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Decatur Utilities plans to replace 3 transformers

By Catherine Godbey 340-2441

After more than four decades of heating microwaveable dinners, ironing wrinkled clothes and, in general, creating an easier life for residents, Decatur Utilities plans to retire three transformers.

The transformers at the Decatur primary station between Market Street and 19th Avenue Southeast transfer power received from the Tennessee Valley Authority to DU customers.

DU hired Fisher & Arnold Inc., a Memphis-based architectural and engineering firm, in February to evaluate the performance of the transformers. Fisher & Arnold engineer Phil Cathey recommended replacing the transformers during a DU board meeting Aug. 22.

"The transformers are in the late stage of life and standing on their last leg," Cathey said.

"The chemical tests show the deterioration of insulation on the inside of the transformers."

Deteriorating insulation results from a combination of age, heat and moisture, DU Electric Manager Dan Gibbs explained, and could potentially lead to a short circuit.

A combination of the transformers' disintegrating structure and the production time needed to manufacture replacement transformers requires immediate action.

"It is prudent that we start this process now," DU Interim General Manager Stan Keenum told the board.

Of the three primary stations, which also include Cedar Lake and Trinity, the Decatur primary station transfers the majority of the power. Operating between 140 and 150 megawatts, the Decatur primary station services 12,212 DU customers.

Fisher & Arnold examined several options and ultimately suggested replacing the transformers with identical units, three single-phase transformers. The solution represents the most cost-effective and least time-consuming option.

"Replacing the units in kind is the best plan ... it will be easy to install them and it makes for the quickest turnaround possible, and that is the No. 1 factor," Cathey said.

From the three companies providing estimates, Gibbs proposed accepting Korean-based Hyundai Heavy Industries bid. At a cost of $4.5 million, Hyundai expects to manufacture and deliver the transformers in 18 months.

Members of the board were receptive to the offer, but questioned what incentives existed for Hyundai to comply with the delivery date.

"It's just too large a commitment on our part not to have some type of commitment on their part," board Chairman Neal Holland said.

The board delayed approval of the bid until DU reaches an agreement with Hyundai concerning a performance bond or liquidated damages contract. Gibbs is reviewing a sample liquidated damages agreement Hyundai operated under previously and anticipates the board's final approval shortly.

During the manufacturing stage, DU officials plan to visit Korea for the testing of the transformers. According to Hyundai's timeline, installation of the transformers will occur by the summer of 2009.

If the operating transformers short circuit before installation, Gibbs assured the board the spare transformer at the Decatur primary station
and the transformers at the Cedar Lake and Trinity primary stations can carry the power for three months.

DU anticipates the future transformers lasting 40 years, through another generation of customers and new technological devices.

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