Monticello Posts $7.8M USA Material Cost-Reduction Savings

June 14th, 2018
Author: Lisa Kuehl, Xcel Energy

The Monticello Nuclear Plant recently reported a $7.8 million cost-savings as a part of their participation in the Utilities Service Alliance (USA) Material Cost-Reduction (MCR) project. The USA MCR project, which started in January 2017, has driven significant cost-savings across the Alliance since that time. This item from Monticello shows the project is picking up steam and is starting to fulfill the tremendous potential savings identified just over a year ago when it started. 

Brad Vickery, USA MCR Project Manager, notes that, “One of the more significant savings opportunities the MCR project offers is to identify reverse engineering opportunities to provide obsolete parts replacement to eliminate or defer a costly modification through a bridging strategy. This allows the plant to operate the existing system or component for several more years or even the remaining life of the plant. These reverse engineering opportunities are where the big dollar savings can be found.” 

As part of the USA MCR project, each plant was asked to provide and review their long-term project plan with USA and Paragon Energy Solutions. Paragon is a key USA supplier that is working directly with USA and the utilities on the MCR project. During the Monticello plant project review, it was discovered that a modification was scheduled to be completed in 2021 and 2022 to replace the High Pressure Core Injection (HPCI) and Reactor Core Isolation Cooling (RCIC) speed control systems. Manufacturing of the original speed control system was discontinued by the original equipment manufacturer in the mid-1990s. Support and repairs were discontinued several years ago.
Paragon successfully reverse-engineered replacement parts for this system and worked with Monticello staff to confirm the parts would be a suitable long-term replacement. The product provided by Paragon allowed Monticello to use reverse-engineered replacement parts as a bridging strategy to defer - or eliminate - a digital modification to the system. The original equipment manufacturer had implemented a digital replacement for the obsolete speed control system at other nuclear plants, but the required modification was very costly.
The cost to implement the new digital system modification was in the Monticello long-term project plan with an estimated cost of nearly $8 million. The replacement parts from Paragon will cost the Monticello plant less than $200,000. Removing the costly digital modification from the long-term plan, in favor of utilizing the reverse-engineered replacement parts for years to come, is the basis for the total cost of ownership innovative/strategic sourcing savings of $7.8 million.
“Total MCR project savings through March 31, 2018 are in excess of $12 million dollars,” stated Jim Kitchens, USA Director Economic Strategies. “As successful as we have been so far, we feel we are only scratching the surface. This is real dollar savings and folks are starting to see the impact USA and this team can have on their bottom line. I’m excited about where this team is headed in the future.”

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