2016-07-29_REVISION - C1982056 ‎(12)‎

• Permit No: C1982056
• IBM Index Class Name: Revision
• Doc Date: 7/29/2016
• Doc Name: Response to Borehole Cost
• From: Twentymile Coal, LLC
• To: DRMS
• Type & Sequence: SI2
• Email Name: JLE
• Email Name: DIH
• Media Type: D
• Archive: No

8/2/2016 State.co.us Executive Branch Mail - Fwd: Twentymile Coal, LLC - Foidel CReek Mine (C-82-056), Review of Borehole Closure Costs for SI -2
STATE E Hernandez - DNR, Alysha <[e-mail]>
COLORADO,
Fwd: Twentymile Coal, LLC - Foidel CReek Mine (C-82-056), Review of Borehole
Closure Costs for SI -2
1 message
Ebert - DNR, Jared <[e-mail]> Mon, Aug 1, 2016 at 4:26 PM
To: Alysha Hernandez - DNR <[e-mail]>
Foidel Creek Mine, C-1982-056, SI -2, "Response to Borehole Cost"
---------- Forwarded message ----------
From: Nettleton, Jerry<JNet [e-mail] >
Date: Fri, Jul 29, 2016 at 12:45 PM
Subject: Twentymile Coal, LLC - Foidel CReek Mine (C-82-056), Review of Borehole Closure Costs for SI -2
To: "[e-mail]" <[e-mail]>
Jared —
As a follow-up to my 07/15/16 email and our subsequent conversations, I have reviewed the 02/16 and 06/16 SI -2 bond
updates for Task 182, Borehole and Monitoring Well Sealing, and have obtained and reviewed documentation for actual
borehole sealing costs from our drillers and compared them with the 06/16 updates. The following summarizes my
concerns and the results of my review:
➢ For Task 182, the 02/16 bond update showed a total cost of $624,193 and total task hours of 910
➢ The 06/16 update for this Task showed a total cost of $700,674 and total task hours of 1,678, an increase of
12.3% in the total cost and 84.4% in total hours
Based on the very significant increase in task hours, the 06/16 update for Task 182 was reviewed, and it was
noted that the increase in hours was primarily for "Drill Rig and Labor" and "Water Truck". The hours ranged
from a decrease of 60% to an increase of 129%. Of the 45 discrete closure activities, the equipment/labor
hours stayed the same or decrease for 3 activities, increased up to 50% for 8 activities, increase between 50%
and 100% for 12 activities, and increased over 100% for 22 activities.
Invoices for recent drilling and borehole closure activities (MR272 and MR275 corresponding to Borehole WC -
005 through WC -022) were reviewed, and based on a limited sampling and comparison with the updated (06/16)
CDRMS costs, the costs were in the same range, but generally somewhat less. Unfortunately, the boreholes
for which I was able to find actual costs generally fell in the lower range of the noted increase in
equipment/labor costs (up to 50% increase), so I'm not sure they are representative, however I don't have
actual costs to assess some of the activities for which the increases are greater. I would ask that you review
the labor hours for those activities highlighted on the attached calculation forms (increases greater than 100%)
for possible adjustment.
Best regards,
Jerry
https://mail.googl e.com/m ai I/u/0/?ui=2&i k=e29129fcb5&view=pt&search= i nbox&th=1564836dObO5l8d3&si m l=1564836dObO5l 8d3 1/2