REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Negotiate and Execute Amendment No. 1 to the Substation Agreement with 651 Walsh Partners, LLC for Laurelwood Junction Substation
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On March 22, 2022, the City Council authorized the City Manager to negotiate and execute a Substation Agreement with 651 Walsh Partners, LLC (Walsh Partners) for the Laurelwood Junction Substation (LJ Substation) (RTC 22-1704). Walsh Partners is a Digital Realty Trust data center. Under the "Substation Agreement by and between the City of Santa Clara and 651 Walsh Brothers, LLC" ("Agreement" - Attachment 1) executed on January 6, 2023, Walsh Partners is required to construct, at its own expense, the LJ Substation with a capacity of 99 megavolt-amps (MVA) to serve its data center. Costs incurred by Silicon Valley Power (SVP) related to the design, procurement, construction, inspection, and testing associated with LJ Substation are paid in full by Walsh Partners as required by the Agreement. The construction of LJ Substation is near completion and is scheduled to be energized in Summer 2025.
DISCUSSION
The Agreement included Exhibit E (Available Capacity Schedule). Exhibit E details the load ramp and required payments for activities associated with the LJ Substation. Under Exhibit E of the Agreement, the maximum load is 24 MVA by 2032. Staff meets with Digital Realty staff regularly to discuss many items related to the project. As part of those discussions staff proposed adjusting the schedule for the 24 MVA. The proposed Amendment No. 1 to the Substation Agreement would adjust the schedule for the 24MVA from 2032 to 2027. Staff is supportive of a schedule adjustment as it maintains the total 24 MVA load and does not affect any of the California Independent System Operator (CAISO) transmission modeling and current power commitments in that area.
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