REPORT TO COUNCIL
SUBJECT
Title
Action on an Agreement with Alternative Energy Systems Consulting, Inc. for a Third Party Commercial Strategic Energy Management Program for Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), has developed energy efficiency programs to benefit its commercial and industrial customers. These programs implement the City’s Public Benefits Program Policy Statement adopted by Council on May 12, 1998, and Public Utilities Code (PUC) Section 385 covering the Public Benefits Charge (PBC). Over the past several years, the state legislature, California Energy Commission, and environmental agencies have increased their pressure on publicly owned utilities, like SVP, to boost energy efficiency programs, with legislation pushing to double the amount of energy efficiency achieved in California.
Every four years, electric utilities in California are required to conduct a study to determine all economically feasible energy efficiency potential within their service territory. Based on SVP’s load profile, nearly all of its energy efficiency potential comes from business customers. SVP is required by state law to expend all PBC funds collected on programs and projects relating to energy efficiency, renewable energy, low-income, and electric technology research and development. For these reasons, SVP seeks to continue to enhance the business energy efficiency programs to address the statewide energy efficiency and greenhouse gas reduction goals.
DISCUSSION
Pursuant to City Code Section 2.105.140(c), the City conducted a formal request for Request for Proposals (RFP) with the award recommendation based on “best value.”
In April 2023, staff issued the RFP for Third Party Energy Efficiency and Building Electrification programs, using the City’s e-procurement system. The City received proposals from the following firms:
• Alternative Energy Systems Consulting, Inc.
• ARCA Recycling, Inc.
A three-member evaluation team was formed to evaluate the proposals. Each team member independently evaluated and scored the proposals. Staff determined all proposals were responsive and met the initial pass/fail review of the stated minimum qualifications. Proposals were then evaluated for:
• cost effectiveness of program delivery;
• ability to supplement existing programs with a new program offering; and
• addressing underserved customer segments.
Interviews were held in June 2023 for further clarification.
Staff recommends award of contract to Alternative Energy Systems Consulting, Inc. (AESC) for a Third Party Commercial Strategic Energy Management Program as it meets the evaluation criteria set forth in the RFP. The term of the proposed agreement will be four (4) years. This will include three years of program activity as well as project initiation and project closeout.
AESC will deliver a Commercial Strategic Energy Management Program which will include a three-year Strategic Energy Management (SEM) and electrification program targeting elementary and high schools, colleges, community-based organizations, and public sector facilities. The program will be delivered through a combination of cohort-based training and workshops and one-on-one technical and behavioral coaching and consulting support. The delivery will include onsite activities and remote coaching to help participants actualize operational best practices and implement identified opportunities. The program’s primary objectives are to improve energy efficiency and achieve energy cost reductions through no cost and low-cost improvements and develop a continuous energy improvement program and ongoing monitoring. The program will also engage stakeholders at various levels within the participating organizations to incorporate strategic energy management into the company’s culture.
The total cost to implement the program is $580,334, plus $33,600 for additional services, for a total maximum compensation not-to-exceed $613,934. The AESC agreement will be time-and-materials with a not to exceed amount for program development and administration. It also includes fixed fees for each workshop and coaching, technical support, and energy modeling. Moreover, 10% ($58,033) of the base fee is contingent upon meeting the performance target of 841,500 kWh in savings.
Staff requests authorization for the City Manager to execute the agreement and negotiate and execute any amendments to extend the term as required and increase the maximum compensation by $50,000 to allow SVP to increase the number of program participants and extend the training and workshops for existing participants.
ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the proposed actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to sections 15301, 15302, and 15303 of Title 14 of the California Code of Regulations in that, as the proposed actions will consist of (1) the reconstruction, replacement, repair, maintenance, or minor alteration of existing facilities; and (2) the installation of small new energy efficiency equipment and devices.
FISCAL IMPACT
The maximum compensation under the proposed three-year agreement with Alternative Energy Systems Consulting is $613,934.
Sufficient funds are available in the Electric Operating Grant Trust Fund in the Public Benefits Program Budget.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Determine the proposed actions are exempt from CEQA pursuant to Sections 15301 (Class 1 -Existing Facilities), 15302 (Class 2 - Replacement or Reconstruction), and 15303 (Class 3 - New Construction or Conversion of Small Structures) of Title 14 of the California Code of Regulations;
2. Authorize the City Manager to execute the proposed agreement with Alternative Energy Systems Consulting, Inc. for a Third Party Commercial Strategic Energy Management Program for a four-year term beginning on or around April 1, 2024, and ending on or around March 31, 2028, with a maximum compensation not-to-exceed $613,934, subject to the annual appropriation of funds funded by the Electric Operating Grant Trust Fund; and
3. Authorize the City Manager to take any actions as necessary to implement and administer the Agreement and to negotiate and execute amendments to the Agreement to (a) extend the term as needed to complete program delivery; and (b) increase the maximum compensation by an additional $50,000 for a total maximum compensation not to exceed $663,934, subject to the appropriation of funds and review and approval as to form by the City Attorney.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Proposed Agreement with Alternative Energy Systems Consulting, Inc.