06-26-1979 HUCMz
Special Meeting
June 26, 1979
TO: File 75500
RE: Hutchinson, Minnesota
Curtiss - Wright, Turbine Installation
A Special Meeting was held in the Commissioners' Room at the
Hutchinson Utilities Building on June 26, 1979 at 9:30 a.m.
to discuss the referenced installation. The following persons
were in attendance:
Mr. Larry Zelle, Attorney, Robins, Davis, & Lyons.
Mr. John Nixon, President, Gas Turbine Corporation.
Mr. Howard Quade, President, Hutchinson Utilities Commission.
Mr. Herb Filk, Vice - President, Hutchinson Utilities Commission.
Mr. Rufus Alexander, Manager of Utilities, Hutchinson, MN.
Mr. Rich Peterson, Attorney, Hutchinson,
Mr. Hugo Casatelli, Director of Program Management, Curtiss - Wright.
Mr. Len Green, General Manager of Gas Turbine Operations, C -W.
Mr. Dana Taylor, Attorney, Curtiss - Wright.
Mr. Bob Palmquist, Mechanical Engineer, Associated Consultants.
1. The initial position of the Hutchinson Municipal Utility was as
follows:
A. Gas Generator. The inlet guide vanes (IGV's) on the LP
compressor are covered under warranty. After only 750 hours
of operation, substantial damage occurred. The problem
with the IGV's was a situation which pre - existed the
Hutchinson installation. Hutchinson wants an extended
warranty in operating hours, rather than calendar time.
B. Power Turbine. The end plate needed replacement. Power
turbine stator cracking was repaired once. New cracks
have been discovered. Additional repairs, according to
a metallurgical expert, would be fruitless. Hutchinson
wants a new power turbine stator.
If agreement cannot be reached on the above, Curtiss - Wright should
take out their unit and return to Hutchinson monies spent.
2. The initial position of Curtiss - Wright was as follows:
A. Gas Generator. If IGV's had been inspected per the CW
schedule, the catastrophic failure would not have occurred.
Hutchinson should be responsible for this failure.
B. Power Turbine. Some units have been in service for 13,000 hours,
and have caused no problems. If the power turbine stator is
repairable, SW will repair it, under warranty. If the power
turbine stator is irrepairable, Curtiss - Wright will replace it.
Curtiss - Wright feels that the unit has been accepted by Hutchinson,
and Curtiss - Wright will not take the unit back.
3. Curtiss - Wright did not change out the orifice in the de -icing
valve with a smaller orifice, per Rolls -Royce instructions. This
probably contributed to the failure of the IGV's.
4. Hutchinson feels the requirement that the IGV's be replaced
after only 750 hours operation is unreasonable.
5. CW feels that a shared amount between Hutchinson and CW for
the approximate $381,000 repair price would be acceptable to CW.
However, CW would thereby not necessarily feel the responsibility
for the failures.
6. Hutchinson feels the seriousness of the potential problem
should have required CW to point out, in specific terms, the problems
from lack of inspection.
7. CW disputes item 6 above. CW feels inspection would have shown
the potential problems.
8. Hutchinson feels CW should have recalled the replaced defective
components.
9. Hutchinson said no information had been sent to Hutch on a
new fix for the IGV's prior to failure. CW says they weren't
available. Hutch said Rolls -Royce did have the new fix available.
10. JN - Even at 250 hours, there is no guarantee that a catastrophic
failure could not occur.
11. LZ - It is known that IGV's can fail in less than 250 hours.
LG - they can crack, but no catastrophic failures will occur.
12. LZ - What portion of the repairs does CW propose to share?
LG - Hutchinson is responsible for the failure, but in order to
settle the dispute, C14 will talk about sharing the costs.
13. LZ - How does the $381,000 break down for catastrophic failure
and repair of IGV's. LG & HC - can't say. Labor might be 20%
of total. IGV parts approximately $30,000 material. With re -work,
IGV's will fit in the existing casing.
14. LZ - What price and warranty will CW offer? LG - The remaining
warrantys, good until September 29, 1979, and March 1980 (power
turbine) will remain in effect. Additionally, an overhaul warranty
would apply. CW offered to pay for 25% of the cost of repairs.
15. LZ - Hutchinson is troubled by the PT problems. Hutchinson
will live with the cracking. However, Hutch is concerned with the
degree of cracking in just 750 hours. Hutchinson would like a PT
warranty based upon hours of operation, rather than calendar time,
if CW is confident PT stator can be repaired withour replacement.
Hutch anticipates a catastrophic failure in the PT, if it is
repaired rather than replaced.
i
16. LG - Eight units in New Zealand have run 9,000 - 13,000 hours,
with approximately 1200 starts. Many have cracks in the PT stator,
but are still giving satisfactory service and are within the Service
Bulletin guidelines.
17. LZ - Will CW extend the warranty on the PT stator to 5,000 operating
hours? LG - I have no authority to extend it. CW feels this is not
required.
LZ - This would merely be a conversion from 1 year calendar time to 5,000
operation hours.
LG - CW does not feel this is necessary.
RA - What is the longest warranty CW has given?
LG - Five years, in Kuwait.
18. LZ - Provide details on the CW overhaul warranty.
LG - Six months on parts, as provided by Rolls - Royce. One year on labor.
19. LZ - There is an impasse on the PT. Perhaps CW should inspect and
advise.
LG -- If PT can't he corrected, CW would make good.
LZ - Impasse is on warranty. The amount of cracking in 750 hours, already
having had one repair, is disturbing. If repairs are made, and then we
inspect after 3 - 5,000 hours of operation, and PT stator looks alright,
then OK. However, a catastrophic failure could occur.
LZ - Have machine type repairs been made on other cracks.
LG - Yes, CW should inspect the cracks and make a decision on whether or
not to repair.
LZ - This should be done, and at that time a decision should be made on the
PT warranty.
LG - The cracked units can go a long time after cracks develop, and still
keep within the guidelines of the Service Bulletin.
20. The following items were discussed, with. CW not present:
A. Service Information Bulletin 22, on cracking of PT, came out on
12/1/77, some six months after the Hutch unit was in service.
B. CW (Al Sharp) previously advised both. RA and JW that a piece of
IGV had fractured from a unit in Canada after only 198 hours operation.
C. RA - Hutchinson can work with Associated Consultants to purchase
power from NSP, Otter Tail, or some other source. UPA would get
energy from there to satisfy the Contract.
D. If CW knows that Hutch has access to other equipment, they may
yield. For instance, San Diego Electric has some units available
for immediate installation.
E. Various alternatives for making an offer to CW were discussed.
21. (CW Present). LZ - Hutch makes the following firm proposal to CW.
A. GG. Hutchinson will pay $100,000 of the repair cost predicated
upon the following:
(1) The $381,000 repair figure, quoted by CW includes no profit
to CW, and no contributions from Rolls - Royce.
(2) The overhaul warranty would Be an extension to the existing
warranty. (CW says it will be concurrent) .
B. PT
(1) New stator housing.
(2) The old stator housing will be repaired and made available to
Hutch as a spare.
(3) One year warranty on new housing.
C. All terms shall be completed within 30 days after agreement.
D. In return for the above, Dutch will provide a release on all claims
relating to the IGV failures.
22. LG - CW rejects the Hutch offer.
23. LZ - The matter can go to litigation. Expenses to Hutch, due to down-
time of the unit, could be charged to CW.
24: LG - Regarding PT, W will honor its warranty obligations. On GG, CW
would agree to 50 -50 sharing, with no conditions attached. CW would expect
a release regarding past failures of GG. Future warranty would apply. 30
day time frame could be met.
25. LG - CW will not release Hutch GG until agreement is reached on
settlement.
26. LZ - Does release CW wants, apply also to Rolls- Royce.
DT - Only applies to M.
DT - CW would prefer, however, to have release include Rolls - Royce.
LG - CW proposal is full release of CW and Rolls - Royce.
LZ - Rolls -Royce should he involved. Is LG speaking only on behalf of CW?
LG - Yes.
27. The following items were discussed, with CW not present:
A. UPA presently requires approximately 15 MW from Hutchinson, on
contract.
B. JN - Hutchinson could get a rental engine CGG) from Rolls -Royce or
CW.
C. JN - Rolls -Royce reportedly gave CW approximately $160,000 for
settlement on Hutchinson unit.
D. RA - Stator housing for PT should not be repaired. It should.be
replaced.
E. LZ - We must allow CW to propose how they would fix the PT stator,
under their warranty. We will tell CW we believe it should be
replaced.
F. RA - Due to cost of fuel oil, the CW unit will not be run much, so
not many hours will be put on PT stator housing, prior to
expiration of warranty.
G. LZ - Our position is that stator housing is irrepairable. CW can
look at and advise. On GG, CW proposal is unacceptable.
H. LZ - Our next move should be to contact Rolls- Royce. We will talk
about repairs, and possible rental GG from RR.
1. LZ - Alternative is to pay $381,000 to CTRL, then. sue CW.
J. HF - What is status of GG.
K. LZ - We own it. They have it.
L. LZ - We could possibly get an injunction to deliver engine (GG).
Hutchinson would have to put up bond of $381,000 (for a cost of
$25,000), then get GG.
M. Rich F - The failure to inspect is creating a dollar difference of
$100,000. We can possibly live without GT for awhile.
N. LZ R Ve will reject CV offer and withdraw ours. CW should then
propose how to repair stator.
28. (CW Present). LZ - The CW offer is rejected. The Hutch offer is
withdrawn. CW should provide means of correcting PT stator housing problem.
CW should inspect and provide proposed method of repair. Hutch hopes it
will be done quickly.
LG - We are at an impasse. CW will complete repairs on the GG, bill Hutch,
and then ship it, after payment.
LZ - Can Alex continue corresponding with LG or before?
LG - Yes.
LZ - How soon will CW have someone out on PT stator housing?
LG - We will check and advise.
The meeting was adjourned at 1:45 p.m.
The above minutes of the Special Meeting were recorded by Robert
Palmquist of Associated Consultants.
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