Exhibit 3 – Detailed Description of Contingency Commitments
1. Engineered Equipment Price Increases
• There were significant increases in engineered equipment pricing from what was estimated in developing the Indicative Price to the contracted prices. • The costs for the BESS and BOS Power Distribution Center (PDC) buildings increased by $4 million, transformers increased by $2 million, and the demineralized water treatment equipment increased by $1.3 million for a total of $7.3 million.
• These price increases were largely driven by market conditions with vendor pricing and delivery times increasing because of greatly increased demand for electrical related equipment to support renewable, energy storage, and data center projects.
2. Changes in Administration/Maintenance/Control (AMC) Buildings • The original plan for Grayson was to have the Control Room in a separate building from the Administration/Maintenance Building. The intent of the separate Control Room building was to divorce its construction, which was required for plant commissioning, from the administrative/maintenance facilities which were not required for commissioning. This plan was later abandoned when it was determined that the BESS electrical equipment (e.g., transformers and switchgear) could not be delivered any sooner than similar equipment for the Wartsila Power Island, therefore removing any benefit of attempting to commission the BESS early. The AMC Building was originally designed as a two-story structure, while the Control Room building was a single-story structure. This two-building concept was used by ARB in developing the Indicative Pricing.
• As detailed design commenced, and the BESS conceptual design evolved, significant space constraints at the site became another substantial issue.
Understanding the space constraints and the inability to commission the BESS early, it became necessary to revise the design and combine the two buildings into a single AMC Building.
• Consolidating the two originally designed structures into a single structure, with necessary functional/office space, the AMC Building grew into a three-story structure.
• The additional height coupled with the seismic requirements necessitated a more extensive foundation. This resulted in the need for a deeper pile- supported foundation as compared to the planned slab-on-grade. • The combined effect of these changes resulted in an increase of $15 million in Pre-Engineered Metal Building costs, including all structural work and architectural finishes, as well as an additional $1.5 million for electrical and fire protection/detection systems.
9 {{section.number}}a
3. Utility Building Heating Ventilation and Air Conditioning (HVAC) Scope Change • Originally, the HVAC equipment for the Utility Building was to be provided by Wartsila, with an allowance of $600,000 included in the Indicative Price to cover the installation cost of the Wartsila-provided equipment. • As it became obvious that Wartsila was ill-prepared to take on the responsibilities of an EPC contract, GWP decided to convert Wartsila’s role to an EP-only contract. During this transition, Wartsila neglected to inform GWP that the responsibility for this scope, which Wartsila had included as part of their construction contractor’s responsibility, would now fall to GWP. • This oversight was not discovered until after ARB had developed their Initial Estimate price for the project. GWP and ARB did not identify this scope change until Wartsila provided a revised technical specification for the project. • As a result, it was necessary for ARB to procure all HVAC equipment and to complete the installation with different specifications and equipment. • The total cost for this revised scope is $2.1 million, resulting in an increase of $1.5 million.
4. Wartsila UPS Building Addition
• As part of the black start design development, it became apparent that Wartsila needed a power source for the engine pre-lube pumps to function after engine shutdown with a loss of site power.
• Initially, during the early stages of the Wartsila design process, the need for a direct current (DC) source post-engine trip with a loss of on-site power was deemed unnecessary by Wartsila. However, it was later discovered that this power source was indeed needed, and Wartsila ended up supplying the large DC battery and UPS required.
• The responsibility for providing the foundation and interconnection, however, fell to ARB. This contributed to the increase in concrete and cable quantities.
5. BESS Black Start Battery Building Addition
• Initially it was thought that the BESS system would be able to self-support its energy needs for black start.
• As work progressed on the sequencing of activities needed to reconfigure and be ready to black start Grayson and the GWP system, the required time was greater than the intrinsic capability of the BESS system to stay in standby with no external power source.
• The addition of this Battery Building was required to provide an external power source to support black start capability of the BESS.
• This resulted in an additional cost of $1.2 million for Wholesale Electric to furnish and install the building itself. Additionally, there was an increase of $275,000 for associated fire protection and detection systems for a total of $1.475 million.
10 {{section.number}}a
6. Unit 9 Restoration
• The project scope included upgrading the Unit 9 turbine and balance of plant control systems.
• In developing the final design, issues were identified with the gas compressor control panel and conduits. The panel, in its as-found condition, did not meet current hazardous area requirements, and the conduits were filled with cable to a point where replacing individual damaged conductors was not possible. • This resulted in an additional cost of $450,000.
7. Design Changes and Enhancements
• Throughout the design development, numerous changes were made to address various project requirements and improvements. These included, but were not limited to:
Addition of hazardous areas
Relocating buildings
Additional efforts to support the ground improvement schedule Inclusion of a UPS battery room to support black start Helical piles design
Water treatment interconnect
15kV duct-bank segregation
These design changes were essential to meet safety standards, operational efficiency, and project goals, resulting in an additional cost of $1.25 million.
8. Quantity Changes
• As the design progressed from preliminary information to 90% drawings, there were significant increases in the quantities of materials required. These included:
4,000 cubic yards of concrete based on final Wartsila design and seismic requirements (from 11,000 cubic yards to 15,000 cubic yards) 200,000 pounds of steel (from 1,000,000 pounds to 1,200,000 pounds) 3,000 feet of pipe (from 22,000 feet to 25,000 feet)
3,300 feet of cable tray (from 0 to 3,300 feet)
27,700 feet of cable (from 371,100 feet to 398,800 feet) • These additional quantity changes, which incurred an extra cost of approximately $9 million, were essential to meet the final design specifications and ensure the project's structural integrity and functionality. These changes included both functional design adjustments and unforeseen underground improvements that were beyond the demolition limits.
9. Underground Exploration
• The Grayson site is an old site with significant underground infrastructure, not all of which is accurately documented on drawings. The portions of the site to the east of the old Boiler Building were demolished to grade but not excavated to the same extent as the west side of the Boiler Building due to the amount of active electrical, communication, and natural gas lines that serve Unit 9 and outlying substations.
11 {{section.number}}a
• Additionally, the Grayson project must be constructed while maintaining in service various underground utilities that support Unit 9 as well as the outlying substations that are fed from the Kellogg Switching Station. • In order to identify clear routes for new underground duct banks, particularly in running new circuits into the Kellogg Switching Station, extensive use was made of hydro-vac trucks to safely remove dirt to explore locations for new construction where there was the possibility for pre-existing energized circuits or other live utilities. Finding clear paths into the Kellogg Switching Station was particularly challenging.
• This work totaled approximately $950,000.
10. Extended Schedule and Acceleration
• The Indicative Price was based on a 21-month construction duration from mobilization to substantial completion, assuming simultaneous starts for both the BESS-BOS and Wartsila components.
• The construction of the Wartsila Power Island started as planned, however, the start of construction for the BESS portion of the project was delayed as the project team (GWP, ARB and Wartsila) worked through how Grayson would cope with a loss of offsite power and the need to black start, resulting in a nearly 4-month delay for the BESS-BOS construction.
• Engineered equipment and project specific cable lead times have also grown in duration due to the combined demand for electrical equipment for renewable energy, energy storage, and data center projects.
• These delays extended the overall schedule by one and a half months, requiring acceleration of the electrical work after the BESS battery containers are set.
• The extended schedule resulted in an additional cost of $2.5 million. The acceleration efforts resulted in an increase of $2 million.