Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8c
ACTION ITEM
Date of Meeting
December 10, 2019
DATE: December 4, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Mike McLaughlin, Director, Cruise Operations
Sandra Kilroy, Director, Maritime Environment and Sustainability
Fred Chou, Capital Program Leader, Seaport Project Management
Paul Meyer, Sr. Manager, Maritime Environment and Sustainability
SUBJECT: Pier 66 Shore Power Capacity and Connection - an early Action of the Seattle
Waterfront Clean Energy Strategic Plan
Amount of this request:
$960,000
Total estimated project cost:
$17,000,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to design, permit, and develop
construction documents for the Pier 66 Shore Power Project. The amount requested under this
authorization is $960,000 of a total estimated project cost of $17,000,000.
EXECUTIVE SUMMARY
The port is an industry and regional leader in economic development and sustainability. As
Seattle’s cruise industry continues to grow, the port recognizes its responsibility and the
importance of concerted efforts to balance economic growth with sustainability. The Seattle
Waterfront Clean Energy Strategic Plan will provide a port investment strategy to protect the
environment and improve community health. Through this approach the port seeks to achieve
its vision of being the greenest, most energy efficient port in North America.
The provision of shore power for cruise ships, is the port’s greatest opportunity to reduce
greenhouse gas (GHG) emissions and improve local air quality. Currently, the port’s Smith Cove
Cruise Terminal at Terminal 91 (T91) which began operations in 2009, provides shore power at
its two cruise vessel berths. The single berth facility at Pier 66’s Bell Street Pier Cruise Terminal,
which opened in 1999, does not have shore power for cruise vessels.
To enable future shore power connections by the cruise ships that call on the Pier 66, the port
engaged and is currently working closely with Seattle City Light (City Light) to plan and provide
shore power to the Bell Street Pier Cruise Terminal. This project serves as an early-action
toward implementing the larger Clean Waterfront Energy Plan. Based on City Light’s system
COMMISSION AGENDA – Action Item No. 8c Page 2 of 6
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
impact study estimates that were provided in 2018, the port estimated the total investment
required to bring power to the Pier 66 via landside infrastructure though the City’s right of way
would cost approximately $30 million. Most of these estimated costs were attributed to
infrastructure installation through the city right-of-way.
This year, after research and exploration of lower cost approaches, port staff proposed a
submarine cable to bring the power to the facility. This alternative, which would avoid costly
street trenching, will bring power along the seafloor of Elliott Bay from Terminal 46 (T46)
directly to Pier 66. The port conducted a submarine cable feasibility study and found the
approach to be feasible. Staff shared the submarine cable feasibility findings with City Light,
who examined two options to bring power to Terminal 46 to feed the submarine cable and
minimize construction impacts to waterfront right-of-way. The cost of the preferred landside
feeder option via T46 and a submarine cable to Pier 66 resulted in a combined conceptual level
project cost estimate of $17 million—nearly a 50 percent cost reduction compared to the $30
million landside option evaluated in 2018.
This request for funding will enable the design, development, and permitting phases of this
project to begin, inclusive of both on-site and off-site infrastructure by the Port and City Light.
The target date for shore power system completion for the project is by the start of the 2022
cruise season.
JUSTIFICATION
The Bell Street Pier Cruise Terminal at Pier 66 is a single berth cruise facility in the heart of
downtown Seattle’s waterfront. Pier 66 is the port’s first cruise terminal—opened in 1999—and
is homeport to Norwegian Cruise Line and its subsidiary Oceania Cruises. This terminal, along
with the Smith Cove Cruise Terminal at T91 contributes significantly to the region’s economy on
an annual basis, generating more than 5,500 local jobs and $893.6 million in business revenue
each cruise season.
In addition to its economic development mission, the port is also an industry regional leader in
sustainability and committed to addressing global climate change and improve local air quality.
In 2017 the port’s Commission adopted ambitious GHG reduction targets in alignment with the
Paris Climate Agreement and is planning and implementing projects and programs to achieve
these critical air emission reductions.
For instance, under the Northwest Ports Clean Air Strategy, the port was instrumental in efforts
that decreased diesel particulate matter (DPM) and GHG emissions from port activities by 82
percent and 20 percent, respectively, since 2005. Looking to the future in which the port and
Washington State envision a decarbonized maritime industry, the port has initiated a regional-
scale planning effort known as the Seattle Waterfront Clean Energy Strategic Plan to enable and
accommodate future needs and zero emission maritime operations. The plan envisions working
in close partnership with the Northwest Seaport Alliance (NWSA), City Light and other key
maritime energy users like Washington State Ferries and SSA Marine Inc. to holistically plan and
COMMISSION AGENDA – Action Item No. 8c Page 3 of 6
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
develop strategies to ensure availability of clean, cost effective, resilient and reliable power for
a carbon-free future.
The port’s two shore power connected cruise berths are already resulting in significant
emission reductions. In 2019, 89 percent of shore power capable ships at T91 successfully
connected and avoided an estimated 4,300 metric tons (tons) of CO
2
.
Expansion of shore power to Pier 66 advances the port’s Century Agenda target to reduce
Scope 3 greenhouse gas emissions from Scope 3 sources, by 80% by 2050 (from 2007), and be
the greenest port in North America. The electricity demand needed to power ships berthed at
Pier 66 is available from City Light without extensive infrastructure upgrades or transmission
changes. This project does require the port to invest in the connection from the south, but the
unique solution of utilizing a submarine cable for power delivery, instead trenching in the right
of way, significantly reduces the overall cost.
On a cost per ton basis, assuming a 28-year infrastructure life (2022-2050) and $17 million cost,
staff estimates the cost in 2019 dollars of the cumulative carbon reduction by 2050 to be $269
per ton if 50% of all calls to Pier 66 connected and $134 per ton if 100% of all calls to Pier 66
connected. If every single one of the shore power capable ships that called at Pier 66 in 2019
connected each year through 2050, the cost of emission avoided would be $192. As a measure
of comparison, the estimated cost per ton of CO
2
reduced from the port’s purchase of Green
Direct wind power from Puget Sound Energy was $61 per ton and the cost per ton of
conservation achieved through the Airport’s Stage 3 Mechanical Upgrades was $300 per ton.
During the design development phase of this project, additional innovative solutions as well as
funding support from state and federal agencies committed to supporting clean electricity
substitution for combustion will be explored. Cost sharing strategies with our leasehold
partner, Norwegian Cruise Line Holdings, are also being explored and will be further developed
once design has sufficiently developed. Furthermore, staff will explore cost savings
opportunities during design efforts and coordinate with the new cruise terminal project
development at Terminal 46.
Diversity in Contracting
For planning and design services, we are leveraging existing indefinite delivery/indefinite
quantity contracts which are fulfilling the port’s previous small business program requirements.
For the future construction phase, the project manager will work with the Diversity in
Contracting Department to establish direct women and minority business enterprise (WMBE)
aspirational goal for the project.
COMMISSION AGENDA – Action Item No. 8c Page 4 of 6
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
DETAILS
Scope of Work
The major components of the P66 shore power project’s work scope include the following:
(1) Pier 66 onsite shore power infrastructure/equipment inclusive of shore power cable
management system
(2) Approximately one mile of armored submarine cable
(3) Terminal 46 onsite shore power infrastructure/switch gears
(4) Offsite shore power related infrastructure and feeders by City Light
(5) Design development/permitting and environmental review for project
(6) Develop shared funding strategy
Schedule
The preliminary project schedule is shown below:
December 2019 (This
Action)
12 months
Early 2021
Mid-year 2021
2022 Cruise Season
Cost Breakdown
This Request
Total Project
Design*
$960,000
$1,255,000
Construction**
$15,745,000
Total
$960,000
$17,000,000
* Inclusive of cost of service agreement obligation with City Light
** Staff will seek grant and funding partnership opportunities that would reduce the overall construction/project
costs.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Not invest in shore power infrastructure -- cruise ships at berth would continue
to burn fuel to generate onboard electricity, while emitting greenhouse gases and air
pollutants.
Cost Implications: $0
Pros:
(1) No capital investment is required.
Cons:
(1) Cruise ships berthing at Pier 66 would generate electricity onboard from fossil fuel
generators.
COMMISSION AGENDA – Action Item No. 8c Page 5 of 6
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
(2) The port would not advance progress toward Century Agenda emission reduction
targets.
This is not the recommended alternative.
Alternative 2 – Bring shore power to Pier 66 through upland/landside infrastructure and install
shore power equipment on Bell Street Pier.
Cost Implications: $30 million
Pros:
(1) Reduce cruise ship air emissions while ships are at berth.
(2) Advance the port’s Century Agenda target to reduce greenhouse gas emissions.
Cons:
(1) Requires high initial capital cost.
(2) Significant impact to street/communities during construction.
(3) Significant design and underground construction work through city right of way and
potential to encounter differing site conditions and higher change order rate would be
anticipated.
This is not the recommended alternative.
Alternative 3 – Bring shore power through landside infrastructure into and through Terminal
46, install a submarine cable that runs along the Elliott Bay seafloor from T46 to the Bell Street
Pier. Install shore power equipment on Pier 66 Bell Street Cruise Terminal to provide enough
power for the largest ships expected to call on the port.
Cost Implications: $17 million
Pros:
(1) Lower costs compared with full landside shore power infrastructure installation option
under Alternative 2.
(2) Reduce cruise ship air emissions while ships are at berth.
(3) Advance the port’s Century Agenda target to reduce greenhouse gas emissions by 80%
by 2050, from 2007 and be the greenest port in North America.
Cons:
(1) Requires initial capital cost.
(2) Additional risks in permitting related to submarine cable installation.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$17,000,000
$0
17,000,000
COMMISSION AGENDA – Action Item No. 8c Page 6 of 6
Meeting Date: December 10, 2019
Template revised June 27, 2019 (Diversity in Contracting).
AUTHORIZATION
Previous authorizations
$295,000
0
$295,000
Current request for authorization
$960,000
0
$960,000
Total authorizations, including this request
$1,255,000
0
$1,255,000
Remaining amount to be authorized
$15,745,000
$0
$15,745,000
Annual Budget Status and Source of Funds
This project, C800120 P66 Waterfront Electrification/Shore Power, was included in the 2019
Capital Plan with an estimated total project cost of $30,000,000. The project has been included
in the 2020 Capital Plan with an updated estimated total project cost of $17,000,000.
This project will be funded by the Tax Levy.
Financial Analysis and Summary
Project cost for analysis
$17,000,000
Business Unit (BU)
Cruise Operations
Effect on business performance
(NOI after depreciation)
• No incremental operating revenue or cost-savings is
directly associated with this project.
• On-going maintenance expenses, if any, are not yet
known.
• Estimated useful life of shore power infrastructure is
28 years, resulting in a depreciation expense of
approximately $600,000 annually. NOI after
depreciation will reduce by that respective amount.
IRR/NPV (if relevant)
N/A
CPE Impact
N/A
Future Revenues and Expenses (Total cost of ownership)
Potential opportunities for grant revenue and cruise line project investment will be explored to
offset the port’s cost-share of the project. On-going maintenance costs and possible support
from relevant leasehold partners will be explored through the design process.
ATTACHMENTS TO THIS REQUEST
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None