When it rains, it pours.

-----Original Message-----
From:	Bestard, Jose
Sent:	Sun 8/26/2001 8:33 PM
To:	Cuiaba LT@ENRON
Cc:	Reis, Jose Lucio; Jens, Felipe; ESA Excom@ENRON; Anson, Jose; Domingues, Adriana; Miceli, Keith; crankin@velaw.com
Subject:	Cuiaba - Incident GT11

See the two messages below. Last Saturday afternoon, when GT 11 was being taken off-line after what appeared as a very successful gas commissioning run, it encountered an abnormal response. They opened the Turbine today an showed severe damage. We do not know how long it may be out of service but it may be approximately three months.

The incident occurred while the turbine  was under Siemens custody during a commissioning event.

John Guidry will be discussing the Technology Assurance Agreement with Cliff Rankin to understand how it applies to the particular circunstances.

John Guidy will alert Dick Vincent to get our insurance personnel involved and perform our own investigation.

Orlando Gonzalez has a 9:00 AM meeting with Parente tomorrow about other issues, we will take the opportunity to inform him.

This is a significant event for the Lender's conference that we have scheduled Tuesday. The insurance protection question will be very pertinent.

I will communicate with Furnas management and the Ministry of Mines and Energy. I am sure that during the course of the day there will be more questions, including the press. We will discuss this tomorrow.

	Caution. We need to be factual in our communications. There will be a human temptation to assign blame to someone (Siemens). We know what happened, we need to know why it happened, to determine what was the root-cause of the failure and how it may be avoided, and this may take weeks to determine, or never precisely determined.

From a PPA perspective, the Aditivo 4 that we just executed can cover the situation. The average output derived  from GT 11, drops to zero, the availability factor for this output will be considered 100% for future calculations. We will loose the revenue. Furnas will have market exposure for this parcel, which is very significant. The consultations we are having with Aneel to provide Furnas a pass-through vehicle, for regulatory changes during the Initial Contracts,  if implemented can reduce the Furnas exposure.

 
Jose

---------------------- Forwarded by Jose Bestard/ENRON_DEVELOPMENT on 08/26/2001 06:58 PM ---------------------------


Tony Apps
08/26/2001 08:25 AM
To:	Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jose Bestard
cc:	Carlos Alberto Lopez/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Petrus Rosa/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Guidry, John Krupski/Enron@EnronXGate, Jcarlos@ccnpress.com.br 

Subject:	Incident GT11

Laine 

Further to the good news of completing the commissioning on gas of GT11 last evening, during the shut down on completion of engine commissioning on gas a serious incident occurred with GT11.

The machine was automatically being shut down via the SGC (sub group contol) when the load was at approximately 13MW the unit tripped.

The initial trip was for gt surge protection, however many alarms were present and the sequence of events is currently being investigated to determine the exact cause.

Sufficient to say we are not sure if infact a compressor surge occurred but there was certainly a  loud noise.

The machine has sustained mechanical damage to some components, Jacking oil line has broken, bearing vibration probes on the GT compressor bearing are damaged, as are bearing oil seals.

The engine in addition could not be put on turning gear and the rotor is stationary.

The rub that has occured as a result of the incident is sufficient to prevent the machine being put on turning gear.

Until the machine has cooled down and a thorough inspection has been made we will not know the extent of any internal damage, if any.

Sufficient to say that we will need to carry out the above inspections in addition to the combustion chamber inspection, already programmed for 9 days from Sunday.

The length of time the unit will be out will obviously depend on the extent of damage, but a rough guess will be say 2 weeks to undertake and rectify any damage to bearings and maybe a rebalance, if however there is internal damage this could mean the rotor out which could be, say 2 months, if parts are available.

We will not know until monday afternoon at the earliest, possibly tuesday exactly what the situation is.

The decision to be made will be do we continue running GT12 on oil for potentially a minimum of 2 -3 more weeks minimum, potentially months, or take the decision to stop now and get the machine available on gas a quickly as possible? This decision can only be made  when we have the full information on the extent of the damage.

Another issue will be that of responsibility for the costs to rectify the above, the machine is not covered by warranty but was under Siemens care custody and control for the commissioning process.


Tony 
---------------------- Forwarded by Jose Bestard/ENRON_DEVELOPMENT on 08/26/2001 06:58 PM ---------------------------


Tony Apps
08/26/2001 02:01 PM
To:	Laine A Powell/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jose Bestard
cc:	John Guidry, Petrus Rosa/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Carlos Alberto Lopez/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Krupski/Enron@EnronXGate, Richard Vincent/Enron@EnronXGate 

Subject:	Gt11 Incident update

Bad news guys

Today at 16:00hrs we opened the transition duct door of GT 11 Hrsg, the whole area between the GT outlet and the duct burners is littered with debris.

Upon initial inspection there has been a catastrophic failure within the Turbine.

Visable is severe damage to row 3 and 4 vanes and blades.

This will necesitate a complete machine strip down and failure evaluation.

I guess minimum 2-3 months out of service subject to spare parts availability.

The major decision to be made is whether to proceed with commissioning of unit 12 on gas or continue to run on oil.

I will be home this evening please call if necessary.

Tony