Title
Approval of Amendment No. 1 to Services Agreement No. AGR 25-925 with Andritz Hydro Corp. in the Amount of $663,720.70 to Authorize the Expenditure of Tariff Fees for Repairs to the Abiquiu Hydroelectric Plant Draft Tube and Approval of a Budget Revision 2017-22 in the amount of $87,190.00
Recommended Action
I move that the Board of Public Utilities recommend of Amendment No. 1 to Services Agreement No. AGR 25-925 with Andritz Hydro Corp. to incorporate tariff fees, increasing the base contract by $81,771.75 plus New Mexico Gross Receipts Tax (NMGRT) of $5,417.38, for a revised total contract amount of $663,720.70; and recommend Budget Revision 2017-22 in the amount of $87,190.00 (consisting of $81,771.75 base cost and $5,417.38 NMGRT, with minor rounding) to fund the remaining shortfall from the Electric Production fund reserves; and forward to County Council for final approval.
Utilities Manager's Recommendation
The Utilities Manager recommends that the Board approve the motion as presented.
Body
The existing draft tube on Unit #3 at the Abiquiu Hydroelectric Plant experienced significant wear due to cavitation created by the dissolved oxygen injection system. This injection system is required to force air into the discharge water to enhance downstream oxygen content and sustain aquatic life. However, the injection piping on the legacy draft tube was horizontally mounted on the inside, which obstructed the discharge flow and caused the severe cavitation that ultimately wore through the steel wall. To resolve this issue, the new draft tube design places the injection piping ring on the outside perimeter, eliminating the internal flow obstruction and preventing future cavitation on the inner wall.
The Board previously approved Services Agreement No. AGR 25-925 in the base amount of $538,500.00, plus NMGRT of $38,031.57, for an original contract total of $576,531.57 to repair the damaged section of the draft tube and install this new aeration intake system. At the time of the original approval, the Board also authorized a project contingency of $62,000.00.
To ensure proper fitment of the new draft tube and accommodate additional mobilization to the site, staff utilized this approved contingency to issue a change order for a specialized laser survey. The total cost for this laser work and mobilization was $30,080.00, plus a 7.0625% NMGRT of $2,124.40, for a total of $32,204.40, leaving a remaining project contingency balance of $29,795.60. However, the remaining balance had not been carried forward into FY 2027.
Because the original agreement did not allow for or anticipate tariff increases, this formal Amendment No. 1 is required to address unexpected tariff impacts. Through subsequent reviews, staff successfully negotiated a decrease in the total tariff fee proposed by Andritz from $102,747.00 down to $81,771.75. This amendment incorporates these negotiated tariff fees into the contract, ensuring the full completion of the engineering, supply, and final repair services.
Alternatives
If the Board does not approve the amendment and updated purchase order, staff will be unable to fulfill the finalized contract adjustments with Andritz Hydro Corp. Because the necessary physical repair work has already been completed to successfully restore the generator to service, non-approval means the county will be unable to pay the contractor for the required tariff expenses incurred during the project.
Fiscal and Staff Impact
The total cost for Amendment No. 1 (Negotiated Tariff Fees) is $87,189.13 inclusive of tax. Because the remaining FY 2025 contingency balance of $29,795.60 did not carry forward into the current fiscal year budget, there is no active project budget available to absorb these costs.
To cover this obligation, this request includes a Budget Revision in the full amount of $87,190.00 to appropriate funds directly from the Electric Production fund reserves (where the expired FY 2025 contingency money currently resides). This budget revision consists of a base cost of $81,771.75 and NMGRT of $5,417.38.
The updated fiscal breakdown for Services Agreement No. AGR 25-925, including the contingency allocation, is shown in Exhibit D
Attachments
A - AGR 25-925- Amendment No.1
B - Original Proposal Abiquiu - Supply And Install New Draft Tube
C - Terms and Conditions
D - Andritz Purchase Order
E - Abiquiu Draft Tube Tariff Letter - May 13, 2026
F - Proforma Invoice
G - Fiscal Breakdown
H - Budget Revision 2017-22