REPORT TO COUNCIL
SUBJECT
Title
Action to Amend Prior Authorization to Allow Issuance of Purchase Orders to Cooper Power Systems, a Wholly Owned Subsidiary of Eaton Corporation, for the Purchase of Switchgear Within the Previously Authorized Maximum Amount of $1,500,000
Report
BACKGROUND
On March 7, 2023, pursuant to Section 2.105.280(b)(2) of the Santa Clara City Code, the City Council authorized the sole source purchase of switchgear from Eaton Corporation (RTC #23-101). The purchase supported, among other things, the interconnection of a new photovoltaic and battery storage facility at West Valley Mission Community College (Mission College) with Silicon Valley Power’s distribution system.
The authorization included an amount not-to-exceed $400,000 for switchgear and associated equipment for the Mission College facility, as well as authority to purchase additional switchgear from Eaton Corporation for Silicon Valley Power (SVP), up to a total amount not-to-exceed $1,500,000.
DISCUSSION
Staff have been notified by Eaton Corporation that the switchgear to be procured is manufactured by its wholly owned subsidiary, Cooper Power Systems. As a result, purchase orders and payments for the switchgear must be issued to Cooper Power Systems rather than to Eaton Corporation. Because Cooper Power Systems is a separate legal entity from Eaton Corporation, it is recommended that the existing City Council authorization be amended to reflect the correct vendor’s name.
In addition to the vendor’s name change, Eaton Corporation requires the City to accept its standard Terms and Conditions for any purchase orders issued. Staff, in coordination with the City Attorney’s Office, have negotiated modifications to these Terms and Conditions and is recommending approval of the attached Terms and Conditions for use on all purchase orders issued to Eaton Corporation and/or Cooper Power Systems.
Approval of the recommendations does not increase the previously authorized maximum compensation of $1,500,000 and does not expand the scope of authorized purchase. Individual switchgear units are approximately $250,000 each. Thus far, no purchase orders have been issued under the authorization granted under RTC #23-101.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(5) of Title 14 of the California Code of Regulations as the proposed actions are administrative in nature and will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
Sufficient funds not-to-exceed $400,000 for the purchase of switchgear and associated equipment for the Mission College facility is available in the Electric Utility Capital Fund Transmission and Distribution Capital Maintenance and Betterments project (CIP 2006). Funding for purchases of additional switchgears up to the total amount not-to-exceed, $1,500,000 (inclusive of the $400,000 for the Mission College facility) may be included in capital project budgets in the Electric Utility Capital Fund where appropriate. Funding for future purchases will be included in the regular budget process.
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 or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Amend the prior authorization under RTC #23-101 to authorize the City Manager to (a) issue purchase orders with Eaton Corporation and/or Cooper Power Systems, and (b) execute the Terms and Conditions attached to this Report to Council for purchases of switchgear within the previously authorized maximum compensation amount of $1,500,000, subject to the appropriation of funds and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Eaton Corporation Terms and Conditions