Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
6c
ACTION ITEM
Date of Meeting
September 25, 2018
DATE: September 17, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Jeffrey Brown, Director Aviation Facilities and Capital Programs
Wayne Grotheer, Director Aviation Project Management
SUBJECT: Variable Frequency Drive Renewal and Replacement (CIP #C800801)
Amount of this request:
$1,970,000
Total estimated project cost:
$3,995,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) advertise and award a
construction contract for the Variable Frequency Drive Renewal and Replacement project at
Seattle-Tacoma International Airport; and (2) utilize Port of Seattle crews and small works
contracts for preliminary work if required. The amount of this request is $1,970,000 for a total
estimated project cost not to exceed $3,995,000.
EXECUTIVE SUMMARY
Commission previously authorized $2,025,000 for design in May 2017. This additional
authorization of $1,970,000, for a total project authorization of $3,995,000, will provide the
necessary funding to complete this project that will replace 47 of the oldest and outdated
Variable Frequency Drives (VFDs) installed at Seattle Tacoma International Airport. This project
represents the first phase of a program to replace approximately 131 VFDs that are reaching
the end of their useful life. VFDs control critical Heating, Ventilation and Air-conditioning
(HVAC) systems throughout the airport, including air handling supply fans in the terminal
buildings and pumps in the cooling towers. The new VFDs are more energy efficient and will
also result in reduced greenhouse gas emissions. The estimated project cost of $3,995,000
represents a budget savings of $2,839,000 or 41%, over prior estimate.
JUSTIFICATION
The VFDs have an American Society of Heating, Refrigeration and Air-conditioning Engineers
(ASHRAE) recommended useful life of ten to fifteen years and all 47 of these drives have been
in operation for more than 15 years. Several have been in operation for more than 21 years.
The manufacturer no longer supports these older VFDs, and failures have occurred depleting
repair parts from maintenance inventory. If this project is not completed additional failures of
COMMISSION AGENDA – Action Item No. _6c___ Page 2 of 5
Meeting Date: September 25, 2018
Template revised September 22, 2016; format updates October 19, 2016.
these 47 VFDs could result in extended outages of HVAC systems in the terminal buildings that
would affect tenants, travelers, and employee comfort.
DETAILS
The 47 VFDs this project will replace are located throughout the airport terminal buildings. The
new VFDs will be connected to the airport’s Direct Digital Control (DDC) system for energy
consumption and performance monitoring. These new VFDs will reduce energy consumption by
approximately 58,000 kilowatt hours per year (KWH/year) and reduce greenhouse gas
emissions by 1.1 metric tons per year as compared to the older technology VFDs. Success for
this project will be achieved when all 47 of these VFDs are replaced, fully commissioned and
connected to the DDC system.
Scope of Work
The scope of work for this project includes:
Replace 47 existing VFDs that have exceeded their useful life.
Connect new VFDs to the existing DDC system.
Provide wiring, testing, commissioning and associated equipment for a fully functional
system.
Salvage components from these 47 VFDs and add those components to the Port’s spare
parts inventory.
Small Business
To maximize small business and Woman, Minority Business Enterprise (WMBE) participation,
Port staff has provided additional outreach efforts through the Port of Seattle’s Small Business
Generator (PortGen) program. The PortGen program provided information about the project
scope of work, and training about the Port’s procurement processes. Working with Economic
Development Division’s Small Business Development Department (SBDD), the Port will establish
small business goals and requirements for the project. Additional time will be allocated for
prime contractors to meet with potential MWBE firms as part of the pre-bid meeting agenda.
Schedule
Activity
Construction start
1
st
Quarter 2019
Final In-use date
4
th
Quarter 2020
Cost Breakdown
This Request
Total Project
Design and Soft Costs
$0
$1,175,000
Construction
$1,970,000
$2,820,000
Total
$0
$3,995,000
COMMISSION AGENDA – Action Item No. _6c___ Page 3 of 5
Meeting Date: September 25, 2018
Template revised September 22, 2016; format updates October 19, 2016.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1– Do not replace these VFDs.
Cost Estimate: An estimated $325,000 in costs to date would need to be expensed if this project
is canceled.
Pros:
(1) No additional investment required
Cons:
(1) VFDs have an ASHRAE recommended useful life of ten (10) to fifteen (15) years. All 47 of
these VFDs have between 15-21 years of use and are considered obsolete.
(2) Increases likelihood of extended HVAC system outages affecting tenants, travelers, and
employee comfort due to these VFDs having exceeded their recommended useful life.
(3) Manufacturers no longer provide repair parts for VFDs manufactured 15-20 years ago
and the Port’s spare parts inventories have been depleted.
(4) Does not provided energy and performance monitoring through connection to the DDC
system.
(5) Does not provide energy savings or reduction in related greenhouse gas emissions.
This is not the recommended alternative.
Alternative 2 – Replace 131 VFDs that have exceeded the ASHRAE recommended useful life.
Cost Estimate: $11.135 million
Pros:
(1) Reduces the likelihood of extended HVAC system outage due to these VFDs failing.
(2) Provides energy and performance monitoring through connection to the DDC system.
(3) Efficient VFDs will reduce energy usage and related Greenhouse gas emissions.
Cons:
(1) Significant capital investment required.
This is not the recommended alternative.
Alternative 3 – Replace the 47 oldest VFDs that have exceeded the ASHRAE recommended
useful life.
Cost Estimate: $3.995 million
Pros:
(1) Reduces the likelihood of extended HVAC system outage due to these VFDs failing.
(2) Provides energy and performance monitoring through connection to the DDC system.
(3) Components from these 47 VFDs will be salvaged and added to the Port’s spare parts
inventory in support of the remaining end of useful life obsolete VFDs.
(4) Efficient VFDs will reduce energy usage and related greenhouse gas emissions.
COMMISSION AGENDA – Action Item No. _6c___ Page 4 of 5
Meeting Date: September 25, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Cons:
(1) Requires capital investment.
(2) Does not replace 84 remaining end-of-life VFDs.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Prior estimate
$6,834,000
$0
$6,834,000
Changes from prior estimate
-$2,839,000
$0
-$2,839,000
Revised estimate
$3,995,000
$0
$3,995,000
AUTHORIZATION
Previous authorizations
$2,025,000
$0
$2,025,000
Current request for authorization
$1,970,000
$0
$1,970,000
Total authorizations, including this request
$3,995,000
$0
$3,995,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project (CIP #C800801) was included in the 2018 – 2022 capital budget and plan of finance
with a budget of $6,834,000. The budget savings of $2,839,000 will be transferred to the
Aeronautical Allowance CIP (C800753), resulting in no net change to the airport capital budget.
As the project progressed the design costs were negotiated and reduced. The per-unit cost of
the 47 VFD’s was originally estimated at a high unit cost because the specific VFD to be
replaced had not been identified. We now have a detailed design and have identified the exact
47 VFD’s that will be replaced and have the per-unit cost of each VFD which significantly
reduced the cost estimate.
The funding source for this project will be the 2018A revenue bonds and future revenue bonds.
Financial Analysis and Summary
Project cost for analysis
$3,995,000
Business Unit (BU)
Terminal Building
Effect on business performance (NOI after
depreciation)
NOI after depreciation will increase
IRR/NPV (if relevant)
N/A
CPE Impact
$0.01 in 2021
COMMISSION AGENDA – Action Item No. _6c___ Page 5 of 5
Meeting Date: September 25, 2018
Template revised September 22, 2016; format updates October 19, 2016.
Future Revenues and Expenses (Total cost of ownership)
This project replaces existing equipment that is obsolete. Replacement of the equipment will
require a similar level of maintenance (or slightly less) and does not have a material impact on
current Aviation Maintenance O&M costs.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
May 23, 2017 – The Commission authorized design for the Variable Frequency Drive Renewal
and Replacement (CIP #C800801).
