Strategic contracting leads to $11 million savings during Leland Olds Station outage

The turbine of Leland Olds Station Unit 2 was disassembled during this fall's outage. 

Leland Olds Station’s fall outage on Unit 2 was completed in December, coming in $11 million under budget.

During the outage, the unit's turbine and boiler underwent a major overhaul. The boiler is overhauled every three years, and a major turbine outage is performed every nine years.

According to Leland Olds Station Plant Manager Jason Cowan, the savings were due to strategic contracting and the Leland Olds Station Planning and Engineering group overseeing all the work performed by contractors during the outage.

“This strategy shifts the schedule and cost overrun risk from Leland Olds Station to the contractor, because a greater percentage of outage work is contracted on a lump sum versus time and material basis,” Cowan said. “Additionally, Leland Olds Station engineers and planners developed work scopes utilized for contractor bidding. The contractors are now awarded the job based on best value in relation to the defined scope rather than being stationed on site to work as needed. These changes transfer the risk from Basin Electric to the contractors.”

Basin Electric’s Procurement division and Leland Olds Station implemented these changes after the suggestions were made by the cooperative’s Process Assessment Team, a group of cross-functional employees tasked to perform a detailed review of all areas of the cooperative.

“This big savings was even more impressive because we overcame delays due to COVID and the outage ran about a month behind due to extended work on the turbine,” Cowan said. “It was a big win for us to be able to complete all the work we knew needed to be done as well as the additional work that was discovered when we opened up the turbine and boiler for millions less than was budgeted. It frees up capital that can go a long way in working for our members.”

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