $ 1,800,937 $ 1,948,946 $ 1,839,001 $ 1,862,962 $ 1,883,636 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 21,066 $ 114,705 $ 129,228 $ 100,255 $ 116,002 $ 116,213 $ 111,335 Discount Rate = 6% NOx Emissions Allowances $ 14,451 $ 120,101 $ 130,721 $ 88,425 $ 113,082 $ 110,743 $ 104,083 Fuel Cost $ 14,260,000 $ 10,245,000 $ 12,891,000 $ 12,465,333 $ 11,867,111 $ 12,407,815 $ 12,246,753 Estimated Operating Expenditures $ 16,574,298 $ 12,246,927 $ 14,951,886 $ 14,602,960 $ 13,935,196 $ 14,497,732 $ 14,345,807 Net Present Value $ 116,674,200 $ 19,439,242 $ 20,198,464 $ 18,891,758 $ 19,907,980 $ 21,121,880 $ 23,537,682 $ 24,586,193 Nominal Rating in kW $ 76,000 Estimated Cost per kW $ 1,535 Projected Retirement Date Estimated Cost per MWhr $ 102

New Generation Net Generation, MWhr 332,880 332,880 332,880 332,880 332,880 332,880 332,880 Capacity Factor = 50% Capital cost$ 76,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 Capital Cost = 1000 $/kW Variable Operating Cost$ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 Fixed O&M = 20.29 $/kW Fuel Cost$ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 Variable O&M = 1.73 $/MW-hr Net Present Value $ 225,096,400 $ 103,206,174 $ 22,816,268 $ 24,641,569 $ 26,612,895 $ 28,741,926 $ 31,041,280 $ 33,524,583 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 2,962 Estimated Cost per MWhr$ 97

NM2 - Four Year Extension Page 2 El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 2

2011 2012 2013 2014 2015 2016 2017 2018 2019 B&McD Recommended Expenditures Boiler Conduct non-destructive examination of selective areas $ 180,000 $ 180,000 Inspect superheater and reheater attemperators and downstream piping $ 40,000 $ 40,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Chemically clean boiler $ 1,250,000 $ 1,250,000 Turbine-Generator Perform turbine inspections $ 2,000,000 Perform boroscope examinations of turbine rotor $ 40,000 Perform turbine valve inspection $ 300,000 High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater pppiping g hangers g $ 50,000 $ 50,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 100,000 $ 100,000 Inspect boiler feed pump discharge piping for FAC $ 20,000 $ 20,000 Balance of Plant Conduct eddy current testing of feedwater heater tubing $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000 Conduct non-destructive examination of deaerator and storage tank $ 20,000 $ 20,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stack $ 25,000 Comply with ASME TDP-1-2006 $ 320,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 825,000 $ 3,320,000 $ 45,000 $ 30,000 $ 440,000 $ 335,000 $ 1,280,000 $ 30,000 $ - Owner Planned Expenditures Boiler Lower header modifications $ 300,000 Turbine-Generator Generator stator rewind $ 1,000,000 High Energy Piping N/A Balance of Plant Replace #2 feedwater heater $ 500,000 Electrical and Controls Replace exciter and voltage regulator $ 250,000 2400V Switchgear replacement $ 300,000 Total Owner Planned Expenditures $ 600,000 $ 1,750,000 $ - $ - $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 24,214 201,237 219,031 148,161 189,476 185,556 174,398 183,143 181,032 Capacity Factor = 25% NOx Emissions, tons 24.09 200.17 217.87 147.37 188.47 184.57 173.47 182.17 180.07 NOx emissions = 0.000994693 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.68 $ 0.61 $ 0.63 $ 0.64 $ 0.63 $ 0.63 Escalation Rate = 8% Fixed Operating Cost $ 2,278,781 $ 1,767,121 $ 1,800,937 $ 1,948,946 $ 1,839,001 $ 1,862,962 $ 1,883,636 $ 1,861,866 $ 1,869,488 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 21,066 $ 114,705 $ 129,228 $ 100,255 $ 116,002 $ 116,213 $ 111,335 $ 114,581 $ 114,070 Discount Rate = 6% NOx Emissions Allowances $ 14,451 $ 120,101 $ 130,721 $ 88,425 $ 113,082 $ 110,743 $ 104,083 $ 109,303 $ 108,043 Fuel Cost $ 14,260,000 $ 10,245,000 $ 12,891,000 $ 12,465,333 $ 11,867,111 $ 12,407,815 $ 12,246,753 $ 12,173,893 $ 12,276,154 Estimated Operating Expenditures $ 16,574,298 $ 12,246,927 $ 14,951,886 $ 14,602,960 $ 13,935,196 $ 14,497,732 $ 14,345,807 $ 14,259,644 $ 14,367,755 Net Present Value $ 151,727,700 $ 19,439,242 $ 20,198,464 $ 18,891,758 $ 19,907,980 $ 21,121,880 $ 23,537,682 $ 26,779,888 $ 26,449,133 $ 28,721,209 Nominal Rating in kW $ 76,000 Estimated Cost per kW $ 1,996 Estimated Cost per MWhr $ 101 Projected Retirement Date

New Generation Net Generation, MWhr 332,880 332,880 332,880 332,880 332,880 332,880 332,880 332,880 332,880 Capacity Factor = 50% Capital cost$ 76,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 $ 1,542,040 Capital Cost = 1000 $/kW Variable Operating Cost$ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 $ 575,882 Fixed O&M = 20.29 $/kW Fuel Cost$ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 $ 17,443,350 Variable O&M = 1.73 $/MW-hr Net Present Value $ 345,885,100 $ 103,206,174 $ 22,816,268 $ 24,641,569 $ 26,612,895 $ 28,741,926 $ 31,041,280 $ 33,524,583 $ 36,206,549 $ 39,103,073 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 4,551 Estimated cost per MWhr$ 115

NM2 - Six Year Extension Page 3 Condition Assessment Report Newman Unit 1, 2, & 4

APPENDIX C - Newman Unit 4 Economic Analysis

2011 2012 2013 2014 2015 2016 2017 B&McD Recommended Expenditures Heat Recovery Steam Generators Conduct non-destructive examination of selective areas $ 120,000 $ 120,000 Inspect superheater and reheater attemperators and downstream piping $ 20,000 $ 20,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Turbine-Generator Gas Turbine 1 Perform combustion inspection$ 400,000 $ 400,000 $ 400,000 Perform hot gas path inspection$ 800,000 $ 800,000 Perform major inspection $ 2,200,000 Gas Turbine 2 Perform combustion inspection$ 400,000 $ 400,000 $ 400,000 Perform hot gas path inspection $ 800,000 Perform major inspection$ 2,200,000 $ 2,200,000 Steam Turbine Peform turbine inspection$ 2,000,000 Perform boroscope examinations of turbine rotor$ 40,000 High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater piping hangers $ 20,000 $ 20,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 60,000 $ 60,000 Inspect boiler feed pump and HRSG circulating pump discharge piping for FAC $ 40,000 $ 40,000 Balance of Plant Conduct non-destructive examination of deaerator and storage tank $ 15,000 $ 15,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stacks $ 35,000 Comply with ASME TDP-1-2006 $ 100,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 5,500,000 $ 810,000 $ 3,025,000 $ 810,000 $ 3,285,000 $ 815,000 $ - Owner Planned Expenditures Heat RecoRecovery er S Steamteam G Generatorsenerators Partial replacement of economizer bundles and headers $ 750,000 $ 750,000 Partial replacement of LP section bundles $ 500,000 $ 500,000 Turbine-Generator Gas Turbine Life Extension $ 7,500,000 $ 7,500,000 High Energy Piping N/A Balance of Plant N/A Electrical and Controls N/A Total Owner Planned Expenditures $ 8,750,000 $ - $ 8,750,000 $ - $ - $ - $ - Operating Costs Net Generation, MWhr 1,039,277 1,169,528 1,140,275 1,086,672 962,792 1,063,246 1,037,570 Capacity Factor = 59% NOx Emissions, tons 1,298.90 1,461.69 1,425.13 1,358.14 1,203.31 1,328.86 1,296.77 NOx emissions = 0.001249813 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.60 $ 0.61 $ 0.60 $ 0.60 Escalation Rate = 8% Fixed Operating Cost $ 6,955,566 $ 3,765,445 $ 5,388,633 $ 5,702,843 $ 4,745,017 $ 5,278,831 $ 5,242,230 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 904,171 $ 666,631 $ 672,762 $ 652,003 $ 587,303 $ 637,948 $ 626,001 Discount Rate = 6% NOx Emissions Allowances $ 779,341 $ 877,014 $ 855,078 $ 814,882 $ 721,986 $ 797,315 $ 778,061 Fuel Cost $ 60,076,000 $ 67,167,000 $ 70,500,000 $ 62,789,000 $ 58,368,000 $ 63,885,667 $ 61,680,889 Estimated Operating Expenditures $ 68,715,078 $ 72,476,090 $ 77,416,473 $ 69,958,728 $ 64,422,306 $ 70,599,761 $ 68,327,181 Net Present Value $ 563,316,500 $ 89,602,284 $ 85,480,896 $ 112,355,569 $ 96,280,073 $ 99,484,246 $ 113,326,250 $ 117,100,781 Nominal RatingRating in kW 207,000 Estimated Cost per kW $ 2,721 PProjected j tdRti Retirement tDt Date Estimated Cost per MWhr $ 75

New Generation Net Generation, MWhr 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 Capacity Factor = 75% Capital cost$ 207,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 Capital Cost = 1000 $/kW Variable Operating Cost$ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 Fixed O&M = 20.29 $/kW Fuel Cost$ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 Variable O&M = 1.73 $/MW-hr Net Present Value $ 798,332,200 $ 307,603,523 $ 90,767,004 $ 98,028,365 $ 105,870,634 $ 114,340,285 $ 123,487,507 $ 133,366,508 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 3,857 Estimated Cost per MWhr$ 84

NM4 - Two Year Extension Page 1 El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 4

2011 2012 2013 2014 2015 2016 2017 2018 2019 B&McD Recommended Expenditures Heat Recovery Steam Generators Conduct non-destructive examination of selective areas $ 120,000 $ 120,000 Inspect superheater and reheater attemperators and downstream piping $ 20,000 $ 20,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Turbine-Generator Gas Turbine 1 Perform combustion inspection$ 400,000 $ 400,000 $ 400,000 $ 400,000 Perform hot gas path inspection$ 800,000 $ 800,000 Perform major inspection $ 2,200,000 $ 2,200,000 Gas Turbine 2 Perform combustion inspection$ 400,000 $ 400,000 $ 400,000 $ 400,000 Perform hot gas path inspection $ 800,000 $ 800,000 Perform major inspection$ 2,200,000 $ 2,200,000 Steam Turbine Peform turbine inspection$ 2,000,000 Perform boroscope examinations of turbine rotor$ 40,000 High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater piping hangers $ 20,000 $ 20,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 60,000 $ 60,000 $ 37,893 Inspect boiler feed pump and HRSG circulating pump discharge piping for FAC $ 40,000 $ 40,000 Balance of Plant Conduct non-destructive examination of deaerator and storage tank $ 15,000 $ 15,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stacks $ 35,000 Comply with ASME TDP-1-2006 $ 100,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 5,500,000 $ 810,000 $ 3,025,000 $ 810,000 $ 3,285,000 $ 815,000 $ 3,010,000 $ 847,893 $ - Owner Planned Expenditures Heat RecoRecovery er S Steamteam G Generatorsenerators Partial replacement of economizer bundles and headers $ 750,000 $ 750,000 Partial replacement of LP section bundles $ 500,000 $ 500,000 Turbine-Generator Gas Turbine Life Extension $ 7,500,000 $ 7,500,000 High Energy Piping N/A Balance of Plant N/A Electrical and Controls N/A Total Owner Planned Expenditures $ 8,750,000 $ - $ 8,750,000 $ - $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 1,039,277 1,169,528 1,140,275 1,086,672 962,792 1,063,246 881,935 969,324 971,502 Capacity Factor = 57% NOx Emissions, tons 1,298.90 1,461.69 1,425.13 1,358.14 1,203.31 1,328.86 1,102.25 1,211.47 1,214.20 NOx emissions = 0.001249813 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.60 $ 0.61 $ 0.60 $ 0.60 $ 0.60 $ 0.60 Escalation Rate = 8% Fixed Operating Cost $ 6,955,566 $ 3,765,445 $ 5,388,633 $ 5,702,843 $ 4,745,017 $ 5,278,831 $ 5,242,230 $ 5,088,693 $ 5,203,251 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 904,171 $ 666,631 $ 672,762 $ 652,003 $ 587,303 $ 637,948 $ 532,101 $ 585,903 $ 585,420 Discount Rate = 6% NOx Emissions Allowances $ 779,341 $ 877,014 $ 855,078 $ 814,882 $ 721,986 $ 797,315 $ 661,352 $ 726,884 $ 728,517 Fuel Cost $ 60,076,000 $ 67,167,000 $ 70,500,000 $ 62,789,000 $ 58,368,000 $ 63,885,667 $ 61,680,889 $ 61,311,519 $ 62,292,691 Estimated Operating Expenditures $ 68,715,078 $ 72,476,090 $ 77,416,473 $ 69,958,728 $ 64,422,306 $ 70,599,761 $ 68,116,572 $ 67,712,998 $ 68,809,880 Net Present Value $ 727,543,200 $ 89,602,284 $ 85,480,896 $ 112,355,569 $ 96,280,073 $ 99,484,246 $ 113,326,250 $ 121,898,444 $ 126,901,425 $ 137,551,268 Nominal RatingRating in kW 207,000 Estimated Cost per kW $ 3,515 PProjected j tdRti Retirement tDt Date Estimated Cost per MWhr $ 78

New Generation Net Generation, MWhr 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 Capacity Factor = 75% Capital cost$ 207,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 Capital Cost = 1000 $/kW Variable Operating Cost$ 2,393,582 $ 2,393,582 $ 2,393,582 $ 2,393,582 $ 2,393,582 $ 2,393,582 $ 2,393,582 $ 2,393,582 $ 2,393,582 Fixed O&M = 20.29 $/kW Fuel Cost$ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 Variable O&M = 1.76 $/MW-hr Net Present Value $ 981,180,600 $ 307,647,586 $ 90,814,593 $ 98,079,761 $ 105,926,141 $ 114,400,233 $ 123,552,251 $ 133,436,432 $ 144,111,346 $ 155,640,254 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 4,740 Estimated Cost per MWhr$ 80

NM4 - Four Year Extension Page 2 El Paso Electric Company, Inc. Newman 1, 2, & 4 and Rio Grande 5 & 6 Condition Assessment B&McD Project No. 53549 Condition Assessment Recommendation Implementation Timetable for Newman Unit 4

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 B&McD Recommended Expenditures Heat Recovery Steam Generators Conduct non-destructive examination of selective areas $ 120,000 $ 120,000 Inspect superheater and reheater attemperators and downstream piping $ 20,000 $ 20,000 Test safety valves $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Turbine-Generator Gas Turbine 1 Perform combustion inspection$ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 Perform hot gas path inspection$ 800,000 $ 800,000 $ 800,000 Perform major inspection $ 2,200,000 $ 2,200,000 Gas Turbine 2 Perform combustion inspection$ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 Perform hot gas path inspection $ 800,000 $ 800,000 Perform major inspection$ 2,200,000 $ 2,200,000 $ 2,200,000 Steam Turbine Peform turbine inspection$ 2,000,000 $ 2,000,000 Perform boroscope examinations of turbine rotor$ 40,000 $ 40,000 High Energy Piping Inspect main steam, hot reheat, cold reheat and feedwater piping hangers $ 20,000 $ 20,000 Conduct non-destructive examination of selected areas of main steam, hot reheat, cold reheat, and feedwater piping $ 60,000 $ 60,000 $ 37,893 Inspect boiler feed pump and HRSG circulating pump discharge piping for FAC $ 40,000 $ 40,000 Balance of Plant Conduct non-destructive examination of deaerator and storage tank $ 15,000 $ 15,000 Conduct visual inspection of circ water piping $ 5,000 $ 5,000 $ 5,000 $ 5,000 Conduct inspection of stacks $ 35,000 Comply with ASME TDP-1-2006 $ 100,000 Electrical and Controls Monitor auxiliary transformer for combustible gas Inspect, adjust and test medium-voltage switchgear $ 10,000 Conduct high energy arc-flash potential study $ 35,000 Total B&McD Recommendations $ 5,500,000 $ 810,000 $ 3,025,000 $ 810,000 $ 3,285,000 $ 815,000 $ 3,010,000 $ 847,893 $ 5,055,000 $ 810,000 $ - Owner Planned Expenditures Heat RecoRecovery er S Steamteam G Generatorsenerators Partial replacement of economizer bundles and headers $ 750,000 $ 750,000 Partial replacement of LP section bundles $ 500,000 $ 500,000 Turbine-Generator Gas Turbine Life Extension $ 7,500,000 $ 7,500,000 High Energy Piping N/A Balance of Plant N/A Electrical and Controls N/A Total Owner Planned Expenditures $ 8,750,000 $ - $ 8,750,000 $ - $ - $ - $ - $ - $ - $ - $ - Operating Costs Net Generation, MWhr 1,039,277 1,169,528 1,140,275 1,086,672 962,792 1,063,246 881,935 969,324 825,776 892,345 895,815 Capacity Factor = 55% NOx Emissions, tons 1,298.90 1,461.69 1,425.13 1,358.14 1,203.31 1,328.86 1,102.25 1,211.47 1,032.07 1,115.26 1,119.60 NOx emissions = 0.001249813 tons/MWhr Variable Operating Cost, $/MWhr $ 0.87 $ 0.57 $ 0.59 $ 0.60 $ 0.61 $ 0.60 $ 0.60 $ 0.60 $ 0.60 $ 0.60 $ 0.60 Escalation Rate = 8% Fixed Operating Cost $ 6,955,566 $ 3,765,445 $ 5,388,633 $ 5,702,843 $ 4,745,017 $ 5,278,831 $ 5,242,230 $ 5,088,693 $ 5,203,251 $ 5,178,058 $ 5,156,667 NOx Allowances = 600 $/ton Variable Operating Cost, Non-fuel-related $ 904,171 $ 666,631 $ 672,762 $ 652,003 $ 587,303 $ 637,948 $ 532,101 $ 585,903 $ 497,607 $ 538,492 $ 540,623 Discount Rate = 6% NOx Emissions Allowances $ 779,341 $ 877,014 $ 855,078 $ 814,882 $ 721,986 $ 797,315 $ 661,352 $ 726,884 $ 619,240 $ 669,159 $ 671,761 Fuel Cost $ 60,076,000 $ 67,167,000 $ 70,500,000 $ 62,789,000 $ 58,368,000 $ 63,885,667 $ 61,680,889 $ 61,311,519 $ 62,292,691 $ 61,761,700 $ 61,788,636 Estimated Operating Expenditures $ 68,715,078 $ 72,476,090 $ 77,416,473 $ 69,958,728 $ 64,422,306 $ 70,599,761 $ 68,116,572 $ 67,712,998 $ 68,612,789 $ 68,147,408 $ 68,157,687 Net Present Value $ 900,138,100 $ 89,602,284 $ 85,480,896 $ 112,355,569 $ 96,280,073 $ 99,484,246 $ 113,326,250 $ 121,898,444 $ 126,901,425 $ 147,262,251 $ 148,873,872 $ 158,919,122 Nominal RatinRatingg in kW 207,000 Estimated Cost per kW $ 4,348 PProjected j tdRti Retirement tDt Date Estimated Cost per MWhr $ 82

New Generation Net Generation, MWhr 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 1,359,990 Capacity Factor = 75% Capital Cost$ 207,000,000 Fuel Cost = 6.03E-06 $/Btu Fixed Operating Cost$ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 $ 4,200,030 Capital Cost = 1000 $/kW Variable Operating Cost$ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 $ 2,352,783 Fixed O&M = 20.29 $/kW Fuel Cost$ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 $ 71,265,264 Variable O&M = 1.73 $/MW-hr Net Present Value $ 1,170,171,400 $ 307,603,523 $ 90,767,004 $ 98,028,365 $ 105,870,634 $ 114,340,285 $ 123,487,507 $ 133,366,508 $ 144,035,829 $ 155,558,695 $ 168,003,391 $ 181,443,662 Heat Rate = 8690 Btu/kWhr Estimated Cost per kW$ 5,653 Estimated Cost per MWhr$ 78

NM4 - Six Year Extension Page 3