Open book contracting for EPC projects

The development of an independent power project to the point of financial closing and release of funds for construction requires substantial effort and expense on the Owner's part to bring together all of the required elements. This statement is certainly not news to those involved in the business. Through the course of project development, owners must handle the negotiation of power sales agreements, locate sites and contract for fuel, find steam hosts if cogeneration is involved, obtain permits, arrange financing, and finally, select an EPC Contractor to design and build the plant. All of this effort is done at risk and puts a considerable demand on the Owner's resources. This paper discusses ways the Owner and Contractor can work together during this phase of a project to expedite the development process, manage costs, control risk, and ensure quality. This paper also illustrates the successful use of this approach for both Black and Veatch and CMS Generation on the Grayling Generating Station Project, a 36 MW waste wood fueled IPP plant in Michigan. The project was successfully completed almost three months ahead of schedule and has been in operation for just over one year at an availability of over 95 percent