In brief

After the banking crisis of 2007-08, the US government made economic recovery a high priority. Under the American Recovery and Reinvestment Act 2009, it funded a raft of major infrastructure projects. Among the first to be completed was the upgrade of a hydroelectric plant in Los Alamos County, New Mexico.

The challenge

There are two factors at play in this project. The first is the economic downturn following the 2007-08 financial crash, which provided the macroeconomic background. There is also the specific history of the hydroelectric power plant in Abiquiu, New Mexico, which began commercial operation in 1990. [1] Microeconomic ventures, such as the Abiquiu plant, held the key to American recovery. The US government needed to revive its economy by rebuilding its infrastructure and injecting capital into new initiatives.

The initiative

The American Recovery and Reinvestment Act of 2009 (ARRA) was an economic package intended to provide a stimulus to the US economy in the wake of the economic downturn. [2] Its measures are nominally worth USD787 billion. ARRA includes federal tax relief and the expansion of unemployment benefits and other social welfare provisions, along with spending on education, healthcare and infrastructure, including the energy sector.

The Abiquiu power plant received funding under ARRA to increase its production capacity. Half of the USD9 million funding was provided through the Department of Energy (DOE) and its wind and water power programme; half was provided by Los Alamos County, New Mexico. [3] The programme worked to improve the performance, lower the costs and accelerate the deployment of innovative wind and water power technologies. Using the US’s wind and water resources for electric power generation was intended to help stabilise energy costs, enhance energy security, and improve the environment.

The project’s specific objective was to add a newly-constructed powerhouse and a low flow turbine-generator to the existing Abiquiu hydroelectric facility. These initiatives were intended to increase the power generated at Abiquiu. The project was completed successfully on schedule and to budget.

The public impact

The impact was seen in terms of new jobs for the local region, Los Alamos County, and an increased, and more efficient, generation of electricity:

  • Fifty construction jobs were created during the course of the project, with support for many other jobs in engineering design, construction inspection, materials testing, manufacturing and administration.
  • With the addition of the turbine-generator, the total plant power generation capacity increased by over 22 percent to 16.9 MW.

At 250 cubic feet per second, the water-to-power efficiency of the low flow turbine-generator was 35 percent better than that of the larger existing turbine-generators.

Have an idea for a case study? Print

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Stakeholder Engagement Good

The major stakeholders of the project were Los Alamos County and the American DOE. The other stakeholders were the State of New Mexico, the contractor, RMCI, the engineer, AECOM, the Federal Energy Regulatory Commission (FERC), and the US Army Corps of Engineers. Their interests were well aligned towards a common objective.

The project was designed and constructed using a design-build methodology to meet a tight construction schedule. As the success of the project indicates, the duties of all the players were clearly assigned at the outset and supported through the overall project. However, there were no external stakeholders involved.

Political Commitment Strong

There was political commitment at national level. The US government was very committed to the 2009 Act as a vital means of achieving economic recovery, and the DOE provided significant funding (USD4.5 million) through ARRA. [4] There was also commitment at state and county level, particularly as the plant’s increased power reduced New Mexico's reliance on external sources in meeting its energy needs.

Policy

Clear Objectives Strong

The objectives of the project were specific and measurable:

  • The objectives of ARRA, to stimulate recovery and investment, were clearly stated in the Act.
  • Hydropower projects were intended to play an important role in meeting President Obama's goal of generating 80 percent of America's electricity from clean energy sources by 2035 and of stimulating recovery through infrastructure investment.
  • The Abiquiu plant was an integral part of the hydropower initiative and DOE’s wind and water power programme.
  • There was a clear objective for the plant’s own productivity – for the first year of operation, the new turbine-generator should show five percent increase. (This objective was far exceeded.)

Feasibility Good

There were three main aspects to feasibility here:

  • Technical – the technical challenges, such as needing to complete the coffer dam during the winter months – were known before the start of the project and were overcome successfully, which shows that the technical feasibility of the project was fully evaluated.
  • Financial – the project financing was not finalised at the time of the preparation of the grant application. However, the project realised significant financial benefit by only having to finance half of the project cost and at a secured interest rate of three percent, which was considerably less than market rates.
  • Human resources – the creation of construction-related jobs was addressed as part of the Los Alamos County application to the DOE, and the targets (20 construction jobs and 11 engineering jobs) were both feasible and exceeded.

Action

Management Good

The roles and responsibilities of all the parties involved were clearly defined, and there was a formal reporting mechanism. Because County staff were onsite operating the existing Abiquiu facility, the owner was able to provide daily inspection, off-hours access to the plant, and almost immediate answers to questions from the contractor, RMCI. The monthly teleconference between the owner and the DOE staff was vital to the project’s eventual success. The project, as energy secretary Steven Chu announced, was the first ARRA-funded hydropower project to be completed.

Measurement Strong

There were effective measurement functions in place, for example the monthly reporting between the owner and FERC staff, staff, who also carried out field inspection visits. The results of the project were also measurable in terms of production of additional electricity after the implementation of the project.

Alignment Strong

All the actors were aligned with each other and worked together to achieve the targets:

  • The staff of the engineer, contractor and owner were in constant communication and responded to each other's questions and concerns as rapidly as possible.
  • One administrative challenge was the extensive reporting required for ARRA funding compliance as well as for FERC and other agency reporting requirements. This challenge was made significantly less difficult than anticipated due to the tremendous level of cooperation and assistance of all the agencies and agency-affiliated staff.
  • Very close and daily coordination and cooperation between the Abiquiu plant staff and the design-build team enabled the contractor to complete the project with no downtime of the existing plant, no disruption of power generation and no lost revenue.
  • All the funding and regulatory agency staff (DOE, FERC, US ACE, etc) made it a priority to respond to other parties' communications whether the communication was about construction, reporting, administration, financial accounting or any other aspect of the project.