How the budget for John Wayne Airport's new electricity and air conditioning generator nearly tripled in size — from an inkling of an idea at $11 million to a robust utility plant at $31 million — apparently is not a case of contractors bilking the county-owned aviation hub or of frivolous spending.
Rather, it illustrates how major construction projects often morph, especially when they are planned in a volatile cost environment and are part of a larger undertaking, like the airport's half-billion dollar expansion.
"More often than not, it's a more innocent explanation," said Allan Hauck, the construction management department head at Cal Poly San Luis Obispo. "The most likely culprit is that the project is so complex and there are so many unknowns."
Indeed, when JWA officials first started planning to produce their own electricity and air conditioning in the early 2000s, they didn't account for replacing much of their aging existing equipment, which they would still need for backup. Nor had they planned on building a freestanding structure to house all of the equipment.
"The project is much bigger today than it was in 2004," said airport spokeswoman Jenny Wedge.
Added Director Alan Murphy: "We think it's a good project, and we think it's going to be cost-effective for us, and give us that additional level of independence."
The $11-million core of the project was a new "co-generation" plant: a system that would both produce electricity by internal combustion and capture the excess energy to create cool water for air-conditioning. It could help prevent power outages, which happened on occasion.
Financial consultants told airport officials they would save more than $1.25 million annually in electricity costs, and the savings would pay for the equipment within eight years of ignition. That same payback schedule is true today — for the co-generation portion alone.
There just happens to be another $20 million in other equipment, design and building costs.
The four natural gas-fired generators are massive Cummins engines with 18 cylinders — the size of a small school bus each. Running simultaneously, they can create a total of seven megawatts of electricity.
Murphy said they considered using solar energy for part of the electrical load, but projected savings didn't outweigh the cost to install a solar system.
The county Board of Supervisors approved the airport's request to buy the gas engines in 2004 for $2.6 million.
While some of the airport's other capital improvement projects are being paid for with federal grants and special passenger fees, the engines and other Central Utility Plant components were funded by airport revenues solely, officials say. These include airline leases, parking fees, concessions, etc.
Murphy wanted to buy the engines before finishing the plant's design, to lock in that year's pricing and to get a leg up on the lengthy permitting process. He had the engines "pickled" in 2004 and stored.
But by the time contractors started up the engines in late 2010, they had to spend more than $1 million to refurbish them. The generators needed lubrication and to be modified to meet air quality standards.
One of them started smoking and is now being repaired under warranty.
The other equipment