Snohomish County PUD and KimberlyClark Corporation Cogeneration Project Everett, WA

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Snohomish County PUD and Kimberly-Clark
Corporation Cogeneration ProjectEverett, WA
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Introduction

• The Snohomish County PUD and Kimberly-Clark
  jointly began construction of a 115MM
  cogeneration facility in 1993. The PUD provided
  the capital and owns the project in addition to
  receiving the electrical output. Kimberly-Clark
  provided construction management and
  operates/maintains the facility, receiving steam
  for its tissue mill processes.

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Kimberly-Clark Who We Are

• Founded in 1872

• Second largest tissue manufacturer in the world

• Operations in 23 U.S. states and 40 countries
  

• Sales in over 150 countries

• 66,000 employees worldwide

• Fortune 100 company

• One of the 500 largest companies in the world

• Annual sales in excess of 14 billion

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What We Make
CONSUMER BUSINESSES

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Everett Mill
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Everett Mill
Employees 896 (154 Salaried, 742
Hourly) Operating Schedule 7/24 (12-hour
shifts) Operations Pulp (Riverside-idled log
and chip plant) Tissue Manufacturing Paper
Converting and Packaging Distribution Utili
ties (5 Boilers, 52MW Generator) Paper
Machines 5 _at_ 195,000 MT/yr Converting 14
Converting Units 21 Winders/Folders Total Site
Footprint 200 acres
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Everett Mill Utilities Complex
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14 Boiler

• Designed by Gotaverken (Kaeverner)
• 800 lbs., 850 F
• 435,000 pounds/hour superheated steam
• Under-fire air with a moving fuel grate
• Natural circulation
• Fuels wood waste, natural gas diesel oil

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Wood Waste Pile
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Steam Turbine Generator

• General Electric
• 52 MW
• 16 stages
• Single-flow, double-automatic extraction
  condensing unit
• 1st extraction 300 lbs, 2nd extraction 40
  lbs.
• Exhaust pressure of 2.04 Hg absolute

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Turbine Generator
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Basic Contractual Agreements

• Snohomish County PUD owns the cogen facility and
  Kimberly-Clark operates and maintains it
• Term of Contract 21 years, renewable every 5
  years thereafter by Kimberly-Clark
• PUD Rights - Annual Project Output of 325, 000
  mwhrs
• Power replacement penalties based on Mid-Columbia
  Electricity Price Index
• Kimberly-Clark Rights 6,000,000 mmbtus of
  steam

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Basic Contractual Agreements (cont.)

• PUD Obligations Capital costs, some OM costs
  after 15 years, some fuel costs after 10 years
• Kimberly-Clark Obligations All OM costs up to
  15 years, power generation, maintain facility in
  accordance with OM agreement

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Project Development

• KC initially approached PUD in December of 1990
• Memorandum of Understanding executed in April of
  1992
• Construction Operating Contracts Executed
  October 1993
• Ground breaking began in October 1993
• Project on-line and in Commercial Operations
  August 1996

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Development Participants and Roles

• Snohomish PUD Owner, Financing, Marketing of
  Electrical Output
• Kimberly-Clark General Contractor, Provided
  Site
• Major Subcontractors
• HA Simons Engineering and Procurement
• Gotaverken Wood-Waste Boiler its Facilities
  T/G Building
• Fletcher General Construction of Substation,
  Underground Piping, and Electrical Distribution
  System within the KC mill.
• General Electric Manufacturing and installation
  of Turbine Generator and auxiliaries

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Factors Contributing to Success of Development

• Belief that cost reductions could be achieved by
  cooperative cost sharing
• KC and PUD took on roles that were within their
  normal scope of experience and responsibilities.
• KC had experience constructing and operating
  boilers
• PUD had access to inexpensive capital and the
  ability to market the electrical output
• Existing Site Infrastructure already in place
  Water, Gas, Electrical Interconnection, Water
  Treatment
• PUDs existing Power Supply Portfolio simplified
  integrating electrical output into resource mix

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Factors Impeding the Success of the Development

• Dissimilar General Business Activities and
  Institutional Environments
• Little common understanding of each partys
  accepted business rules
• KC makes pulp and paper
• PUD acquires and distributes electrical power
• Differences in accepting business risks
• PUD generally very risk averse
• KC more willing to accept risk
• Private Sector vs. Public sector obligations
• Decisions related to environmental impacts
• Duration of contractual commitments private
  entities are willing to enter into
• Public disclosure obligations

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Operating History

• Startup Issues
• Fuel slides
• Slagging
• Superheater tubes
• Reliability Issues
• Wood system
• Ash system
• Pressure parts
• Performance Issues
• Recovery Boiler
• Waste wood supply

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Conclusion

• Latest technology boiler
• Contributes to local economy
• Stabilizes mill longevity
• Burns two waste products
• Stabilizes mill load swings
• Generating resource near the load center
• Renewable Resource

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Conclusion (cont)

• Would you do this again?
• Difficult to predict what locally elected
  officials would choose in today's environment
• Locally elected Commissions under siege due to
  high retail rates. May not wish to
  simultaneously take on risks associated with
  developing a new resource
• Volatile power markets
• Public Power is risk averse
• Uncertain regulatory environment
• Entering into a long term commitment less likely

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