Busted Gears

The engine room housing Cypress College's co-generation unit is quiet with the exception of a three-way conversation about one of the engines.

 

Media Credit: Kenny Rivera (click photo for larger image)

 

In March, the noise from the engines had made conversation nearly impossible. Now, it's Sept. 11, and the three people servicing the engines are able to speak in a normal voice.

Albert Miranda, director of the physical plant at Cypress College, earlier explained the co-generation installation began in 2004, and the engines started running "a year or a year and a half" ago. He said if they were working properly they could produce about "fifty percent of the energy we use on campus."

However, they were shut down in August.

"The original intent (in purchasing the unit)," Miranda said, "was in case there was a blackout," the co-generation unit would keep the school power on.

Miranda, Harold Martin, foreman from Valley Power, and Eric Jacobs, a representative from Salas O'Brien Engineers, are the three men talking about the engines. They all say they were optimistic the engines will be back online soon; and soon after that, the engines will be running as intended. Miranda says that day that the engines should be up the following week.

Two weeks later, Miranda writes in an email, "The engines are off line."

So What Happened?

The reason the engines are off, according to Miranda and his boss, Karen Cant, vice president of administrative services at Cypress College, is Noresco, the prime contractor on the project, declared the project completed even though Cant says the co-generation unit "never worked consistently."The North Orange County Community College District (NOCCCD) disagrees. So, the NOCCCD shut off the engines until it could decide what steps to take.

Cant said the contract with Noresco required the engines to run consecutively for 30 days, after which the NOCCCD would take ownership of the project. She said the engines have been unable to run for 30 days.

Miranda said the NOCCCD has hired Martin and Jacobs independently to service the engines and then attempt to get them back online and then get them to function as they were originally intended.

Ninety-nine percent of the work is done, Jacobs said Sept. 11. But, "If they (NOCCCD board members) don't accept the engines, Noresco's stuck." He added, "The most likely outcome is the district will accept the engines."

Martin said he has also been hired to service the engines. On Sept. 10, over the phone, he said, "It is running. We're just servicing them." He said "we're not going to turn them off." The following day the engines weren't running. (However, Miranda on Sept. 5 said the engines were turned off three weeks earlier.)

"We've taken care of them for quite a while. They're running real good," Martin said. He said the engines are making the college money when they are running.

Martin was hired because the company he works for, Valley Power, is the local service provider for Wakishaw engines, the engine brand used in the co-generation unit. Jacobs explained, "If you buy a Ford, you'll take it back to a Ford dealer."

 

Media Credit: Kenny Rivera (click photo for larger image)

 

Requiem for a Generator?

The contract was signed by the NOCCCD and Noresco in January 2004. It includes a clause that reads, "Substantial completion shall occur on or before December 16, 2004." According to the contract, "substantial completion" "is that stage in the progress of the Work when the Work is complete . . . so the District can occupy or use the Work for its intended purpose."

The NOCCCD purchased the entire co-generation unit for approximately $7.5 million, Cant said. "(Noresco) has gotten a majority of the payment," but the school is "holding back the retention." A retention is normally 10 to 15 percent of the total contract price, said Kevin Neuburger, a construction project manager unrelated to this project.

Both engines must operate for 30 days consecutively, Cant said, and the engines have not been able to do that.

Miranda said, "Only one was running at a time."

"(Noresco's) not able to tell us why," Cant said.

Cant's only been on the project about a year and said she's known about problems with the engines as far back as December.

"We don't know if there are design flaws," she said.

Miranda said they've hired Jacobs and Martin to "protect the investment." He said, "Protecting our interest is mainly what we're doing."

Miranda said he was and is optimistic about the completion of the project.

Cant said she was not. "I've probably been more pessimistic than him (Miranda)."

 

Media Credit: Kenny Rivera (click photo for larger image)

 

See You in Court

Cypress College President Michael Kasler's wrote of the problem in his Sept. 12 newsletter. "After a prolonged period of failed attempts by Noresco to get both engines working in order to provide redundant power to the campus and with the advice of NOCCCD legal counsel, the engines have been turned off. Litigation will follow."

Cant said, "Most likely we're going to end up in some kind of a lawsuit." Later, she said a lawsuit is "inevitable." Cant also said it was currently in the letter writing stage and lawsuits like this one generally take multiple years to conclude.

However, James Rossini, the lawyer hired by the NOCCCD, wrote in an email there will be no lawsuit. "The District filed a lawsuit in March, 2007. In April 2007, the District and Noresco agreed to arbitrate the dispute. The lawsuit was dismissed and the arbitration was commenced shortly thereafter . . . "

"The arbitration is in the 'Discovery' stage," he wrote. "This means the parties are still gathering information."

The contract states that if Noresco "fails or refuses" to continue working on the project, then "all costs, expenses or other charges" to "maintain progress of the Work in accordance with the then current Construction Schedule shall be at the sole cost of Noresco." Meaning: The costs incurred for hiring Jacobs and Martin may be at Noresco's expense, according to the contract.

According to "North Orange County Community College District's Complaint Against Noresco Holdings, Inc.," a legal document filed by Rossini on March 9, 2007, The NOCCCD alleges "Noresco acted with malice, and/or fraud."

The NOCCCD attorney writes Noresco misled it on what the generator would do, including saying the generator "would operate with a positive cash flow" (save money for the campus). NOCCCD also accuses Noresco of "failing to complete the Cypress Project according to the agreed-upon project schedule" (it wasn't finished on time), "failing to provide generators that operate consistently and reliably," and "failing to construct a power plant that continues operation in the event of a utility power outage as optional standby power."

Theresa MacKinnon of Noresco's legal department declined to make a statement. "We don't have a comment at this time, because we have a pending matter between the parties."

But NOCCCD attorney Rossini wrote, "Noresco is seeking what it considers its unpaid contract balance of approximately $600,000."

What Now?

Both Cant and Miranda said the district will continue pursuing the completion of the co-generation unit. "With this kind of investment," Cant said, "you don't give up early."

She added, "We haven't given up on the project, just the people running it."

President Kasler's Sept. 12 newsletter reports there will be meetings on finding solutions for the engines and getting them online, "hopefully."

 

Artist: Jeremy Hall | Graphic enhanced by: Bryce K.